Nouriel Roubini sobre a Russia putinesca, e sobre duas integracoes concorrentes

Um artigo amplo, tratando menos de economia (que é a especialidade de Nouriel Roubini, o Mister Doom da crise de 2007-2008) e bem mais de política, e até de geopolítica e de geoeconomia.
Vale a pena ler com atenção.
Paulo Roberto de Almeida
 
Russia: 21st Century Empire?
Nouriel Roubini

Roubini's Edge - Economic Insights of a Global Nomad
Nouriel Unplugged, November 24, 2014 

Russian President Vladimir Putin has gone on record stating that the breakup of the Soviet Union was one of the worst catastrophes of the 20th century.

Putin’s statement—which is ominous in its own right—takes on an even more menacing tone in light of recent events in the nations of the former Soviet Union. The most obvious example is Ukraine’s conflict with Russia, which perhaps more than any other recent event in the region, has seized the attention of the West.

During the last year, the conflict in Ukraine has come perilously close to a state of full-blown though undeclared war.

Looking back over the past 12 months, we’ve seen a seismic shift in the political makeup of the region. Russia has effectively annexed the Crimean Peninsula, which includes the city of Sevastopol, home of the Russian Black Sea Fleet—and critically, the Russian Navy’s only warm-water port. In the political sphere, Ukraine’s unpopular president, Viktor Yanukovych, abandoned his vast estate along the Dnieper River, fled into exile in Russia, and was soon after impeached by the Ukrainian parliament.

Despite these momentous events, the conflict, which began on November 21, 2013 in Kiev’s Independence Square, grinds on. In Eastern Ukraine, Russian separatists—some wearing what appear to be Russian military uniforms—continue to battle the Ukrainian Army, with both sides suffering casualties despite several cease-fire agreements.

But in a larger sense, the crisis in Ukraine represents a metaphor for Putin’s increasingly imperial ambition. While the situation in Ukraine is grave and could escalate into an even more dangerous crisis, it’s still just one piece of a much broader puzzle.

Unlocking that puzzle begins with Vladimir Putin—and what are, by all appearances, his plans for reconstituting the Russian Empire.

Moscow’s Long Arm—A Firsthand Experience
I personally experienced the long arm of Vladimir Putin’s political machine two years ago, just as I was preparing for a trip to Moscow.

In May of 2012, the Financial Times published an op-ed piece I had written with my good friend, the political scientist Ian Bremmer. In the article, Ian and I said we believed that Russia was on the wrong path.

We listed many reasons why: Russia’s intervention in state capitalism; a pervasive sense of authoritarianism; and a population in demographic decline, as well as rampant socially driven diseases like alcoholism. We recognized early on some of the problems—economic, political, and social—that Russia might face.

A few days after the FT ran our op-ed piece, Ian and I were going to meet with senior policymakers in Moscow. When I arrived, half of the people I was scheduled to meet with suddenly decided to cancel.

I suppose there could have been a nasty spring flu going around the United Russia party that May; but more likely, people who hold dissenting views from Russia’s party in power will suddenly have their meetings politely canceled.

This isn’t surprising: corruption in Russia has become endemic to the political system.

Transparency International’s Corruption Perceptions Index, which measures the way public-sector institutions are perceived, ranks the Russian government 127th out of a total of 177 countries rated—which is hardly an endorsement of Mr. Putin’s style of governance.

Empire Building, 21st-Century Style
Russia has always considered itself an empire—even before the Bolshevik Revolution.

In Tsarist days, Imperial Russia was a great power that believed buffer states were necessary to maintain its security and its place in the world. After the Bolshevik Revolution, during the era of the Soviet Union, Russia maintained client states in Eastern and Central Europe to control a sphere of influence far larger than its own national territory.

During the time of the tsars, Ivan the Terrible expanded the Russian Empire by enlisting the support of the Cossacks. Now the organizational complexity of the 21st century has given empire builders a new tool to consolidate their power: the supranational union.

The Creation of the European Union
On January 1, 1999, 11 democratic European countries, including the most economically powerful nations in Western Europe, officially united to create a common currency—the euro.
The eurozone, along with its free-trade counterpart, the European Union, represents a culmination of work toward a united Europe that had begun decades earlier.

Perhaps it isn’t surprising that Putin’s latest attempt at empire building has taken on this distinctly modern form, using the European Union and the eurozone as templates for consolidating power.

The Eurasian Economic Union (EEU), which will formally go into effect on January 1, 2015, is Putin’s latest bid to unite the territories of the former Soviet Union. The original territories to be included in the union were Russia, Belarus, and Kazakhstan—but the treaty was amended in October to include Armenia. The nation of Kyrgyzstan may soon follow suit.

Click to Enlarge

The Eurasian Economic Union: A Rival EU?
The Eurasian Economic Union is something economists refer to as a “customs union”—a free-trade zone with a common tariff applied to foreign goods.

But the EEU is still in a gestational phase. The history of the European Union suggests that over time, the integration of a free-trade area expands—which may well be Putin’s goal.

Putin doesn’t want to simply create another North American Free Trade Agreement (NAFTA). His aim is to create another EU—a rival EU—with the Kremlin exercising the real power behind the scenes.

To understand the empire-building project that Putin has embarked upon, it makes sense to think of the EEU as a political union first. Putin’s ability to consolidate power politically was a necessary first step, leading to progressively greater economic integration.

As a customs union grows, it establishes trade, financial, and investment links among its constituent states. Then, as time goes on, member states may stabilize their currency exchange rates, eventually becoming interconnected enough to develop a common currency.

The eurozone experiment suggests that sustaining a monetary union requires banking, fiscal, and full economic union. When you begin to trace the trajectory of the eurozone experiment, the outlines of Mr. Putin’s plan begin to come into focus.

If Russia wants to establish the Eurasian Economic Union as a rival to the EU, then it must include Ukraine, Russia’s largest neighbor to the west.

As Jimmy Carter’s National Security Advisor Zbigniew Brzezinski once wrote: “Without Ukraine, Russia ceases to be an empire, but with Ukraine suborned and then subordinated, Russia automatically becomes an empire.”

And indeed, what started as a customs union is now becoming a broader economic union for the three members of the EEU in 2015. Russia has already heavy-handedly suggested to Kazakhstan and Belarus that they should start to stabilize their currencies and eventually think about a common currency in the future. There are even proposals for the beginning of a banking union, with joint regulation and supervision for banks in the EEU. Kazakhstan has already balked at the idea of a common currency that would be a stepping stone for a fuller banking, fiscal, economic and eventually political union.

But Russia is pressing the issue, and the delicate political transition in Kazakhstan may give Russia an opportunity to “pull a Ukraine” in Kazakhstan, as we will discuss below.

Putin’s rhetoric is that Russia should protect Russian ethnic minorities wherever they are in the former Soviet Union—and about 25 million ethnic Russians live in those former Soviet republics.

What a Sanctions War Would Do
In the geostrategic sense, Ukraine plays a key role in the development of the EEU, but there are additional risks to an escalation of the conflict there.

The nightmare scenario for the West—and for investors—is an escalating sanctions war with Russia.

Thus far, Western sanctions have targeted only key individuals and companies in Russia, and have been limited mostly to specific organizations, such as the energy sector, the military, and state banks. Essentially, the sanctions have tried to encourage financial markets to price in a greater risk premium for Russian investments, but have steered clear of broad trade restrictions.

Russia retaliated with counter-sanctions, specifically a ban on food imports and restrictions on imported clothing, cars, and other products for government ministries. Coupled with a much weaker Russian ruble, which reduces Russia’s purchasing power in the world, Russian imports from Europe have collapsed. The Russian government is now trying to replace these goods with domestic production.

But the real concern is energy. Approximately one-third of Europe’s gas supply comes from Russia—and about half of that gas is transported through Ukraine.

According to Eurostat, the EU’s official statistics reporting agency, Germany gets about one-third and Sweden almost one-half of their imported energy from Russia. Poland, Slovakia, Bulgaria, and Lithuania depend on Russia for 90% or more of their imported energy, excluding intra-EU trade.

Europe’s Energy Imports

Source: New York Times

If the West were to impose stricter sanctions against Russia, Russia might then retaliate with the supreme sanction against the West—cutting off the supply of natural gas to Europe.

If the conflict between Ukraine and Russia were to escalate into a full-blown war, which for the moment at least does not seem likely, the risk of a disastrous energy embargo would rise dramatically—though this would damage the Russian economy as much, perhaps even more, than it would hurt Europe.

As recently as 2009, a pricing quarrel arose between Russia and Ukraine when Gazprom, the Russian gas giant, refused to renew a contract due to concerns over Ukraine’s outstanding debt. The dispute was ultimately resolved by Vladimir Putin and then Ukrainian Prime Minister Yulia Tymoshenko, but not before it threatened real catastrophe.

