Investors hoping that the US government’s proposed $700bn Troubled Asset Relief Program to buy banks’ toxic assets will signal a bottom for equities may be disappointed, says David Rosenberg, North American economist at Merrill Lynch.

“Keep in mind,” he says, “for all the bottom pickers out there, that after the Resolution Trust Corporation was established in 1989 it took a year for the stock market to bottom, two years for the economy to bottom, and three years for the housing market to bottom.