Economist Nouriel Roubini is extremely pessimistic about the US economy

[swag]

From the conclusion of his latest long blog post

In conclusion, markets, investors and policy makers will soon wake up from the delusional dreams and the fairy tales they have been indulging into for too long and will face the five ugly realities that I described above:

1)the U.S. will experience a sharp slowdown followed by a severe recession;

2)the Fed will pause and then ease in the fall but such easing will not be able to prevent the U.S. recession;

3)after a suckers’ rally following the Fed pauses and easing, stock markets will enter into a bearish contraction phase; and other risk assets will also experience sharp drops. In 2006, cash is king;

4)the rest of the world will not decouple from the U.S. recession and there will be no “rotation” in global growth as the rest of the world will sharply slow down – after a short lag – following the U.S. recessionary lead;

5)the risk of a disorderly rebalancing of the growing global current account imbalances is increasing with serious consequences for the U.S. dollar and with the growing risk of dangerous global trade and asset protectionism.