By the time the two leaders had brokered an accord, gas pressure had already dropped in Poland and the Czech Republic—sending ripples of fear about energy supply through Western Europe that winter and causing waves of selling in European equities.

Russian gas lines crisscross Ukraine

Source: BBC

So in the event of a Russian gas embargo of Western Europe, where would Russia sell its natural gas?

While Putin could attempt to redirect sales of natural gas to his trading partner China, the infrastructure required to transport that gas has not yet been completed, and the construction required to make it operational will take years to complete.

Despite limitations in the transportation infrastructure, the Russians already have a steady agreement in place to sell gas to China—driven in some measure by Russia’s insecurity about its relationship with the West.

On the other side of the equation, tensions with Russia have already led some European countries to sign contracts with the United States for future natural gas delivery. (At present, US law does not allow for the export of meaningful amounts of liquefied natural gas [LNG], but new LNG licenses are being issued.) The US is also increasingly exporting its excess supply of coal to Europe, as the domestic shale gas and oil boom reduce US coal consumption.

It’s Not Just Ukraine
I recently traveled to the Central Asian nation of Kazakhstan, which is a former Soviet republic and founding member of Putin’s Eurasian Economic Union. Russia has deep and longstanding economic ties with Kazakhstan, especially in the trade of raw materials and finished goods.

Kazakhstan is the largest landlocked nation in the world, and the ninth-largest country by overall landmass. Its northern border with Russia is longer than 4,000 miles. Roughly one-quarter of Kazakhstan’s population of 17 million is ethnic Russian—but in the north and west of the country, ethnic Russians account for between 40-50% of the population.

This August, in a disturbing turn of events, President Putin remarked that Kazakhstan has never had independent statehood and was historically “part of the large Russian world.” He also said that Kazakhstan’s citizens of Russian descent needed to be protected—and that they would insist on protection if tensions were rising.

The Kazakhstanis naturally bristled at this rhetoric, made especially ominous by the fact that Putin had made nearly identical remarks about the ethnic Russians in Ukraine. Putin also made special mention of Kazakhstan’s current president, Nursultan Nazarbayev, praising him for having “created a nation” where none had existed before.

This leaves many Kazakhstanis concerned about what Putin’s plans for Kazakhstan may be after Nazarbayev eventually disappears from the scene. Nazarbayev is now in his mid-70s and has run the country since its independence without a clear plan of succession. There are also additional concerns about whether the ethnic Russian population of Kazakhstan will rise to the bait and begin to assert their “rights” with force, as they already have in Ukraine. President Nazarbayev has already responded to this perceived risk by appointing more Russian ministers to participate in his government.

Kazakhstan has played a fascinating balancing act between Russia, China, and to a lesser extent, the West. Indeed, Kazakhstan now sells more than half of its resource exports to China.

I don’t believe there is any reason for great concern about Kazakhstan in the short term—but the uncertainty about succession after Nazarbayev leaves the presidency could make Kazakhstan vulnerable.

Unlike many other countries in the region, Kazakhstan has some significant economic advantages—including sizable resource exports and earnings, the fact that it has managed to save some of its oil earnings in its sovereign wealth fund. All of this gives Kazakhstan some bargaining power vis-à-vis Russia—at least as much bargaining power as a country a tenth the size of Russia can command.

Source: RT

Putin has also engaged in similar bullying tactics in Armenia, Moldova, Kyrgyzstan, and Tajikistan—all of which are relatively poor, landlocked nations, with few resources and limited wealth, and which now seem likely to join the EEU at some point in the future.

While these territorial conflicts may seem distant from Western investors, taken as a whole, they amount to a pattern of behavior in a potentially volatile region of the world that investors should not ignore.

Challenging Global Infrastructure
Also on the geopolitical front, Russia and its BRICS partners—Brazil, India, China, and South Africa—are working on creating a development bank that will serve as a BRICS alternative to the Western-controlled International Monetary Fund (IMF) and the World Bank. This is yet another troubling example of Russia’s apparent desire to turn its back on the West.

In another example, there has been speculation that Russia and China are planning to create an international payment system to replace the SWIFT system in order to limit the capacity of the US and Europe to impose financial sanctions against them. Support for some of these ideas has cooled in China, though, where the notion of replacing the SWIFT system has been rejected, while many analysts in the West think the idea is nothing but a pipe-dream.

In addition, recent revelations of electronic surveillance by the US may lead Russia and other illiberal states to restrict Internet access and create their own nationally controlled data networks.

Creating a full Eurasian Economic Union that is less tied to the West through trade, financial integration, electronic payment, and communication may be a romantic fantasy for Russia given the fiscal costs the project would entail—costs that Russia cannot afford.

Moreover, the recent fall in oil prices—which is perhaps driven in part by Saudi Arabia’s goal of punishing Russia for its role in Syria and the Middle East, as well as the sanctions against Russia by the West—have led to a free-fall of the Russian ruble and a near-recession in Russia this year and possibly next year as well.

Despite these headwinds, Putin is still very popular at home where a controlled media has spun a tale of a strong Russia helping its ethnic cousins in Ukraine. But as the economy falters, the neoimperial goals of Putin will be increasingly challenged.

Nevertheless, for now the Eurasian Economic Union dream is a dream to which Putin dearly clings—and he is nothing if not tenacious.

Final Thoughts
Taken as a whole, Vladimir Putin’s behavior suggests that his endgame is to keep the former member states of the Soviet Union unstable enough to give up on closer ties with the West. His plan is multifaceted—part political, part military, part geostrategic—and focused on maximizing Russia’s influence in the region as well as increasing the power of the fledgling Eurasian Economic Union.

Counterbalancing those risks in the region are the central banks of the G4—the Fed in the United States, the European Central Bank, the Bank of England, and the Bank of Japan—which have kept interest rates low enough to suppress market volatility.

So far, that support from central banks has served as an effective counterweight to the perception of geopolitical risk in places like Ukraine. With a few short-term exceptions, stock market prices have remained relatively stable since the crisis in Ukraine began almost a year ago.

There’s still plenty of risk in the world today. As an investor, you should pay attention to those events, but don’t automatically assume that geopolitical risk will translate into a massive correction in asset prices.

Vigilance and careful observation are a must—panic is not required.

Cordially,
Nouriel Roubini
Chairman
Roubini's Edge
http://www.RoubinisEdge.com



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Nouriel Roubini e a economia brasileira: o profeta do apocalipse anuncia crise...

Today's Monitor, Mar 28, 2014

Nouriel Roubini

SPOTLIGHT

Brazil: Has it Hit Bottom?

