How to pick up the economic pieces

Stephen Roach, chairman of Morgan Stanley Asia, has had to get used to being called a pessimist.

In "Original Sin", an article he wrote in 2005, he began to question the Federal Reserve's failure to address asset bubbles and cautioned that the resulting moral hazard dilemma posed "grave threats" to financial markets.

In 2007, he predicted that US housing prices would start to decline in 2008, the first time since 1933. He also concluded that the world economy was on the verge of recession. For many, his prediction was simply too pessimistic to be real.