Perspective from Comstock Partners:

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More Important than Historical Statistics--Private Debt Decline

We believe the private debt decline that has already started will continue, and be led by the consumers who are reigning in their spending habits, saving more, and paying off (or defaulting on) their enormous debt.  Although it might seem that deleveraging would be beneficial for our economy, almost certainly any decline from present debt levels will not be "orderly" and consumer demand will contract sharply...

Now that the credit binge has ended, we expect consumer demand to continue declining.  As the consumer continues to retrench, we expect the household debt to decline below $10 tn. from $13.3 tn. now.  With the deprivation of this consumption power which has been the backbone of the U.S. economy for the past 75 years, the economy can be expected to enter a double dip recession.

Link: http://www.comstockfunds.com/default.aspx/act/newsletter.aspx/category/MarketCommentary/MenuGroup/Home/NewsLetterID/1613/startrow/3.htm
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Another Bear Market Trap

The sharp rally off the October 4th intraday low of the S&P 500 is a result of the assumed prospect of a real plan to save the Euro Zone and the European banks that have large holdings of sovereign debt, and slightly improved U.S. economic numbers indicating that the U.S. may not be in a recession right now...

As we have pointed out numerous times in previous comments and special reports, the economy has a good reason to be weak.  Household debt relative to GDP has exploded over the last couple of decades and consumers are now in the lengthy process of paying it down.  That's why consumers are not spending and that's why businesses are not hiring.  The demand for goods and services is just not there.

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Link: http://www.comstockfunds.com/default.aspx?act=Newsletter.aspx&category=MarketCommentary&newsletterid=1615&menugroup=Home&AspxAutoDetectCookieSupport=1