"...In the first place, the U.S. economy has never been in recovery. It was more or less just a statistical recovery. GDP increased because of the way it is calculated, but the real economy and people on the street experienced no growth. Better employment numbers were the result of temporary government hires and those created by the Bureau of Labor Statistics' (BLS) small business birth-death rate model. "Cash for Clunkers" helped the auto industry temporarily, but now auto sales have plummeted. Stimulus for housing only slowed or paused the decline; now that those programs have expired, housing has plunged further. I could go on! Those bearish fundamentals and others are coming back to the point that the market and its followers are beginning to realize the economy is still declining. A lot of people are calling for a double-dip recession, but I don't even think we came out of the recession. This is just a deeper plunge, and will feel more like going into depression.
There are also the debt issues. So far this is mostly focused on Europe, but the U.S. is a bigger problem. Many of the U.S. states are bigger than Greece, and 40 or more of them are in the same bad shape. I expect that to come to the forefront before long because those states are going to have to have federal bailout assistance..."
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