Here is a great post from Mish at www.globaleconomicanalysis.blogspot.com about what happened in 2008 and what to expect in 2009.  I don’t disagree with any of it.  Here are some excerpts:

2008 brought a continuation of the housing crash, massive foreclosures, rising unemployment, the collapse of Bear Stearns, the bankruptcy of Lehman, a $700 billion bailout that most citizens were against, fear mongering by Bush and Paulson to get the bailout bill passed, a ponzi scheme right under the nose of the SEC by Madoff that wiped out as much as $50 billion, hundreds of mortgage lenders imploding, and a stock market crash that was down as much as 51% finishing the year at -38.5%.

We also witnessed a credit crunch, soaring corporate bond yields, a commodities boom and crash with oil soaring to $140 then falling to $36, record low yields in treasuries, the nationalization of Fannie Mae and Freddie Mac, and a bailout of AIG that has already cost taxpayers over $100 billion. Sadly, socialism was embraced while free market principles were shot and left for dead. Worldwide, the Fiscal Insanity Virus Spread Rampantly.

Finally, 2008 was a year of the biggest ever declines in the CPI, auto sales, consumer sentiment, home sales, home prices, and treasury yields which actually went negative on a couple of occasions. The only comparable period in US history to this sequence of events was the Great Depression.

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2008 is the year the impossible happened, the impossible being deflation. Deflation was called on this blog and a few other places but the idea was essentially mocked as impossible by the masses.

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Themes For 2009

Looking ahead in 2009 here are some things I see as likely.

Obama will pass a stimulus package of $850+- billion but $300 billion will be “tax relief” amounting to $19 a week at most. $19 a week per household is not going to stimulate much of anything but it will add to the budget deficit. People will use that money to pay down bills, which is exactly what they should be doing with it.

The first 3-5 months are going to be extremely weak on the jobs front with 400,000 or more jobs lost each month. Obama is going to need to create 2-3 million jobs just to counteract job losses in first half of the year. There is no way he is going to create jobs that fast given implosions in state budgets and retailers.

In 2009 consumers will continue to retrench, housing will continue to decline, and as many as 100 small or regional banks will implode over falling commercial real estate prices. The Fed may arrange shotgun marriages with these banks instead of letting them go under.

He continues to get into specifics about what will happen with the stock market, the dollar, gold, inflation, etc.  I urge you to read the whole thing to know what to expect and how to prepare yourself for the continued zombification that will come.