Do you see a rebound?

The Mall of America would be a great practice field for the Minnesota Vikings, fall and winter clothes are already 40% off at Macy's, and the Palms in Vegas is mailing me coupons.

Recently, I went out to eat with some friends: One owns a construction business that has come to a standstill; two are media types out of work; and one is the owner of a small manufacturing company, who is laying people off as fast as she can and is now worried about her own survival. And I'm sure you've heard similar tales of woes from your family, friends and neighbors.

Historically, the Fed has lowered interest rates to spur spending and investment.

Well, the Fed has already cut interest rates to banks down to essentially zero. The media are screaming about potential inflation due to the trillion dollars the Fed put into the system, but that trillion has simply replaced the trillion written down by the banks, which have another trillion and a half in write-downs to go.

In the past, the government has increased spending and cut taxes to spur spending during times of economic crisis.

However, Uncle Sam is now in so much debt that this is no longer a serious option. And it looks like we are going to spend another $900 billion-plus on health care reform over 10 years (a lot of money, sure, but about a third less than what Wall Street will spend on bonuses).

Businesses do not see a turnaround in 2010. Even with public figures talking up the economy (and who can blame them, it's practically in their job description) businesses are not listening. If consumers aren't spending, why should businesses?

For example, Intel (NASDAQ: INTC) said the year will close strong, although it still will be down compared to 2008. This end-of-the-year optimism is being driven by a once-in-five-year change in the Windows operating system -- something that should have created booming demand, not a modest uptick.

Excess capacity is everywhere -- we have more than enough people, factories, stores, and so on to meet current demand.

Want to buy an indoor mall? You can get one in North Myrtle Beach for $3.3 million -- less than the previous value of many homes in that area.

By year-end 2009, we will see a more than $4 trillion pullback in credit lines. And we are a country that runs on credit. In fact, the entire growth in consumer spending from 1997 to 2008 was paid for with home equity lines and credit cards.

Credit standards are already impossibly high. My credit lines literally shrink every month because I do not use them. But what if I needed them? And I almost couldn't get a lease for a new car even though I have never missed a bill payment. The majority of people cannot borrow money and, therefore, cannot spend. This will not change in 2010.

Next: Reason #6: Excess capacity

Not only are consumers not spending, their actual attitudes toward spending have changed.

Even for the six people on the block who are flush with cash, frugality is the new chic. My neighbors, high-end Saab and Volkswagen types, just bought a Kia Sportage for their daughter (nice car, by the way).

A fear of a loss of income will continue to squelch consumer spending. Most people I know are fearful about their futures -- i.e., losing their jobs or seeing a cut in commissions, profits, or wages. This means they will hang on to their pennies in 2010.

Bottom line: Consumers drive 70% of GDP, and a meaningful recovery will not happen without their dollars.

Next: Reason #4: Changing consumer attitudes

The pundits on CNBC get all giggly when we lose "only" 550,000 jobs -- a true sign of the times. Uber analyst Meredith Whitney, one of the few people on Wall Street who has been worth listening to during the past three years, is forecasting 13% unemployment in 2010 or 2011.

Officially, unemployment currently stands at 9.8%. But if you add in part-time workers wanting more work and the people who are so discouraged they have stopped looking, the number is a shocking 20%.

People not only feel poorer, they are poorer. Personal wealth will continue to decline in 2010, as home prices fall even further, fueled by a wave of 7 million homes that will go into foreclosure in the next 12 to 18 months. And foreclosure rates will remain above historical norms well beyond that.

More foreclosures mean more downward price pressure in the housing market. And homeowners will experience a commensurate loss of wealth as the value of their homes decline. And this is on top of all the money that had previously been lost in the stock market -- as much as 40% of accumulated consumer wealth.

Think the economy is recovering? Think again.

Forget the noise and statistics thrown around by the politicos and pundits. We are not at the end of this recession -- we are in the middle of it.

This will not be a V-shaped recession and recovery, folks. It is a U-shaped one at best, meaning we have a while to go before things truly pick up. But, more than likely, we are dealing with a W-shaped recession, and we are near the end of the second leg ... and then down we go.

The eeriest reason you should be wary of a pullback in October is the similarity between the chart of the rally that began March 9 and the 1937-1938 rally, which was followed by a sharp pullback.

They are practically identical -- seriously, check it out.

This could be a harbinger of a major slide beginning no later than December, but probably starting in October.

Two key elements of the market's rise -- short-sellers covering their positions and money managers looking for quick profits -- are waning, reducing buy-side volume.

This will eventually impair the market's ability to sustain itself as more shorts are entering the market and more managers are preparing to bank profits before the end of their year on Nov. 1.

Next: Sign #10: An eerie similarity

Market volume is so light that many technicians do not see the rise in the indices as "real." They want to see increased buying volume to confirm another upward leg in the rally.

While volume may increase in the short term, it still will be considered light, as many investors are very cautious (and should be) about getting in after a 40% rise in the markets. Without heavier volume, the market is very vulnerable to a downturn.

Next: Sign #9: Short covering and money managers looking to bank profits

The market has been indiscriminate in this rally, pushing up 487 out of 500 S&P stocks. This level of irrationality is ending, and certain segments are going to take a hit.

Once this happens, the broad-based support for the S&P 500 will erode brick by brick.

Next: Sign #8: Light volume