This is part of a series of Spotlights updating our views on the global economy and asset markets this year and next. Bottom line: Brazil’s growth outlook has marginally worsened in the face of persistent constraints: A lack of domestic drivers, an extended monetary-tightening cycle, depressed investor confidence and insufficient policy responses. Despite better-than-expected Q4 GDP numbers, a rough start to the year and a probable extension of the Brazilian Central Bank’s (BCB) hiking cycle into 2015 have prompted us to revise our 2014 and 2015 growth forecasts downward. Our end-2014 forecast for the Brazilian real still stands at 2.4 to the dollar—unchanged from our forecasts last year. Following the BCB’s February decision, we now see the key interest rate (the Selic rate) reaching 11% by year-end, but near-term real appreciation could allow the BCB to take a marginally more dovish stance. Our October presidential election scenario remains mostly unchanged: President Dilma Rousseff is the favorite, but the opposition still has a serious chance of scoring a victory. Although policy making would be more pragmatic and market-friendly under the latter scenario, we would also expect a second Rousseff administration to correct some of its previous blunders. What has changed: Brazil’s GDP numbers surprised to the upside in Q4, but the start of the year was marked by anxieties about the risk of contagion from the turmoil in Argentina and signs of China’s deceleration. All in all, recent developments have led us to slightly revise down our forecasts for 2014 (which were already pessimistic) and 2015 (which remain somewhat optimistic). At the turn of the year, the real was seen as one of the most fragile emerging market currencies—especially following Argentina’s devaluation and the release of China’s soft December PMI reading—but it has recently regained some strength. We now expect the Selic to end the year at 11% (we were expecting 11.25% before the February decision), but recognize the final 25-bp hike we expect in April will depend on the strength of incoming data.  Us vs. consensus: Consensus projections for Brazil’s 2014 growth have steadily fallen over the past few months, but should rise when Q4 data are factored in. As a result, our once-below-consensus forecast is now mostly in line with analysts’ estimates, but will settle slightly below consensus after the revision cycle. Despite our 2015 GDP growth projections, we remain significantly above consensus for next year due to our expectation of a post-election improvement in policy making. On monetary policy, our projection for the Selic has gone from above consensus to generally in line with consensus, although markets continue to price in too many hikes.    Macroeconomic Dynamics Despite generally disappointing data for industrial production and retail sales in late 2013, Q4 GDP surprised to the upside (0.7% q/q), providing additional statistical carry-over for 2014. However, a bumpy start to the year has led us to marginally reduce our 2014 GDP forecast. Even if exports provide a lift to growth this year on a weaker real, we see little room for consumption to be much stronger than it was in 2013, and the temporary factors that drove investment last year (scheduled projects, base effects) will not re-occur. Tighter financial conditions and political uncertainty in the run-up to the October elections have also made for a bleaker growth outlook.    Recent inflation readings came in marginally below our expectations, prompting a small revision to our average inflation forecast for the year (from 6.2% y/y to 6.0%); however, elevated inflation expectations, a weaker real (on average), high services-sector inflation and increases in regulated prices all continue to paint a poor picture for the CPI. The BCB’s lack of credible inflation-targeting framework (the official 4.5% goal has not been actively pursued for the past few years) is feeding into elevated inflation expectations (5.7% y/y in 2015), and bringing these down would require changes in both monetary and fiscal policy (particularly the latter). On average, the real will be weaker in 2014 than it was in 2013, although we may not see much more depreciation from current levels. The weak currency will help rein in Brazil’s wide current account gap, but we still expect a deficit of over 3.0% of GDP for 2014. Policy Implications Following the BCB’s 25-bp Selic hike in February, we now expect a final 25-bp increase in April. Given our call for emerging market capital flows to stabilize through the year and for the real to weaken marginally (supported by very high nominal and real rates), we also see a less worrisome external financing scenario, while the domestic growth scenario has worsened. These two factors have kept the BCB from adopting a more hawkish stance, despite elevated inflation expectations. We highlight that the currency remains a key variable to watch. Coupled with investors’ negative assessment of Brazil’s past policy choices, the prospect of a credit-rating downgrade this year led the government to announce a budget cut in February. Although the move is a step in the right direction, Brazil’s low-growth scenario impairs implementation.

Roubini Views on Critical Issues

Our views on the most important economic issues, with a selection of alternative insight from various sources

The Reserve Bank of India: No change expected from the April meeting

Brazil’s rating downgrade: does this mean anything?

The end to Hungary’s marathon easing cycle – Are we there yet?

Historiadores exageram nas analogias - Niall Ferguson e Nouriel Roubini

Mesmo historiadores sensíveis, como Niall Ferguson, e economistas sensatos, como Nouriel Roubini (mas ele já cometeu algumas impropriedades, ao acreditar que Marx estava certo ao prever as crises capitalistas), podem se deixar fascinar por falsas analogias da história.
Todos, na verdade, são tentados a comparar a crise atual com a de 1929, que por sua vez deslanchou a crise bancária de 1931 e precipitou o mundo na grande depressão dos anos 1930.
Os dois autores deste artigo, aliás interessante, acreditam que a atual crise bancária europeia poderia levar para a ruptura da democracia na região, o que não só é totalmente falso, como francamente ridículo.
Enfim, eles têm direito de fazerem as analogias que desejam, mas existem regras para isso, e devemos comparar o que é comparável.
Ora, a Europa atual, e o capitalismo de nossos dias, assim como o papel dos Estados, e dos bancos centrais, são totalmente diferentes do que tínhamos nos anos 1920 e 30.
Em todo caso, vale a leitura, se deixarmos de lado esses alertas totalmente desprovidos de fundamento.
Paulo Roberto de Almeida 

Der Spiegel, 06/12/2012

 

The Perils of Ignoring HistoryThis Time, Europe Really Is on the Brink

A Commentary by Niall Ferguson and Nouriel Roubini

FROM DER SPIEGEL

• 
  The article you are reading originally appeared in German in issue 24/2012 (June 11, 2012) of DER SPIEGEL.

DPA

People line up outside the Postscheckamt in Berlin to withdraw their deposits in July 1931. The 1931 European banking crisis contributed directly to the breakdown of democracy.

The European Union was created to avoid repeating the disasters of the 1930s, but Germany, of all countries, has failed to learn from history. As the euro crisis escalates, Berlin should remember how the banking crisis of 1931 contributed to the breakdown of democracy across Europe. Action is urgently needed to stop history from repeating itself.

Is it one minute to midnight in Europe?

The failure of German public opinion to grasp the dire state of affairs in Europe today is inviting a repeat of precisely the crisis of the mid 20th century that European integration was designed to avoid.

With every increase in the probability of a disorderly Greek exit from the monetary union, the pressure on the Spanish banks increases and with it the danger of a Mediterranean-wide bank run so big that it would overwhelm the European Central Bank. Already there has been a substantial re-nationalization of the European financial system. This centrifugal process could easily continue to the point of complete disintegration.

We find it extraordinary that it should be Germany, of all countries, that is failing to learn from history. Fixated on the non-threat of inflation, today's Germans appear to attach more importance to the year 1923 (the year of hyperinflation) than to the year 1933 (the year democracy died). They would do well to remember how a European banking crisis two years before 1933 contributed directly to the breakdown of democracy not just in their own country but right across the European continent.

Astonishingly few Europeans (including bankers) seem to remember what happened in May 1931 when Creditanstalt, the biggest Austrian bank, had to be bailed out by a government that was itself on the brink of insolvency. The ensuing European bank crisis, which saw the failure of two of Germany's biggest banks, ushered in the second half of the Great Depression. If the first half had been dominated by the American stock market crash, the second was all about European banks going bust.

What happened next? The banking crisis was followed by President Hoover's one-year moratorium on payment of World War I war debts and reparations. Nearly all sovereign borrowers subsequently defaulted on all or part of their external debts, beginning with Germany. Unemployment in Europe reached an agonizing peak in 1932: In July of that year, 49 per cent of German trade union members were out of work.

The political consequences are well known. But the Nazis were only the worst of a large number of extremist movements to benefit politically from the crisis. "Anti-system" parties in Germany -- including Communists as well as fascists -- had won 13 percent of votes in 1928. By November 1932, they won nearly 60 percent. The far right also fared well in Austria, Belgium, Czechoslovakia, Hungary and Romania. Communists gained in Bulgaria, France and Greece.

The result was the death of democracy in much of Europe. While 24 European regimes had been democratic in 1920, the number was down to 11 in 1939. Even bankers know what happened that year.

Those of us who repeatedly warned in the 1990s that the experiment of monetary union would end badly would be gloating now -- if we were not so troubled by the prospect of history repeating itself.

Losing Faith

What is the situation today? Europe's periphery is in depression. According to the IMF, gross domestic product will contract this year by 4.7 percent in Greece and 3.3 percent in Portugal. Unemployment is 24 percent in Spain, 22 percent in Greece and 15 percent in Portugal. Public debt already exceeds 100 percent of GDP in Greece, Ireland, Italy and Portugal. These countries, along with Spain, are now effectively shut out of the bond market.

Now comes the banking crisis. We have warned for more than three years that continental Europe needed to clean up its banks' woeful balance sheets. Next to nothing was done. In the meanwhile, a silent run on the banks of the euro zone periphery has been underway for two years now: cross-border, interbank and wholesale funding has rolled off and been substituted with ECB financing; and "smart money" -- large uninsured deposits of high net worth individuals -- has quietly exited Greek and other "Club Med" banks.

But now the public is finally losing faith and the silent run may spread to smaller insured deposits. Indeed, if Greece were to exit, a deposit freeze would occur and euro deposits would be converted into new drachmas: so a euro in a Greek bank really is not equivalent to a euro in a German bank. Greeks have withdrawn more than €700 million ($875 million) from their banks in the past month.

More worryingly, there was also a surge of withdrawals from some Spanish banks last month. On a recent visit to Barcelona, one of us was repeatedly asked if it was safe to leave money in a Spanish bank. This kind of process is potentially explosive. What today is a leisurely "bank jog" could easily become a sprint for the exits. Indeed, a full run on other PIIGS banks would be impossible to avoid in the event of a Greek exit. Rational people would ask: Who is next?

In the meantime, the credit crunch in the euro-zone banks on the periphery remains severe as banks -- unable to achieve the new 9 percent capital targets by raising private capital -- are selling assets and contracting credit, thus making the euro-zone recession more severe. Fragmentation and balkanization of banking in the euro zone, together with domestication of public debt, is now well underway.

