January 24, 2008 12:41

Nouriel Roubini turns bullish, in a fashion

Last year, when Time's Board of Economists gathered for its annual debate in Davos (and no, Time doesn't really have a Board of Economists on an ongoing basis, we just gather them together every year here at the World Economic Forum), economist and superblogger Nouriel Roubini was the only gloomy voice in the crowd. As Peter Gumbel recounted in Time last January:

"Goldilocks is threatened by three bears," Roubini said — a housing recession, the beginning of a credit crunch and continued high oil prices. (He pointed out that, while it may be true that crude prices have fallen in the last few months, they are still high in historical terms.) Roubini was open in his use of language that others avoid: "I worry about a U.S. hard landing," he said.

He got that pretty spectacularly right. And so this year, people were paying a lot more attention to his words. As I recount in the story for the magazine that I was whining so much about yesterday:

"The debate is not whether we're going to have a soft landing or a hard landing in the U.S. but how hard the landing is going to be," says Nouriel Roubini, professor of economics at New York University. He sees a sharp, possibly year-long U.S. recession and a global slowdown

Nobody on the panel really disagreed with that negative assessment. Which got me thinking that, now that almost everybody agrees with the Roubinis and Steve Roaches of the world, it might be time to start discounting their opinions a bit.

This morning, as I sat on a comfy chair writing my post on Al Gore and Bono, I noticed that Roubini had settled in with his laptop a few comfy chairs away. So I sidled over and asked him if he thought maybe economic gloom had gotten too much in fashion.

He cited the five stages of grief (denial, anger, bargaining, depression, acceptance). "I think we’re getting into the depression stage, we’re going to go soon enough into acceptance," he said. "The mood here is pretty depressed. That sets the stage for acceptance and fixing the problems and moving on."

So are you turning bullish? I asked him. "At least we’re reaching the bottom point, or close to it," he said. "It’s a start."