NPR logo

Followers Prefer Dr. Doom When He's Full Of Gloom

  • Download
  • <iframe src="https://www.npr.org/player/embed/136669781/136669751" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Followers Prefer Dr. Doom When He's Full Of Gloom

Business

Followers Prefer Dr. Doom When He's Full Of Gloom

Followers Prefer Dr. Doom When He's Full Of Gloom

  • Download
  • <iframe src="https://www.npr.org/player/embed/136669781/136669751" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

Economics professor Nouriel Roubini was one of the few people to predict the 2008 financial crisis. After that, investors, central bankers and political leaders followed his views. On Wall Street, his gloominess earned him the title of Dr. Doom. What's he think about the economy now? Aaron Elstein, of Crain's New York Business, teamed up with member station WNYC for this report.

MARY LOUISE KELLY, host:

The economist Nouriel Roubini became a celebrity after predicting the collapse of the housing bubble, the market crash and the economic crisis of 2008. Top investors, central bankers and political leaders closely followed the views of Roubini, a New York University economics professor. His many gloomy predictions have earned him to title of Dr. Doom. But lately, his outlook has been sunnier, and that might not be so good for his own prospects.

Aaron Elstein of Crain's New York Business teamed up with member station WNYC in New York for this report.

Professor NOURIEL ROUBINI (Economics, New York University): There is no light at the end of the tunnel. And now there is a vicious circle, with the real economy contracting and the financial sector contracting, and everything is feeding on each other.

AARON ELSTEIN: That's Nouriel Roubini in full Dr. Doom mode, speaking on the "PBS NewsHour" the same day that Lehman Brothers filed for bankruptcy in 2008. And this is Roubini earlier this year, sounding a much more optimistic note at the World Economic Forum at Davos, Switzerland.

Prof. ROUBINI: There's a global economic recovery, both in advance economies and emerging markets. The risk of an outright double-dip recession in advanced economies and the risk of outside deflation are lower than they were last year.

ELSTEIN: Roubini thinks his audience will accept his move to the sunnier side. When I asked him about this, he argued he's no perma-bear about the economy: As the facts on the ground change, so will his views. The only way to maintain clients and credibility, he said, is to call things as you see them. Sounds sensible, but will it work?

Dr. ALBERT WOJNILOWER (Economist): I became known as Dr. Doom.

ELSTEIN: This Dr. Doom is Albert Wojnilower. Thirty years ago, he was one of the most widely followed analysts on Wall Street, earning his nickname because he warned accurately that rising interest rates would hurt stock prices. He was so influential that when he and another analyst known as Dr. Gloom, Henry Kaufman, changed their minds in the early 1980's and forecast better times ahead, it was page-one news in The New York Times.

Yet as Wojnilower's views got sunnier, his audience got smaller. His phone rang less often. His forecasts were as accurate and insightful as before, but people simply weren't as interested.

Dr. WOJNILOWER: There is a certain kind of typecasting. So far as the clientele was concerned, they were disappointed whenever I didn't deliver end-of-the-world kind of forecasts.

ELSTEIN: Is today's Dr. Doom doomed to lose his audience in the same way? One sign Roubini no longer holds the sway he once had: Google searches for his name are way down.

New York Web-research firm Insider Monkey found that searches for Roubini's name this past February were 75 percent lower than the previous spring. And since then, they've fallen another 20 percent. Insider Monkey's research finds that when investors are fearful and stocks are falling, they seek out Roubini's opinions. But when investors are feeling good and confident like they have for several months - they're less interested in hearing what Roubini has to say.

Think of this way: Roubini is a big opera buff. He knows people loved the legendary Luciano Pavarotti when he sang classic opera songs like this...

(Soundbite of music)

Mr. LUCIANO PAVAROTTI (Opera Singer): (Singing in foreign language)

ELSTEIN: But when Pavarotti made an album of pop songs...

(Soundbite of music)

Mr. PAVAROTTI: (Singing in foreign language)

ELSTEIN: ...he bombed.

Fortunately for Roubini, there are signs his audience may be ready for Dr. Doom again. Oil prices have soared, which threaten to cool the economic recovery in the U.S. And lately, Roubini has been warning that China's super-stellar growth pattern is unsustainable. Perhaps Dr. Doom won't have to change his tune after all.

(Soundbite of music)

Mr. PAVAROTTI: (Singing in foreign language)

ELSTEIN: For NPR News, I'm Aaron Elstein.

Copyright © 2011 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

We no longer support commenting on NPR.org stories, but you can find us every day on Facebook, Twitter, email, and many other platforms. Learn more or contact us.