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Roubini Sees Asset-Bubble as Money Chases Commodities (Updat

Bloomberg.com -- By Anabela Reis and Mark Deen

Nouriel Roubini said investors are “chasing commodities” and there is a risk of new asset bubbles emerging as stock markets and commodity prices surge amid record-low lending rates.

“There is a beginning of a bubble in financial markets,” with “asset prices going higher,” Roubini, the New York University professor who predicted the global financial crisis, said in a speech in Lisbon today.

Equity markets around the world have surged in recent months, with the MSCI World Index up 25 percent so far this year and by around 66 percent since its March 9 low. The price of crude oil has jumped 70 percent since the beginning of the year to about $76 a barrel in New York.

Part of the increase in oil prices is “money chasing commodities,” Roubini said. “There is a r

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Submitted Nov 20, 2009 By: UncleCurt

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DanMtz Veteran Author Oakland Posts:428 Points:304,245 Joined:Oct 2009	Message Posted: Nov 22, 2009 4:09:37 PM Ignore DanMtz Report Abuse Roubini is a "glass half-empty" kind of guy.
Franck Veteran Author Oakland Posts:323 Points:171,535 Joined:Sep 2009	Message Posted: Nov 21, 2009 7:44:44 PM Ignore Franck Report Abuse It is too premature to claim that there is an asset price bubble in oil. The price declines that occurred during the financial crisis a year ago are still fresh in the minds of many investors. Gold, on the other hand, has been rising fairly steadily since 1999. Bubbles need sustained price increases to generate more momentum & long speculation. If I had to pick a commodity showing characteristics of an asset price bubble, I'd pick gold, not oil.
adr47 Champion Author Saskatchewan Posts:2,391 Points:536,470 Joined:Nov 2008	Message Posted: Nov 21, 2009 1:42:41 PM Ignore adr47 Report Abuse The greedy ones will screw us again. Greed Rules
earlybirdMA Rookie Author Boston Posts:85 Points:37,910 Joined:Oct 2009	Message Posted: Nov 21, 2009 11:38:00 AM Ignore earlybirdMA Report Abuse enough already
earlybirdMA Rookie Author Boston Posts:85 Points:37,910 Joined:Oct 2009	Message Posted: Nov 21, 2009 11:37:12 AM Ignore earlybirdMA Report Abuse nuthin i didnt already know
earlybirdMA Rookie Author Boston Posts:85 Points:37,910 Joined:Oct 2009	Message Posted: Nov 21, 2009 11:36:00 AM Ignore earlybirdMA Report Abuse good for him
POLELANE Champion Author Ohio Posts:6,287 Points:715,320 Joined:Mar 2008	Message Posted: Nov 21, 2009 11:24:21 AM Ignore POLELANE Report Abuse certainly sounds reasonable; we'll see how it plays out long term
Zakmeister All-Star Author Cleveland Posts:633 Points:209,145 Joined:Jul 2007	Message Posted: Nov 21, 2009 10:34:45 AM Ignore Zakmeister Report Abuse So what else is new?
w4kh Champion Author Riverside Posts:6,846 Points:1,272,520 Joined:May 2004	Message Posted: Nov 21, 2009 10:27:12 AM Ignore w4kh Report Abuse Any business or person who does not want to see their money disappear, is looking to commodities and equities, given the low interest rates... the increased number of players and money in these markets equates to increased demand, which in turn equates to rising prices, hence crude oil futures near $80/barrel and the equities markets rebounding - it is NOT because of economic recovery, but rather because of weak dollar and attempts to hedge against declining value.
qmyster All-Star Author Denver Posts:570 Points:166,540 Joined:Aug 2009	Message Posted: Nov 21, 2009 10:21:53 AM Ignore qmyster Report Abuse It should be around 30 a barrel.
Cheepo Champion Author Tampa Posts:5,054 Points:2,175,190 Joined:Apr 2003	Message Posted: Nov 21, 2009 10:13:38 AM Ignore Cheepo Report Abuse Yes, humblepie, wake up AMERICA!!!!!!!
granma3xnow Champion Author Indiana Posts:1,998 Points:410,675 Joined:Dec 2008	Message Posted: Nov 21, 2009 10:13:25 AM Ignore granma3xnow Report Abuse Our future is in the hands of speculators.
AC-302 Champion Author Los Angeles Posts:14,815 Points:1,941,735 Joined:Aug 2004	Message Posted: Nov 21, 2009 10:12:58 AM Ignore AC-302 Report Abuse Gold is at an all time high right now, too. Eventually it will fall. If you bought gold when it was $500 or $600, you'd be fine, but not now when it's over $1100. It's interesting that we have colliding market forces that may throw the market into turmoil again. And once again, the commodities traders are bidding up the price too much. Another oil rise and fall will set our economy (and the world economy) back enough. Instead of allowing oil speculation leverage of 1 to 20, the government should throttle it back to something like 1 to 4 or 5. That would put the brakes on wild speculation, because the oil traders then couldn't control that much of the market.
