Yesterday Personal Income and Spending showed the first decline in 2 years. Recent reports taken together indicate a rapidly declining economy. In fact, J.P. Morgan economists have slashed forecasts for the second half of 2011 today from 2.7% GDP growth (already reduced) to below single digit. The inference is a trip back to recession.

Rumours emanating from Europe Tuesday that more debt troubles were about to plague Spain, Italy and even France, do not help either.Whatever 2011 year-to-date gains existed have been wiped-out for major equity indexes. And today was the worst loss for $SPY since August 2010.

The Jackson Hole Summit is coming this month and perhaps Bernanke will find a new Keynesian remedy to pull out of his hat a la QE3. 

Wednesday will bring us ADP employment data, Factory Orders and ISM Services Data.