Forget all that talk about "green shoots," kids. We're been in the eye of the storm, but now we're about to run into another round of mortgage resets. It's going to get much, much worse:

World Bank President Robert Zoellick warned policy makers that fiscal-stimulus plans are insufficient to turn around the “real economy” and rising joblessness threatens to set off political unrest across the globe.

“While the stimulus has given an impulse, it’s like a sugar high unless you eventually get the credit system working,” Zoellick said in an interview with Bloomberg Television’s “Political Capital with Al Hunt” scheduled to air tonight and over the weekend. “When unemployment increases, that’s probably the most political, combustible issue.”

From Ryan Chittum at the Columbia Journalism Review:

The option-ARM resets mark the end of the salad days for their holders. The principal has to be paid off sometime, after all. So interest-only payments will reset to amortize in many cases will be an even bigger amount owed than when they first purchased the house. Low-interest teaser rates will reset to presumably higher rates.

Now, the question that raises for me is: How many of these option ARMs have been written down by the banks? If they haven’t been, then the capital holes are going to be blow out again.

On a broader level, it spells more trouble for the housing market, which is already down by a third nationwide (remember those jokers who said it could never decline even 1 percent?), and which, as the Times wrote the other day, is just now getting fully hit by the pain of prime-mortgage holders.

This will be, uh, bad for the economy. That’s not even mentioning the still-to-come crash of commercial real estate loans, credit cards, car loans, etc.

The press doesn’t need to be cynical about a potential recovery, but after all it’s been through in the past few years, it sure doesn’t need to give readers false hope.

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(Acknowledging coffee as a food group)

In 1974 the argument was whether or not to call it a Recession or a Depression, but without any doubt we had one.

The economic woes of the 1970s extended well into the 1980's, with fits and starts and forays into inflation and deflation and stagflation - a veritable plethora of 'flations confronting the country for the better part of a decade. President Ford initiated the somewhat feeble Whip Inflation Now as gas prices went spiraling up, home values came cascading down and unemployment skyrocketed. Sound familiar?

There was a lot of analysis to be had - one was a panel discussion broadcast by NBC Radio in 1974 and later edited into a one hour documentary called "The Wayward Economy" as part of their Second Sunday series. The panel consisted of various economic "experts" (with heavy emphasis on the Chicago School of Economics) at the time; Pierre Renfret, Peter G. Peterson, Ralph Nader (during his relevancy period), Yale Brozen and Tilford Gaines.

This documentary was aired on September 17, 1974.

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There were several questions at President Obama's G-20 Summit press briefing today asking him to compare himself to the previous administration. While he made clear there was a significant difference between himself and his predecessor, mostly he shied away from slagging the Republicans he replaced, and particularly George W. Bush.

But watching him onstage, you couldn't help making the comparison. And all I can say is: What a relief it is to once again have a thinking, competent, and capable man as the president.

Still, probably the most pertinent question, for those watching at home, came from Chuck Todd:

QUESTION: What concrete items that you got out of this G-20 can you tell the American people back home who are hurting, the family struggling, seeing their retirement go down, or worrying about losing their job, what happened here today that helps that family back home in -- in the heartland?

PRESIDENT OBAMA: Well, as I said before, we’ve got a global economy. And if we’re taking actions in isolation in the United States but those actions are contradicted overseas, then we’re only going to be halfway effective, maybe not even half.

You’ve seen, for example, a drastic decline in U.S. exports over the last several months. You look at a company like Caterpillar, in my home state of Illinois, which up until last year was doing extraordinarily well. In fact, export growth was what had sustained it even after the recession had begun.

As a consequence of the world recession, as a consequence of the contagion from the financial markets debilitating economies elsewhere, Caterpillar is now in very bad shape.

So if we want to get Caterpillar back on its feet, if we want to get all those export companies back on their feet so that they are hiring, putting people back to work, putting money in people’s pockets, we’ve got to make sure that the global economy as a whole is successful.

No doubt this is some reassurance for Americans. At the same time, it was responses like this one, I think, that will help build confidence in America among other nations:

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I'm betting that wingnut heads will explode over President Obama stating the obvious: eight years of BushCo rule have left us in no shape to proclaim "We're No. 1!":

LONDON, April 1 -- On the eve of a global economic summit here, President Obama delivered an unusual warning Wednesday for an American leader: The "voracious" U.S. economy can no longer be the sole engine of global growth.

The statement signaled a recognition of a new economic era with a less dominant U.S. role. Although Obama said the United States should not miss "an opportunity to lead" the way out of the crisis, he suggested he would not be the globe's financial decider. "I came here to listen," he said, "not to lecture."

His message also amounted to a challenge to world leaders that highlights the core differences expected at Thursday's summit. As more than 20 heads of state write a plan to combat the crisis, major European powers are firmly resisting calls to further open their coffers and cut taxes to spur the global economy.

