Prophet of Doom predicts a long, ugly recession and a 40% drop in the S&P 500

Economist Nouriel Roubini, known as “Dr. Doom” – prophet of doom, or ‘Dr. Apocalypse’ – after predicting the housing crash of 2007 and the resulting financial crisis in 2008, he showed great pessimism about the global economy and the performance of Wall Street’s main stock index.

In an interview with Bloomberg, the New York University Stern School of Business economics professor predicts a “long and ugly” recession in the United States and around the world at the end of this year – which could to last through 2023. to add, predicts a sharp correction in the Standard & Poor’s 500, which could rise by as much as 40%

“Even with a simple recession, the S&P 500 could fall by 30%,” warns the CEO of Roubini Macro Associates. In a “true hard landing”, which Roubini considers the most likely, the index could plunge by 40%.

Nouriel Roubini – who earned the nickname of fortune teller for the worst economic and financial crisis since the Great Depression after warning in 2005 that the speculative boom in the US housing market could lead to an economic crisis – says anyone who expects to a shallow recession should address the huge debt ratios of corporations and governments.

As interest rates rise and debt service costs rise, “many zombie institutions, zombie families, businesses, banks, ghost banks and zombie countries will succumb,” he points out. And, he points out, that will be when “we will see who is swimming naked”.

And what does that mean? It’s only when the tide is out that we realize who was swimming naked. In other words, things can look very nice and beautiful to a certain extent, but if a company – for example – is over-leveraged waiting for a wave to come and instead catch the low tide, it will be fully exposed.

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