The Great Recession is over, but the Great Recovery isn’t quite here. That’s no surprise. We’ve been expecting a rather lengthy transition that’s betwixt and between for some time. A year ago we opined that “the recovery period, whenever it commences, will be unusually slow and sluggish.” We’ve reiterated the forecast a number of times. Perhaps future economic data will prove otherwise, although for the moment there’s no shortage of like-minded thinkers.

As the folks at Yardeni.com, an independent financial consultancy, advise in today’s note to clients:

Everyone is capitulating. Investors usually do that at the bottom of a bear market, not this close to the top of a bull market. It seems to me that everyone I talk to in our business is depressed. That’s not surprising given all the downbeat chatter suggesting that the end is near. For the past year, as stocks soared, the widespread view among institutional investors was that “this will end badly.” Nevertheless, they were mostly fully invested bears. They felt compelled to participate in the bull market. Now they are worrying that the end is finally in sight for the global economic recovery, the bull market in stocks, and (of course) the euro.

But Yardeni and company aren’t necessarily bearish. As the note continues:

I see the beginning of the end of the deficit-financed social welfare state. But that won’t necessarily lead to a bad ending. It could be the beginning of greater fiscal discipline among governments around the world. That would be a happy outcome. Just imagine a world where governments freeze their spending, retirement ages are tied to average life expectancy, and homebuyers are required to put 30% down to buy a house.

Even so, it’s almost certain that big, quick and easy gains in all the major asset classes a la 2009 are history. The future will be tougher, on a number of levels. But what to call the new era? Sy Harding, president of Asset Management Research Corp., has a suggestion today via an essay titled: From Great Recovery to Great Austerity!