REMEMBER NOURIEL ROUBINI? The New York University
economist was the lone voice six years ago on financial- news shows warning of a huge US real estate bubble that would burst so badly that it could shake the very foundations of the global financial system. Those days, of course, he was invited to business talk shows as some sort of comic relief, while investment banks pushed an array of mortgage-linked instruments as a sure way to riches. Hacks made fun of “his downbeat message, combined with an accent reminiscent of a James Bond villain”. Despite more dire warnings from mainstream economists who quietly joined Roubini’s cries of wolf, the US housing bubble just kept burgeoning.
Eventually, of course, the bubble did burst and Roubini the Cassandra morphed into Roubini the Sage. During the global financial crisis, you couldn’t change TV channels without staring at him on CNBC, Bloomberg TV and CNN or reading one of his op-ed pieces in The New York Times, Financial Times or The Wall Street Journal.
You see, Roubini is a prolific writer who can churn out highly opinionated stuff far faster than most professional hacks. Up until two weeks ago, he was still predicting further collapse in hou sing prices in the US. “If house prices are going to fall another 5% to 10%, ano ther eight million households are going to be in negative equity,” he was quoted as saying in November. “We are going to have another nasty crisis. Forget about subprime, look at prime.”
So, imagine the reaction when New York newspapers reported that “Dr Doom” was trading his New York loft close to the university where he teaches for a US$5.5 million ($7.1 million) luxury condo in Manhattan’s tony East Village. Roubini is putting down US$2.6 million cash for a 3,700 sq ft triplex penthouse and has locked in a low 3.62%-interest US$2.9 million mortgage. Just about everyone was agog. Was the man who correctly called the top of US housing market and was one of the first to predict the last bubble now calling the bottom with his daring property purchase? Or does Roubini just need a bigger pad for his wild weekend parties?
If you have just been watching CNBC or reading op-ed pieces in The Wall Street Journal, I’m afraid you don’t know the real Roubini. To be sure, Roubini has, in the words of one writer, “parlayed predictions of an economic bust into fame, rising fortune and a vigorous social life” in New York. Two years ago, just before it went belly up, Condé Nast’s business magazine Portfolio did a long offbeat profile of “Dr Doom”, complete with a big photo of him half-drunk, half-asleep, leaning at a bar in New York’s TriBeCa neighbourhood that trendy, young fashionistas 30 years younger are known to frequent. “Life is good for New York University’s party- boy economist, once regarded as a crank,” the piece said.
That brings me to my own interaction with the man. I first came across Dr Roubini in 1997 at the height of the Asian financial crisis as a journalist in Hong Kong. That was before Google went live and when Internet search engines were scrappy and unreliable. I had heard that a New York academic had begun to put together a fairly comprehensive database of news clippings and opinion pieces on the Asian crisis, including some of my own stories.
At first, it was hard to access his database, because someone had given me the wrong URL. Of course, these days, all it takes is to type his name in a search engine like Google. When I eventually accessed Roubini’s site, I realised that almost every piece I had written during the crisis was in there, but then so were thousands of other pieces from hundreds of publications and journalists around the world.
For journalists like me, Roubini’s Asian financial crisis website became a go-to site. I could read what my peers were writing on the subject. He was putting in a lot of reports, data and stuff that I could use in my stories or cross-check against information I was gathering. He was updating the site every day. Indeed, his now very lucrative consultancy, Roubini Global Economics or RGE, was actually built on that Asian financial crisis database.
I remember reaching him on the phone one night and having a conversation with him during the crisis. We talked for about 20 minutes. I remember trying to make sense of my notes after the conversation because he was just all over the place and I hadn’t been able to write everything down. Yet, he sounded like a very helpful, likeable, eccentric academic who seemed pleased that someone would bother to call him all the way from Hong Kong.
It was also the last time we spoke. Years later, when he became famous as an omnipresent commentator on CNBC and CNN, I pestered him with interview requests to no avail. I called his office, left messages on his machine and got no response. I guess hundreds of journalists are hounding him with similar requests and he has to be choosy these days. More recently, I have tried to contact him through his publisher for an interview about his book, only to be told he is too busy and not doing any more promotional interviews, certainly not with journalists based in Singapore.
Born in Turkey to Iranian Jewish parents, Roubini lived in Israel and Italy before relocating to the US. He went to Harvard for his PhD in international economics, worked for the IMF, the World Bank as well as the Clinton Administration before returning to academia. At NYU’s Stern Business School, he became a prolific op-ed writer and as early as 2004, began predicting the bursting of the US housing bubble, before subprime mortgage became popular. As a straight shooter not afraid of calling a spade a spade, Roubini may have antagonised a lot of people, but over the years he has won respect. He has been described as one of the most influential economists and thinkers in the US.
He is the kind of guy you might bump into at an airport bar, surfing furiously and answering his emails on his laptop or iPad. In a magazine interview some years ago, he described himself as a “global nomad”.
“You can be sitting still, surfing the Internet and [experiencing] other worlds, ideas and societies. But I’ve found that there is nothing better than visiting a different country, even if for three days. You can’t only be a virtual global nomad, with goggles on, in a virtual reality. You have to be there. You have to see it, smell it and live it,” he said.
Whichever way you look at it, Roubini has just placed a big bet on the US real-estate turnaround. As the US housing market turns over the next year or so, the economy will likely follow. Remember the old axiom: Look at not what people say but what they do. Roubini may still be talking about “negative equity” and “further price declines”, but his actions are telling.
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