humblepie Champion Author Toledo Posts:7,962 Points:1,392,220 Joined:Mar 2006	Message Posted: Nov 21, 2009 10:09:41 AM Ignore humblepie Report Abuse if washingtons printing presses keep spitting out iou's 24/7 commodities will continue to rise, does anyone think gold is going back to $300 an ounce ? washington is giving away our way of life to get re-elected by morons who scream change and give us the same old thing "wake up america"
sleepyt Champion Author Chicago Posts:1,378 Points:416,175 Joined:Mar 2008	Message Posted: Nov 21, 2009 10:09:40 AM Ignore sleepyt Report Abuse Interesting information, indeed - and not surprising. This has happened before after market crashes, when money fled securities for commodities. As described below, it is demand push inflation. That said, don't think for a minute that Keynesian government spending won't eventually stimulate the US economy. It'll work - it is one of the few economic theories that actually has predictive power.
Jamer Champion Author Orange County Posts:3,957 Points:695,550 Joined:Jul 2002	Message Posted: Nov 21, 2009 10:09:19 AM Ignore Jamer Report Abuse More speculation which costs us money.
CISA Champion Author Orange County Posts:2,089 Points:673,320 Joined:Dec 2006	Message Posted: Nov 21, 2009 10:09:11 AM Ignore CISA Report Abuse He sees asset prices going higher -- yet wants a second stimulus. Hyopcrite?
BeaverBilly Champion Author Alberta Posts:4,960 Points:1,571,735 Joined:Feb 2003	Message Posted: Nov 21, 2009 10:08:42 AM Ignore BeaverBilly Report Abuse I would rather buy Gold than invest in commodities right now. Everyone is dumping US Dollars. You have to follow what China is doing.
Asbury09 Champion Author Iowa Posts:2,362 Points:554,855 Joined:Jan 2009	Message Posted: Nov 21, 2009 10:06:24 AM Ignore Asbury09 Report Abuse this whole thing is getting more interesting all the time
Toppers Champion Author Atlanta Posts:4,097 Points:1,498,140 Joined:Mar 2005	Message Posted: Nov 21, 2009 10:05:35 AM Ignore Toppers Report Abuse Hopefully we've learned and...are ready for it...
tazdriver Champion Author Huntsville Posts:4,892 Points:1,177,500 Joined:Jan 2007	Message Posted: Nov 21, 2009 10:03:50 AM Ignore tazdriver Report Abuse We need to take care of the US and it will help revive the economies around the world
kfinto Veteran Author Texas Posts:400 Points:1,148,495 Joined:Apr 2005	Message Posted: Nov 21, 2009 10:03:31 AM Ignore kfinto Report Abuse With the government printing dollars like they are going out of style why would anyone invest in the U.S. dollar?
Voltus Champion Author Miami Posts:3,261 Points:648,055 Joined:May 2005	Message Posted: Nov 21, 2009 10:01:54 AM Ignore Voltus Report Abuse Interesting info, will use it for my investments.
BlackGumTree Champion Author Virginia Posts:10,378 Points:995,345 Joined:Dec 2005	Message Posted: Nov 21, 2009 9:59:54 AM Ignore BlackGumTree Report Abuse Fools! People who have dollars are getting rid of them by trading them for commodities that will hold their value better. A bubble in the commodities is not what they need. The dollar is losing value. That is why prices are going up. It takes more of the cheaper dollars to buy today what you bought last year. Its called inflation. And it is stimulated by Deficit Spending. When will they learn. The Economy is what needs to be stimulated, not Inflation! Hey! Its the Economy, Stupid!
rvn4me Champion Author Texas Posts:1,872 Points:550,060 Joined:Jan 2009	Message Posted: Nov 21, 2009 9:59:50 AM Ignore rvn4me Report Abuse When is the administration going to stop this like he promised? Seems like that was just another lie. They are trying to turn us into a third world country and are doing a good job of it.
spunky4443 Champion Author Washington Posts:3,994 Points:1,047,220 Joined:May 2005	Message Posted: Nov 21, 2009 9:58:30 AM Ignore spunky4443 Report Abuse Oh well this is part of life.
hank1326 Champion Author Los Angeles Posts:4,079 Points:767,250 Joined:Jun 2008	Message Posted: Nov 21, 2009 9:57:33 AM Ignore hank1326 Report Abuse Excellent point by jony. The reactive current administration is all talk and no action. Worst of all they are selfishly locked in on their agenda instead of real issues.
Pucked Champion Author Fort Worth Posts:1,091 Points:210,780 Joined:Jun 2009	Message Posted: Nov 21, 2009 9:56:57 AM Ignore Pucked Report Abuse Talking heads - talking heads and more talking heads!
