Roubini, speaking on CNBC's "Squawk Box Europe," said that with oil possibly climbing toward $100 a barrel towards the end of this year, long-term interest rates rising, big budget deficits and unemployment likely reaching 11 percent in the US and around 10 percent in Europe, we could see another dip in economic activity.
And, of course, the bad economy would affect company earnings. While the markets has priced in a fast V-shaped recovery, Roubini sees poor earnings prospects at companies and expects many companies to surprises on the downside. With such poor prospects, he believes "there's going to be a significant market correction for equities, for commodities and even for credit."
What I find quite interesting in this recession is that unemployment is sometimes being treated as a leading, not a lagging indicator, as is usually the case. Roubini, too, said "recovery signs should come from unemployment," among the other usual suspects such as housing, industrial production, sales and consumption data.
Just as General Electric Co. (GE) Vice Chairman John Rice told Bloomberg on Friday that he isn't seeing any green shoots such as increase in orders, Roubini also sees "more yellow weeds than green shoots." GE is often considered a proxy for the economy as the large conglomerate reaches many areas of the economy.
But Roubini's doom and gloom view doesn't stop with a possible double-dip. Even when the economy recovers, he says, it will be very weak because of the debt overhang in so many sectors, as well as the large budget deficits governments have taken on to stimulate their economies.
And joining others in the U.S. and around the world, Roubini warned about the dangers of protectionism.
It's interestingto note that while Roubini warns of double-dip recession and a market correction, multi-billionaire financier George Soros says the worst of the global economic crisis is over.