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Every week it gets worse and worse and worse. Today it was Japan….

THERE HAS NEVER BEEN DATA THIS BAD FOR ANY MAJOR ECONOMY – EVEN IN THE GREAT DEPRESSION. December industrial production came in down 9.6%, worse than the METI forecast. It is now down almost 21% year over year. METI forecasts a further 4.7% decline in February. The inventory to production ratio soared again. Maybe METI will be correct.

If it is, Japan industrial production will have fallen 28% (non annualized) in four months. It will have fallen by a third in about a year. Nothing in the history of major nations compares. A 28% decline in four months would be more than half of the entire decline in U.S. industrial production over the 3 years and nine months of the U.S. Great Depression.

It would be a greater decline in four months than in any 12 month period in the Great Depression in the U.S. We are literally looking at the unimaginable. (I am attaching the U.S. industrial production index from the Great Depression for comparison).

States are currently at the mid-point of fiscal year 2009 — which started July 1 in most states — and are in the process of preparing their budgets for the next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps of $46 billion (over 9% of state budgets) have opened up in the budgets of at least 42 states plus the District of Columbia. These budget gaps are in addition to the $48 billion shortfalls that these and other states faced as they adopted their budgets for the current fiscal year, bringing total gaps for the year to over 14 percent of budgets.

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It may be particularly difficult for states to recover from the current fiscal situation. Housing markets may be slow to fully recover; the decline in housing markets has already depressed consumption and sales taxes as people refrain from buying furniture, appliances, construction materials, and the like. Property tax revenues are also affected, and local governments will be looking to states to help address the squeeze on local and education budgets. And as the employment situation continues to deteriorate, income tax revenues will weaken further and there will be further downward pressure on sales tax revenues as consumers are reluctant or unable to spend.

Prime Minister Kevin Rudd said the massive stimulus package was aimed at nation building and supporting up to 90,000 jobs “in the face of the unfolding national and international economic emergency.”

The government faced a “stark choice — to act or fold its arms and let the free market rip,” the centre-left Labor Party leader said. “The government has resolved to act and will continue to act.”

The package includes spending of 28.8 billion Australian dollars on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of 12.7 billion dollars to eligible workers, farmers and students.

Up to 950 dollars would be paid to workers earning 100,000 dollars or less, supporting up to 8.7 million individuals, the government said in a statement.

Similar amounts would be paid to single-income families, drought-affected farmers and others in need from March.

The government slashed its economic growth forecast by half, upped its estimate of job losses and warned the budget would plunge 22.5 billion dollars into deficit instead of achieving the 21.7 billion surplus predicted last May.

Gross domestic product growth is now expected to be 1.0 percent in 2008/09 and 0.75 percent the following year, compared with respective forecasts of 2.0 percent and 2.25 percent made just three months ago.

The unemployment rate is expected to surge to 7.0 percent in 2009/10 from 4.5 percent in December, the government said.

The latest stimulus package follows a pump-priming exercise in December which fed 10.4 billion dollars into the economy, targeting pensioners and others in a bid to boost consumer spending.

Adding to the new measures, Australia’s central bank slashed interest rates by one percentage point to a 45-year low of 3.25 percent Tuesday, the latest in a series of aggressive cuts.

Reserve Bank governor Glenn Stevens said the board had taken the stimulus package into account in making its decision.

“The combination of expansionary monetary and fiscal policies now in place will help to cushion the Australian economy from the contractionary forces coming from abroad,” he said.

The International Monetary Fund predicted last week that the Australian economy would contract by 0.2 percent in 2009 if no further measures were taken.

Preparing the way for the budget deficit announcement, Rudd on Monday said the global economic crisis and China’s slowdown would punch a 115-billion-dollar hole in tax receipts over the next four years.

A statement issued by the base Sunday said the body of Capt. Jonathan Bayless, 28, was found Friday night. Police did not give details but said it was in an area north of the city soccer complex and they are awaiting autopsy results.

Col. Christopher Ayres, the base’s 91st Missile Wing commander, said Bayless was a training chief with the 91st Operations Support Squadron. He had been at the Minot Air Force Base since March 2005.

Bayless went on active duty in May 2003, the statement said. Base officials did not list his hometown but said he had been assigned earlier to Vandenberg Air Force Base for missile combat crew member training.

”The 91st Missile Wing has lost not only a valuable member of our team, but a member of our family, and he will be missed.” Ayres said in the statement.

Now scientists in China and the United States believe the weight of water, and the effect of it penetrating into the rock, could have affected the pressure on the fault line underneath, possibly unleashing a chain of ruptures that led to the quake.

Fan Xiao, the chief engineer of the Sichuan Geology and Mineral Bureau in Chengdu, said it was “very likely” that the construction and filling of the reservoir in 2004 had led to the disaster.