The process of political fragmentation is also speeding up. In the last Greek elections, seven in 10 voters cast their ballots for smaller parties opposed to the austerity program imposed on Greece in return for two EU-led bailouts. Established parties are also losing out to splinter parties in Italy, where the comedian Beppe Grillo's Five Star Movement has just won control of the city of Parma, and in Germany, where a maverick party called the Pirates is all the rage. Less frivolous populists now have substantial support in France, the Netherlands and Norway. This trend is ominous.

Reducing Moral Hazard

The way out of this crisis seems clear.

First, there needs to be a program of direct recapitalization -- via preferred non-voting shares -- of euro-zone banks both in the periphery and the core by the European Financial Stability Facility (EFSF) and its successor the European Stability Mechanism (ESM). The model should be the US's successful Troubled Asset Relief Program (TARP).

The current approach of recapping the banks by the sovereigns borrowing from domestic bond markets -- and/or the EFSF -- has been a disaster in Ireland and Greece. It has led to a surge of public debt and made the sovereign even more insolvent while making banks more risky as an increasing amount of the debt is in their hands.

Direct capital injections would bypass the sovereign and avoid the surge in public debt. In practice, the euro-zone taxpayer would become a shareholder in euro-zone banks and the current balkanization of banking would be partially reversed. This might also help overcome the political resistance to cross-border mergers and acquisitions in coddled domestic banking systems.

Of course, over time, sound banks that restore capital through earnings would be able to buy back the public preferred shares. So this partial nationalization would be temporary.

Second, to avoid a run on euro-zone banks -- a certainty in the case of a "Grexit" and likely in any case -- a EU-wide system of deposit insurance needs to be created.

To reduce moral hazard (and the equity and credit risk undertaken by euro-zone taxpayers through the recap and the deposit insurance scheme), several additional measures should also be implemented:

• The deposit insurance scheme has to be funded by appropriate bank levies: This could be a financial transaction tax or, better, a levy on all bank liabilities -- both deposits and other debt claims.
• To limit the potential losses for euro-zone taxpayers, there needs to be a bank resolution scheme in which unsecured creditors of banks -- both junior and senior -- would take a hit before taxpayer money is used to cover bank losses.
• Measures to limit the size of banks to avoid the too-big-to-fail problem need to be undertaken. In the case of Bankia, the merger of seven smaller caixas merely created a bank that was too big to fail.
• We also favor an EU-wide system of supervision and regulation. If the euro-zone taxpayer backstops the capital and deposits of euro-zone banks, then supervision and regulation cannot remain at the national level, where political distortions lead to less than optimal oversight of banks.

True, European-wide deposit insurance will not work if there is a continued risk of a country leaving the euro zone. Guaranteeing deposits in euros would be very expensive as the exiting country would need to convert all euro claims into a new national currency, which would swiftly depreciate against the euro. On the other side, if the deposit insurance holds only if a country doesn't exit, it will be incapable of stopping a bank run. So more needs to be done to reduce the probability of euro zone exits.

Part 2: No Alternative to Debt Mutualization

Specifically, three actions are needed:

• Fiscal austerity policies should not be excessively front-loaded while structural reforms that accelerate productivity growth should be sped up.
• Economic growth needs to be jump-started in the euro zone. Without growth, the social and political backlash against austerity will be overwhelming. Repaying debt cannot be sustainable without growth.
• The policies to achieve this include further monetary easing by the ECB, a weaker euro, some fiscal stimulus in the core, more bottleneck-reducing and supply-stimulating infrastructure spending in the periphery (preferably with some kind of "golden rule" for public investment), and wage increases above productivity in the core to boost income and consumption.

Finally, given the unsustainably high public debts and borrowing costs of certain member states, we see no alternative to some kind of debt mutualization.
There are currently a number of different proposals for euro bonds. Among them, the German Council of Economic Experts' proposal for a European Redemption Fund (ERF) is to be preferred -- not because it is the optimal one but rather because it is the only one that can assuage German concerns about taking on too much credit risk.
The ERF is a temporary program that does not lead to permanent euro bonds. It is supported by appropriate collateral and seniority for the fund and has strong conditionality. The main risk is that any proposal that is acceptable to Germany would imply such a loss of national fiscal policy sovereignty that it would be unacceptable to the euro-zone periphery, particularly Italy and Spain.
Giving up some sovereignty is inevitable. However, becoming subject to a "neo-colonial" submission of one's fiscal policy to Germany -- as a senior periphery leader put it to us at a recent meeting of the Nicolas Berggruen Institute (NBI) in Rome -- is not acceptable.
Not Optional
Until recently, the German position has been relentlessly negative on all such proposals. German officials have repeatedly opposed the direct recapitalization of troubled banks. Chancellor Merkel has consistently ruled out euro bonds. Some German spokesmen have made it sound as if they actually want a Greek exit from the euro zone. Others have been over-eager to impose the same fiscal regime on Spain as has already been imposed on Portugal.
We understand German concerns about moral hazard. Putting German taxpayers' money on the line will be hard to justify if meaningful reforms do not materialize on the periphery. But such reforms are bound to take time. Structural reform of the German labor market was hardly an overnight success. By contrast, the European banking crisis is a financial hazard that could escalate in a matter of days.
We have tried to come up with proposals that address German anxieties. But we want to emphasize that action is urgently needed. Germans must understand that bank recapitalization, European deposit insurance and debt mutualization are not optional. They are essential steps to avoid an irreversible disintegration of Europe's monetary union. If Germans are still not convinced, they must understand that the costs of a breakup of the euro zone would be astronomically high -- for themselves as much as for anyone.
After all, Germany's current prosperity is in large measure a consequence of monetary union. The euro has given German exporters a far more competitive exchange rate than the old deutsche mark would have. And the rest of the euro zone remains the destination for 42 percent of German exports. Plunging half of that market into a new Depression can hardly be good for Germany.
Ultimately, as Chancellor Merkel herself acknowledged last week, monetary union always implied further integration into a fiscal and political union.
But before Europe gets anywhere near taking this historical step, it must first of all show that it has learned the lessons of the past. The EU was created to avoid repeating the disasters of the 1930s. It is time Europe's leaders -- and especially Germany's -- understood how perilously close they are to doing just that.

Economistas doidos: o caso especial de Nouriel Roubini

O sucesso, como se sabe, costuma subir à cabeça, inclusive dos melhores economistas.
Parece ser o caso, também, de Nouriel Roubini, tornado famoso depois que acertou a terceira previsão de crise do capitalismo, depois das dez anteriores que fez -- e pelas quais recebeu merecidamente a alcunha de Mr. Doom -- e que agora se tomou de amores por Karl Marx (que ele não deve ter lido, de verdade) e passou a dizer que o mercado não funciona mais.
Parbleu! Ele ficou maluco!
O mercado SEMPRE funciona, embora não no sentido desejado por ele, que talvez esperasse que o dito mercado se comportasse como em uma de suas previsões.
Se o mercado não funcionou como ele esperava, não adianta chamar Marx em seu socorro, ou reclamar do mercado, e sim reajustar suas previsões erradas, pois o mercado continua onde sempre esteve: funcionando direitinho, para remunerar uns, e punir outros, inclusive economistas metidos a besta que acham que sabem mais do que o mercado como este deve se comportar.
Eu creio que, tendo acertado, finalmente, três das dez crises que previu, Roubini vai começar a errar novamente, e seu valor de mercado vai inevitavelmente diminuir.
Sim, o mercado sempre se vinga daqueles que ousam afrontá-lo.
Vamos baixar o Roubini de Triple A, para B minus...
Mais um pouco ele fica na companhia de Karl Marx em matéria de previsões erradas sobre o capitalismo e a economia de mercado.
Menos, Roubini, menos...
Paulo Roberto de Almeida

CRISE
Roubini: mercado não está funcionando
Opinião e Notícia, 18/08/2011

'Nós pensamos que o mercado funciona. Ele não está funcionando', disse o economista

O economista Nouriel Roubini, professor da Universidade de Nova York e um dos poucos que previram a crise há quatro anos, disse em entrevista ao Wall Street Journal que uma das críticas feitas por Karl Marx ao capitalismo estava certa, e que o sistema experimenta hoje, na atual crise financeira, o efeito de suas contradições.

“Em certa altura o capitalismo pode destruir a si mesmo. Isso porque não se pode perseverar desviando a renda do trabalho para o capital sem haver um excesso de capacidade [de trabalho] e uma falta de demanda agregada. Nós pensamos que o mercado funciona. Ele não está funcionando. O que é racional individualmente é um processo autodestrutivo”.

‘Governos zumbis’
Roubini ressalta que as empresas, para economizar e fazer caixa em meio à crise, iniciam um processo que resulta em menos dinheiro nas mãos dos seus trabalhadores, deixando-os com menos dinheiro para gastar, o que por sua vez resulta na diminuição da receita das próprias empresas.

