- Nouriel Roubini told Der Spiegel that he expects global stocks to drop by 30% to 40% this year.
- The ‘Dr Doom’ economist also predicted President Trump won’t be reelected, and warned that investors may be underestimating the potential fallout from coronavirus.
- “I live in New York City and people there are hardly going to restaurants, cinemas, or theaters,” Roubini said, speaking before the city confirmed its first case on Sunday. “If it comes, we are totally f***ed.”
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Nouriel Roubini – an economist nicknamed “Dr Doom” for his pessimistic predictions – told Der Spiegel that he expects stocks to plummet this year, President Donald Trump to lose the election, and the novel coronavirus to have a bigger impact on the global economy than many investors anticipate.
Stocks will fall
“I expect global equities to tank by 30% to 40% this year,” Roubini – a professor at New York University’s Stern School of Business – told the German newspaper.
The S&P 500 posted its worst weekly performance since the 2008 financial crisis last week as investors braced for coronavirus to disrupt supply chains, weaken customer demand, and slow economic growth.
Roubini advised investors to hold cash and government bonds. “You have to hedge your money against a crash,” he said. “That’s my motto: “Better safe than sorry!”
Trump will lose
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As the US and Iran push for regime change in each other’s countries, escalating tensions will “drive up oil prices and lead inevitably to Trump’s defeat in the elections,” Roubini predicted.
The economist pointed to the 1973 oil shock, the oil crisis in 1979, and the Kuwait invasion as examples of oil-price spikes scuppering past presidents’ reelection campaigns.
“The Democratic field is poor, but Trump is dead,” Roubini added.
Coronavirus poses a major threat
“The markets are completely delusional,” Roubini told Der Spiegel. If coronavirus causes the Chinese economy to shrink by 2% in the first quarter, and it only grows by 6% in each of the next three quarters, the slowdown “would essentially mean a recession for China and a shock to the world,” he said.
A major coronavirus outbreak in the US would escalate the situation, Roubini said.
“I live in New York City and people there are hardly going to restaurants, cinemas, or theaters,” he continued, speaking before the city confirmed its first case on Sunday. “If it comes, we are totally f***ed.”