When I think of the market I rightly or wrongly or because of long habit think of the U.S.
This talk of decoupling - premature, in my opinion. After all the same issues are prevalent in the U.K. (housing, credit, inflation) and generally true across Europe (credit, inflation and housing in some areas). Economic slowdown in the two largest economic zones is not going to be resolved quickly.
What is probably different, this time, is that if it is exacerbated by persistent high oil prices which continue even higher due to real supply issues, much of the Canadian economy will be savaged as well, even if the TSX doesn't show it.
Will high prices cure high prices? Eventually but if they are so high as to stall certain economic activity, there'll be nothing to celebrate. Again it will all depend on why prices are high. At this point I still believe that supply and demand are the major factors, not speculation. Speculation is merely a side-effect from investors realizing there is a long term, not short term, problem.
And if peak oil is already here, and we start seeing actual declines in world wide output - as we should at that time - there'll be no lack of high prices only less and less economic activity as a something of a semi-permanent feature of the world until we sort out alternatives. That's the danger of not acting quickly enough to have alternatives in place.
And that's why the 'when' of this possible, some say likely, event is so critical.
I hope its not soon; I hope then we also learn from this episode of very quick oil price gains and start working seriously on alternatives, finally. But if prices do back off I am not hopeful we will take the right steps given the nature of humans and our present day politics.