GO
Loading...

Enter multiple symbols separated by commas

Roubini: My 'Perfect Storm' Scenario Is Unfolding Now

"Dr. Doom" Nouriel Roubini says the "perfect storm" scenario he forecast for the global economy earlier this year is unfolding right now as growth slows in the U.S., Europe as well as China.

Nouriel Roubini
Getty Images
Nouriel Roubini

In May, Roubini predicted four elements – stalling growth in the U.S., debt troubles in Europe, a slowdown in emerging markets, particularly China, and military conflict in Iran - would come together to create a storm for the global economy in 2013.

“(The) 2013 perfect storm scenario I wrote on months ago is unfolding,” Roubini said on Twitter on Monday.

Chinese inflation data released on Monday, suggested that the economy is cooling faster than expected, while employment data out of the U.S. on Friday indicated that jobs growth was tepid for a fourth straight month in June.

Roubini said that unlike in 2008 when central banks had “policy bullets” to stimulate the global economy, this time around policymakers are “running out of rabbits to pull out of the hat."

Policy easing moves by the European Central Bank, Bank of England and the People’s Bank of China last week did little to inspire confidence in global stock markets.

“Levitational force of policy easing can only temporarily lift asset prices as gravitational forces of weaker fundamentals dominate over time,” he said.

Bill Smead, CEO of Smead Capital Management, agrees that there is little central banks can do to arrest the global slowdown.

Last week, he told CNBC that there is “virtually zero chance” that pump-priming by central banks will succeed, suggesting that policymakers should instead let the economic bust work itself through the system.

Contact Asia News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Asia Video

  • WA mining minister: 'We welcome all investments'

    Bill Marmion, Western Australian Minister for Mines and Petroleum, says he welcomes all foreign investments in Western Australia. He also explains why the government doesn't support an iron ore inquiry.

  • Chinese cash a good thing for Fortescue Metals?

    David Lennox, resources analyst at Fat Prophets, explains why the Australian government may be in favor of Chinese companies lifting their stakes in Fortescue Metals.

  • One year at office, how has Modi fared?

    While Prime Minister Modi has been successful on the international stage, the Indian economy has yet to see a "significant revival," says Rajiv Biswas, Asia Pacific chief economist at IHS Global Insight.