Roubini’s Manhattan condo

Nouriel Roubini, the New York University economist who predicted the bursting of the U.S. housing bubble, recently bought a Manhattan condo for 5.5 million U.S. dollars. The 3,700-square-foot triplex penthouse has a massive living and dining area on the first floor and three bedrooms and three bathrooms on the second and third floors. He bought the place for 25 percent less than the asking price of 7.3 million dollars right before the eruption of the global financial crisis in 2008. Real estate agents in New York welcomed the news, raising hopes that the real estate market has bottomed out.

In September 2006, most economists rolled their eyes when Roubini warned of an economic crisis brewing in a speech. His descriptions of the ensuing crisis proved to be accurate, however. He was hailed as a prophet and jetted around the world to dispense advice to politicians and businessmen desperate to know what would happen next. He soon grew rich. Born in Turkey, Roubini earned a Ph.D. in economics from Harvard University and worked as an economist at the U.S. Federal Reserve Bank. He went from non-mainstream economist to prophet thanks to the crisis.

His purchase, however, did not indicate a change in his views. In September, Roubini warned of a significant risk of a double-dip recession not only in the U.S. and Japan, but also in many European countries. On the U.S. economy, he spoke of a 40-percent chance of a double-dip recession in the U.S. and a slide back into recession within 12 months.

Prominent pessimist Paul Krugman, a Nobel laureate and economics professor at Princeton University, also bought a Manhattan condo for 1.7 million dollars last year. John Paulson, chairman of Paulson & Co. and one of Wall Street’s biggest pessimists, purchased a 1,850-square foot Manhattan condo for 2.8 million dollars. Condos in Manhattan have grown popular among prominent figures and the rich. The ex-wife of Tiger Woods, Elin Nordegren, and the daughter of the late Korean President Roh Moo-hyun have also bought condos there. Though other real estate markets in the U.S. remain in a slump, Manhattan condos have rebounded this year, leading economic pessimists to buy them.

Editorial Writer Park Yeong-kyun (parkyk@donga.com)