O economista considera que só uma outra etapa de massivo incentivo fiscal ou uma reestruturação da dívida universal pode tirar o mundo da crise. Sem isso, temos hoje ”economias domésticas zumbis, bancos zumbis e governos zumbis”.

Fontes: International Business Times - Nouriel 'Dr. Doom' Roubini: ‘Karl Marx Was Right’

Ouro, a reliquia barbara, segundo Keynes... e Roubini

Ninguém, na verdade, tem a solução perfeita para os dilemas monetários: seja ouro, seja "fiat money", como o criado pelos Bancos Centrais, todas essas "soluções" são falhas de uma ou outra forma. Isso ocorre simplesmente porque a economia é muito dinâmica para se acomodar com apenas um meio fixo e um único sistema de pagamentos: qualquer arranjo monetário é ou submetido aos acasos da geografia e aos imponderáveis da tecnologia (como o ouro), ou ele fica sujeito às manipulações políticas dos governantes (esses criadores de papel moeda).
Não existe moeda perfeita, ou estável, ou que reflita o verdadeiro "valor" das coisas. Seria preciso primeiro definir o que seja valor, algo eminentemente subjetivo...
Agrego um último comentário ao que disse Nouriel Roubini, mais abaixo:
"When you had a traditional gold standard, boom and bust with severe swings in economic activity were the norm-really big ones. It was only once we moved to fiat money that central banks were able to smooth the business cycle, and make it less volatile, as we did during the financial economic crisis."
Pois é, o padrão ouro deixa os ciclos mais duros e intratáveis. Mas essa confiança nos "Lords of Finance" -- faço aqui referência ao livro de Liaquat Ahmad, sobre os banqueiros centrais que mandavam no mundo dos anos 1920 -- me parece totalmente sem sentido também: essa coisa de que os bancos centrais podem "amolecer" os ciclos econômicos acaba redundando no que se viu em 1929 e em 2007: uma bolha financeira -- pode ser imobiliária ou de bolsa, também -- estourando e provocando uma crise de proporções monumentais. O Alan Greenspan que era saudado como "salvador do mundo" em 1997-98 foi o mesmo que criou a bolha de 2007, ao deixar os juros lá embaixo durante muito tempo. Nesse sentido, esse "amolecimento" criou as condições para um novo desastre.
Acreditar que banqueiros centrais, dotados do poder de "fiat money", seja pessoas oniscientes e sempre atuando corretamente é de uma ingenuidade gritante para quem é economista (ou simples cidadão).
Fico por aqui.
Paulo Roberto de Almeida

Roubini: Here's Why a Gold Standard Won't Work
CNBC, Tuesday November 9, 2010, 1:23 pm EST

A gold standard would just make business cycles more extreme, according economist Nouriel Roubini.

What's more, a gold standard would make central banks unable to fight inflation or deflation, much less do anything to combat persistent unemployement, Roubini said in an interview with NetNet yesterday.

"A fixed exchange regime, even if it is not a gold standard... That world just doesn't work. Because in that world, monetary policy by definition instead of being countercyclical becomes procyclical," Roubini told NetNet. "Suppose you have a fixed exchange rate regime...It just exacerbates the business cycle."

Roubini asks us to imagine two countries: One that's growing very quickly, and one that's growing very slowly.

The economy that is growing quickly would tend to "overheat"-an economic phenomenon characterized by accelerated growth, inflation, and the potential for asset bubbles. In the economy that is growing more slowly, there would be a tendency toward deflationary pressure and recession. So, instead of having a central bank with the capacity to successfully counter-balance these tendencies, an economy fixed exchange rate regime is to continue to reinforce the existing negative trends in the business cycle, Roubini argues.

Although he is best known as an economist who challenges conventional views, Roubini pretty well lines-up the consensus view of mainstream economics on the gold standard or fixed exchange rate regimes: "You have the opposite of what any optimal rule about monetary policy will tell you."

The ranks of the gold standard advocates, which have long included many Austrian economists and others worried about central bank manipulation of the money supply, were seemingly joined this week by World Bank President Robert Zoellick. Hardcore gold standard folks, however, are skeptical of Zoellick.

Nouriel Roubini agrees with the skeptics. "In fairness to him [Zoellick], he was speaking about a wide variety of issues in the global economy... So it was not a proposal centered around going back to some modified gold standard," Roubini said.

Roubini seems to think a gold standard is a pretty awful idea. "There are many fundamental problems with any variant of a gold standard," he said.

A general summary of Roubini's position on the issue would likely begin by saying that, generally speaking, a fixed exchange rate regime or gold standard limits the flexibility and range of actions that central banks can take to improve a nation's economy in fundamental ways. (For example, in a fixed exchange rate regime, central banks have less ability to maximize employment, stimulate growth, and manage price stability.) And, as Roubini specifically pointed out to me, fixed rate regimes inhibit the ability of banks to provide lender of last resort support to an economy when necessary.

According to Roubini, there are other major feasibility issues with the proposals for a transition to a global gold standard. One of the principal problems with such proposals is the current level of central banks' gold reserves.

Roubini raises the following question: If you are on a gold standard, or modified gold standard, what do you do in the event of a bank run-if you don't have enough gold to fully back the currency? Roubini explains that most central banks in today's economy have far greater financial liabilities than gold in reserve. In fact, according to Roubini, in the case of most central banks today that ratio is about 40 or 50 to 1.

Of course, many who support a gold standard would say that limiting the ability of central banks to increase their leverage would be a benefit of adopting the gold standard.

Aside from the issue of central banks insufficient current gold reserves, there are the issues that historically plagued gold standard economies. One of the most intractable of those issues was the impact that the gold standard had on traditional business cycles.

Historically speaking, Roubini says, during the days of the gold standard economies were constantly imperiled by spasmodic cycles: "When you had a traditional gold standard, boom and bust with severe swings in economic activity were the norm-really big ones. It was only once we moved to fiat money that central banks were able to smooth the business cycle, and make it less volatile, as we did during the financial economic crisis."

Of course, this directly contradicts Austrian business cycle theory, which argues that boom-bust cycles are caused by central banks departing from the gold standard.

In short, Roubini views challenge the Austrian economists where they live: at the intersection of monetary policy and the business cycle.

We eagerly await the response. Over to you Ron Paul and the Mises Institute!

Crisis Economics (2): trechos do livro de Nouriel Roubini

‘Crisis Economics’
By NOURIEL ROUBINI and STEPHEN MIHM
The New York Times Review of Books, May 6, 2010

Excerpted from Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini and Stephen Mihm. Reprinted by arrangement with The Penguin Press, a member of Penguin Group (USA), Inc. Copyright (c) May, 2010.

For the past half century, academic economists, Wall Street traders, and everyone in between have been led astray by fairy tales about the wonders of unregulated markets and the limitless benefits of financial innovation. The crisis dealt a body blow to that belief system, but nothing has replaced it.

That’s all too evident in the timid reform proposals currently being considered in the United States and other advanced economies. Even though they have suffered the worst financial crisis in generations, many countries have shown a remarkable reluctance to inaugurate the sort of wholesale reform necessary to bring the financial system to heel. Instead, people talk of tinkering with the financial system, as if what just happened was caused by a few bad mortgages.

Throughout most of 2009, Goldman Sachs chief executive Lloyd Blankfein repeatedly tried to quash calls for sweeping regulation of the financial system. In speeches and in testimony before Congress, he begged his listeners to keep financial innovation alive and “resist a response that is solely designed to protect us against the 100-year storm”.

That’s ridiculous. What we’ve experienced wasn’t some crazy once-in-a-century event. Since its founding, the United States has suffered from brutal banking crises and other financial disasters on a regular basis. Throughout the 19th and early 20th centuries, crippling panics and depressions hit the nation again and again. The crisis was less a function of sub-prime mortgages than of a sub-prime financial system. Thanks to everything from warped compensation structures to corrupt ratings agencies, the global financial system rotted from the inside out. The financial crisis merely ripped the sleek and shiny skin off what had become, over the years, a gangrenous mess.

The road to recovery will be a long one. For starters, traders and bankers must be compensated in a way that brings their interests in alignment with those of shareholders. That doesn’t necessarily mean less compensation, even if that’s desirable for other reasons; it merely means that employees of financial firms should be paid in ways that encourage them to look out for the long-term interests of the firms.

Securitization must be overhauled as well. Simplistic solutions, such as asking banks to retain some of the risk, won’t be enough; far more radical reforms will be necessary. Securitization must have far greater transparency and standardization, and the products of the securitization pipeline must be heavily regulated. Most important of all, the loans going into the securitization pipeline must be subject to far greater scrutiny. The mortgages and other loans must be of high quality, or if not, they must be very clearly identified as less than prime and therefore risky.

