The New Year jubilance has come to abrupt sobriety the past few days. As of yesterday, markets are officially negative again year to date in 2009. How will the month finish out? This is a question we will not be able to answer... for another 18 days.

The past few trading days have served to work off some over-bought levels that had spiked on the major indices. This could be constructive. We are watching key trend supports for an indication of whether this action will serve to fill in the technical base for a more sustained rally, or fall apart again for another downside test. The big spook over the next few weeks will be disappointing corporate earnings reports for Q4 2008. Yes you would think this bad news has been priced in, but it is more the forecasts companies make going forward that will rule the day.

Conventional thinking to date has called for a bad first half 2009 with a recovery starting for the world economy after that. If that scenario were to hold, then stocks could well begin to rally into the next cyclical bull from here. This thesis will falter if too many companies admit they cannot see hope for a 2H recovery as of yet. Another risk factor will be the magnitude of corporate write-downs and defaults on outstanding loans.

Now moving into the 14 month of the US recession, strains are starting to extenuate in most other (lagging) countries around the world. The Euro-zone is bickering among itself as their unified currency continues to falter. Yesterday, ECB President, Trichet, said that the global economy would “slow down significantly in 2009” but advanced his hope that “2010 should be the year of the recovery”.

This week oil prices have re-coupled again to the on-going saga of plunging world demand. Reality dawned as the OECD warned China, Germany and Russia are showing the fastest pace of deterioration among large economies as the entire global system succumbs to a "deep slowdown”. And China's Banking Commission said it would prove "exceptionally difficult" to meet the country's 8% growth target for 2009, the level seen as crucial to prevent unemployment from rising and setting off civic unrest.

On a positive note, scared out of their wits, many oil producers and car companies are now pledging serious capital and commitment to greener, sustainable energy.

“As President-elect Obama talks about promoting green jobs as America's route out of recession, Gulf States, including the emirates, Qatar and Saudi Arabia, are making a concerted push to become the Silicon Valley of alternative energy. They are aggressively pouring billions of dollars made in the oil fields into new green technologies. They are establishing billion-dollar clean-technology investment funds. And they are putting millions of dollars behind research projects at universities from California to Boston to London, and setting up green research parks at home.” See Gulf Oil States seeking a lead in green technology.

Even the Big 3 auto makers say they have pinned their hopes on "green" models. GM said it was on track to offer the revolutionary Chevrolet Volt in November, 2010, and on Monday announced a major contract with Korean manufacturer LG Chem Ltd to make the batteries. See: Too little, too late?

All of this is encouraging. But companies still have to stay solvent long enough to see their ideas through. So far they are budgeting for a second half recovery in consumer demand. That may not come.

Those that make confident pronouncements about how this year will go are blowing hot air. This is no time to be reckless. Responsible, practical management needs a survival plan for financial security should this downturn last until 2010. If it bounces back sooner, that will be a welcome gift.