Kenneth Rogoff
Professor of economics and public policy at Harvard University and formerly chief economist at the International Monetary Fund.
RECORD
Mr. Rogoff teamed up with Carmen Reinhart to write This Time Is Different: Eight Centuries of Financial Folly, a highly praised examination of past financial crises. The book, published last year, concludes that the crashes of the past millennium were not in any significant way unique. Rather, they all followed excessive accumulation of debt.
ANALYSIS
Mr. Rogoff's advice is simple. Instead of plunging further into debt, governments need to get their finances in order, and when they do borrow they should stick with maturities of 10 years or more in order to lessen the impact of big swings in interest rates.
QUOTE
"The essence of the this-time-is-different syndrome is simple. It is rooted in the firmly held belief that financial crises are things that happen to other people in other countries at other times. The old rules of evaluation no longer apply. We are doing things better. We are smarter. We have learned from past mistakes."
OUTLOOK
A grandmaster chess player, Mr. Rogoff sees the world differently than most economists. One of his views is that the age of the Internet will shortly be topped by the increasing use of artificial intelligence throughout the economy. More immediately, he expects weak global growth through next year, but a turnaround in time for 2012, as long as governments can control their spending and avoid trade wars.
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Robert Kessler
Founder and CEO of The Kessler Companies Inc., whose subsidiaries devise and run U.S. Treasury portfolios for large companies, financial institutions and wealthy individuals.
RECORD
Based in Denver, Colo., Mr. Kessler has a passion for climbing mountains and investing in fixed-income products. He has won the attention of sophisticated investors by consistently producing double-digit returns from his government bond holdings. In 1989, he devised a way for his high-net-worth clients to benefit from the repo market, where financial institutions borrow money at rock bottom rates for short periods.
ANALYSIS
Deflation, not inflation, is the biggest threat as the economy struggles to regain a strong footing. As corporations and consumers pay off their debt and banks horde cash, government stimulus is essential to spur growth. Today is the wrong time for nations to implement financial austerity programs.
QUOTE
"There is this constant talk of deficits [leading]to inflation. We don't really have any indication that's true. In the Depression in the United States, we had huge deficits, of course, and we had no inflation. We had deflation. Japan has gone through 20 years now of deficits that are far, far higher than ours, and they have deflation."
OUTLOOK
Stock markets are stuck in a lengthy range-bound cycle. But U.S. government bonds - "the most maligned asset class in the marketplace" - remain a great buy. The bull market for 10-year Treasuries has run for years and it will continue because of concerns about deflation.
Nouriel Roubini
Professor of economics at the Stern School of Business, New York University, and chairman of consulting firm Roubini Global Economics LLC.
RECORD
Two years before the economic meltdown, Mr. Roubini warned the IMF that the U.S. would shortly face "a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence, and, ultimately, a deep recession." The prescient warning won him the nickname "Dr. Doom" - and a reputation for being a sage.
ANALYSIS
Mr. Roubini wants governments that don't face the wrath of the bond market to maintain stimulus and those that have to implement austerity to keep interest rates extremely low. Meanwhile, countries that have saving surpluses, such as China, Japan and Germany, need to stimulate spending. If countries fail to co-ordinate a balance between austerity and spending there is a strong risk of a double-dip recession, he says.
QUOTE
"Policy makers are damned if they do and damned if they don't. If they take away the monetary and fiscal stimulus too soon - when private demand remains shaky - there is a risk of falling back into recession and deflation. On the other hand, if policy makers maintain the stimulus for too long, runaway fiscal deficits may lead to a sovereign debt crisis."
OUTLOOK
Mr. Roubini told the Sunday Times of London a year ago that he maintained only a relatively small exposure to stocks through a large mutual fund. "As for actively managed funds, I never saw the point of paying someone large fees for sub-standard returns," he said. "Never invest your money as though you are gambling at the casino. Buying and selling individual stocks is a waste of time."
Warren Jestin
RECORD
Warren Jestin, the veteran Scotiabank chief economist, got it right on the Canadian dollar, accurately predicting the loonie and the Canadian economy would stay strong as the U.S. took a hit.
ANALYSIS
When the weather gets steamy, Mr. Jestin likes to chill with his family at his cottage on Lake Vernon in Huntsville, Ont., or put up his feet and read a book. He offers the same kind of soothing advice to investors in these turbulent times. Expect volatility, stay diverse and look for stocks with hefty dividends. And if you're young, get at least one college degree.
QUOTE
"The legacy of economic and financial challenges confronting many countries ... suggests that we will experience a rocky road to recovery - a journey that won't be taking us back to a world that existed before the recession began."
OUTLOOK
Mr. Jestin isn't expecting a double-dip. But he says the boom times are gone, perhaps for years. Canada and most of the developed world is entering a period of much more modest growth. That means average growth in the low 2-per-cent-a-year range for Canada vs. the 3-plus we thought was normal. Mr. Jestin blames the downshift on rising interest rates, big fiscal overhangs for governments everywhere and much tighter banking regulation.
Barton Biggs, Traxis Partners
RECORD
Hedge fund manager Barton Biggs, who made a name on Wall Street by pushing investors into emerging markets in the 1990s, is one of those investors who can move markets when he acts. His company, Traxis Partners LP, surged nearly 40 per cent last year after betting big that stocks would climb steeply off their lows of March, 2009. Now, he thinks stocks are poised for another big fall.
ANALYSIS
Mr. Biggs dumped nearly his entire holdings of U.S. technology stocks last week. He's worried that governments will cut off stimulus spending too early, stalling out the recovery. So he's raising cash and cutting his long positions. Then again, Mr. Biggs was bullish on Mexico just before the peso crashed in 1994.
QUOTE
"We are at exactly the same stage in the cycle as we were in 1982, using the exact kind of words: 'The U.S. economy is collapsing, the world is collapsing, it's the worst time since the Great Depression.' Blah blah blah."
OUTLOOK
Mr. Biggs is in the double-dip camp. He worries the slide could last two to three quarters, with the economy growing as little as 2 per cent a year. If that happens, the market could tumble another 10 to 15 per cent from where it is now, he predicts.
Bill Gross, Pimco
RECORD
You know you're good when Warren Buffet calls you for advice. That's the way it is for Bill Gross, who has roughly $1-trillion (U.S.) under his watch at Newport Beach, Calif.-based Pimco. He has a reputation for making big money on bonds, and sometimes, not losing it. Mr. Gross spared most of his clients from the subprime mortgage crisis, which began in California.
ANALYSIS
The way Mr. Gross sees it, the world is into a new normal of tepid growth, deleveraging, reregulation and de-globalization. Population growth is at a dead-end in the developed world so we can't continue borrowing tomorrow's growth with debt today because we'll never be able to pay it back.
QUOTE
"We overdid a good thing and now the financial reaper is at the door, scythe and financial bill in one hand, with the other knocking on door after door of previously unsuspecting households and sovereigns to initiate a standard of living death sentence."
OUTLOOK
Look beyond stocks and bonds if you want to make money. Maybe, collecting stamps, as Mr. Gross does, would be a better bet. He says the developed world will grow much more slowly than in the past, and China and India still don't consume enough to make up the gap. That means dismal returns for investors.