Nouriel Roubini, known by the investing world as Doctor Doom for his constant negative stance on US equities and the economy, recently pulled a 180. This past week, in a shocking change of heart, Roubini endorsed US stock markets, bonds and global stocks for the next 2 years.

Roubini, an economics professor at NYU, has become famous for his constant bearish outlook and ability to foresee economic contractions, including the US housing collapse 6 years ago.

Speaking at the Milken Institute Global Conference on Monday, April 30th, Roubini finally capitulated to the awesome power of the Federal Reserve and central banks around the world. Although bearish on equities and global economies for some time, he is now convinced central banks are powerful enough to keep the markets strong - at least for another 2 years.

As an example of the power of a central bank and complicit government, take one look at the Nikkei exchange in Japan which is up over 40% in 6 months (since new Prime Minister and stimulus crazed Shinzo Abe took power).

6 Month Chart of the Nikkei

Roubini's change of heart came 24 hours prior to Ben Bernanke reaffirming his stimulus program, effectively assuring the markets that the Fed remains committed to low interest rates and massive, monthly bond and mortgage buying programs. US equities broke out to an all-time high on Thursday, the day after Bernanke's comments.

However, in his bullish comments, Roubini included one caveat by noting, "At some point, there's a levitational problem."

Roubini believes that when global stimulus and easing runs out of influence (likely a couple years down the road), a recession is probable, with the possibility of a depression. When slowing global growth eventually overruns policy makers, "The global growth scare would imply that commodity prices should be lower, bond yields should be lower, and equities should be lower," exclaimed Roubini.

Lets hope its the beginnig of more optimism.

Regards Inca.