...will be the Elaine Garzarelli of our time. Never heard of her? I didn't think so.
In case your eyes aren't glued to CNBC all day like mine , i.e. you have a life, Nouriel Roubini is the NYU economics professor that correctly "predicted" the current economic downturn. He's sometimes called "Dr. Doom" because he is just about the most pessimistic analyst out there. He is enjoying his fifteen minutes of fame, appearing on CNBC regularly, and being quoted just about everywhere else. He seems to love the attention and hasn't changed his story that things are bad and going to get worse. Give the man his due; he's been right so far. But...
Elaine Garzarelli was the sage of an earlier time. She correctly "predicted" the stock market crash of '87 and received a ton of attention, too. But since then, well, have you heard any of her predictions lately? Just like Norman Greenbaum, who sang "Spirit in the Sky" way back in 1970, she proved to be a one-hit wonder.
As everyone knows, good news gets buried in the inside of the newspaper while bad news makes the front page. When is the last time you read a story about a Boy Scout helping a little old lady across the street? Never? Similarly, optimistic forecasters don't attract as much attention as pessimistic ones. If at least one person is calling for a correction on any given day of the year, then eventually someone is going to get it right. Such was Garzarelli's luck. In the stock market rally from August, 1982 to October, 1987 Cassandras were calling for a correction nearly every day. Bestsellers abounded with the title "The Coming Crash of (fill in the year)." It's kind of like the old adage, "Live each day as if it's your last and one day you'll be right." So Garzarelli "predicted" the Crash of '87 and enjoyed her fifteen minutes of fame before falling back into obscurity.
I believe the same fate awaits Roubini. I don't doubt that he's a brilliant economist, but the fact is, there are a zillion brilliant economists and analysts out there. He was in the right place at the right time. This crisis won't last forever and I'll bet he doesn't forecast the rebound correctly. Remember, there's more fame in doom and gloom than cautious optimism. My guess is that in ten years or so he's only a footnote, just like Garzarelli is today.