New Forecast

The new forecast of Roubini October 13, 2009 from New York University, Nouriel Roubini, economist who was one of the few in anticipating the crisis subprime is known as Dr. Catastrofe. For this reason, everytime it is by issuing an opinion, markets tremble at their terrible prophecies. He has done again it and has pointed again to the American real estate market. Roubini prefers to be called Dr.

Realista. And in its realism, the Economist prefers to look at what the market refuses to do. The market certainly’s it not convenient to be cautious. The euphoria is generating important benefits to investors that after the crisis that made them lose billions of dollars, do not want under any point of view, that this financial veranito runs out. The market gave its verdict and advocates an unrealistic v-shaped economic recovery The markets are currently discounting a V-shaped recovery and must begin to deduct a U-shaped recovery, so he could observe one correction in the fourth or first quarters, Roubini told the Wall Street Journal. It gives the feeling that markets nor repaired in the fragility of the recovery and the risks which are still latent. The crisis gave rise to the need for a correction in the value of assets, correction that does not seem to have taken place as it should have been.

The euphoria that live markets is clearly reflected in the bags. The S & P 500 index rose 51% from the minimum level in 12 years that reached in last March. The European Dow Jones Stoxx 600 index on the other hand, accumulated an increase of 48%. The monetary policy of high liquidity and historically low rates levels generates an opportunity that can not miss the markets to recover profitability. If the context is allowing this risky growth markets, something must be done before it is too late.

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