Although I am a perennial optimist--and I've calmly invested my way through many a market disaster--I don't think PL1's scenario is too far out of line this time. And it will only get worse as more ARMs reset; we're not even at the beginning of a deflationary cycle in housing.
I am convinced that regardless of who wins the presidential election, investors are in for some serious pain.
If Democrats win, the short- to intermediate-term consequences (say 4 to 8 years) are going to be tragic for investors as we swallow some bitter medicine. Particularly if the tax issue comes into play.
If Republicans win (and they continue the policies of the current administration), the intermediate- to long-term financial, political, and societal consequences are going to be extremely severe and very long-lasting. I'm thinking end-of-empire bad.
It's a really bad choice all around for people who have had the intelligence and foresight to have invested their money. The question for me is how to prepare for what's coming.