A slew of poor economic data over the past two weeks suggests that the U.S. economy is headed for a U-shaped recovery--at best--in 2010. The macro news, including data on consumer confidence, home sales, construction and employment, actually suggests a significant downside risk even to the anemic levels of growth which I forecast for H1 (the first half of the year). The U.S. faces continued challenges in H2--particularly as historic levels of fiscal stimulus fade--and appears far too close to the tipping point of a double-dip recession.

This is not the conventional wisdom. Heated debate continues to rage in the U.S. on whether the economic recovery will be V-shaped (with a rapid return to robust growth above potential), U-shaped (slow anemic, subpar, below trend growth for at...