If the Market is forward looking...what was it seeing in March?

Just 11 weeks ago, on March 17th, "Mr Market" took a look into the future & screamed...holy @#$%!! That Monday we all watched in amazement as Bear Stearns was taken under by JP Morgan @ a token $2/share and the broader market made new lows. While a full fledged financial collapse was averted, thanks to heroic & unprecedented actions by the FED & Treasury, the beginning of something bad was upon us. The market put in a "bottom" on that day, yet we all should have taken heed to what the market was seeing for us in September?

Was the market seeing the credit contraction ending, or the how-zing market recovering, or the banks restoring their capital, or the investment banks getting through the losses & deleveraging, &/or a robust economy?

If the market is supposed to be forward looking & a forecaster of future economic activity, then maybe the market was warning us about what was about to & is continuing to happen.... more losses in all parts of debt market, more dilutive capital raising, more wrenching corporate restructurings, & a stagflationary economy.

The "rally of hope" that all was well after the Bear Stearns event, was based on the belief that the worst was behind us & recovery was ahead... yet the facts are now showing otherwise... We are still in the midst of the problems & have yet to see the end of the crisis. The financial markets are in the throes of an unprecedneted credit contraction that will take time...maybe a long time. If Lehman's debt can get downgraded after all the fed support & fresh capital raising, they didn't need, then how can the problems be behind us when its clear they are ongoing?

The credit losses continue, the capital raising continues, the corporate restructurings continue, and there are still unknown losses & issues to resolve like CMBS, consumer/auto credit, municipal debt, ARPS, how-zing forclosures, unwinding of all the various FED TAFy's that is holding the bad debts, the GSE's risks, the rating agency nonsense, the bond insurer situation, and inflation & the economy.

To think the credit crisis is over & we are on our way back to a normalized investment enviroment, while nothing we are currently seeing indicates that the crisis is over, is simply more hope.