Some people believe that securitization should be abolished. That’s short-sighted: properly reformed, securitization can be a valuable tool that reduces, rather than exacerbates, systemic risk. But in order for it to work, it must operate in a far more transparent and standardized fashion than it does now.

Absent this shift, accurately pricing these securities, much less reviving the market for securitization, is next to impossible. What we need are reforms that deliver the peace of mind that the Food and Drug Administration (FDA) did when it was created.

Let’s begin with standardization. At the present time, there is little standardization in the way asset-backed securities are put together. The “deal structures” (the fine print) can vary greatly from offering to offering. Monthly reports on deals (“monthly service performance reports”) also vary greatly in level of detail provided. This information should be standardized and pooled in one place.

It could be done through private channels or, better, under the auspices of the federal government. For example, the Securities and Exchange Commission (SEC) could require anyone issuing asset-backed securities to disclose a range of standard information on everything from the assets or original loans to the amounts paid to the individuals or institutions that originated the security.

Precisely how this information is standardized doesn’t matter, so long as it is done: we must have some way to compare these different kinds of securities so they can be accurately priced. At the present time, we are stymied by a serious apples-and-oranges problem: the absence of standardization makes comparing them with any accuracy impossible. Put differently, the current system gives us no way to quantify risk; there’s far too much uncertainty.

Standardization, once achieved, would inevitably create more liquid and transparent markets for these securities. That’s well and good, but a few caveats also come to mind. First, bringing some transparency to plain-vanilla asset-backed securities is relatively easy; it’s more difficult to do so with preposterously complicated securities like Collateralized Debt Obligations (CDOs), much less chimerical creations like the CDO2 and the CDO3.

Think for a moment about what goes into a typical CDO. Start with a thousand different individual loans, be they commercial mortgages, residential mortgages, auto loans, credit card receivables, small business loans, student loans, or corporate loans. Package them together into an asset-backed security (ABS). Take that ABS and combine it with 99 other ABSs so that you have 100 of them. That’s your CDO. Now take that CDO and combine it with another 99 different CDOs, each of which has its own unique mix of ABSs and underlying assets. Do the math: in theory, the purchaser of this CDO is supposed to somehow get a handle on the health of 10m underlying loans. Is that going to happen? Of course not.

For that reason, securities like CDOs — which now go by the nickname of Chernobyl Death Obligations — must be heavily regulated if not banned.

In their present incarnation, they are too estranged from the assets that give them value and are next to impossible to standardize. Thanks in large part to their individual complexity, they don’t transfer risk so much as mask it under the cover of esoteric and ultimately misleading risk-management strategies.

In fact, the curious career of CDOs and other toxic securities brings to mind another, less celebrated acronym: GIGO, or “garbage in, garbage out”.

Or to use a sausage-making metaphor: if you put rat meat and trichinosis-laced pig parts into your sausage, then combine it with lots of other kinds of sausage (each filled with equally nasty stuff), you haven’t solved the problem; you still have some pretty sickening sausage.

The most important angle of securitization reform, then, is the quality of the ingredients. In the end, the problem with securitization is less that the ingredients were sliced and diced beyond recognition than that much of what went into these securities was never very good in the first place.

Put differently, the problem with originate-and-distribute lies less with the distribution than with the origination. What matters most is the creditworthiness of the loans issued in the first place.

Equally comprehensive reforms must be imposed on the kinds of deadly derivatives that blew up in the recent crisis. So-called over-the-counter derivatives — better described as under-the-table — must be hauled into the light of day, put on central clearing houses and exchanges and registered in databases; their use must be appropriately restricted. Moreover, the regulation of derivatives should be consolidated under a single regulator.

The ratings agencies must also be collared and forced to change their business model. That they now derive their revenue from the firms they rate has created a massive conflict of interests. Investors should be paying for ratings on debt, not the institutions that issue the debt. Nor should the rating agencies be permitted to sell “consulting” services on the side to issuers of debt; that creates another conflict of interests. Finally, the business of rating debt should be thrown open to far more competition. At the present time, a handful of firms have far too much power.

Even more radical reforms must be implemented as well. Certain institutions considered too big to fail must be broken up, including Goldman Sachs and Citigroup. But many other, less visible, firms deserve to be dismantled as well. Moreover, Congress should resurrect the Glass-Steagall banking legislation that it repealed a decade ago but also go further, updating it to reflect the far greater challenges posed not only by banks but by the shadow banking system.

These reforms are sensible, but even the most carefully conceived regulations can go awry. Financial firms habitually engage in arbitrage, moving their operations from a well-regulated domain to one outside government purview. The fragmented, decentralized state of regulation in the United States has exacerbated this problem. So has the fact that the profession of financial regulator has, until very recently, been considered a dead-end, poorly-paid job.

Most of these problems can be addressed. Regulations can be carefully crafted with an eye toward the future, closing loopholes before they open. That means resisting the understandable impulse to apply regulations only to a select class of firms — the too-big-too-fail institutions, for example — and instead imposing them across the board, in order to prevent financial intermediation from moving to smaller, less-regulated firms.

Likewise, regulation can and should be consolidated in the hands of fewer, more powerful regulators. And most important of all, regulators can be compensated in a manner befitting the key role they play in safeguarding our financial security.

Central banks arguably have the most power — and the most responsibility — to protect the financial system. In recent years, they have performed poorly. They have failed to enforce their own regulation, and worse, they have done nothing to prevent speculative manias from spinning out of control.

If anything, they have fed those bubbles, and then, as if to compensate, have done everything in their power to save the victims of the inevitable crash. That’s inexcusable. In the future, central banks must proactively use monetary policy and credit policy to rein in and tame speculative bubbles.

Central banks alone can’t handle the challenges facing the global economy. Large and destabilizing global current account imbalances threaten long-term economic stability, as does the risk of a rapidly depreciating dollar; addressing both problems requires a new commitment to international economic governance. The International Monetary Fund (IMF) must be strengthened and given the power to supply the makings of a new international reserve currency.

And how the IMF governs itself must be seriously reformed. For too long, a handful of smaller, ageing economies have dominated IMF governance. Emerging economies must be given their rightful place at the table, a move reinforced by the rising power and influence of the G20 group.

All of these reforms will help reduce the incidence of crises, but they will not drive them to extinction. As the economist Hyman Minsky once observed: “There is no possibility that we can ever set this right once and for all; instability, put to test by one set of reforms, will, after time, emerge in a new guise.” Crises cannot be abolished; like hurricanes, they can only be managed and mitigated.

Paradoxically, this unsettling truth should give us hope. In the depths of the Great Depression, politicians and policy-makers embraced reforms of the financial system that laid the foundation for nearly 80 years of stability and security. It inevitably unraveled, but 80 years is a long time — a lifetime.

As we contemplate the future of finance from the mire of our own recent Great Recession, we could do well to try to emulate that achievement. Nothing lasts forever, and crises will always return. But they need not loom so large; they need not overshadow our economic existence.

If we strengthen the levees that surround our financial system, we can weather crises in the coming years. Though the waters may rise, we will remain dry. But if we fail to prepare for the inevitable hurricanes — if we delude ourselves, thinking that our antiquated defenses will never be breached again — we face the prospect of many future floods.

Crisis Economics: o livro do momento - Nouriel Roubini

O livro do Mr Doom, em pessoa, o profeta do apocalipse financeiro...

Prophet-Making
By PAUL M. BARRETT
The New York Times Review of Books, June 17, 2010

CRISIS ECONOMICS
A Crash Course in the Future of Finance
By Nouriel Roubini and Stephen Mihm
353 pp. The Penguin Press. $27.95

In late March, the former Federal Reserve chairman Alan Greenspan told Al Hunt of Bloomberg Television that the financial crisis had been a “once in a century” shocker. “We all misjudged the risks involved,” Greenspan said. “Everybody missed it — academia, the Federal Reserve, all regulators.”

Well, not everyone. A number of prominent scholars warned long before the meltdown of 2008 that something awful was approaching. Greenspan and his successor, Ben Bernanke, chose to ignore the alarms.

One of the most articulate pessimists was Nouriel Roubini, nicknamed Dr. Doom by the news media. Roubini, a professor at the Stern School of Business at New York University, told an audience of fellow economists at the International Monetary Fund as early as Sept. 7, 2006, that the United States faced a cata­strophic housing bust, a crash in the market for mortgage-backed securities, the collapse of major investment banks and a deep recession. Most listeners seemed “skeptical, even dismissive,” Stephen Mihm reported in The New York Times Magazine. The moderator of the event joked, “I think perhaps we will need a stiff drink after that.”

