LAS VEGAS — A "global perfect storm" looms for 2013 in which the U.S. economy could fall back into recession and the euro zone will begin to break up, according to the latest gloomy forecast from economist Nouriel Roubini.
Photo: Oliver Quillia for CNBC.com
Nouriel Roubini guest hosts Squawk Box on CNBC.
Four primary factors will come together, according to the famed "Dr. Doom," to create worldwide turbulence: In addition to the troubles in the U.S. and Europe, Roubini sees military conflict in Iran and a slowdown in emerging markets, particularly China, as the added elements to create the storm.
"You put it together — the euro zone troubles with the US slowdown, China...you could have a train wrecknext year," Roubini said during the opening day of the Skybridge Alternative Conference, or SALT, a gathering of a few thousand hedge fund managers concerned about global economic direction.
In particularly, Roubini sees nothing but problems ahead for Europe, where peripheral nations are struggling with inability to pay their debts.
Fears are growing that the fiscal problems in Greece, Portugal, Spain and elsewhere will spread to the global economy.
"Greece is going to be the first country that's going to restructure and exit," he said. "Others will leave also."
“By the end of the year Spain is going to lose market access," Roubini said in a subsequent CNBC interview. "They’re going to require a bailout. That will keep them out of the markets for a year or two. That’s not going to work out – then maybe two years down the line then you have a restructuring of the debt...And eventually even Spain could exit the euro zone—but it’s not something that’s going to happen in 12 months."
Closer to home, Roubini sees the U.S. stock market going into a further tailspin through the year, with the Standard & Poor's 500 declining to 1,300 by the end of 2012. The economy will struggle and likely grow less than 2 percent next year, he added.
Roubini spoke on the opening day of SALT last year as well, predicting slow economic growth and a stock market that would move sideways. The S&P 500 is at nearly exactly the same level it was when the conference kicked off in 2011.
"Economic growth is going to (be below) 2 percent, the unemployment rate is high, job creation is going to be anemic," he said. "That's a problem that's going to get worse."
