Stocks are getting battered across-the-board yet again today, with all of the major U.S. stock indices down 2 percent as of this writing. The Dow is down over 1,300 points, or 12 percent, from its recent April 23 high. Investor fear is running rampant across Wall Street and around the globe. And as if the contagious European debt crisis weren’t enough, markets now have military tensions between North and South Korea to add to their laundry list of worries.

So the question must be asked: Are we looking at a second-half slowdown? Is growth going to come in only around 1 to 2 percent, instead of, say, 3 or 4 percent? Is that the real message of our sinking stock market right now?

We’ve got Spanish banks going down, bank-to-bank funding stress rising in Europe, gold still soaring, the euro still falling, and Nero fiddling. LIBOR is now up 11 days in a row. Did someone say contagion? Systemic risk? Interconnectedness? Credit-risk spreads between high-yield junk bonds and Treasuries right here in the U.S. have jumped roughly 200 basis points in just the last month. These are not good signs.

Over in Europe, all of the welfare-state countries are still being guaranteed. That’s wrong. What Europeans really ought to be doing is temporarily guaranteeing their bank debt to avoid a credit meltdown. Let these countries sweat bullets and feel the added pressure to curb their welfare states.

One silver lining in all of this remains the steep Treasury yield curve. It’s still predicting no double-dip recession. We’ve also got a strong King Dollar, which is pushing down energy prices. Gas prices are actually falling heading into Memorial Day weekend. This, of course, becomes a tax cut for American consumers and businesses. That’s a good thing.

One final concern worth noting: If China were to jack up its renminbi right now, it could very well turn into one big global deflationary mistake.

More to be revealed . . .