Yesterday, I did a blog entry giving Warren Buffett's warning that the US economy will remain in a shambles for at least all of 2009. But if yesterday's performance of the Dow Jones Industrial Average is anything to go by, it will be around for a lot longer than that.

As The Wall Street Journal tells us, stocks fell to their lowest level in 12 years with signs that investors were knuckling down to a long slump. The US economy shrank at a 6.2% annual rate in the fourth quarter and economists say it's likely to shrink at around 5% pace this time. And the unemployment rate, 7.6% in January, is expected to show another rise in February when the Labor Department reports on Friday. People are just fleeing the market because they don't expect it will turn around any time soon. That tells us shares are a leading market indicator. They tell us how people expect the market will be performing months out from now. As Hugh Johnson, chairman of Illington Advisors in Albany told the Dallas Morning News: "Right now, the stock market is sending a very gloomy, yet clear message," Johnson said. "And that is that the outlook for the economy in 2009 and 2010 will be much worse than people expected."

There are some other worrying figures too. MarketWatch reports that personal savings have suddenly soared to a 14 year high, a sure sign that people are stocking up for a long and hard haul, knowing that they could lose their job and that the economic signs will continue to look bad.