Nouriel Roubini Is Back And Bearish

Nouriel Roubini, the famed bear who is credited with foreseeing the economic meltdown coming, is back and bearish. Surprise!

Mr. Roubini told CNBC Wednesday that asset bubbles have started to form due to excessive monetary expansion. Governments must soon tigthen monetary policy and withdraw economic stimulus to avoid another bubble in real estate prices. However, the risk of withdrawing stimuli too soon is that economies may fall back into recession he warned.

Mr. Roubini predicts a "slow, anemic, U-shaped recovery" due to a soft labor market, excess capacity and low capital expenditure. He believes GDP growth will be stronger in the first half of the year than in the second half when the economic stimulus will fade out.

In a decidedly less bearish tone, Mr. Roubini predicts that developed economies will experience a slowdown in growth, but this will only push stock prices moderately lower. He adds, "I don't think we're going to retest the lows of last March".