Buckle Up -- We Haven't Reached Bottom Yet

Then comes commercial real estate, where values are already plummeting, vacancy rates are rising and permanent financing is difficult to find. A collapse in this sector would be particularly bad news for regional banks and insurance companies.

And let's not forget all those otherwise sound companies taken over by private-equity firms and management teams that proceeded to load them up with debt. A prolonged recession is almost certain to cause a larger-than-expected increase in the default rates on the "leveraged loans" and junk bonds used to finance those deals, and that will be another direct hit on the major Wall Street banks.

What does all this mean?

It means that, in terms of the stock market, the Dow Jones industrial average will find its way back down near 8,000 sometime in the next few months to see whether that is the new floor, or it is somewhere even below that. "Testing the lows," as the traders say on Wall Street.

It means that we're in for a lousy economy for the next couple of years requiring another big economic stimulus plan from the federal government -- one that needs to be focused less on tax cuts and more on helping the unemployed, preventing cutbacks in vital state and local government services, and creating jobs directly through investments in infrastructure.

And it means that the financial sector is not out of the woods, that more financial institutions will get in trouble and that another round of rescue efforts could well be needed.

This thing ain't going away any time soon.