If this is a depression why call it great?

With the nonfarm payrolls (decreasing by 533,000) and the recent ISM numbers one would expect that the GDP contraction in the 4th quarter will be 7-8%. If they hadn't taken so many folks out of the labor force the headline numbah would have most probably broke 7%. This level of nonfarm payrolls is the highest since 1974 and lends more credence to my estimation that the stock market bottom (using Goldie's recent forecast of $65 S&P 2009 earnings) will reflect PE levels in the neighborhood of previous bear market lows : 1974 PE low equates to S&P of 514, 1982 low equates to S&P low of 429, and 1932 low equates to S&P of 364.

The real unemployment rate in America, measured in the fashion back when folks didn't think you could inflate your way out of the business cycle, has been double digits for awhile and is probably somewhere inbetween 12-15%.

It is estimated that for every 1 percent decline in U.S. and Europe's GDP there is a corresponding 7% drop in China's export growth rate. Orders at the recent Canton Trade Fair fell 17.5% which roughly translates into a 2.5% GDP drop in U.S. and Europe. Obviously conditions now are much worse, with real estate softening in China and the lag in the Chinese stimulus having a delayed effect, even if it is front-loaded; it would appear that the risk of a recession in China is now real.

China in recession takes oil to around $20-$25.

There are no free-market ideolouges in the depression foxhole so the expectation is that the kitchen sink, the rest of the appliances, and the floorboard is about to be thrown at this. (In other words we ain't seen nothing yet ... trillion dollar stimulus package?)

Bernakke will start monetizing cows to inflate the price of milk.