The FT’s Gillian Tett has a very enjoyable piece on rockstar economist Nouriel Roubini, and what it’s like to be him in the new normal.
The context is a breakfast meeting at the uber-hip Soho Grand hotel.
Here’s the choicest bit, on the satisfaction of having been “right” about a coming crisis.
Indeed, when Roubini attended the World Economic Forum meeting in Davos in January 2007 to make similar prophesies, his warnings were widely dismissed. It was at this rarefied Swiss mountain resort that I first encountered him and I remember it very well. In the preceding months I had also started to write about the dangers of complex finance (albeit far less eloquently and dramatically than Roubini) and those pieces sparked criticism from some of the luminaries assembled at Davos, who accused me of being “alarmist”. Though we had never met before – and have barely talked since – at one sun-dappled lunch in a stuffy Swiss hotel Roubini forcefully defended my articles. I tell him I was grateful; vocal Cassandras were very thin on the ground back then.
“I remember that,” Roubini laughs. He then recalls, with irritation, a column written by Michael Lewis, author of the acclaimed Wall Street study Liar’s Poker (1989) as well as the recently published study The Big Short (2009), during that Davos meeting, which labelled Cassandras such as Roubini as “wimps” and “ninnies”. “It is amazing how some people have changed their views,” he says, adding acerbically that “there is a lot of Monday morning quarterbacking” now.
That Michael Lewis column in question would be this one titled: Davos is for Wimps, Ninnies, Pointless sceptics.
After bringing up the concerns expressed by Roubini (“The system is becoming complex.”), Steven Rattner (“The world isn’t pricing risk appropriately.”) and Stephen Roach (“What’s occurring right now in markets and policy circles is a dangerous degree of complacency.”), Lewis concluded:
So why do these people waste so much of their breath and, presumably, thought, with their elaborate expressions of concern? Even if these global financial elites knew something useful that you and I don’t — that, say, 50 hedge funds were about to go under and drag with them half the world’s biggest banks along with a third of the Third World — they would be unlikely to do anything about it.
And if they really believe the markets mispriced risk, or were about to adjust, they must also believe they could make vast sums of money if they quit their day jobs and opened a hedge fund to take the other side of stupid trades. But they don’t really believe that, or at least some of them would be off doing it, rather than spilling the beans to Bloomberg News.
Is perhaps the only point of standing in the snow and expressing your doubts to a television camera to prove that you are the sort of person whose doubts matter?
The funny thing is… even in retrospect, Lewis’ comments do stand up, especially given the vagueness of the warnings that so many folks made back then. Let’s be clear: Nouriel Roubini may have called for a crisis, and Stephen Roach may have been right to identify complacency in policy circles, but in terms of identifying useful themes about the timing and mechanism of the oncoming crisis, even the Davos doomsayers weren’t that helpful.
Anyway, back to Roubini, who opens up about the whole rockstar thing:
As he dollops yoghurt on to his granola, I cut to the chase. How does such lofty economic “wisdom” coexist with his new-found celebrity, gossip-column status? “Celebrity has become a burden,” he sighs, “there are more demands on your time. People think it is glamorous to fly places. But it is not – even if you travel business class and stay in wonderful hotels, you end 10,000 miles away from home.” He reckons that he spends two-thirds of each year on the road; unsurprisingly, the new book was mostly written on planes.
You should read the whole thing. At the end, it kind of sounds like Roubini is asking Gillian Tett on a date to Cannes.
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