""The U.S. is doing better than other advanced economies.""
Dr. Doom actually sees a bright spot — U.S. stocks. Nouriel Roubini, co-founder and chairman of Roubini Global Economics, told CNBC's Closing Bell Thursday that investors should be overweight U.S. equities for the time being.
"I've been suggesting you should be overweight in the U.S. equities for the time being," he said. "The forces of slow but improving growth, massive liquidity and continued Fed easing, reduction of tail risk, of low volatility, of low risk aversion can continue for awhile."
The U.S. economy also looks to be in better shape than other advanced economies, Roubini said, noting the faster deleveraging, housing recovery, energy revolution and reshoring of manufacturing.
But growth in the second or third quarter will be dragged down by the effects of the sequester and higher taxes. "U.S. growth will be mediocre—about 1.7 percent this year," he said.
Roubini said Japan is the second-best option right now, predicting the market has 10 percent upside this year while the yen will weaken. Again, Roubini hedged saying there are still many challenges facing Japan.
"My problem is that by next year unless they implement structural reform, unless they start dealing with the fiscal problem because the debt is unsustainable, just monetary and fiscal easing cannot increase potential growth," he said, adding Japan needs structural reform and trade liberalization.
The Bank of Japan surprised global markets Thursday announcing plans to double the country's money supply. Roubini called the move "very aggressive."
—By CNBC's Shannan Siemens. Follow her on Twitter @ShannanSiemens