“this recession could linger for years”

That’s a quote from Obama’s speech today.  The good news is that he understands the severity of the crisis.  The bad news is that economic stimulus takes time to work its way through the economy.  Even if stimulus-based infrastructure projects start quickly (unlikely given the bickering in congress being reported today) we will not see impact in the real economy until late in the year at best.  Stock markets do anticipate recovery but historically by 4-6 months, which means that stock market recovery is still most likely months away.  Given this scenario (and the deleveraging pressures I have discussed previously) it should not be at all surprising to see a retest of the November 2008 market lows sometime in the first half of this year.

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