From Politika….

Just when you thought there is nothing that can surprise you anymore in this country, comes this. LNT’s “Degpunktā” reports that Valmiera state prison had four special guards dogs shot as part of the “economy regime”. Apparently, the guards couldn’t bring themselves to do that so they called in an outsider and gave him a gun. I wonder if that’s the kind of measures that Mr Slakteris, the minister of finance, meant when he famously told the Bloomberg TV that “we will be …taupÄ«gi [economical].”

And from the Telegraph….

Ryanair’s chief executive caused howls of protest today when he suggested that the airline may charge passengers £1 to use its toilets.

From Calculated Risk…..

The S&P 500 closed at 735 or so. The low in 1997 was 737.01.

Note: the S&P 500 was at 744 when Greenspan spoke of “irrational exuberance”!

From Megan McArdle…..

One of the enduring mysteries of the last month has been how fourth quarter GDP could have been falling faster in Europe than in the United States. Now we have an answer: our first GDP estimates were way too optimistic. The revised estimates now put the annualized rate of decline in the fourth quarter at 6.2%, rather than the 3.8% initially predicted. That’s roughly in line with the decline in Europe and the UK, though Japan still has a commanding lead in the race to the bottom.

From Felix Salmon…

It’s pretty much impossible to get one’s head around the sheer enormity of the numbers in Barack Obama’s first budget. But it’s important to try, and one anonymous commenter has a very good point: the entire federal budget, as submitted by President Clinton in 1996 through 1999, was smaller than the budget deficit that Obama is proposing for next year.

From Spiegel…..

And how about subprime companies? European corporations are deeply in hock, with $801 billion in corporate debt maturing this year-nearly one-third more than in the U.S. Some, such as Munich-based chipmaker Qimonda and Swedish automaker Saab, say they are insolvent.

From Edward Hugh…….

According to the 2009 budget Barack Obama is sending to congress today, the United States will have a $1.75 trillion deficit this year. The figure represents 12.3 percent of estimated gross domestic product, double the previous post-war record of 6 percent in 1983, and the highest level since the deficit totaled 21.5 percent of GDP in 1945, at the end of World War II. It seems the numbers are about to start getting let out of the bag, and it will be interesting to see how the markets react.

From Bloomberg….

China investors should be “defensively positioned” as a decline in the nation’s tax receipts signals a steeper slowdown in spending than retail sales figures show, according to Goldman Sachs Group Inc.

“Tax data show much sharper deceleration in income and consumption in the past few months than suggested by official retail sales or income growth figures,” Goldman Sachs analysts Joshua Lu, Caroline Li and Fiona Lau wrote in a note today.

Value-added tax has “de-linked sharply” from retail sales figures, the analysts wrote. VAT rose 1 percent in the fourth quarter from a year earlier, while retail sales gained 21 percent, according to the note.

When the sales tax figures diverge sharply from the total sales figures, one set of figures has to be wrong.

From Bloomberg….

Japan’s exports plunged 45.7 percent in January from a year earlier, resulting in a record trade deficit, as recessions in the U.S. and Europe smothered demand for the country’s cars and electronics.

The shortfall widened to 952.6 billion yen ($9.9 billion), the biggest since 1980, the earliest year for which there is comparable data, the Finance Ministry said today in Tokyo. The drop in shipments abroad eclipsed a record 35 percent decline set the previous month.

A nation that used to finance the US is now having to sell assets to finance itself.

From the Telegraph….

The cost of bankruptcy protection on German debt has reached an all-time high on spill-over from the financial crisis in Eastern Europe and mounting concerns about the stability of Germany’s banking system.

People are becoming more wary about lending to the German government. Used to be that the thought of Germany defaulting was unthinkable.

It use to be said that the Debtor was the slave to the Lender. But nowadays it is reversed. As Gregor says….

Collectively, the debtors are in control. Not the creditors. This is why the the Creditors, not the Debtors, will be making most of the concessions in the years ahead. Whether the US public debt is inflated away, rescheduled, or repudiated–or some combination of all three–it doesn’t matter much. The process is already underway.

He is speaking of the domestic US market, but it is just as true world wide.