I'm training to be an actuary, so I hope my answer reflects some knowledge!

Markets generally are determined by share prices, and share prices are usually reflected by confidence and profits. If there is no confidence or profits, then money is not being spent. An economy is in good health if money is being spent. Simple example: good economy: I have money, and I give it you and you give me food. I benefit from food, you benefit from money, and some of that is taken as tax by the government who technically spend it to help us all. You can then spend the money, and the people who receive government spending money can spend.... everyone keeps repeatedly benefitting over and over. Bad economy: I don't have money/hold my money back, the cycle doesn't even begin, and nobody benefits.

This downturn is not in any particular way unusual, except for the closure of quite a few long established and big name companies.

As always, it's quite normal for economies to go into a boom, then a slump, then a boom then a slump, each lasting around 5 to 10 years each.

The problem this time, is that as time passes, jobs become harder to get. 100 years ago, being a train driver meant that you had to operate a lot of machinery, and so train companies would happily pay you to learn to drive the train, a complex job. Now, a subway/tube train is far simpler to operate, and so more people have the ability to do it, and so are paid less.

Basically, as technology improves, less humans are needed to work, meaning less money for people without jobs.

As companies shut down, only bigger companies remain, and so larger competition should be created between these bigger companies, driving down prices, and increasing mass production, though people will be less willing to spend.

On top of that, natural resources like oil are running out, but nobody seems to care.

The other argument is that the slump will be over as soon as people start trading shares again, and banks start borrowing money from each other once again. A lot of banks have been quite reckless and willing to lend finance to those who could not pay back in the last few years, but they will now learn from their mistakes and make it tougher.

The bigger issue than the economic downturn is how the world is going to change. We have to address finding oil alternatives such as hydrogen, we have to address the fact that ever improving technology means less need for human workers, and how that may mean we end up with low costs of living but with almost everyone living in a middle class and a handful of extremely wealthy people. (Though these things are to do with the extreme future).

If you disregard the ever changing world, then historically, share confidence and borrowing will start back up again any time in the next 4-9 years to get to where we were before. At the moment it's a shock to the system, but we will get used to it, then we will stabilise, and then we will slowly pick ourselves back up. The time it will take to start the improvements could be up to a year or longer, and the progress will be extremely slow, taking, as I said, around 4-9 years to hit where we used to be just a year or 2 ago, but then again, a few radical movements in the economy could change all that, but historically, that is unlikely.

I see things getting better towards the end of 2009 once Obama has had almost a year in office. However, it's not just the Obama administration, it depends on the next congress as a whole. It's not Democrat versus Republican either, as they are both at fault.

Our biggest challenge is that it's not just the US, it's the global economy, as a lot of countries depend on the US and we depend on working with other countries as well. The US is at the mercy of other countries, different markets, and various economies. Other countries are also affected by the US, and look to our country for leadership.

There is still a lot of work that needs to be done to clean up the mess, so this is something that will not happen overnight. As a whole the United States government has always been in debt. I cannot predict an exact date, yet would say it will take at least a good year before we see things start to pick up again to improve the economy.

Typically the public markets is a leading indicator for when things will get better. I think the key is that the market needs a reason to get better. Right now, most of the news is still pretty grim. Companies are going bankrupt, the unemployment rate is up, etc. To make matters worse, lots of hedge funds got themselves into trouble and had to meet redemption requirements of their investors. What this means is that these very large funds that own big pieces of public companies were forced to sell to meet capital requirements. They didn't sell, at least not completely, because they thought stocks they were holding were bad. Many of them sold because their investors wanted their money back. When you have this level of selling and no up-tick in buying, then equity prices get hammered. So, in a sense, the problems were really compounded and perpetuated. I think we should all expect 2009 to be a bad year.

I believe we are at a fork in the road for the downturn. Folks who have lost jobs over the last few months are going to come to the end of their resources in the coming months; at which point the economy will accelerate in decline.

If those folks can, in sufficient numbers, find gainful employment, then I think a 9 month timeframe is reasonable for a change from decline to increase.

If government action and loosening credit cannot get employees back in to the workforce, then I believe we'll find a more solid downturn lasting up to several years.

There is some hope I think as if enough moment and good will is earned quickly enough many companies that took a conservative position will be in a position to rehire employees they let go to solidify their cash position.

All of this of course is conjecture, I'm no economist and even the economists couldn't give you a weatherman's forecast. My personal belief is this is one of several shock-waves we will feel over several decades as manufacturing disappears from the economy, wages begin to balance across nations, and the new rules necessary for an information and services economy congeal.

Sadly things will get worse before it gets better. We have at least 3 more years until it gets better. The next 2 waves of foreclosures will be worse then the first wave. Hold on to your seats folks. The truth hurts

The bottom for unemployment should happen in either the 2nd or 3rd quarter. Remember that employment is a lagging indicator, and so the recovery will probably start in the 4th quarter, but most people won't realize it at the time.

I think that the end of the economic downturn is still at least a year away. In order for things to get better, things have to get worse. In order for the economy to right itself, the government needs to let failing corporations fail. It's kind of like a purge to get rid of the bad parts of the economy, and once that has happened then the economy will start to turn around.

The difficulty w/ predicting the length of anything happening now is twofold; one, all our information is in the past, and past performance is no real predictor of future events. Two, all the economic measurement tools were created years ago. Truthfully? We have no real way to guess how things WILL go, so we always look to the past to see what DID happen the last time things "were like this". So, with that being said, unless something really nuts happens over the next 30 days, this current economic condition simply CANNOT fix itself for two years. It's time to tighten your belt, deny yourself & your kids things you'd usually just buy without a second thought, and train yourself to think that "going without" is normal.