Nouriel Roubini said in a Journal op-ed yesterday that the stress tests were a sham, the bank run-up was temporary, that financial sector losses would hit $3.6 trillion and that nationalization should not be on the table.
Sure, some of the points were salient, but the real subtext to the story was how little effect the piece had. The market didn’t react to it, as it might’ve back in February, and it hardly received any chatter in the media or even blogs.
Let’s face it: The market rebound has not been kind to Dr. Doom.
Granted, the wheels could totally fall off again and he may yet be proven right. But until there’s another cataclysmic event, Roubini’s star just won’t shine as bright as it did less than two months ago.
Now the arc of an uber-bear who misses the turn will look different than the arc of an uber-bull. A crash will render an uber-bull instantly irrelevant and mocked. They could be finished in one day. An uber-bear on the other hand, can maintain credibility and a cult following long after their predictions fail to come true. For one thing, negative people are just generally more respected by intellectuals and critics than positive people. For another, and this is key, you can never really prove a bear wrong.
They can bark at the moon for years and years for all different reasons, and when the crash comes, people will call them oracles. That was certainly the case with Roubini, who only honed in on the housing crisis after banging away on trade deficits for the longest time. Plus, there can always be another crash. You can’t prove there won’t be, so you can’t prove that they’re actually wrong. Ever.
Also, for what it’s worth, it really doesn’t matter that Roubini has made a few noises that were a little more optimistic lately. Even if he became wildly bullish it wouldn’t help. Roubini is Dr. Doom. That’s his role in the media. When the economy power ahead again, the news will find new stars to honour — not the guy mainly known for being dour.
And lest you think this is purely conjecture or “opinion” the charts actually prove this to be true. As Google Trends confirms, interest in searching for Roubini’s name has been on the decline all year.
Meanwhile, this hilarious chart from the blog Maoxian shows, it appears that Roubini perfectly caught the bottom of the market when he went on a much-talked about tour of the world.