Renowned economist Nouriel Roubini has revealed that global economies are experiencing more than just a “soft patch”, as problems in the US real estate market and the impasse over its budget shortfall have induced pessimism.
Mr. Roubini also mentioned that approximately half of all mortgaged homes will have their loans underwater in a year’s time.
He cited that current US home prices are already 33 percent below peak levels, mainly attributed to the decrease in demand and increase in supply, due to more foreclosures.
Mr. Roubini also voiced several concerns about the emerging markets, such as excessive credit growth and bubbles in asset prices. He added that policymakers are not hitting up interest rates swiftly enough to curb inflation.
“China is resisting excessive appreciation, and the rest in Asia and Latin America don’t want to lose market share to China — if China doesn’t want to move, I’m not going to move,” he quipped.
“No country in the world can be so productive. We’ll need something of a miracle this time around, but I’m somehow skeptical.”
Meanwhile, Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy, commented on Mr. Roubini’s take on China, saying, “One reason why China will not have a hard landing is because Nouriel Roubini said there would be a hard landing.”
“Given the quality of economic management in China, I think they will find solutions to this,” Mr. Mahbubani added.
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