The slowdown noted by the jeweler highlights the risks to the economy as the debt crisis grinds on, writes MoneyShow.com senior editor Igor Greenwald.

When overnight futures traders get excited because Italy’s yields haven’t hit 8% yet, it’s clear the stock market has some issues.

Whatever measures Europe undertakes in the next ten days to save its common currency and the solvency of its governments and banks, it remains wedded to austerity, virtually guaranteeing a continent-wide recession.

The credit agencies are sharpening their knives again, as they try to quantify the economic damage already wrought.

European business executives are spending their time scrambling for financing and gaming crisis scenarios, hardly bullish tells.

And so Monday’s lightly-traded levitation is back to looking like a one-day respite in a bearish tape. As Merrill Lynch’s Mary Ann Bartels points out, the trading action is displaying disturbing similarities to the summer of ’08, shortly before the bottom fell out.

Now as then, the S&P 500 recovered from the initial slump to get back to its 200-day moving averages, only to roll over once again, breaking below the 50-day.

The question is whether the economy may also be more damaged than it’s letting on, now as then. On July 31, 2008, the initial GDP estimate for the second quarter showed growth of 1.9%, which would be revised to 3.3% a month later, rallying stocks 1.5% that day.

That was revised down to 2.8% by the end of September, but stocks hung in there despite having lost 7% since the prior estimate. By the time growth for the second quarter of 2008 was ultimately downgraded to 1.3% in late July 2009, the S&P 500 was down 22% from a year earlier.

The US is nowhere near in as bad a shape as it was three years ago, economically, so it’s possible to take the parallel too far. But it’s also true that Europe spent the summer of ’08 thinking it was in much better shape than the US, only to get dragged into our muck.

And, coincidentally or not, here comes Tiffany (TIF), the jeweler’s shares dumped like so much cubic zirconium this morning after it noted “recent sales weaknesses in Europe and in the eastern part of the US.” Despite the 21% sales jump and 63% earnings boost the company reported, its stock was getting crushed 10%.

Ordinarily, the intraday travails of a luxury jeweler shouldn’t mean much to the overall outlook for the economy, except that high-end sales have done so much to prop up cumulative consumer spending totals.

Tiffany’s clientele figures to be much more sensitive than the general population to the recent market declines. But middle-class spending also depends on the wealth effect, and neither stocks nor the still declining housing prices have made many people want to spend money lately.

A consumer credit survey released yesterday by the New York Federal Reserve showed newly delinquent consumer balances up notably in the third quarter, bucking consistent improvement over the prior two years. If Congress fails to resolve longstanding differences over tax policy, a payroll tax hike will shrink paychecks starting next month, further inhibiting spending.

At that point, the economy will be more reliant than ever on the Tiffany’s crowd to save the day. But even that lot is feeling a bit pinched at the moment.