If you're wondering why stock markets have reacted so violently on Monday to one piece of disappointing economic data - manufacturing activity in the New York region skidded according to the Empire State manufacturing index - here's an interesting thought from John Hussman , of Hussman Funds:

"Until now, 'less bad than expected' has been enough for investors," he said. "At this point, however, stocks are priced to require an economic recovery. That is a difficult bet, in my view, because as I noted last week, economic expansions are emphatically not driven by a 'consumer recovery.' They are invariably driven by swings in gross domestic investment - capital spending, autos, housing, factories, and other outlays that are heavily reliant on debt financing. That's why housing starts have such a strong correlation with GDP growth."