For strong stomachs only

Nouriel Roubini is an economics professor at NYU and writes a well-regarded economics Web site, RGE monitor.com. And he thinks the economy will get a lot worse before it gets a lot better. Appearing this morning on CNBC's "Squawk Box," he predicted a severe recession in the U.S. and a serious slowdown globally (hat tip to Calculated Risk). What's especially sobering about Roubini's forecast is that it, well, makes sense. Short term, government has done pretty much all it can, what with the Fed cutting interest rates and consumers quickly spending their stimulus checks. It's like a dying patient who shows a little improvement after medication, but not enough to alter the prognosis. He sees consumption falling by early fall (not great news for retailers). From CNBC:

I expect the economic recession to be long and protracted, about 12 to 18 months. I expect the financial crisis to become more severe.

Eventually there will be a bottom in housing, but right now the credit losses are spread in subprime to near prime to prime to commercial real estate to credit cards to auto loans to student loans to leveraged loans to muni bonds to industrial and commercial loans to corporate bonds...

See what I mean about the strong stomach? He sees stocks falling another 10 percent to 15 percent before the market hits bottom. Not all economists are quite so gloomy, of course, but a consensus is emerging that the next six months - at least - are likely to be very tough. It's not just housing anymore - it's everything from falling stock prices to rising gasoline and food prices to falling employment. In other words, a mess.