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Europe may look like a nightmare, but it’s similar to the US, where aside from the financials, many sectors are doing well, notes Jim Fink of InvestingDaily.

Back on July 21, Eurozone finance ministers and the International Monetary Fund (IMF) agreed to fund a second huge bailout of Greece that would defer the Greek debt issue for at least a couple of years.

So why are Greece’s two-year notes yielding 50%? The reason is that the July bailout agreement can’t go into effect until it is approved by national parliaments, and that hasn’t happened yet because of August vacations and some parliamentary opposition in Finland and Slovakia.

German Chancellor Angela Merkel’s political party—the Christian Democratic Union—lost its fourth straight local election, this time in her home state of Mecklenburg-Western Pomerania. Investors have interpreted the loss as the electorate’s rejection of her push for more taxpayer money to fuel Eurozone bailouts.

Meanwhile, Italy’s ten-year bonds fell for a record 11 straight trading days on news that Italy’s largest union is calling a nationwide strike. The strike is meant to pressure Italy’s parliament to reject Prime Minister’s Silvio Berlusconi’s plan for budget austerity—a program that’s needed to prevent a credit downgrade and a potential default.

What a mess! And the head of Germany’s state-owned development bank KfW Group didn’t help matters when he said that the situation today is “much more dramatic than in 2008.” The CEO of Deutsche Bank AB (DB) piled on the panic by stating that many European banks would “obviously” fail if they were forced to write down their European sovereign debt exposure to their current market values.

Eurozone finance ministers don’t meet again until September 16, so we could be in for another week of uncertainty. [And the G7 finance ministers meeting last weekend was quite unsuccessful—Editor.]

The good news for US investors is that Atlanta Federal Reserve President Dennis Lockhart recently said that US banks’ exposure to European sovereign debt is “contained” and “should not have a large impact on the US economy.”

Nevertheless, investor fears about indirect US bank exposure (i.e., debt holdings in European banks that themselves have direct sovereign debt exposure) caused the S&P 500 to reverse course mid-week and turn a 3.6% gain into a slight loss.

The bearish clincher was Friday’s August employment report, which showed a much worse-than-expected net gain in jobs of zero, the first time since 1945 that the economy created no jobs. For good measure, jobs for June and July were revised down by a total of 58,000.

The employment number was actually not as bad as reported; it deducted 45,000 jobs because of the temporary two-week Verizon strike that has now concluded. Furthermore, some economists estimate that up to 30,000 additional jobs would have been added by related businesses were it not for the Verizon strike.

This would have brought the total private-sector job gain to 75,000—hardly a stellar number, but one that doesn’t signal a recession.

The Economic Cycle Research Institute’s (ECRI) Weekly Leading Index fell for the third consecutive week to the lowest growth reading since November 2010. The 4.3% decline in growth is a bit worrisome, although it’s not yet pronounced enough to mark a recession.

ECRI co-founder Lakshman Achuthan says that the US economy is on “thin ice.” Other economists aren’t too optimistic either.

NEXT: Reasons to Be Bullish on the US Stock Market