SOS Out of the Woods?

Observations and views of Gary Shilling for last 6mths - March 09 to Sept 09

• overall view is DEFLATION will continue
• savings are up (a turn from 1985 from +12% to -10% in 2008/9) but for last 6 mths savings had turn +5%
• consumption debt has dropped +10% over the last few months
• deleveraging in process - credit default swap has dropped from USD56 trillion a year ago to USD28 trillion recently
• unemployment hit 9.7% in Aug 09 (although at slower pace)

MyView

My view is ss shown in the picture above. Most investor are looking at the rear mirror. Haven't they forgotten about Jan to Jul 2008? Will it repeat?