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Considering that a stopped clock tells the correct time at least twice a day, it's interesting to read what a variety of economists and stock market newsletter writers have to say about the future of the stock market.

Some are considered to be "permabears" --- an allusion to what I assume is permafrost in the Arctic and their perennial inclination to be nattering nabobs of negatism. More on them in a minute, but first the good news:

Norm Fosback's Mutual Fund Forecaster makes the case that company earnings have been declining, but that stock values have already taken that into consideration. The current state of the economy has already been factored into stock prices, and that probably happened over the past 10 months when they began their decline. What matters now is the expectation of what we can expect over the next six months. Then, longer term, Fosbak's economic models, as he puts it, "provide room for longer-term optimism."

This would mean an advance of 19 percent over the next 12 months and 74 percent over the next five years. I would buy that. Bob Brinker appears to agree as well, but his optimism is conditional. It depends on lower prices for oil.

The interesting fact that Fosbak points out is that American income --- the total personal income of all Americans --- hit a new high in June. The paradox is that overall wealth has declined, thanks to stock market reversals and declining home values, but the actual income that people have to spend is at an all-time high. This is one of the reasons that economists have not been able to classify our current economic condition as a full-fledged recession.

I see signs of encouragement as I toil away in the world of local commerce. Sure, some businesses I work with are slowing down, but none have shut their doors and many are actually booming. On a rare outing to Walnut Creek's North Main Street last Saturday night, I was struck by the extent to which that downtown area just reeks of money. What seemed like a parade of luxury cars and people spilling out into the streets had me wondering, "Who are these people? Why aren't they in bed trying to save money?" And finally, "What am I doing here?"

The anomaly of high income coupled with lower wealth is happening on a larger scale in the banking business. I do some business with Wachovia Bank and know something about their operations. They are actually making plenty of money on a day-to-day operating basis --- billions of dollars to be exact. But their balance sheet (their wealth) dropped substantially on paper earlier this year because accountants can't tell exactly how much value to assign to those troubled mortgages. As a hint of how much uncertainty surrounds this issue, Wachovia's stock shot up 30y percent IN A SINGLE DAY about a month ago.

Meanwhile, back on the tundra, The New York Times Magazine cited Harvard economist Nouriel Roubini who predicted back in 2006 that we would have virtually all of the problems we have today, but nobody listened. "He sounded like a madman in 2006, and was a prophet when he returned in 2007," according to the organizer of an economic conference where he was a speaker.

On his blog, he writes under titles like "The Coming Systemic Bust of the U.S. Banking System." He predicts that the true cost of the housing crisis will not be $300 billion as predicted by congressmen but rather, as much as $1.5 trillion dollars. And so on...

Based on my own grassroots experience, I think we'll muddle through these crises. We'll use inflation over time to effectively pay off some of the enormous upcoming debt, and the rest will require some sacrifice in the way of higher taxes and the cramping of style. We can talk about our parents as the "Great Generation," but as for my generation --- us "baby boomers" --- we may have to settle for being the "Luckiest" of all time.