S&P is out with their mid year update and their analysts are not very optimistic.  The following is the results of their roundtable discussion:

• Peak to trough in taking our estimate of the second quarter, we’re looking at a 21% drop in household net worth since the end of 2007. That’s the result of the 57% drop in the stock markets combined with a 32% decline in home prices.
• … as we look forward into 2010, there’s a large amount of debt coming to maturity that will start to spike in 2010 through 2014. That’s going to weigh very heavily on corporate credit quality and the ability to refinance that debt, starting now and carrying through the next four or five years.

• Commercial real estate lags the overall economy, so problems with CMBS have really just begun. Refinancing needs are huge and will exacerbate the credit issues if banks don’t start lending again. Downgrades will far exceed upgrades for the foreseeable future. For CMBS, the credit deterioration is just beginning and we believe the outlook is negative.

• The outlook for RMBS is slightly less negative. Most of the subprime issues are behind us from a ratings perspective. However, we still have a lot of work to do on Alt-A and prime because the credit picture in those segments has continued to deteriorate.
• We’re seeing some companies take a relook at their capital structure with an eye toward deleveraging, if that’s possible. Some companies who are on the fence of speculative grade and investment grade, they’re looking to either stay investment grade or get back to investment grade, so we’re seeing a bit of that. But with that said, corporate executives have short memories.

Source: S&P