“There have been many cases in which a water reservoir has triggered an earthquake,” said Mr Fan. “This earthquake was very unusual for this area.

There have been no seismic activities greater than a magnitude seven quake along this particular seismic belt before.”

The 7.9 magnitude quake struck last May and left more than five million people homeless. It remains a raw and emotional topic for most Chinese, and the government has been quick to quash any suggestion that Zipingpu may have been responsible for the catastrophe. Researchers have been denied access to seismological and geological data to examine the earthquake further.

To test his hunch he designed Rat Park, an alternative laboratory environment constructed around the need of the subjects rather than the experimenters. A colony of rats, who are naturally gregarious, were allowed to roam together in a large vivarium enriched with wheels, balls and other playthings, on a deep bed of aromatic cedar shavings and with plenty of space for breeding and private interactions. Pleasant woodland vistas were even painted on the surrounding walls. In this situation, the rats’ responses to drugs such as opiates were transformed. They no longer showed interest in pressing levers for rewards of morphine: even if forcibly addicted, they would suffer withdrawals rather than maintaining their dependence. Even a sugar solution could not tempt them to the morphine water (though they would choose this if naloxone was added to block the opiate effects). It seemed that the standard experiments were measuring not the addictiveness of opiates but the cruelty of the stresses inflicted on lab rats caged in solitary confinement, shaved, catheterised and with probes inserted into their median forebrain bundles.

Filings of Chapter 7 and Chapter 13 bankruptcies rose 33% in 2008 as the economy worsened, according to data from U.S. bankruptcy courts and compiled by bankruptcy data firm Automated Access to Court Electronic Records. Chapter 13 bankruptcy allows people to pay off debts under a three- to five-year plan; Chapter 7 bankruptcy allows for a discharge of all debts.

In 2007, there were 819,115 such filings in the 50 states and Washington, D.C. The number rose to 1,086,130 in 2008 as the recession took hold. That’s nowhere near the record of 2.1 million filings in 2005, as consumers rushed to file before a federal bankruptcy reform law went into effect and made filings more difficult and expensive, but it’s still a significant leap.

When a car buyer still owes money on a vehicle he is trading in, the dealer promises to pay off the outstanding loan, then resells the vehicle. But as more dealers go out of business, some are sticking consumers with the bill. Lenders can then go after the previous owner who thought the debt was paid, or repossess the car from the new owner who assumed it came with clear title.

“It’s devastating for people when it happens because they have two car payments and they can’t afford them,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento-based nonprofit that lobbies on behalf of vehicle owners. “Their credit is destroyed for no fault of their own because the dealer defaulted.”

Regulators in California and other states, including Florida, Iowa and Washington, are seeing a surge in consumer complaints. They warn the problem is sure to grow this year because of the deepening recession and continued trouble in the auto industry.

The research was conducted for The Sunday Times over the last two months in three provinces vital to Chinese trade – Guangdong, Zhejiang and Jiangsu. It found that the global economic crisis has scythed through exports and set off dozens of protests that are never mentioned by the state media.

While troubling for the Chinese government, this should strengthen the argument of Premier Wen Jiabao, who will say on a visit to London this week that his country faces enormous problems and cannot let its currency rise in response to American demands.

The new US Treasury secretary, Timothy Geithner, has alarmed Beijing and raised fears of a trade war by stating that China manipulates the yuan to promote exports.

However, a growing number of economists say the unrest proves that it is not the exchange rate but years of sweatshop wages and income inequality in China that have distorted global competition and stifled domestic demand. The influential Far Eastern Economic Review headlined its latest issue “The coming crack-up of the China Model”.

Yasheng Huang, a professor at the Massachusetts Institute of Technology, said corruption and a deeply flawed model of economic reform had led to a collapse in personal income growth and a wealth gap that could leave China looking like a Latin American economy.

Richard Duncan, a partner at Blackhorse Asset Management in Singapore, has argued that the only way to create consumers is to raise wages to a legal minimum of $5 (£3.50) a day across Asia – a “trickle up” theory.

The instability may peak when millions of migrant workers flood back from celebrating the Chinese new year to find they no longer have jobs. That spells political trouble and there are already signs that the government’s $585 billion stimulus package will not be enough to achieve its goal of 8% growth this year.

The American economist Nouriel Roubini said growth figures of 6.8% in the fourth quarter of 2008 masked the reality that China was already in recession – a view privately shared by many Chinese financial analysts who dare not say so in public.

Why are there so many names on the U.S. government’s terrorist list?

In September 2007, the Inspector General of the Justice Department reported that the Terrorist Screening Center (the FBI-administered organization that consolidates terrorist watch list information in the United States) had over 700,000 names in its database as of April 2007 – and that the list was growing by an average of over 20,000 records per month.