Good policy will hasten the economy's work-off of the glut and sharply lower the burden, cost and risk to new entrants starting in an industry, opening a business, expanding employment and investment (look for business-friendly economies like Ireland and Hong Kong to come out of this mess sooner than most).

Bad policy will make the recession longer. Bad policy makes the necessary hangover more protracted and sharply raises the burden, cost and risk of entering a new industry, opening a business and increasing employment and investment (check out Japan's 10-year slumber through the wilderness for guidance on what not to do).

America's prospects for a speedy (well, speedier, at least) recovery will be immeasurably improved if any federal stimulus plan focused more on reducing burdens on the private sector and accelerating the working off of excess and dysfunction faster (hint: bankruptcy is good for you) and stopping a deflationary downward spiral. If DC wants to help, the leadership needs to express its positive intentions loudly, clearly, firmly and consistently stated and backed up with firm action or, and some cases, firm inaction. Mr. President-Elect, take note, and if you don't, well, we're coming closer toward the end of your future term(s) too with each passing episode of "Lost" anyway.

Odds of a “GD: The Sequel” are low judging from historical averages and most politicians' desire to get re-elected. If this recession does set a new record, well - ouch - but that still means every passing episode of "Lost" brings us closer to the end. Even Japan eventually got out of its decade-long funk. No country (excluding some masochistic banana republics) willingly stews in misery forever (North Korea, even your time will come). Too many of us are epicureans.

Additionally, catastrophic shocks to the economy -- from a big war, sky-high oil prices or other assorted strife abroad -- wont help, to put it mildly. So use Google News Alerts and Intrade to track news and bets on flash points in the Middle East, the Caucuses, Kashmir and between J-Lo and Marc Anthony.

In any case, just as the time to invest in a ritzy condo in Buenos Aires's Recoleta district was when Argentina's economy was falling apart during the 2002 peso crisis, or the time to invest in Eastern Europe was as it suffered apoplectic seizures and disarray after the Berlin Wall fell in 1989, or to invest in Chile in the 1970's back when Salvador Allende and the Communists were on their way to victory before Pinochet and the Chilean (University of) Chicago Boys moved in and launched massive free market reforms that made Ronald Reagan and Margaret Thatcher blush, the time to look to invest or at least think about it is often when things look darkest.

None of this is to say the next up-cycle will be particularly vigorous. Folks, we're coming off a massive, 25-year-old orgy of debt and the hangover will be pronounced. And I don't mean to suggest that picking the inflection point is easy. It is treacherous. Many fund managers and economists have tried and failed. An apparent ground floor could turn out to be a trap door.

But do not underestimate the resilience and dynamism of the U.S. iEconomy. Make no mistake: A turning point is coming (or is already upon us). To paraphrase Matthew Broderick's Ferris Bueller, don't blink or you could miss it.

Better yet, “Don't Worry, Be Savvy” (tm) and learn to love the abyss

More at:http://tracktheturnaround.serenity21...the-abyss.html