Roubini: My 'Perfect Storm' Scenario Is Unfolding Now
Published: Monday, 9 Jul 2012 | 6:11 AM ET
"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
<http://www.cnbc.com/id/47356500/?Global_Economy_Faces_a_Perfect_Storm_in_20
13_Roubini> 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 on Monday.
<http://www.cnbc.com/id/48114690/> 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 (ECB), Bank of England
(BoE) and the People's Bank of China (PBoC) 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 arrest the global slowdown.
Last week, he told CNBC that there is " <http://www.cnbc.com/id/48089774/>
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.
C 2012 CNBC.com
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