Roubini is predicting an uptick in stock prices over the next two years
as the Federal Reserve continues its stimulus efforts. But buyer beware,
Dr. Doom says, because a day of reckoning is lurking at the end of the
two-year horizon.
The Fed, he said, is creating the same problems
that led to the financial crisis in 2008 by keeping rates near zero.
"They are creating massive fraud," Roubini said during a panel at the
Milken Institute Global Conference in Los Angeles, Calif. Monday.
He pointed to the junk bond market as one example of a bubble.
"At some point, there's a levitational problem," said Roubini.
When gravity sets in, Roubini says there will not be a recession but a depression.
With
slowing global growth, it's impossible to keep stocks and bonds at
these valuations. "The global growth scare would imply that commodity
prices should be lower, bond yields should be lower, and equities should
be lower," he said.- in CNN Money