eddyp94 Champion Author Ontario Posts:4,146 Points:866,410 Joined:Mar 2008	Message Posted: Nov 21, 2009 9:56:50 AM Ignore eddyp94 Report Abuse there is no reason for riseing oil prices except greed...
traindude Champion Author Virginia Beach Posts:3,310 Points:780,175 Joined:Jun 2007	Message Posted: Nov 21, 2009 9:54:08 AM Ignore traindude Report Abuse i'd just like to have steady income and not have to worry all the time about bills and insurance
Dale Jr. Champion Author Illinois Posts:11,266 Points:2,255,650 Joined:May 2004	Message Posted: Nov 21, 2009 9:53:04 AM Ignore Dale Jr. Report Abuse I like to see a loud bang and see all those investors scramble.
ironbox_sara Champion Author Albany Posts:4,691 Points:1,291,675 Joined:Mar 2006	Message Posted: Nov 21, 2009 9:52:32 AM Ignore ironbox_sara Report Abuse Re-write the article so we can understand the damn thing.
dabuzman Champion Author Seattle Posts:3,794 Points:997,875 Joined:Apr 2006	Message Posted: Nov 21, 2009 9:52:03 AM Ignore dabuzman Report Abuse Only wise the bubble would blow up to never be recover. Then maybe all the speculators would be out of the market.
bad_sailor Champion Author London Posts:2,959 Points:720,155 Joined:Dec 2007	Message Posted: Nov 21, 2009 9:51:11 AM Ignore bad_sailor Report Abuse Big deal.
MightyDude Champion Author Minnesota Posts:5,320 Points:1,669,370 Joined:Mar 2003	Message Posted: Nov 21, 2009 9:50:13 AM Ignore MightyDude Report Abuse what goes around comes around
DABEE1073 Champion Author San Diego Posts:2,963 Points:593,535 Joined:Jun 2008	Message Posted: Nov 21, 2009 9:50:07 AM Ignore DABEE1073 Report Abuse TALK IS CHEAP. IT TAKES MONEY TO BY WHISKEY.
vizilo Champion Author British Columbia Posts:1,916 Points:1,831,620 Joined:May 2004	Message Posted: Nov 21, 2009 9:46:07 AM Ignore vizilo Report Abuse Will he be right a second time? No one will remember if he was wrong
doncNJ Champion Author New Jersey Posts:2,760 Points:561,920 Joined:Oct 2008	Message Posted: Nov 21, 2009 9:44:05 AM Ignore doncNJ Report Abuse Bubbles burst but I think the gold price will hold.
148366 Champion Author Spokane Posts:3,646 Points:1,031,000 Joined:Apr 2007	Message Posted: Nov 21, 2009 9:43:21 AM Ignore 148366 Report Abuse They never learn that bubbles burst but they keep flying to the flame.
RedRam2005 Champion Author San Antonio Posts:3,539 Points:600,300 Joined:Dec 2007	Message Posted: Nov 21, 2009 9:41:07 AM Ignore RedRam2005 Report Abuse This could bite the speculators again. But the rest of us will have to pay the price in the mean time.
VetteBlue Champion Author San Jose Posts:5,466 Points:1,117,585 Joined:Jan 2007	Message Posted: Nov 21, 2009 9:39:20 AM Ignore VetteBlue Report Abuse Speculators are everywhere.
copperhead8 Champion Author Boston Posts:10,723 Points:1,841,600 Joined:Dec 2004	Message Posted: Nov 21, 2009 9:37:27 AM Ignore copperhead8 Report Abuse Only time will tell the outcome.
dopster Champion Author Toledo Posts:2,177 Points:1,353,010 Joined:Aug 2004	Message Posted: Nov 21, 2009 9:34:00 AM Ignore dopster Report Abuse Re-regulate Wall Street.
jony Champion Author Florida Posts:2,928 Points:821,700 Joined:May 2006	Message Posted: Nov 21, 2009 9:33:22 AM Ignore jony Report Abuse I thought the "administration" was going after the spectulators? Oh my mistake
Tonester1 Champion Author New Jersey Posts:7,627 Points:1,363,195 Joined:Oct 2006	Message Posted: Nov 21, 2009 9:30:34 AM Ignore Tonester1 Report Abuse Who the heck is Roubini?
BillHeatherL Champion Author Alberta Posts:2,751 Points:978,135 Joined:Apr 2007	Message Posted: Nov 21, 2009 9:29:51 AM Ignore BillHeatherL Report Abuse money chasing commodities = money chasing money
neptune2008 Champion Author Michigan Posts:3,599 Points:709,305 Joined:Aug 2008	Message Posted: Nov 21, 2009 9:28:17 AM Ignore neptune2008 Report Abuse speculation speculation speculation
kyrunner Champion Author Lexington Posts:3,906 Points:720,735 Joined:Aug 2008	Message Posted: Nov 21, 2009 9:26:33 AM Ignore kyrunner Report Abuse Americans confidence in our economy is at all time lows. We can't figure out what the federal government is trying to do with our monetary system with the huge spending and therefore the chances of major downturns are always around the corner.
Ltdc Champion Author Long Island Posts:2,357 Points:718,845 Joined:Jul 2007	Message Posted: Nov 21, 2009 9:24:32 AM Ignore Ltdc Report Abuse Some investors never learn their lesson.
BazooQC Champion Author Montreal Posts:4,736 Points:673,455 Joined:Oct 2008	Message Posted: Nov 21, 2009 9:23:17 AM Ignore BazooQC Report Abuse The stock markets have plunged so much, a correction to former prices is now seen as a bubble. Hummm.