Thursday, April 30, 2009
From Justin Fox at Time Magazine:
Nouriel Roubini was one of the first people to start talking about this financial crisis and recession and gosh darnit if he's not going to be one of the last. He popped by this afternoon to talk to some TIME editors and writers. While he was here, he made fun of the notion that we're seeing "green shoots" in the economy—choosing instead to use the word "weeds." He picked apart one recent upbeat economic report (I won't mention which investment bank issued it), by pointing out that a minimal slowdown in the pace of house-price declines, a couple of less-dismal months of retail sales, and slightly less contraction in the manufacturing sector does not an economic recovery make.It will be interesting to see if/when Roubini turns bullish.
He was equally as dismissive of the good first-quarter earnings many banks have reported. He pointed out that loan-loss reserves are actually in many cases on the relative decline—this Bloomberg story highlights that in the first quarter non-performing assets at Wells Fargo rose by 40% while loss reserves grew by just 5%. "We're going back like nothing ever happened," Roubini said. "It's pathetic."