Market Talk

The big talk these days is over the double-dip, the question of whether or not the economy will slip back into recession. The bulls say no, the bears say maybe, the pragmatists say it doesn’t matter because the economy stinks regardless. The markets are talking about it, the Fed is thinking about it, Spain’s problems are threatening to make it come true.

Look, if the recovery builds steam, as most people still believe, then the economy will grow, jobs will be created, and the government’s efforts will have paid off, no matter the cost and there won’t be any double-dip. If the recovery falters, if the jobs markets stagnates, if wages stagnate, if the government is so squeezed from its last go-round with bailouts and stimulus that it’s unable to blow mind-numbing amounts of money on boosting spending, well, there still won’t be a double-dip. Why?

Because it’ll be a sign the economy never actually came out of the first dip.

The signs are growing that the real economy is hitting a plateau, if not rolling over, as the various and massive government interventions into the private market fade (except for ultra-low interest rates; the Fed’s nowhere near raising them.) What’s pushed the recovery along this past year has has been government intervention, massive stimulus spending, massive inducements to consumer spending, massive monetary easing. It’s all been temporary, however, and as various programs dissipate, the real economy is left to do the heavy lifting. There are indications it isn’t up to that job.

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- Don’t dismiss the notion that retail spending is being partly driven by homeowners strategically defaulting on mortgages, even though it’s hard to quantify exactly hoe many people are “spending the mortgage,” Paul Jackson writes at HousingWire.

- Small businesses, which have led job creation in previous recoveries, may be finally contributing to job growth now as the economy rebounds, Atlanta Fed’s macroblog says.

- “The Squid has been living for years off the simple fact that, like the fabled IBM of yore, no-one ever got fired (or sued) for picking Goldman Sachs,” the Epicurean Dealmaker notes. “That calculus has been changed,” and everyone knows it.

- Google’s (GOOG) recent acquisition of secretive early-stage start-up Agnilux ranks as the “most curious” deal in its history, Digital Daily blogger John Paczkowski says.

- Picking apart Apple’s (AAPL) blowout earnings, Silicon Alley Insider’s Dan Frommer says Apple’s iPhone business is growing much faster internationally than it is in the US.

- Lots of merger chatter swirling swirling around UAL Corp’s (UAUA) United Airlines. And while a deal might make sense for operational reasons, Footnoted’s Theo Francis notes the company has made it “substantially more attractive” for its top executives to seal a deal.

- Facebook’s launching an ambitious plan to essentially take over the Internet.

- Looks like Adobe (ADBE has finally given up on getting Flash on the iPhone. “We will still be shipping the ability to target the iPhone and iPad in Flash CS5,” Mike Chambers, Adobe’s principal product manager for the Flash platform, writes on his blog. “However, we are currently not planning any additional investments in that feature.”

- Investors take note: A stock-market indicator with a good long-term record has flashed a buy signal.

- The grudge match over your 401(k)