Now Roubini is taking his victory lap. Writing with Mihm, an associate professor of history at the University of Georgia and the author of that admiring August 2008 Times Magazine profile, Roubini clearly relishes an I-told-you-so opportunity in his book “Crisis Economics: A Crash Course in the Future of Finance.” Why shouldn’t he? Readers hungry for more of the professor’s grim analysis will appreciate his erudition. Even people who aren’t finance buffs ought to read and heed his words.

To his credit, Roubini doesn’t merely recount how right he was. After a brisk recap of Wall Street’s scariest hours since the Great Depression, he turns to the question of the moment: how to prevent such debacles in the future?

That’s no graduate school exam question. As I write this, the United States Congress is trying to iron out kinks in a broad financial regulatory reform bill. Sadly, lawmakers have been debating halfway measures whose inadequacy becomes all the more striking in comparison with Roubini’s bracing agenda. His ideas aren’t all politically feasible, but that doesn’t make them any less sensible.

Roubini begins with an indisputable paradox. The government’s emergency rescue plan — the distasteful but necessary Wall Street bailouts and deficit-­enlarging stimulus spending — staved off global depression and brought about a dramatic stock market recovery. It also drained whatever fleeting political will existed to rein in Wall Street in a serious way. The surviving megabanks have brazenly paid out record bonuses, even though they owe their very survival to taxpayer largess.

Let’s start with those fingernails-on-the-blackboard bonuses. Roubini notes that the main problem isn’t their size, grating as that may be. The real trouble is that investment bank traders are paid huge bonuses for making reckless bets that yield short-term returns. They aren’t penalized when their gambling ultimately costs their employers money (or drives the firms out of business). This leads to a casino culture lacking common-sense caution. One potential remedy: put bonuses into a pool held in escrow for several years. If a trader’s record proves solid, he or she gets a payout. If not, the bonuses are nullified. Greater prudence would kick in, and, not coincidentally, overall compensation would shrink.

Only government could impose across-the-board pay reform. Since Wall Street would have collapsed without the ­taxpayer-financed rescue, Roubini says, Congress should have mandated a ­bonus-escrow system as a condition of the bailouts. Mesmerized by Wall Street campaign dollars and terrified of being branded “socialists,” lawmakers never seriously considered the idea. It didn’t help that President Obama surrounded himself with bank-friendly economic advisers like Lawrence Summers and Timothy ­Geithner.

The sorry performance of the three major private credit-rating agencies — Standard & Poor’s, Moody’s Investors Service and Fitch Ratings — played a critical role in the financial mess. Over and over, they stamped AAA ratings on the sausage-like securities made up of poisonous minced mortgages. Congress has debated imposing modest new requirements that the rating agencies make their operations more transparent. Roubini demands more drastic action. He would have government end the tradition of the sausage-making investment bankers paying the raters for their grades, a whopping conflict of interest if ever there was one. Roubini recommends that the agencies should be limited to accepting pay from investors in securities. Further, he urges a smart deregulatory move: removal of the agencies’ certification by the Securities and Exchange Commission as “nationally recognized statistical rating organizations.” This publicly blessed oligopoly, intended to maintain high standards, has only inhibited competition that would bring down the price of security-rating services.

Lawmakers have been debating provisions that would shed some additional light on the opaque market in derivatives. Those are the voluminous Wall Street deals that were supposed to dilute risk by spreading it but instead contributed to a risk epidemic. Heck, Roubini writes, let’s just identify the most dangerous ones and ban the suckers. He nominates credit default swaps, the quasi-insurance policies sold by American International Group, among others, which paid off when designated bonds went bad. Since we don’t allow people to insure their neighbors’ houses against fire, for fear of encouraging arson, why allow traders to bet on bonds blowing up? We shouldn’t.

Eliminating all bad loans will never happen. Since banks will always make mistakes, Roubini argues, they should be required to retain more capital and maintain higher levels of liquid assets (cash and securities that can be sold quickly). The legislation under consideration by Congress would authorize regulators to stiffen capital and liquidity rules. But the legislation would leave it to regulators to provide specific numbers. Roubini wouldn’t give the civil servants so much discretion.

Capital requirements are connected to Roubini’s most radical suggestion. He would force financial conglomerates to retain capital relative to all the risks posed by their various units. “This requirement would reduce leverage and, by extension, profits,” he writes. “Ideally, sending the message that bigger isn’t better would lead these firms to break themselves up.”

That’s right, break themselves up. Unfortunately, the implicit assumption that some banks have grown “too big to fail” has become explicit. Roubini maintains that we should pressure the biggest of them to contract, until they’re small enough that their demise wouldn’t bring down the rest of Wall Street.

With the federal safety net removed, an organization like Citigroup would act more prudently. Repeatedly rescued by the government since the Great Depression, Citigroup shouldn’t continue in its current unmanageable form, Roubini asserts. “Any bank that needs that much help doesn’t deserve to exist.” If Citigroup’s board of directors doesn’t share this view, the N.Y.U. economist advocates legislation that would authorize regulators “to break up banks and other financial institutions that are so large, leveraged and inter­connected that their collapse would pose a danger to the entire financial system.” The plutocrats might well perk up and do the job themselves.

Dr. Doom operates far beyond the horizon of what most experts consider plausible. Based on his track record, we would be wise to catch up to him.

Paul M. Barrett is an assistant managing editor at Bloomberg Businessweek.

Excerpt: ‘Crisis Economics’ (May 7, 2010)

Nouriel Roubini, o economista que previu a crise financeira

Apenas a título de informação sobre um dos economistas mais famosos da atualidade

Nouriel Roubini, el economista que predijo el crack financiero
Gillian Tett
El Cronista.com, Mon, 14 June 2010

Nació en Turquía y vive en Estados Unidos. Fue uno de los pocos intelectuales que pronosticó el colapso bancario. Antes fue criticado por alarmista cuando lo llamaban Dr Funesto. Hoy es uno de los gurús más prestigiosos y toda una celebridad hollywoodense.

El hotel Soho Grand de la neoyorquina Tribeca parece un set de filmación. Dominan la espaciosa recepción las columnas de concreto, las esculturas de metal y amplios sofás de cuero, que la gente elegante, de belleza inalcanzable decora con su presencia.

No parece ser el lugar para encontrarse a desayunar con un académico en Economía. Pero Nouriel Roubini no es el intelectual promedio. Hasta que comenzó la crisis financiera hace tres años Roubini se había dedicado a analizar la economía y a escribir obras como “Ciclos políticos yMacroeconomía” (1997) o “La nueva arquitectura financiera internacional” (coedición, 2005). También dio una serie de discursos referidos a la fragilidad del mundo de los bancos que fue tan agria que le valió el mote de Dr Doom (el Dr. Funesto).

Pero en 2007 se produjo un cambio inesperado. La crisis financiera estalló y, casi de la noche a la mañana, el mundo se dio cuenta de que él era uno de los pocos economistas que había anticipado un colapso bancario de tal magnitud. En la actualidad los líderes del mundo se sujetan de sus palabras, los periodistas van en tropel a sus discursos para enterarse de los últimos anticipos y los clientes pagan sumas altísimas a cambio de los análisis de su consultora Roubini Global Economics.

Su influencia fue más allá del mundo de los negocios y llegó hasta Hollywood. Aparece, representándose a sí mismo, en “Wall Street: Money Never Sleeps”, el próximo filme de Oliver Stone, que continúa la parábola de mercados enloquecidos de la década de los años ochenta, y también en “Inside Job”, un documental narrado por Matt Damon que se estrenará próximamente. Es algo así como un intelectual para enmarcar: su página de Facebook tiene muchas fotos de Roubini en fiestas llenas de estrellas, en general, acompañado de un grupo de mujeres de gran hermosura y juventud. Les encanta la belleza de mi mente... Soy feísimo, pero mi cerebro las atrae‘, le dijo a una sección de chismes el año pasado.

Pocos minutos antes de las ocho, el intelectual devenido en ídolo, de cincuenta y un años, llega a la recepción, vestido con un par de jeans de color negro y una camisa amarillo pálido con el cuello sin abotonar. Combina perfectamente con la decoración del hotel. La única nota disonante son sus zapatos de cuero marrón: sorprende cuán maltrechos están. ¿Es demasiado inteligente para preocuparse por la trivialidad de lustrarlos? O sencillamente, ¿confía demasiado en sí mismo como para que le importe? De cualquier modo, le da a este famoso economista un aire artístico un tanto raro.

Empiezo con: “¿Cómo se siente ser una celebridad?”. Él masculla: “La celebridad tan sólo es palabrería. La gente habla como si yo hubiera salido de la nada, como si todos estos años hubiera trabajado por cuenta en alguna oficina perdida antes de, repentinamente, volverme famoso. Pero eso no es cierto para nada. ¡Hace veinte años que trabajo de economista!”

