One of the only two Wall Street investment strategists to predict today's bear market is now echoing our view on the markets and housing...specifically the relationship between the two...

"Battaglia remains cautious and believes the consumer will remain challenged in 2009," says investment director Eric Roseman, "He's also unconvinced the housing market and the economy will form a bottom this year, a view widely embraced by investment strategists predicting the economy will rebound the second half of 2009."

"He points to housing as the key driver influencing future domestic consumption; until residential housing prices stabilize - down over 23% year-over-year through October, according to the S&P/Case-Shiller Index of 40 cities, it's premature to predict a market bottom at this juncture. Housing is the key to an economic recovery."

Eric went on to elaborate why he agreed with Battaglia, "Underlying economic data everywhere - including the United States, remains bearish. The market does act as a discount mechanism and historically has rallied in the face of bad economic news as investors begin to discount the worst. But again, this is not a normal bear market; it's a credit-inflicted crisis that will take more time to heal."

"My view since October is that investors should focus on high quality investment grade corporate debt, mortgage-backed securities (agency debt) and TIPS, or Treasury Inflation Protected Securities. Income will rule in 2009. Gold prices should also top $1,200 an ounce this year as more investors grow disenchanted with paper currencies - all subjected to competitive devaluations in the face of sharply contracting GDP growth and plunging exports."

"Why take a shot at risky stocks that will succumb to another round of selling, including a deluge of dividend cuts when high grade bonds yield in excess of 7% and offer the scope for big capital gains?"