What many economists seemed to have missed is that the cycle from 2000-2007 was as extended credit cycle that pushed forward the Real Estate cycle (Kuznets), that pushed forward consumption. That moving forward of consumption has benefited Asia tremedously which served as the manufactoring base for most of the world. China is going to have its two largest clients curtail its consumption patterns over the coming year; as well, its capital investment for the Olympics will soon be over as well as the economic stimulus holding the Olympics this summer.
Long-term leading indicators continue to point to a downturn around the world, as it moves to an L shaped recovery.
Surprises are going to continue to point to the downside.
Based on historical credit cycles this will take about 20-25 years or a generational cycle to unwind.