It’s still possible that this “R” word will not turn into the “D” word but in parts of the world it is a depression already. The quarterly economic output numbers are in. In our Great Depression GDP fell 6+ percent in 1931. In Korea last quarter it was down 22%. In Japan 12%. In Germany 7% and here 6%. Recessions are usually under a percent or two. China has lost 10 million jobs. Brazil lost 650000 in December and we are losing 500000-600000 a month. Obama’s economic advisers are a disaster packed with bankers and Fedsters like Robert Rubin and Larry Summers and Geithner for Treasury lately of the NY Fed. I mean we just got rid of old Mr conflict of interest himself, Henry Paulson and we have replaced the pigs in the barnyard with new pigs of the same species. The WSJ reports today that Geithner’s new Chief of Staff, Mark Patterson, was chief lobbyist for Goldman Sachs. Great. So we can expect more of the same disastrous bailouts with Obama as with Bush and Obama is calling for a hurry up offense to push the bailouts forward. Not a minute to waste. Is this Deja Vu all over again? So it’s more money to insolvent banks, more purchases of corporate paper(corporate bonds), more purchases of mortgage debt commonly known as toxic waste, bailouts of sinking car companies and so on. And no oversight, no voting rights to go along with all these enormous injections of cash. The same executives are still there. And if these bailouts haven’t worked, then it must be that we haven’t spent enough. Obama and his gang of well connected intelligent morons never learned the first rule of problem solving: when you’ve dug yourself a hole, the first thing you need to do is stop digging! The congressional Dems have learned nothing from the Bush bailouts and the Republicans ideas to handle a massive increase in the public debt is to cut taxes on the corporations and the wealthy. I have a primitive understanding of global financial markets but is it possible that buying up hundreds of billions to trillions in corporate bonds and toxic scum while simultaneously having Treasury sell bonds with almost no return to our own Federal Reserve pose some risks going forward? Like collapse of the bond market? Like collapse of our currency?My fear is that all these expensive antics will just delay the final reckoning. Obama’s team believes that we have a liquidity crisis but it is a debt and credit crisis. Their way to solve the problem is to get people lending again, get people borrowing again. 70% of our GDP has been consumer driven consumption so let’s get those Wall Mart shoppers shopping! But those shoppers are tapped out and their only friend in the world is their credit card. Average credit card balance in this country is over $11000. Fifteen years ago it was $4000. Credit card default is soaring. Total credit card debt is over $1 Trillion and I read that 5.8% is in arrears with estimates going forward of 10 to 15% this year. If unemployment hits 10 or 12%, those default numbers could be conservative. The news from the states is also not good. Most will be running deficits and a variety of governors from Pennsylvania to California are calling for furloughs, 4 day workweeks, paying bigger share of their generous health and retirement benefits and of course cancelling bond issues, capital projects and the like. California looks particularly iffy with 230,000 of some of the highest paid union workers in the country. My brother has told me that Police and Fire get 90% of their salary at retirement which is often 6 figures as well as lifetime health coverage. The deficit in California is said to be $28 to 48 Billion going forward. California could be the next Argentina. England could be the next Iceland. Latvia could be the next Lithuainia. Personally, I’m pulling for Iceland. The Pots and Pans Revolution finally had an effect. The 17 week protest in front of the Althingi, the Parliament, finally brought the government down and it looks like a woman PM by the name of Johanna Sigurdardottir will be a temporary Prime Minister with a Left Green coalition running things until general elections in May. Could be chaotic but bound to be interesting. Meanwhile over in Davos the World Economic Forum is meeting to resolve this little problem of global meltdown. I suspect there will a lot of grist for John Stewart there. I can’t wait to see what happens tomorrow.