July 9, 2012

Roubini: ‘Perfect Storm’ of Economic Pain Is Unfolding Now

‘Dr. Doom’ says slowdown of major global economies now occurring

Roubini speaking last year. (Photo: AP) Roubini speaking last year. (Photo: AP)

Hold on, here it comes. Perma-bear economist Nouriel Roubini, nicknamed “Dr. Doom” for obvious reasons, tweeted Monday that the ‘perfect storm’ he predicted earlier this year—that of a simultaneous slowdown in the U.S., Europe and China—is now occurring.

As CNBC notes, Roubini predicted in May that 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 in 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.

The network reports, “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,” according to CNBC.

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

In January, Roubini said, "I do expect there's going to be a significant slowdown of growth in China this year.  We're going to see it already in the Q1 numbers … the Chinese will react by reducing the reserve requirement ratio and interest rates to try and jumpstart the economy … I think it's going to happen in the first half of the year."

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