1. US and European debt markets flash new warning signals

Cuddly bear Ambrose Evans Pritchard quotes Willem Sels, a credit analyst at Dresdner Kleinwort: the banks are beginning to face waves of defaults on credit cards, car loans, and now corporate loans. “We believe we’re entering Phase II. The liquidity crisis has eased a little, but the real credit losses are accelerating. The worst is yet to come.”

2. US banks likely to fail as bad loans soar

The FT agrees. We’re still in the early stages of the traditional credit crisis, and more banks are going to go bust.

3. U.S. Bank Failures Loom

“At least 150 banks will fail in the US during the next two to three years, according to a projection by Gerard Cassidy and his colleagues at RBC Capital Markets. If the current economic slowdown deteriorates into a recession on the scale of those from the 1980s and early 1990’s, the number of failures will be much higher this time around — probably as high as 300 of them, by RBC’s reckoning.”

4. Through the floor

Robert Shiller, an economist at Yale University and co-inventor of the index, has compiled a national house-price index that stretches back over a century. This shows that the latest fall in nominal prices is already much bigger than the 10.5% drop in 1932, the worst point of the Depression. And things are even worse than they look. In the deflationary 1930s house prices declined less in real terms. Today inflation is running at a brisk pace, so property prices have fallen by a staggering 18% in real terms over the past year.

5. US probes whether laptop copied on China trip

U.S. authorities are investigating whether Chinese officials secretly copied the contents of a government laptop computer during a visit to China. Surreptitious copying is believed to have occurred when a laptop was left unattended during trade talks in December.

6. Bush Authorized the Leak of Valerie Wilson’s Identity

For those who were falling this story back in 2006, it does seem that Bush outed a CIA agent as retribution for Joe Wilson’s resistance to telling the Niger/Uranium —> Iraq lie. This outraged many people even within the establishment.

7. Uncomfortable truths for a new world of them and us

We’re going to see more articles like this, discussing the shift in the world balance of economic power. The Washington Consensus is over. “Think back to the financial shocks of the 1980s and 1990s. For those of us in the west, these were unfortunate events in faraway places: Latin America, Russia, Asia, Latin America again. There was a risk of contagion, but in so far as rich nations paid a price, it lay largely in the cost of bailing out their own feckless banks. The really unpleasant medicine, prescribed by the International Monetary Fund, had to be taken by the far less fortunate borrowers.

The parameters of globalisation were set by the west. Liberalisation of trade and capital flows was a project owned largely by the US. It was not quite an imperialist enterprise, but, while everyone was supposed to gain from economic integration, the unspoken assumption was that the biggest benefits would flow to the richest. The rules were set out in something called, unsurprisingly, the Washington Consensus.

Against that background, the west’s present discomfort is replete with irony. “