There are fundamental reasons to assume a cyclical bull might emerge, but the length of such a period is in question. Leuthold is praying that the consumer can hold the economy together until capital spending by corporations picks up the slack. Sure that can happen, but not for very long, since the consumer is not too far from being "tapped" out. Typically recessions end up with great "pending demand" awaiting to be satiated, in secular bear markets, however, the structural deficiencies in the economy (in this case, excess debt, excess capacity to name just two) require some time to be rectified, and here at this time, we are lacking that big "pending demand" which is usually the result of a period in which consumers and business were rebuilding their balance sheets. Leuthold is also quite contradictory, bringing up a period of 12 years in the 70' when the public investor gradually deserted the market, and comparing this with a period of barely six months here.
Zeev
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