Well there are a few fundamental differences between what you contend and what I think to say the least. First the impact of this recession and depths of it.
To say that this recession is worse than previous recessions or that the sell-off is unprecedented is factually incorrect. The slope might be steeper, but the actual sell-off is not worse than before. Surely the fear-mongering that the media has participated in this time is worse than before though.
Second about the market dropping and recovery there is a misunderstanding: the index that goes down is not the same as the index that recovers. That is the case in any of the events; certain companies will not survive or recover to their previous strength while new companies and industries will begin their journey to stock market darlings.
The current situation and Japan are actually quite dissimilar as well. In under-estimating the US economy you are effectively under-estimating the most innovative and forward thinking group of people on the planet!
Lastly, I think that the idea of hitting rock bottom from an investors point of view is overblown here. While we would all like to be able to buy-in at the exact bottom of the market the sentiment has been that we are historically low and there are great opportunites. Even if you bought in at 9500 you were nowhere near the top of the market; so that will be a bargain down the road.
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