Recession or depression? Normal bear or Big bear?

Some serious thinkers, with hundreds of years observing markets between them, have recently become pessimistic about the state we are in. They have – independently and in different forums - spoken out in the past week or so. The fact that so many people whose intellect I greatly respect are all pessimistic at the same time is worrying, especially when combined with my own reading of the economic runes.
Each choses to highlight a different main problem/trigger, but all acknowledge a general background of excess, market fragility, policymaking incompetence and sense of the coalescing of multiple dangers creating a looming turning point in history.
What we have got coming may be no normal downturn. These people, whose ideas I’ll try to set out in a few newsletters, point to a set of negative events that could be on a par with some of the worst financial experiences of the twentieth century.
Their ideas resonate with the conclusions I’ve been drawing from my general reading of economic and financial market conditions over the last five months.  As a result I sold off about 30% of my equities early in the year. Now I’ve sold some more some more shares (MS International in this case) so that I have more cash to, hopefully, (a) out-perform on the way down simply by not having so many shares, and (b) buy bargains when the negative impacts have been recognised by Mr Market – he is likely to go into a very poor state of mind when the recessions and other strife become truly visible.
There’ll be some rules to follow in troubled times, the key ones being:

1. Do not invest in risk assets that money needed for family life
2. Keep plenty of cash around
3. All investee companies must pass tests of resilience in the face of a harsh macro-economic environment. This means either or both (a) a rock solid balance, (2) great reassurance that turnover and profit are unlikely to be lost to any significant degree in a downturn.
4. When the time is right, when “there is blood on the streets”, look for the bargains. Be greedy when others are fearful. It’s going to look dark for a while but dawn will come.
5. In the meantime keep busy analysing companies so there are plenty on the shortlist which have been quantitatively and qualitatively assessed. Then, when the opportunity arises little time is needed to get back up to speed understanding them, and they can be bought with decisiveness.

The thinkers are:
George Soros, at Davos last week, said we m.....