NYU Economist Nouriel Roubini has been on television or quoted elsewhere in the press at least 14,000 times in the past year or two. Astonishingly, journalists almost never seem to ask him the most interesting question: “So, Dr. Doom, are there any markets in the world that you actually like?”
A plausible theory is that the question has been asked, but Roubini has dodged it or refused to answer. And that’s exactly what I’d do if I were Dr. Doom. As Joe Weisenthal explains so eloquently in this post on Clusterstock, there almost no downside in being consistently negative about everything.
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.
And the shtick apparently works well with the babes too.
Leaving all of that aside…Bloomberg’s great Asia-based columnist Willie Pesek has finally uncovered a market that Roubini seems to like. And the winner is…
South Korea! Who knew?
Actually it’s not all that hard to understand, if you think about it.
The reason Roubini says Korea may grow more than 1.5 percent next year is the economic-policy changes made over the last 10 years. The 1997-1998 Asian crisis seemed like a curse at the time. It devastated the nation of 49 million and forced the government to accept a humiliating International Monetary Fund bailout.
Today, that experience is proving to be a blessing in disguise. The government assessed the magnitude of its problems and admitted how bad things were. It allowed weak companies and commercial and merchant banks to fail. It acted quickly to rid balance sheets of bad assets. As a result, Korea was the first Asian economy to recover from the crisis and repay the IMF.