According to Bloomberg, Morgan Stanley’s Asia Chairman Stephen Roach said the global economic downturn has only just begun and the full impact of the credit crisis has yet to be felt.

“There’s more to this macro event than just the credit-market contagion itself,” Roach said in a television interview, “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.”

Roach predicts that rising unemployment and falling home prices will continue to hurt consumer spending in the second half in the US. This “post-bubble funk”, already evident in China, will likely lead to the same in other developing nations in Asia.

See Toddo’s Random Thoughts: The Rally Before Reality?

From the Bull Pen: Toddo brought up the thesis that we could see a rally into the election (S&P 1330-1350). Bulls trading on that thesis may look to Wells Fargo (WFC); sell stops below the $30-29 level.

From the Bear Cave: Bears may be eyeing Sears (SHLD) for a downside play. Buy stops can be set above the 200 DMA ($94.60).