What a difference a year makes

It was about this time last year I visited Russia to check out the booming export market for U.S. apples, grapes and pears. Now, a year later, expectations have changed dramatically. The entire world is contracting, and Russia's energy-driven economy is no exception. U.S. apple exports to Russia in December 2008 totaled $1.6 million, down from $2.6 million in November and about $1 million below the $2.5 million in U.S. export sales in December 2007. Here are a couple of headlines about Russia and the rest of the world's economic troubles on this mid-February evening. Remember: It is always darkest.....

Russia plunges as IMF issues warning Sydney Herald
The cut in the GDP forecast came a day after the statistics office said that industrial production in the once-booming economy plunged by 16.0 per cent in January compared with activity in January 2008 - its worst fall for 15 years.

Russia signs oil for loan deal with China Bloomberg

Moscow mayor attacks Kremlin's economic policies Reuters

We have no shortage of glum news on the homefront, unfortunately....

GM needs up to $130 billion to avoid failure Reuters

Sales tax time bomb explodes Mish's Economic Analysis

Time to nationalize insolvent banks Business Standard Roubini column

Whereas Sweden adopted this approach successfully during its banking crisis in the early 1990s, the current US and British approach may end up producing Japanese-style zombie banks — never properly restructured and perpetuating a credit freeze. Japan suffered a decade-long near-depression because of its failure to clean up the banks. The US, United Kingdom and other economies risk a similar outcome — multi-year recession and price deflation — if they fail to act appropriately.

Bank nationalization gains ground with Republicans FT

Barack Obama, the president, who has tried to avoid panicking lawmakers and markets by entertaining the idea, has moved more towards what he calls the “Swedish model” – an approach backed strongly by Mr Graham. In the early 1990s Sweden nationalised its banking sector then auctioned banks having cleaned up balance sheets. “In limited circumstances the Swedish model makes sense for the US,” says Mr Graham.

Mr Obama last weekend made clear he was leaning more towards the Swedish model than to the piecemeal approach taken in Japan, which many would argue is the direction US public policy appears to be heading.

Stimulus boosts food aid by $20 billion Reuters

Food stamp benefits rise by 13 percent through Sept 30. The law also waives until Sept 30, 2010, the three-month limit on benefits to able-bodied adults who have no dependents. Some 31.1 million Americans got food stamps at the latest count.