Roubini, who chairs Roubini Global Economics, spoke before Wall Street had opened, when major European stock indexes traded more than 2 percent lower and Dow Jones industrial average futures were down more than 200 points. Asian markets also tumbled, after crude oil futures declined to a 13-year low of less than $27 per barrel and the Chinese economic slowdown — and the ability of policymakers in the country to handle it — remained in focus.
Dr. Doom said that markets had veered from undue optimism to exaggerated pessimism on the world's second biggest economy.
"A year ago they (markets) believed in this rhetoric of the Chinese government that China could achieve a soft landing; they could maintain growth at 7 percent; that the Chinese were a bunch of super heroic technocrats who could not do any wrong. And now they have gone to the other extreme, saying the policymakers are incompetent; they cannot stabilize growth, their currency, their stock market," he said.
Concerns about China's handling of its economy and financial sector were piqued last summer when authorities intervened in equity markets and devalued the currency amid a stock market rout.