But "it's still the first or second inning" of the cycle, says Jeff Saut, chief investment strategist at Raymond James, citing a ratio of the CRB Index vs. the S&P and (more importantly) growth in emerging markets

Saut was one of the first on Wall Street to recognize the approaching boom, turning bullish on commodities and "stuff stocks" back in late 2001.

He reduced those bets - and corresponding bearish dollar positions - in late 2007 but still believes "the wind is still at the back" of not just oil, gas and coal but base metals, agriculture, timber i.e. Anything where "if you drop it on your foot it hurts," he says.

Like commodities, Saut believes emerging market stocks have suffered a counter-trend decline rather than entered a bear market phase. He is particularly upbeat about Vietnam currently, based on its exposure to the agriculture cycle, and recommends the Vietnam Opportunity Fund.

More bad news from the financial sector today as Fannie Mae reported a $2.3 billion loss. The mortgage giant said it will also slash its dividend more than 85%. Meanwhile, Merrill Lynch, Citigroup and UBS have separately agreed to spend about $38.4 billion collectively as part of a settlement over auction-rate securities.

With headlines like these (and others), it's folly to say the credit crisis has hit bottom but "we are closer to the end vs. the beginning," says Jeff Saut, chief investment strategist at Raymond James.

Saut said the three factors necessary for a true recovery in the credit markets are in place:

• Steepening yield curve
• Cheap currency   
• Recapitalization of balance sheets 

As in: was the bounce from the July 15 lows "the" bottom, "a" bottom or just a weigh station on the road to Gomorrah?

Jeff Saut, chief investment strategist at Raymond James, believes the bounce was very likely just an intermediate-term low vs. the true bottom for the broader market. If the S&P can close above 1291, it's recent high, there may be another surge ahead into the 1330 area, he says. But caution is still warranted, says Saut, whose audited portfolio is up 5% year-to-date vs. double-digit declines for the major averages. "This is a trader's market."

One reason Saut has outperformed as a bold bet he made in early July on stocks "with the worst characteristics," including via leveraged ETFs like the ProShares Ultra Financials (UYG) and ProShare Ultra Real Estate (URE).

Saut dramatically pared down those positions after the initial bounce off the mid-July lows. That said, he does believe some financials like Wachovia may have "the" bottom amid the "plunge, panic lows" of last month.

After Freddie Mac's huge loss this week, expect similar grim news when Fannie Mae reports Friday, says Joshua Rosner, managing director at Graham Fisher & Co.

Rosner, who has distinguished himself by being right and early in calling this credit cycle, concedes Fannie Mae is in better shape than its smaller counterpart, having raised $7.4 billion in capital.

Still, "it's fait accompli the government is going to have to inject capital into [both GSEs]," and it amounts "worse by multiples" than the CBO estimate of $25 billion, Rosner says.

Rosner suspects the politicians know this, and are allowing Freddie to play the "we'll raise money when market conditions improve" game until the government ultimately takes control.

In such a scenario, "I can't imagine shareholders [of both] aren't going to get close to wiped out," he says -- barring a miracle recovery in the housing market.

The timing of such an event is hard to predict, he says, in part because both companies are still "playing accounting games," such as:

• Changing accounting treatment of private label securities by making them Level III vs.  Level II assets.
• Altering servicing practices by allowing bad loans they used to buy out of mortgage pools stay for up to 300 days vs. 90 days, previously.
• Freddie Mac taking $18 billion in tax deferred assets when the company admits it "does not maintain a tax basis balance sheet to support deferred tax accounting under GAAP."

Disappointing July same-store sales figures from Wal-Mart and Target today point not just to the struggling consumer, but why this economic slowdown is just getting started, says Joshua Rosner, managing director at Graham Fisher & Co.

Recent slowdowns have been corporate driven, which Rosner notes are typically short and sharp as CEOs seek to slash costs (and jobs) in order to  quickly "rightsize" their businesses.

In a consumer-led slowdown, like the one underway, slowing consumer spending first hit retailers, then manufacturing, then warehouse space, he explains. In such a scenario, rising unemployment is a lagging indicator, meaning the recent four-year high 5.7% unemployment rate is highly unlikely to be the peak.

As unemployment keeps rising, consumer spending will slow further, putting more pressure on corporate balance sheets, leading to more jobs losses (repeat ad nauseum).

That, in turn, will lead to defaults on commercial mortgage-backed securities (and related losses for their holders) on par with what's occurred in residential MBS, says Rosner, one of the first on Wall Street to warn of the looming crisis.

The timing remains uncertain but Rosner says it will come only after "capitulation" by the rating agencies and corporate executives, who he says are still playing "accounting games" and not really owing up to the severity of losses.

Updated from 10:54 a.m. EDT

The huge loss announced last night by AIG and Citigroup's pending settlement over auction-rate securities (to be announced later today) show again the credit crunch remains very much alive.

It's likely to get worse before it gets better, says Joshua Rosner, managing director at Graham Fisher & Co., an independent research firm, who predicts national home prices will fall another 13%-15% before bottoming in early 2010, "unless they overshoot."

Rosner, whom Fortune dubbed a "prophet of the credit crisis" for his early warnings about problems in mortgage-backed securities, believes companies are still slow to take losses and are "still playing games" with accounting.

For example, Freddie Mac's dismal results this week would have been even worse if not for $18 billion in deferred tax assets. Rosner says that $18 billion figure is questionable, based on Freddie's own admission in the appendix to its filing: "The company does not maintain a tax basis balance sheet to support deferred tax accounting under GAAP, which could result in balance sheet misclassifications and potential income statement adjustments."

Update: An earlier version of this story mischaracterized Rosner's view on recent agreements where Ambac paid Citigroup $850 million to cancel insurance on $1.4 billion of CDOs, and SCA paid Merrill $500 million to cancel insurance on $3.7 billion of mortgage-backed securities (MBS). The deals were a good thing for the monoline insurers, Rosner says, but also revealed that Citi and Merrill had previously been marking the relevant securities at overly inflated values.

In the SCA-Merrill agreement, for example, the company received $500 million for terminating hedges on MBS they were carrying on their balance sheet for $1 billion, he said. "That's one aspect of the game." (Tech Ticker regrets the error.)

Rosner says the slowness of management to really take losses is contributing to the market's "manic-depressive" state (heading back to "depressive" Thursday) because investors keep thinking the "worst is over" and then get hit by the next round of announced losses.

(For the record, Rosner does not own or short financial services stocks and his firm does no investment banking.)