John Mauldin of Millennium Wave Investments states what I have seen intuitively for a while now:
"As I wrote in August 2000 and August 2006, I write again in August 2009: there is a recession in our future. I was early both of those times and I am early now, maybe two years early, though I doubt it. And as I pointed out both of those last times, the stock market drops an average of over 40% during a recession.
"The next bear market, as I wrote in 2003 and in Bull's Eye Investing, will likely be the bottom. (It takes at least three of them to really take us to the bottom.) But the next one will change perceptions for a long time. Valuations will drop. Savings will rise even more. And a generation will grow up. The adults will return. Chastened. Scarred. Shaken. But we will Muddle Through. That is what we do."
The current "bear rally" is building people's confidence to the point where when the next nosedive does happen, people will be disillusioned. They won't know what to believe in anymore. This type of brokenness is a good thing because you have to be honest. You have to admit your mistakes. You have to ask for help. We will then rebuild.
Martin A. Armstrong forecasts the next low in June 2011. If this is true, we could see this next leg down come as late as fall 2010. I doubt it will be later than that, but it could be as early as next month. It is now not a question of "if," but "when."