Advanced economies, compared with emerging markets, have better fundamentals, but getting back to ‘normal' will be a multi-year process, says economist Nouriel Roubini.
Advanced economies, compared with emerging markets, have better fundamentals, but getting back to ‘normal’ will be a multi-year process, says economist Nouriel Roubini.
Nouriel Roubini (pictured) is an economist to be reckoned with. His outspoken and acerbic comments on the world's economic woes may have earned him the nickname Doctor Doom, but his pronouncements and forecasts are uncannily accurate.
Through Roubini Global Economics (RGE), an independent global macroeconomic and market strategy research company he co-founded, he has come into the orbit of hedge funds, advising some of the biggest names in the business.
It is no wonder hedge fund managers are eager for his opinions in order to understand the bigger economic picture. Roubini has advised US presidents, joining the Clinton administration in 1998 as a senior economist in the White House council of economic advisers and then later moving to the Treasury as a senior adviser to Timothy Geithner, then undersecretary for international affairs and now Treasury secretary in the Obama administration.
RGE, stresses Roubini, is not just him. The company provides global economic analysis on all the major economies of the world including advanced economies, emerging markets and some of the more exotic frontier ones. A strategy team essentially provides market ideas, asset implications and global asset allocation throughout all the major asset classes - equity, credit, foreign exchange and commodities - derived from the overall macroeconomic analysis. "It is a top-down approach to asset allocation," says Roubini. From this is derived the fundamental economic macroeconomic analysis.
Within that framework, Roubini expands on his own view of the world. This is what people are clamouring to hear. "Because the headwinds are coming from global forces, it's critical to have that global view. Bottom-up stock-picking becomes much harder."
Roubini believes his expertise is what hedge funds need. "Anybody who does any asset management needs to know and understand the macro and top-down - the linkages across countries and not just individual countries. You need to know what happens in Greece can affect the global economy and financial market. I think a macro global view is critical [for hedge funds]."