I was interviewed this morning on CNBC’s Squawk Box on my views on the economy, on the stock market, on the problems with the banks, the Geithner plan and whether there is light at the end of the tunnel.

The full video of this longish interview is available here.

As I pointed out in the interview  – consistent with my views for the last several months - the rate of economic contraction will slow from the -6% of Q1 to a figure closer to -2% and next year the economic recovery will be so weak – growth below 1% and unemployment rate peaking at 10% - that it will still feel like a recession even if we may be technically out of it. So, compared to the bullish consensus that sees positive growth at 2% by Q3-Q4 of this year and return to potential growth by 2010 my views are still consistently more bearish than the consensus. Still, compared to the sharp contraction in US and global growth in Q1 of this year (about -6%) the rate of economic contraction will slow down towards -2% for the US and other advanced economies by year end. That is only a mild improvement and still a severe U-shaped recession with a very weak and tentative recovery by 2010.

Let me explain next in more detail my economic outlook and its implications for financial markets: