What makes one economist stand out from the pack? Big calls, an enviable job, a bestselling book? Nouriel Roubini, one of the handful of leading voices who “called” the GFC, flew into Perth this week for CHOGM and literally stole the show with a barnstorming address that managed to engross, scare and — for Australians at least — occasionally comfort, a spellbound audience.

Roubini remains bearish, but by no means fatalistic, when making his calls on the outlook for the global economy. The headlines from his address were clear: he believes there is more than a 50% chance of a double-dip recession, he fears for the break up of the European Union and he won’t rule out an ultimate “hard landing” for China.

But on closer investigation, the “Nouriel Roubini show” — which can now draw a huge audience almost anywhere in the world — offers seven key thematic points:

  1. The economic challenges engulfing global markets are permanent, not temporary.
  2. Consumer and markets are paralysed with weighing what he calls the “option value” of action; in other words a “wait and see” syndrome is becoming entrenched.
  3. Continuing poor economic data leads in a self-perpetuating cycle to less investment.
  4. This week’s “terrible” PMI (Purchasing Manager Index ) numbers suggest the European Union and the UK are entering a recession right now.
  5. Despite regular strong sessions on Wall Street, US economic data remains very mixed.
  6. Social unrest, such as the Occupy Wall Street movement, highlights the growing gap between rich and poor, which is a negative economic factor; it reduces aggregate demand.
  7. We are running out of policy options to stimulate global recovery. As he suggests, “If banks get into trouble again, the political will to bail them out this time may be limited.”

Speaking without slides or notes and accompanied by a surprisingly strong Iranian accent, the New York University professor is notably dry — almost humourless. Speaking in extended sentences, he picks and chooses his data as a man might pick cherries from a tree. Asked later how he keeps a grasp of so many different national economies, he says he spends 80% of his time “on the road” and visits some countries, such as China, up to five times a year.

Roubini’s trip to Perth was lightning fast. He appeared for one morning only and then left Australia … no chance then to get to taste the Burswood nightlife. Oddly, the professor first came to public attention as much for his famed parties bedecked with students and starlets in New York nightclubs as his economic forecasts. Roubini’s friendship with Hollywood director Oliver Stone recently even led to a cameo appearance in the movie Wall Street 2: Money Never Sleeps.

Still, it must be said that unlike many pundits who court fame during a crisis, Roubini has stayed the distance. One reason for his durability might be a willingness — often lacking among his peers — to put his head on the block and spell out potential solutions to economic conundrums.

Here are some examples:

A. On the crucial issue of Europe’s sovereign debt/banking crisis Roubini says the Europeans must cut their interest rates to zero.
B. On currencies, he says the euro should be allowed to sink to parity, or below parity, with the $US.
C. He suggests Greece and possibly Portugal will have to leave the European Union, reverting to national currencies that can be devalued; he thinks Ireland should be saved by its recent financial discipline.
D. He predicts China should avoid a “hard landing” this year or next year, but beyond 2014 the country’s economic model, which includes “over-investment in fixed assets”, is simply not sustainable.

But what does the great man have to say of Australia? He has moderate praise for the economic management of the country, he also believes firmly in our comparative advantage in natural resources.

And as for Australia house prices being overvalued? The professor is not willing to join the chorus calling our market over-heated — or indeed say that it is about to fall off a cliff. He says there will be correction, which has already started, and that there will be significant regional variations in price patterns depending on responses to the resources boom. Nonetheless, when put to the test, Australia seems to escape the more gloomy assertions of Dr Doom, of which you might think there will always be many.

*This article first appeared on Business Spectator