Ditto Ex-SD… I think that if anything you are too optimistic. The same psychology which caused the problem will accelerate it in reverse. Don’t think that in 2011-2012 the prices will have fallen enough to make the market go up again. There will have been too many people hurt, too many people afraid…. 2011-2012 will be the big pain years… I think for years after the market will be flat or still fall because the economy will have been crushed.
The years of equity lines, new kitchens, new boats, cars, toys, second homes, investment properties and increased interest rates (a larger spread between Fed rates and actual mortgage rates) will cause long term pain, for at least a decade.
This might be the start of a general long term decline for the US and its need to pay for all the years of spending and no savings.