From Daily Capitalist:

...The truth is that we have not had much of a recovery in the first place, which might prevent the economy from falling enough to display what many would label a double dip — although we are now assigning a 40% probability to such an outcome.

Weak economic growth and labor market conditions imply that the U.S. output gap keeps widening and the employment to population ratio will continue to fall. The anemic recovery and downward trend of inflation and inflation expectations are raising concerns that the economy could not only surprise to the downside, but eventually stall. A growth rate of 1% or lower (now likely for H2 2010) is a severe growth recession, as potential growth is closer to 3%.

With growth nearly stalled, an unstable disequilibrium arises that is likely to...

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