Stephen Roach, chief economist at Morgan Stanley, has forecast a grim future for the American economy. At private meetings with fund managers last week, Roach reportedly said the country has only about a 10 percent chance of avoiding an "economic armageddon."

His reasons? The record trade deficit will result in the continuing decline of the dollar, interest rates will continue to rise to keep treasury bills attractive to buyers, and debt is growing at record levels in America's households.