This weeks Business Week is about as pessimistic as I have ever seen.

The dollar has fallen 9% vs the Euro in the last few months in response to interest rate cuts (although many felt it was overvalued in the past). The weakened dollar is inflationairy and that limits what Alan Greenspan can do in the future. Eventually interest rate cuts will no longer be possible.

Real estate is over valued. Banks are loaded with mortgage debt. Individuals have been financing their over spending (which has been propping up the economy) with second mortgages based on real estate appreciation. As banks have already taken some big hits in other areas, a collapse of real estate values (as happened in Japan after the Asian meltdown and still holds back their economic recovery) could lead to a major banking disaster (again!!).

Those investment grade bonds are looking better and better.

One would hope the depths of pessimism would signal the recovery is about to begin.