I think this will be a slow recovery as the consumer is psychologically shell-shocked. An improved savings rate is good for the country in the long run, but there's a short-term cost in the lack of support for retail. This can cause ripples 'downstream', so I expect to see even more empty neighborhood storefronts than we do now. That's doesn't necessarily mean businesses have closed, so much as many are retrenching. They may move to smaller, cheaper office space, close unprofitable branches, or even go back to the home business model.

Much depends on your local economy. Are you dependent upon just neighborhood locals? Walking or driving? What's your competition doing? Would more marketing improve your bottom line? These and other questions are important as you try to steer through these murky times.

Even in our area, where the per capita income is greater than average and RE is expensive, local businesses are suffering. We've seen our net worth fall by 40% and our income will fall 20% when my DH retires next year - but we are still much more fortunate than most. We have cut back a little, but will cut back a bit more when retirement actually happens. Some budget items, though, can only be cut so far, so there's still a level of discretionary income being spent.

The US was the first into the global recession and thus will be the first out of it. I discount China's numbers by at least half; their economy and its statistics are entirely government-driven and therefore extremely suspect. To say they inflate their figures to suit their political message is putting it mildly, LOL. Still, they are pulling out of a tailspin as well, in one form or another.

The next shoe to drop for the US will be the commercial loan market and the bump in foreclosures. A lot of people didn't realize the banks had stopped foreclosures earlier in the year, so distressed properties were in suspension and are only beginning to work their way back up into view again.

The good thing is so far, upcoming commercial loans due have been able to be rolled over or new stock issued to raise capital. Karen Finerman, one of my favorites on CNBC's "Fast Money" program, recently confessed she had finally unraveled her short position (e.g., lost money) on commercial loan prop management co's because her picks (to implode) had been able to raise capital and keep going.

And there is a lot of pent-up demand for housing stock. The current constrictions on appraisals and mortgages will only lengthen the timeline that demand will continue. It will not destroy the demand itself.

Amongst our family and friends, very few have lost their jobs. Cutbacks in staff, increase in hours, no bonuses, lousy (or no) salary increases - but they're still working and pulling in paychecks.

Like the proverb says, this too shall pass. I've seen quite a few recessions, and every single time the doomsayers come out 'en masse' and say the sky is falling. Truth is, the skies DO fall on some - but for most, they keep going or just pick themselves up and figure out a way to recover.