Bears Gloomy Growl

I think you are right - esp on your latter point - we are already seeing this unfold. (See Citi/Abu Dubai for one example)

Also I am surprised to be hearing healthy holiday numbers for retail. I was expecting it would be a bad season.

My opinion is that Macroeconomic statements are difficult to apply to our modern economy. Each sector is less dependent on each other than at any time before in our history. For example, the treasury continues have record breaking daily tax receipts, holiday spending is up 8% from last year but yet we have a credit crunch.

The US economy is becoming more loosely coupled due to a number of factors -- including globalization of US firms (both sales and ownership), growth in the service sectors and overall diversification.

The credit crunch has impact on the housing sector, but for businesses, they will simply turn to other financing options such as selling ownership stakes opposed to corporate bonds.