The dramatic meltdown of the financial markets has shifted focus from the real economy, which our guest, RGE Monitor chairman Nouriel Roubini, says is where the downturn is truly being felt. The $700 billion bailout and today's global rate cuts may have helped avert a complete financial collapse, the NYU Stern School economist notes. But the recession -- which he says began in Q1 of this year -- is deepening and will last into early 2010.

Retail and personal spending fell sharply over the summer, marking a drop in consumption for the first time since 1991 -- and the Q3 numbers are only going to be worse, says Roubini. Moreover, corporate capital spending is down, which will translate into even fewer jobs in the coming months.

Is Roubini simply being too bearish? "I worry that it'll be worse than I expected," he says in the accompanying video, in which he predicts a slow, possibly L-shaped recovery a la Japan.