That is the question. If we go back to the recession of the early 80’s there was a false positive recovery. If we go the recession of the 90’s we had one bad quarter follow the next. This time around we seem to have the dynamics of at least a couple of recessions at play, hanky panky in financial and real-estate markets, overproduction / under-consumption all related to a huge credit overhang.
As far as the markets are concerned there are a lot of people who got burned sitting on the sidelines waiting for a chance to be vindicated. Yes sadly everyone over estimates their capacity to find the upside in a downside particularly losers–and man o man there are a lot of losers out there this time around.
My pessimism says that we are going to have an extended period of bottom feeding. One to two week rallies fuelled by hope and then dashed by reality; meanwhile labour markets and real consumption are going to continue to trend south as we have yet to hit subsistence levels. When we get down to a general level of toilet paper and left-overs then we will have hit bottom. From there stable profits and some population driven increases in profits will take over and pessimism will slowly change as pent up real demand starts to be supplied.