"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.
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.
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.