Bottom of the 4th Inning...but with 1 outs

I think that's where we're at in the whole thing. Just a little before the halfway mark (which would be Top of the 5th inning with 1.5 outs in my scenario...maybe that's 2 outs but a runner in scoring position?). Whatever, you get the point. Almost halfway. If that's true and life is symmetrical, which is a big if, then you'd say that the economic upheaval and de-leveraging process (which was started by the onset of the recession in mid/fall 2007) is about 3 years old presently. That puts us back near full economic throttle by the Dec 2013 (which I'm defining as stable 4% GDP growth. Here's my reasoning behind this conclusion:

(1) It fits with the neat little theory that I've grown fond of - namely that major economic cycles occur in 15-20 year increments. I'm saying this one started in 2000 and that would put it at a full 13 year cycle. What can I say, I'm an optimist.

(2) Housing led us into this financial collapse and its resurrection will be key to restoring financial health of consumers and the US as a whole. In tandem, housing won't be cured until foreclosures stop. This will lead to an eventual reduction in the excessive glut of houses for sale, which in turn will return us to a reasonable inventory of housing (7-9 months supply) -- which will relieve and increase housing prices relative to renewed demand. That being said, foreclosure are STILL on the rise, although less significantly. I believe that the stabilized economy will stabilize consumers/household income, and that will stem the strong flow of foreclosure that resulted initially from subprime deals and more recently from people losing their jobs in 2008/2009. Here's an AWESOME article on foreclosures and housing inventory!!

(3) Unemployment has made its mark. Sure it'll continue to rise in terms of percentage, but that's just a headline number anyways. We know the partial employed, etc involve an unemployment level much higher than 9.5% in reality. But unemployment has (like housing) stabilized. In fact, the private sector is actually creating jobs consistently. Now it just needs to be enough to offset local government firings (due to budget deficits), and then it must become enough to offset the number of new people entering the workforce, then eventually it must become enough to result in a lower unemployment %.

(4) The financial system is relatively sound and once the rest of the economy begins healing in earnest, it will be ready to invest money and lend -- its a matter of confidence as much as economics.

All these things will take 3 years to fully play out -- but they will. The key in the meantime is to guard against deflation in the immediate and yet incrementally attempt to ward off long term inflation. Moreover, Congress MUST address structural issues to the economy including health care, retirement, etc. Otherwise, the country's debt problems will simply be a balanced knife once the economy has returned to a level where it can service the then-existing debt structure.