Former Reagan administration Council of Economic Adviser Chairman Martin Feldstein is not bashful about the market's response to Greece's woes.

"The euro is weakening despite their [Europe's] better trade balance," Feldstein, an economist, told Bloomberg News Thursday. "This is a kind of an irrational or panic selling where people are just saying, 'I don't know what is going on, I am just going to step to the sidelines and not leave money in euros.' "

The euro, which is down about 8% versus the dollar this year, was virtually unchanged versus the buck at $1.3669 on Thursday at mid-day.

What are the predictions for the economy from Martin Feldstein, professor at Harvard University? Feldstein is a member of the President's Economic Recovery Advisory Board and a noted economist.

First and foremost he sees the risk of a "double dip" recession. He is looking for a stable third quarter, after which time there could be some bad news, causing a slide in the fourth quarter.

Feldstein said: "There isn't going to b enough to sustain a really solid recovery." even though we've had some "good news" lately.

Reuters reports that one of the U.S.'s leading economists, Harvard's Martin Feldstein gave a speech in Florida today in which he said that the U.S. faces a recession that could be "significantly more severe" than recent ones.

This is very bad news because Feldstein is the head of the National Bureau of Economic Research (NBER) which is responsible for determining when recessions begin and end. Not only that, but he is a Republican whose editorials are frequently in the Wall Street Journal. So for Feldstein to make this claim, he must have very compelling and irrefutable evidence on which to base his prediction. Given his position in the firmament of economists, It would be incredibly irresponsible for him to be exaggerating for effect.

Here are some of the scare quotes:

• "The situation is very bad, the situation is getting worse, and the risks are that it could get very bad."
• "There's no doubt that this year and next year are going to be very difficult years."

Add famed investor Jim Rogers to the list of people who think the economy is heading down the tubes.

In an interview with Bloomberg Television, Rogers predicted that "it's going to be one of the worst recessions we've had in a while because we had so many excesses going into it. It's going to be bad for all of us as currencies come under more and more stress and we have more inflation in the world.''

Moreover, Rogers, who already was bearish on the U.S. dollar, said he hopes to have all of his assets in other currencies by the end of the year. He also predicted that the greenback will be "under duress for many years to come."

Rogers, the head of Rogers Holdings, is hardly the only nervous Nelly about the economy. In a separate interview, with Bloomberg News, Harvard University's Martin Feldstein pegged the odds of a recession at more than 50%, adding that consumers "are going to be a little more reluctant to spend, and that is going to put a further drag on growth in 2008.''

Of course, all of this is great news for the Democrats and bad news for the Republicans, particularly former Massachusetts Gov. Mitt Romney, heading into tomorrow's New Hampshire primary. Romney has been touting his experience in corporate America to voters. But voters aren't keen on corporations these days, which is why he's losing ground to Mike Huckabee.

What is the right number for interest rates? 4%? 3%? 2%? No one knows for sure, and that's the problem. Investors are becoming like Pavlov's dogs, frothing at the mouth at the mere thought of an interest rate cut. Once the Fed accedes to their wishes, they are satisfied for a while but wind up wanting more and more cuts.

As today's market action shows, these people are never going to be satisfied. The Federal Reserve lowered short-term interest rates by one-quarter point to 4.25%, the third cut since September. It reduced the discount rate -- the rate the Fed charges banks to borrow money -- by the same amount to 4.75%. "A large minority of economists had projected a half-point cut in the federal funds rate," according to the Wall Street Journal.

The Federal Open Market Committee also remains as worried as ever about the economy.

"Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation," according to the statement from the FOMC. "The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth."