Nouriel Roubini, of New York University's Stern School of Business, was nicknamed "Dr Doom" for being one of the first to warn about a housing collapse in America and a consequent financial crisis. Today he's concerned about the UK's vote to leave the European Union, which has created "a whole bunch of financial, economic, political and geopolitical uncertainties", he said at the World Economic Forum in Tianjin, China, last week.
The British government and Europe's leaders should try to negotiate a solution that could be accepted by British voters in another referendum, but the chances of this happening are slim. If Britain does leave the EU, this could lead to a wider disintegration of both unions, with Scotland becoming independent, while the Nordic countries might start to question their place in Europe. However, the economic and financial impacts of Brexit are unlikely to be as deep as those of 2008, and will not be a major drag on the global economy.
He is also cautious about the outlook for emerging markets. Between 2003 and 2013 these countries saw "high growth and high equity returns". However, the tailwinds that powered them have gone into reverse. Chinese growth has fallen to around 5%-6% per year, commodities have plunged in value and the US Federal Reserve has started tentatively tightening policy, including raising rates. This has hit most major emerging economies, with Brazil and Russia in recession, and South Africa stagnating. India is the only one of the five "Brics" to accelerate in recent years. In this less favourable environment, "only those emerging markets that carry out structural reforms will prosper".
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