Not “well”, but structurally repaired such than solid fundamental growth is at least possible, where there is a shared framework of values that makes a market of stocks possible.

I can see a couple of ways …

1) be finish the cataclysm, wash away many of the busted companies, and the low prices are so low as to attract sideline capital into solid companies that have no debt, actual sales, and are going to be around going forward, no matter what the rest of the market looks like. But the money that would buy these companies is not going to pay the current prices due to the amount of clear-and-present-danger disasters floating around out there today. We have to flush the disasters, burn down the corporate meth labs and crack houses in order to make the neighborhood safe again. That’s one way, re-testing (at least) the March lows.

2) the other way is the Japanese way, with succeeding generations not knowing any other kind of markets and thus not having the sense to avoid them. Muddling through while continuously pumping monetary salvation, bailouts and clunkers programs, throttling the economy, taxpayers, and consumers for a VERY long time. And even then, there is the likelihood that the markets may not heal, what with terminally ill monsters floating around to distort valuations and expectations. People won’t play in the casino if the house steals too large a percentage, and occasionally mugs/murders innocent corporate citizens. Even under option 2, there will have to be structural reforms, and the longer it takes for them to happen, the longer it will hover at the borders between night and day.

It seems clear that none of the Powers That Be (Obama and his gangsters, Bernanke, the criminals in Congress) are inclined toward introducing (or even discussing) any sort of market reforms or regulation, so it will be (at best) 4, 6, ?? years before we have a chance (only a chance) of replacing them and obtaining some Hope for Change.

Meanwhile, the rudderless ship of the US Economy drifts from one crisis to another — health care, social security, entrenched unemployment and increasing poverty. I don’t think the USofA can survive unless we either intentionally or accidentally take door #1.