Nouriel Roubini's 2009 Stock Market Calls Track Record

By: Nadeem_Walayat

Nouriel Roubini, Dr Doom the academic economist who has repeatedly peddled the stocks bear market case to a captured audience of naive investors has again come out with another in a series of Doom stories that has the effect of scaring investors away from the market.

Contrary to the media hype surrounding Nouriel Roubini's market calls, from what I can actually determine from his actual track record is turning out to be truly appalling, which implies a media machine feeding the mainstream press and publicity machine to perpetuate myth of accuracy on the stock market at least.

Nouriel Roubini's Stock Market Calls 2009 -

Back at the stock market bottom in early March 2009, Nouriel forecast that the S&P would fall from 676 to below 600 during 2009- Bloomberg :

“My main scenario is that it’s highly likely it goes to 600 or below,” Roubini said today in an interview at the Chicago Board Options Exchange Risk Management Conference in Dana Point, California. A level of “500 is less likely, but there is some possibility you get there.”

Then again a couple of weeks into the stealth bull market rally, Roubini emerges to state - Bloomberg - Roubini Says Stocks Will Drop as Banks Go ‘Belly

The global equity rebound in March that sent the Standard & Poor’s 500 Index to its best monthly advance in 17 years is a “bear-market rally” and U.S. Treasury yields will “remain relatively low” as investors flock to the safest assets, Roubini said. Treasury Secretary Timothy Geithner’s new plan to remove toxic debt from financial companies won’t be enough for insolvent banks, he said.

Though the academic economists that populate the bankrupt bailed out banks do not come out any better.

Merrill Lynch & Co.’s chief North American Economist David Rosenberg said today the S&P 500 may bottom out at 600 in October, lowering his estimate after the benchmark’s decline last week. That level is about 20 percent below November’s level of 752.44, which was then widely viewed as the “fundamental low,” Rosenberg said.

Throughout the duration of the stealth stocks bull market, Roubini has been WRONG, where he kept silent during the rally but soon as the market dipped for a few days - Straight Times - 21st April 2009

Mr Roubini, a professor at New York University's business school and former adviser at the US Treasury Department, also said he expected China's economy to grow up to 5.5 per cent this year, missing the government's 8 per cent target.

Hopes the world economy will stage a faster recovery this year have fueled a six-week rise in global markets, with major benchmarks on Wall Street and in Asia up more than 20 per cent over just six weeks. But Prof Roubini was doubtful and predicted markets would test the lows seen in March.

And again in the Independent on 21st April 2009.

While an increasing number of analysts have in recent weeks urged investors to go back into equities, Mr Roubini, a professor at New York University's Stern School of Business who has emerged as one of the most respected economic voices in the wake of the credit crunch, warned yesterday that he didn't yet see a buying opportunity.

He holds little faith in the recent market rallies, which prompted some to suggest a recovery was underway. "I'm still cautious and bearish," he said. "I believe we are closer to a bottom in the stock market than a year ago, but this is a bear market rally."

Back in July as the Stealth bull market again corrected, Nouriel Roubini re-appears with another bear market call - Global Investor - Market bear Roubini sticks to dour forecasts

"Macro news, earnings news and financial shocks are going to be worse than expected and that's why I believe this is still a bear market rally," he told BNN

"I am more a realist than a pessimist. I'll be the first one to call for the bottom of this economic contraction, recovery of the market when I see a sustained economic and therefore financial recovery," he said.

And again Roubini came out of the woodwork at the tail end of the recent correction to peddle that a 20% drop is coming - USA Today - 28th October 09

"Investors are hoping for a V, but there are plenty of signs it could be a U-shaped recovery," he warns, adding that his base case — a 60% probability — is for a sluggish, U-shaped recovery. If his base-case scenario plays out, Roubini says, stocks will be ripe for a price correction of 10% to 20%.

Trading Lesson - In my opinion, every time Nouriel talks about the bear market resuming usually coincides with a market bottom. However this also suggests when Nouriel gets bullish it could be time to head for the exits!

The problem is that Nouriel Roubini and other academic's WILL eventually be right, i.e. he will eventually get his drop in stock prices. BUT those that followed his calls will have missed out on one of the greatest bull runs in history or worse lost money shorting the market, as basically where the stock market is concerned, Nouriel's actual track record as illustrated by the actual record shows that he does not have a clue!

And where economics is concerned, barely 6 months ago Roubini stated that the U.S. Economy would not recover from recession until 2010, and therefore plenty of excuses followed the recent U.S. GDP data. What is Nouriel Roubini's REAL track record on the economy ?

For more on the dangers of following academic economists see - Academic Economists Lead Governments to the Edge of the Abyss

Source : http://www.marketoracle.co.uk/Article14751.html

By Nadeem Walayat http://www.marketoracle.co.uk

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Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 400 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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