A number of troubling news have hit the markets lately, sending investing public into the safety net of cash or bonds. Fears of double dip recession have not been new, but the stalling economic data has renewed these fears once again. This is now coupled with the declined of the major stock market indexes like S&P500 and Dow Jones .

On Wednesday, the Federal Reserve noted several things that scored these fears namely the economic recovery, saying employment is showing slowest improvement with the jobless rate staying above 9% mark, the housing market is faltering, and consumer spending is anemic at best.

Senior analyst Walter Zimmerman at United -ICA says ” The stock market drops and rallies are similar to 1929 crash and the economy exhibiting the same patterns and adds that despite the fact he likes to see positive divergence, yet there is none to see”.

David Rosenberg also echoes the same sentiment, he notes that the crash of 1929 was followed by a rally in 1930 and than a period of deflation, credit crunch and widespread economic hardship.

No matter how the parallels between today and 1930 are sketched there are few economists predicting a fully steamed recovery these days.The main concern is the languishing housing market which ran out of Federal stimulus of $8000 credit per buyer this quarter. Many analysts are calling for a double dip housing recession and the calls are growing everyday. The fact is once the incentive is gone existing home sales have trailed off in the tracks and the inventories have started piling up. Would we see a double dip recession in the housing market is now a  matter of perspective.

There are fewer than handful economists out there who are not in the double dip , doomsday scenario at this time. Peter Cardillo of Avalon Partners in New york has been saying that we may not be headed for a double dip recession yet, but a period of slow recovery. He further asserts that slowdown in housing and worries about Euro debt have him made to lower his GDP forecast to 2.75 to 3  percent in 2010.

Now if you ask anyone in Obama administration you would get a  different picture. Treasury Secretary Tim Geithner insists that they will not let the economy fall into another recession and will support it and not withdraw from it like it was done in 1930s. Being in an election year its hard to imagine that the Congress itself will let another full blown recession register in the public domain.

But the doomsday machines are spinning dreams of disaster, it should be pointed out that they also predicted the end of the world back in 2008 which has not happened. The winter months of 2008 were extremely harsh and the general mood of depression was heavy it was suggested all around that the economy will collapse and will never come back. So far that dire prediction has proved to be false.

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