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Friday, May 21, 2010

Dr Doom: Stocks to Tumble Another 20%, Cash the Safest Place

Dr Doom (no not me), Nouriel Roubini, told CNBC that stocks are likely to continue their aggressive decline and shed another 20 percent in value as the world economy weakens.  (In 2006 Roubini predicted the impending housing bust and ensuing financial crisis. His predictions and comments are widely followed in financial circles.)  From

As the market slides into correction territory, Roubini said weakness in euro zone countries and a slowdown in the US and other developed countries will make things even more difficult for investors in the months ahead.

"There are some parts of the global economy that are now at the risk of a double-dip recession," said Roubini, head of Roubini Global Economics. "From here on I see things getting worse."

Prices in both stocks and commodities are likely to take a hit, and investors may only be safe in cash and other safe havens.
"Apart from cash I would invest in short-term government bonds of countries that don't have a serious debt problem, countries like Germany and maybe Canada, a few other advanced economies that from a fiscal point of view are sounder than the weaker economies," he said.

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