For those of you who don't know Merrill Lynch chief economist David Rosenberg, he has been very bearish on the U.S. economy for a long time, long before the recession hit. Some give him credit for predicting how things would play out, while others criticize the fact that he was years early and therefore missed a lot of the upside before being right about the drop. Both points are reasonable, but I bring his name up because he was on CNBC this afternoon sounding much less bearish than any other time I can remember. Not bullish (heaven forbid), but not all that negative either.

Rosenberg pointed out that the stock market typically bottoms out about 60% to 65% of the way through a recession, which by his projections means we are about 90% of the way through this bear market. His downside target for the S&P 500 is 600, but he oddly adjusted that downward after his original level of 666 was reached "too early." He gets to 600 by taking $50 of earnings and applying a 12 multiple. As you can guess for my recent writings, a 12 P/E on trough earnings is much more reasonable in my view than some of the single digit predictions of other strategists.

I typically don't put too much weight in the absolute predictions of either the most bullish or most bearish people on Wall Street because both groups tend to stay in their respective camps far too long (Meredith Whitney comes to mind). That said, when long term bears begin to get more positive, it says a lot for where the market and economy are. If you can get people who hated stocks and panned the future prospects for the U.S. economy, to become even mildly bullish, I think that says something about how much negativity is priced into equities.