We have probably hit the bottom in inventory liquidation, and hopefully we are actually now rebuilding inventory,

This scenario is highly unlikely, but can't be ruled out. The best outcome is a gradual and orderly fall in the value of the dollar improving the trade balance; this is in fact what has been happening.

The deflation concerns give ammunition to the president's tax cut,

This economic indicator continues the string of statistical signs supporting the current Federal Reserve stance, ... The recovery seems to continue, but it is still too weak to generate sufficient payroll growth for inflationary pressure.

Historically, economic and political crises have been buying opportunities. Looking at 17 crises, ranging from President Wilson's nervous breakdown to the Gulf War, the stock market setback generally has been a short-term matter lasting no more than a few months.

That's one of the reasons why consumers are not going on a spending spree, though they're keeping the economic ship afloat. When higher unemployment numbers come out, that will probably rattle consumer confidence a bit.