Rockwell Automation (ROK)

[Investorman]

Jack Welch says U.S. faces "deep downturn"
Wednesday September 24, 1:59 pm ET

NEW YORK (Reuters) - Former General Electric Co (NYSE:GE - News) Chairman and CEO Jack Welch said the U.S. economy faces a deep downturn in coming quarters, and he supports a proposed $700 billion government rescue package for the financial sector.

"I now believe we are in for one hell of a deep downturn," Welch told the World Business Forum in New York on Wednesday, adding that the first quarter of 2009 would likely be "brutal."

Until recently, Welch said, he had believed the U.S. economy could avoid recession, but he has now changed his mind.

"I am now caving," he said. "Get ready for real tough times. They're coming. There is no credit available."

Welch said mortgage lenders, legislators, investment bankers and others are all to blame for the crisis, which stemmed from easy credit and investors' appetite for yield.