Con indignación, repasa los detalles de su ejercicio profesional. Es inusitado. Nació en Estambul en 1959, de padres iraníes que profesaban la fe judía. Los primeros años de su vida los pasó en Irán; luego se mudaron a Italia, donde fue a la escuela y a la universidad. Más adelante, se mudó a los Estados Unidos y en Harvard se doctoró en Economía. Luego dio clases en Yale y en Nueva York. Roubini habla italiano, hebreo y persa, pero dice que sintió que en verdad había llegado a los Estados Unidos: “hace aproximadamente quince años, cuando comencé a soñar en inglés”. En este período también realizó trabajos para el Fondo Monetario Internacional (FMI), la Reserva Federal, el Banco Mundial, el Consejo de Asesores Económicos de la Casa Blanca y el Departamento del Tesoro, antes de poner en marcha su propia consultora.

Difícilmente ese sea el currículum de un don nadie. Pero en el otoño de 2006, mientras la economía mundial y los mercados de crédito estaban en auge, Roubini aún estaba lejos de ser un nombre reconocido cuando le advirtió al FMI: “es probable que los Estados Unidos enfrenten, por única vez, el estallido de la burbuja inmobiliaria, la conmoción en la industria del petróleo, la abrupta caída en la confianza del consumidor y, finalmente, una profunda recesión”, además, que “los propietarios no cumplan los pagos de las hipotecas, y que billones de dólares en títulos garantizados con hipotecas fallen en todo el mundo y el sistema financiero global se detenga repentinamente”. Era una apuesta muy audaz; tanto, que muchos líderes y economistas creyeron que Roubini estaba un poco loco.

En realidad, cuando Roubini fue el Foro Económico Mundial que se reunió en Davos, en enero de 2007, e hizo estos anuncios, no se le prestó atención a sus advertencias. Lo conocí en este resort montañés de aire enrarecido, y recuerdo muy bien nuestro encuentro. Durante los meses anteriores, yo también había empezado a escribir sobre los peligros de las finanzas complejas (si bien de un modo mucho menos elocuente e impresionante que el de Roubini), y esos artículos desencadenaron las críticas de algunas de los luminares reunidos en Davos, que me tacharon de ser “alarmista”. Pese a que no nos habíamos conocido -y habíamos hablado poco desde que lo hicimos-, Roubini defendió vigorosamente mis artículos en un soleado almuerzo muy concurrido que se ofreció en un hotel suizo. Le expresé mi agradecimiento; los agoreros eran muy pocos en ese entonces.

Riendo, Roubini señala: “Lo recuerdo”. Luego evoca, no sin enojo, el artículo que Michael Lewis, autor del ensayo “Liar’s Poker” (1989) y de “The Big Short” (2009), que escribió en esa reunión de Davos, en la que se llamó debiluchos y sosos a los agoreros como Roubini. “Sorprende el modo como algunas personas cambiaron su forma de pensar”, afirma y añade con mordacidad, “Ahora todos son generales después de la batalla”.

Con el profesor de historia económica Stephen Mihm, Roubini es coautor de un libro que trata el colapso bancario, “Crisis Economics”, que aspira a responder a la pregunta de ¿por qué el mundo perdió el control en 2007? y sugiere qué es lo que puede hacerse para subsanarlo. A primera vista, parece dedicarse a la misma temática que los libros originados en el aprieto económico, que en la actualidad los economistas producen en serie. Sin embargo, lo que distingue a esta obra es que Roubini puede afirmar que entendió lo que sucedía antes de que sobreviniera el desastre, a diferencia de casi cualquier otro economista, con la excepción de William White y Claudio Borio del Banco de Pagos Internacionales (BPI). Le pregunto qué fue lo que le dio certeza de que estaba en lo correcto. Me explica: “Después de diez años de analizar los mercados emergentes, sé que Uds. tienen patrones que se repiten una y otra vez. Una burbuja es como el fuego, que precisa oxígeno para seguir ardiendo... cuando ya no hay oxígeno, las cosas cambian”. Más concretamente, en el verano de 2006, Roubini ya veía que el mercado inmobiliario había alcanzado su pico. Eso lo convenció de que el sistema estaba a punto de colapsar, porque había mucha deuda hipotecaria.

Siguió dando advertencias desde el colapso financiero. A principios de 2009, sostuvo que la crisis bancaria podría no haber llegado a su fin. También insinuó que había una probabilidad del 20% de una W (nueva caída en la recesión), a causa de que el crecimiento estadounidense sería muy débil. De hecho, la economía de los EE.UU. se recuperó más rápidamente que lo esperado y también subió el valor de las acciones de los bancos. Por todo ello, algunos rivales se regodean en decir que lo que Roubini tuvo en su mensaje de 2006 fue, simplemente, suerte. Pese a ello, Roubini replica con rapidez que aún es demasiado pronto para concluir que la economía mundial camina hacia la recuperación. Y al menos un mensaje de los que envió últimamente estuvo en lo cierto: durante el año pasado, advirtió repetidas veces sobre los peligros de acechar la deuda soberana. En especial, cree que las dificultades que hay en Grecia son reflejo del problema mayor que enfrenta el mundo occidental, pues parece que los gobiernos no tienen la voluntad de tratar de resolver la deuda gubernamental creciente.

“En la actualidad, lo que en verdad me preocupa sobre los EE.UU. es que tienen estancamiento político”, afirma Roubini y sostiene que esto evita que el gobierno tome las decisiones arduas que se necesitan. “El Reino Unido tiene el mismo problema. No hay una voluntad real de recortar gastos o aumentar los impuestos”. En consecuencia, “habrá tentación de seguir monetizando el déficit fiscal”, lo que finalmente produce inflación.

Para detener esos riesgos, Roubini quiere que los líderes cooperen con la línea de los partidos y que dejen atrás las antiguas etiquetas ideológicas de la “derecha” y la “izquierda”. “Crecí en la Italia de la década de los años sesenta y setenta, y fue un período de mucha agitación social, en la que hasta los adolescentes más jóvenes estaban en política. En ese momento, era un más de centroizquierda”, afirma. En la actualidad, es de centro por lo que respecta a las cuestiones económicas, pues cree que los gobiernos precisan gastar durante una crisis, de modo de respaldar el sistema, lo que está de acuerdo con el pensamiento económico keynesiano; sin embargo, cree que, cuando la crisis llega a su fin, deben cambiar por los enfoques de libremercado, y así refleja los principios de la denominada Escuela Austríaca de Economía. “Hay una gran discusión entre la escuela keynesiana y la austríaca. Pero soy pragmático y ecléctico. Se trata del momento oportuno”.

Entonces, en su opinión, la gente, ¿donde debería invertir en este momento? ¿Qué es lo que él hace? Evasivo, responde: “Jamás compré siquiera una acción, un bono o divisa. Tengo mi 401k (plan de ahorro y aporte jubilatorio) en un fondo de tipo pasivo, que tiene el 100% de inversiones en acciones, la mitad de Estados Unidos y la otra mitad de otras partes. El resto de los ingresos que percibí en los últimos años está en dinero. En algún momento, volveré a los activos que involucren un riesgo mayor, mas no ahora”. Insinúo que esta cautela parece propia del Dr. Doom. No está de acuerdo. “Como apodo, Dr. Doom era lindo y me gustó durante un tiempo, pero en lo que ahora insisto es que soy el Dr. Realist (Dr. Realista)”.

En otras palabras, Roubini ahora quiere que se lo conozca como el sabio que puede dar consejos provechosos y prácticos, en vez del que es capaz de anticipar el desastre. Ciertamente, el día que nos conocimos él había escrito un artículo para el FT, en el que acuciaba a Europa a permitir que Grecia reestructurase su deuda. Y recién regresó de Washington, donde se entrevistó con un grupo de ministros de finanzas y banqueros centrales de Occidente. “Lo que me importa es que, cuando escribo algo, la gente me escuche. Les doy mi sabiduría, con independencia de que coincidan con ella o no”.

Mientras le agrega cucharadas de yogur a la granola, voy directo al grano. ¿Cómo es posible que esta elevada “sabiduría” económica conviva con la fama que recientemente descubrió y lo catapultó a las noticias de chismes? Suspira: “La fama se volvió una carga; el horario es más exigido. La gente cree que viajar en avión a distintos lugares es glamoroso. Pero no lo es, pues aun cuando uno viaje en clase business y se hospede en hoteles fantásticos, uno está a 10.000 millas de su hogar”. Admite que está de viaje casi las tres cuartas partes de cada año; no sorprende saber que su nueva obra se escribió, en su mayor parte, a bordo de un avión.