Nouriel Roubini was interviewed by Maria Bartiromo in USA Today this weekend. As usual, he had plenty of gloomy things to say about the U.S. and European economies.
On the U.S.:
The recovery is still anemic because the painful process of de-leveraging has not even started in the public sector. And next year there will be some fiscal drag because of the fiscal cliff that’s coming up.
Roubini has held this stance for quite some time, and the lack of de-leveraging to date in the public sector certainly has been an issue. With Roubini’s take on the issues in the economy, it would be easy to assume that he has a very poor outlook on the stock market. However, he does not expect the stock market to tank, but he also does not see much upside.
We see it being flat for the rest of the year, like it was flat last year, given all these uncertainties and given there is a fiscal cliff and there is more gridlock. I don’t expect the stock market to tank this year. But I don’t see, from current levels, much upside.
Roubini cites last years near 20% correction in August through September, and believes that the rest of the year will play out in a similar fashion this year as it did last year.
Read the whole interview at USAToday.com.