These were the ADP Employer Services figures, and the government's "official" data always differ somewhat. But ALL the latest numbers tell the same story: The job market is losing steam!

* Manufacturing activity is decelerating fast! The Institute for Supply Management's benchmark index plunged to 53.5 last month from 60.4 in April. That was the lowest reading in 20 months, and far worse than "experts" were looking for! The service sector index also tanked.

* Home prices are setting fresh lows! The S&P/Case-Shiller Index fell 3.6 percent in March. That year-over-year decline was the worst since November 2009, and it leaves prices in 20 top metropolitan areas at the lowest level in eight years.

Meanwhile, April housing starts plunged almost 11 percent and permit issuance dropped 4 percent … pending home sales just tanked 12 percent — far worse than the 1 percent decline economists were expecting … and industrial production ground to a halt in April, confounding economists who were looking for a gain.

Treasury Secretary Timothy Geithner wrote an op-ed back in August 2010 called "Welcome to the Recovery." Maybe he should have named it "Mission Accomplished" … because his starry-eyed optimism seems every bit as misguided as President Bush's a few years earlier.

Economy's Achilles Heel? It Was "Bought and Paid For" in Washington!

How could the economy possibly be weakening again, when we just officially emerged from recession two years ago? How could this possibly happen, when the Paul Krugmans of the world promised that if we just borrowed and spent a few gazillion dollars, everything would be peachy?

And how could we be staring down the barrel of a serious slowdown, when Fed officials like Ben Bernanke swore on a stack of bibles that quantitative easing would save the economy?

Because "bought and paid for" recoveries are inherently unstable and self-defeating! If governments and central banks could truly vanquish the business cycle by just printing, borrowing, and spending all they wanted with no consequences, wouldn't every single one of them have done it before?

The reality is, the economic and political fallout from borrowing and spending so much eventually becomes too much to bear— and you just can't do it anymore! I believe that's where we are now …

The $14.3 trillion debt ceiling is putting shackles on Congress and the administration. So are global creditors and ratings agencies, who are increasingly punishing nations that think they can run up huge deficits and debt burdens.

Meanwhile, the Fed's QE programs have wildly inflated commodity prices and jacked up our cost of living. But because the Fed can't print jobs and boost wages — only fuel speculation by pumping the asset markets full of easy money — we've hit a wall. The "real economy" can no longer support these artificially inflated "financial economy" prices.

Immediate Steps to Take!

First, if you haven't already taken some profits off the table on your long positions, please do so now. This is the time to pare down your risk levels, regardless of what you're hearing on CNBC.

Second, dump any stocks exposed to the weakest parts of the economy. That would include sectors like banking, construction, and retail.