Europe Double-Dip May Bring Correction
Economic woes in Europe could spread to the U.S. and lead to a further correction in stock prices, Nouriel Roubini, chairman of Roubini Global Economics
The weaker euro will affect US exports, the widening of credit spreads will push up bond yields, risk aversion has been rising and bank spreads affect the euro-dollar Libor rate, Roubini said.
"What is happening in the euro zone right now is going to have a negative effect on U.S. economic growth," he predicted.
"There's contagion coming from Europe to the U.S., that's a first thing," he said. Secondly, "too many governments decided to do fiscal austerity too soon."
"A double-dip recession looks likely in the euro zone, it looks like Japan right now is falling off the cliff … and now there is evidence of a slowdown in economic growth also in China
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