The CIT Group woes show that the financial crisis is not over as more writeoffs are on the way, Stephen Roach, chairman at Morgan Stanley Asia.
"Sorry to break to the news, but the financial crisis is not over, à la CIT. You’ve got plenty more writeoffs of bad paper to come," Roach told CNBC.
"75 percent of the world’s economies today are still contracting and the biggest piece on the demand side of the global economy is the American consumer, who is dead in the water," he added.
The markets' reaction to the "anemic character of the recovery" is pretty euphoric, and it actually is a manifestation of the excess liquidity poured into the system by monetary authorities, according to Roach.
"Liquidity is seeking return and right now these markets are priced for a recovery that’s going to end up disappointing," he said.
Despite better-than-expected earnings from some companies, those pricing in vigorous results "are going to be in for a rude awakening," Roach said.
"Where’s the demand? As I go around the world, especially in Asia, I don’t see any follow-through on the demand front," he added.
Talk of green shoots is a "really simplistic way of looking at the world," according to Roach.
"These green shoots are not going to go up to the sky, so my advice is pick a different metaphor," he said.