"For people who say there are green shoots, I see only yellow weeds frankly," Roubini said at a conference in Hong Kong. "It's not a true recovery. It's just a bear-market rally, it's a suckers rally."
That's because the U.S. economy will still be contracting toward the end of the year and won't grow again until 2010, he said. Unemployment will hit 11 percent next year and corporate earnings will come in worse-than-expected, he predicted.
Troubles in the financial sector, meanwhile, are far from over and will be worse than many expect. The results of the government's "stress tests" will show even the biggest 19 American banks don't have enough capital to cope with the huge losses they'll inevitably suffer on souring loans.
"The losses are much more than people are predicting and (the banks) have not reserved enough," Roubini said.
"It looks ugly for every one of those 19 banks, let alone the smaller ones," he added. "So it's going to be ugly for the financial system."
