Roy can you confirm that your friend believes another 30-40% correction in real estate or in stock market in the US? If it is the DJIA which closed today at 8574 was to drop 40% it would sit at 5144, personally I can't see that happening.

Also, my thoughts as I work for a canadian f.i. - if your friends company has just decided to do this now, they're late at jumping on board. Many canadian companies even have gone through this already and are just now starting to lend again commercially. Ontario being one of the hardest hit canadian provinces in terms of unemployment is showing great signs of life, and many of those who have lost jobs are now working for themselves (whether this is good or bad remains to be seen) - I can only speak for my local area in central ontario, but there is alot of activity recently from car buying to house buying, numbers well above what our predictions for this half of the year were. these recently self employed folks even find themselves able to borrow money thanks in part to the actions of our government.

I can't say I believe there wont be some downward pressure and some wild fluctuations still to come in the markets, but personally I seriously doubt we'll see another 30% or 40% correction.. my humble opinion of course.