Things are starting to look up. Everywhere I turn I see signs of life. Mind you I wanted to write "strength" there, but for now signs of life will have to do. Just the same, we're back from the brink. It was touch and go there for a while but it looks like the patient will pull through.

Ah, but what kind of life will the patient have after such a close call?

Over the past week I've had a number of conversations with friends and clients about business where they work and live. Call it a random sample. The only non-random aspect about this little informal survey is that they all know me. None of them know each other, so unless I'm the common thread that somehow guides the way economic conditions affect their businesses...

You get the idea.

Here are my findings:

In case you somehow missed it, we just had another round of bailouts for the largest banks and insurance companies. Many question this decision. Why bail out these banks and insurance companies who made all the bad loans and investments in the first place, goes the argument. Let them fail. The scavengers will pick up what's left and we'll go from there.

Sounds easy enough, doesn't it? The problem is that last part. The part where we "go from there".

Now that we're past the holidays, and we have all the election and campaigning behind us and with the upcoming inauguration. I'm anxious to see what's ahead.

My money says we will have more volatility as optimism and hope are replaced by the reality of the economic downturn. Of course, smart investors aren't overly concerned with volatility, because they know to sit tight and weather the storm.

I also think there's a lot more downside to this market.

This is a different kind of downturn. Many investors have never seen anything like this before. This isn't like the pullback in the year 2000. That downturn was all about returning stock prices to realistic levels from unrealistic valuations. The economic dip that accompanied it was quickly absorbed by our relatively robust economy.

The banks and investment firms, housing and mortgage, the automakers. Today's headlines have the steel industry lining up at the public trough for a handout. Their message is more simple and straightforward than the others though. Their message is only this: "Buy our product"

They want your tax dollars, and what loans they can leverage, to be spent on building projects such as bridges and public buildings. They're turning to the public sector to spend our way out of this economic downturn.

This news is as revealing as it is scary.

First off, Merry Christmas. Belatedly. I'm a whole day late.

Secondly, it's been about a year now we've been in this recession. We'll be in it for another year. I might make that same statement next year.

Did we expect to be able to spend beyond our means forever? (I say "we", I mean in the collective. I didn't expect we could, did you?)

We fueled our economy on the money we had - our paychecks and when they couldn't keep up, our savings, including the savings tied up as equity in our own homes. We then fueled it on money we didn't have - credit card debt and debt backed by hoped-for appreciation in our homes.

How far out on that limb did we think we could go?

Are you a seller or a buyer these days?

With a market drop like yesterdays and the sickening erosion in prices we've been experiencing of late it's hard to imagine many are happy with stocks. Top it off with the hard reality that the dollars you have to invest are worth less now - by about 50% - than they were last year and it sort of makes you want to find a hole to crawl into.

The news is all bad and shows no signs of improvement. This pesky credit crunch brought on by the housing debacle continues to roil the financial industry. Prices are headed up. It costs double just to get to the grocery store and back. Floods in the midwest are sure to put even more upward pressure on food prices. To make matters worse, the dollar's value is miniscule so your savings valued in dollar terms are worth less in real terms.

Invest? Me? Now? You have to be kidding!

Plenty of interesting numbers in the news yesterday.

• Economic growth at a 0.6% annual growth rate
• Consumer spending advancing by 1%
• The Fed's interest overnight interbank lending rate is now 2%

I have to ask, how can anyone not now believe we're in a recession?

Now the question becomes a matter of how long this particular downturn will last. Anyone else think we're in for more than a year of this?

According to Congress' Joint Committee on Taxation:

...it is not practical to contemplate distributing cash rebates until the peak filing season is completed, which in past years has been the very end of May.

And that's if everything goes right. Now add 8-12 weeks' time to process rebate checks and you're looking at July-ish before the big stimulus actually happens.

Think we'll really need it by then?

One thing I really enjoy about writing my own investment blog is that I get to put my own wild ideas out there for anyone and everyone to see. I woke up with an off-the-wall idea this morning and thought for a moment this one might be too crazy. But the more I thought about it the more it seemed to make sense. Or at least it makes sense to me right now, half-way through my first coffee of the morning.

This ¾% interest rate cut the Fed made the other day has bothered me since I first heard the news. My first reaction was that it would do no good. Indeed the market's first reaction was just that. Sorry, that won't quite do it. My later reaction was that a ¾ point had to have some effect. Surely enough, the markets seemed to have the same idea. We saw a rebound.