I agree 100% that a simple 12- 18 Mos. Top to Bottom is not enought … history is ladden with examples of lower lows forming a u shaped cup before finally moving up.

I also agree that the credit is the fuel for growth that no longer exists … Housing rebound? Most of the rebound is in the 0 - 100K houses (mostly foreclosures) and 100K - 200K.

So, here in NC, they are planning to raise taxes:
1. More Sales Tax
2. Surcharge for making more than 100K a year!!!

Now, 2 Obama officials: No guarantee taxes won’t go up
http://finance.yahoo.com/news/2-Obama-officials-No-apf-2491158742.html?x=0&sec=topStories&pos=main&asset=&ccode=

How lovely …. TAXES ARE GOING UP NO MATTER What! All States will have to increase taxes ….. are we earning more? No! Will we have more money to spend … NO … will this stimulate the Economy …. NO ….

I am sure you have seen this from Mish’s blog: http://globaleconomicanalysis.blogspot.com/2009/08/military-vs-non-military-durable-goods.html

Are we going to WAR? Most countries do this to revive their economy and distract the people from the current problems ….

Car rebates from our Children and Grand Kids future income:
http://finance.yahoo.com/news/LaHood-Car-rebates-will-stop-apf-1095811725.html?x=0&sec=topStories&pos=2&asset=&ccode=

As usual …. spend now pay later … can anyone in America do some basic MATH ANYMORE????? Shifting the cost of spending now to future generations will completely weaken this countries future wealth building ….

http://finance.yahoo.com/news/LaHood-Car-rebates-will-stop-apf-1095811725.html?x=0&sec=topStories&pos=2&asset=&ccode=

Whao .. a government drunk on the same modus opperandi … buy now pay later (write it off) … Deficit building ad nauseum … at some point all our creditors are going to demand a highier roi … higher % rates to follow … higher cost of debt to us .. inflation ..

Was watching CNN today - State of the Union - and they interviewd some Citizens …. none borught up the issue of how we are going to pay for all this deficit spending …

The next time down will break the will and trust of all investors …. who is going to invest in the stock market then after all this propeganda??? God help us … is all I have to say ….

And in 87 and ‘03, credit was still flowing and balance sheets could be expanded. I believe we are now saturated — no additional debt can be serviced — so this is the big one. It is a bold call, to say that this is an event of an order of magnitude only seen once a century or so, but that is what the data is telling me. Today I have been perusing the big S&P earnings file, and what I see is the productive sector has been hit the hardest: industrials, materials and information companies have fared the worst.

Burlington Northern and CSX each had revenue off 25%; Caterpillar, 40%; Dupont, 25%; Fedex, 20%; Gannet 18%; IBM 13%; Micron 26%; Ntl Semiconductor 39%; steel producers, 60+%, etc, etc…

These companies reflect the real GDP. There is no comparison here to ‘87 or 2000, only to the ’30s.

I only see growth where I don’t want to see it: military contractors (war profiteers) and health care (an aging population sucking up capital through a horribly inefficient semi-socialist, lawyer-crippled system).

I do not anticipate speculation coming back in force, as after those other crashes. That takes debt and time to dull the memory of the crash. Also, the public has turned cynical — I believe they are finally learning that Wall St is a racket to be avoided.