Morgan Stanley economist Steve Roach is just back from the global captialist confab at Davos and he can’t quite accept the violin music he kept hearing – to him it sounded more like Nero fiddling while Rome burns. To wit, in Roach’s view the U.S. and Chinese economies are still dangerously overheated while the stars of Davos retain their misplaced faith in Alan Greenspan and the Central Committee of the Chinese Communist Party! This is a pretty odd pair on the global scene. The bottom line, according to Roach, is that Greenspan remains unwilling to raise interest rates high enough to choke off U.S. consumer demand. Americans keep extracting cash from their homes with low mortgage rates and buying cheap labor consumer goods from Asia, particularly China. The result is ballooning consumer debt and unsustainable export led “growth” in China. If Roach is right this economic tsunami will make it all the way across the Pacific Ocean.