Those investors and business executives expecting a return to 'giddy' global growth after the U.S. and global economies start to recover need to pay careful attention to one of the world's leading economists.

"Those expecting the world to return to 5% growth will be in for quite a surprise," Stephen Roach, chairman of Morgan Stanley Asia Ltd. (NYSE: MS) told Bloomberg News Friday. "We're maybe going back to 3% [global] growth but we're not going back to 5% growth for some time. So it's a wake up call. We've gone from boom to bust in one year."

Further, the International Monetary Fund agrees, by and large. The IMF now sees global GDP growth of 2.2% in 2009, which is down from solid 5.0% growth in 2007 and 5.1% in 2006. In 2008, the IMF expects the global economy to grow 3.7%, but only 2.5% on a Q4 2007 to Q4 2008, year-over-year basis.

A major unknown: China's 2009 economy

Economist David H. Wang told BloggingStocks Friday, economist Roach "is wise to both lower expectations and to sound the alarm" because economic fundamentals in all major economic regions of the world have deteriorated in 2008, and will continue to do so in 2009.

With a home near the capital of the world, decades ago the parents of yours truly were able to locate and purchase the best and most effective books for their children during their grade school development years.

Dad usually chose books that emphasized cognitive development, while Mom emphasized books and exercises that stimulated creativity, and that had happy endings.

To be sure, Morgan Stanley economist Stephen Roach's macroeconomic reports would not have met Mom's requirement for happy endings.

Roach's post-bubble world

Roach, who now also serves as Morgan Stanley's (NYSE: MS) Asia Chairman, takes the pulse of the U.S. and global economies, the housing slump, the credit crisis, and the financial system, in his most recent report. (pdf)

And, consistent with Roach's reputation for sobering analysis, his economic forecast for the quarters and years ahead is not pleasant, and it differs markedly from the current consensus in financial circles.

That current consensus argues that the U.S. Federal Reserve's recently-established liquidity facilities, combined with the U.S. Treasury's back-up measures, will enable banks and others with bad mortgages and bad mortgage-backed bonds to muddle-through, slowly working-off these debts as revenues increase as the U.S. economy recovers. Likewise, the U.S. housing sector and consumer demand also will recover, as home prices stabilize and consumption returns to more-normal levels as U.S. GDP increases. It's a sort of 'end to the banking and housing crises by a growing U.S. economy better-able to service those bad debts' argument.

Wall Street, really a typical, small, village-like setting, save for the fact that about $8-12 trillion dollars in capital passes through its vortex daily, is a pulse-taking community. And for a dose of reality to counter-balance the sometimes too-rosy institutional research, the Street looks to the 'perpetual pessimist,' Stephen Roach, Morgan Stanley's (NYSE: MS) Asia Chairman.

Roach's take on economic state-of-things as the United States gets back to work this fall? Don't play "Happy Days Are Here Again" just yet. Roach said the global economic slowdown has only just begun, with the United States heading into a recession and the impact of the credit crunch still roiling through financial institutions around the world, Bloomberg News reported.

"There's more to this macro event than just the credit-market contagion itself," Roach told Bloomberg News. "Maybe two-thirds of that is behind us, but the impacts on the real side of the U.S. economy and the global economy are at an early stage.''

U.S., global economies slow together

Economist David H. Wang told BloggingStocks Wednesday Roach's analysis and comments should not be ignored by executives, small business owners, or typical citizens as they set their budgets and financial plans for the year ahead.

Two contrarian signs that a market bottom is approaching have raised their heads. The first is the always somber Marc Faber, the famed proprietor of the Gloom, Boom & Doom Report, who said late last week that the current down-drift in stocks is the beginning of a global bear market.

The second is the increasing chatter that the massive U.S. budget and trade deficits are going to come back to haunt the U.S. economy.

Mr. Faber's bearish pronouncements and the general call by economists and other pundits saying this is the time that the trade deficit is going to crush the U.S. economy almost always coincides with a bottom of the US market.

For the most part, virtually every indicator suggests the U.S. market is approaching a bottom. However, a good contrarian indicator, the AAII Index that measures individual investor sentiment, has stayed stubbornly high. Actually, bullish sentiment has been increasing during this market's decline.