Uh, tax cuts? Unlike the U.S., European taxes fund a strong net of social services like health care that are especially important in an economic downtown. Seems to me that's the last thing they should do right now - especially while they have riots in the streets.

Such resistance may not have mattered as much in the past. In previous downturns -- including the Asian crisis in the late 1990s -- the United States was by and large the driving force of global recoveries. But in the wake of the current crisis, Obama said, Washington will have to deal with "our long-term fiscal position" and the notoriously low consumer savings rates that for years drove Americans further into debt even as U.S. imports soared.

This time, he said, the rest of the world cannot depend on the "United States being a voracious consumer market."

"Those are all issues that we have to deal with internally, which means that if there's going to be renewed growth, it cannot just be the United States as the engine," he said during a news conference with British Prime Minister Gordon Brown. "Everybody is going to have to pick up the pace."

Gee, you mean untrammelled capitalism isn't inherently good? While there's certainly plenty of blame to go around for both parties, we can credit eight years of deregulation for much of this crisis:

The world is falling into the first global recession since World War II as the crisis that started in the United States engulfs once-booming developing nations, confronting them with massive financial shortfalls that could turn back the clock on poverty reduction by years, the World Bank warned yesterday.

The World Bank also cautioned that the cost of helping poorer nations in crisis would exceed the current financial resources of multilateral lenders. Such aid could prove critical to political stability as concerns mount over unrest in poorer nations, particularly in Eastern Europe, generated by their sharp reversal of fortunes as private investment evaporates and global trade collapses.

In its report, released ahead of a major summit of finance ministers in London this week, the World Bank called on developed nations struggling with their own economic routs to dedicate 0.7 percent of the money they spend on stimulus programs toward a new Vulnerability Fund to help developing countries.

[...] In November alone, the IMF parceled out $50 billion to nations in crisis -- the most the institution has ever spent in a single month. With more nations, particularly in Eastern Europe and Central Asia, facing serious trouble, the IMF is preparing to hand out tens of billions more. It is hoping to raise more funds from Western nations and other cash-rich countries such as China and those in the Middle East.

The concern now, however, is that the scope of the crisis may be so vast that even an extra $150 billion may not enough. Some fear that nations in Western Europe such as Austria, Ireland and Spain -- believed to have graduated from IMF lifelines decades ago -- may soon require bailouts, taking funds that would have been spent on poorer nations. It could also prove difficult to raise more money from hard-hit countries including the United States and Britain, where politicians and citizens may decide that charity begins at home.

"I'm worried about what happens when you see that a Greece or an Ireland that might need bailouts," said Simon Johnson, an MIT economics professor and former IMF chief economist. "Where is the money going to come from?"

Krugman cites a 2005 speech Ben Bernanke made as the best explanation for the global economic crisis. In his speech, Bernake said in the mid-1990s, the emerging economies of Asia were major importers of capital, borrowing from other countries to finance their development. After their own financial crisis in 1997-98, Asian countries began protecting themselves by acquiring foreign assets, "in effect exporting capital to the rest of the world."

The result was a world awash in cheap money, looking for somewhere to go.

Most of that money went to the United States — hence our giant trade deficit, because a trade deficit is the flip side of capital inflows. But as Mr. Bernanke correctly pointed out, money surged into other nations as well. In particular, a number of smaller European economies experienced capital inflows that, while much smaller in dollar terms than the flows into the United States, were much larger compared with the size of their economies.

Still, much of the global saving glut did end up in America. Why?

Mr. Bernanke cited “the depth and sophistication of the country’s financial markets (which, among other things, have allowed households easy access to housing wealth).” Depth, yes. But sophistication? Well, you could say that American bankers, empowered by a quarter-century of deregulatory zeal, led the world in finding sophisticated ways to enrich themselves by hiding risk and fooling investors.

And wide-open, loosely regulated financial systems characterized many of the other recipients of large capital inflows. This may explain the almost eerie correlation between conservative praise two or three years ago and economic disaster today. “Reforms have made Iceland a Nordic tiger,” declared a paper from the Cato Institute. “How Ireland Became the Celtic Tiger” was the title of one Heritage Foundation article; “The Estonian Economic Miracle” was the title of another. All three nations are in deep crisis now.

For a while, the inrush of capital created the illusion of wealth in these countries, just as it did for American homeowners: asset prices were rising, currencies were strong, and everything looked fine. But bubbles always burst sooner or later, and yesterday’s miracle economies have become today’s basket cases, nations whose assets have evaporated but whose debts remain all too real. And these debts are an especially heavy burden because most of the loans were denominated in other countries’ currencies.

Nor is the damage confined to the original borrowers. In America, the housing bubble mainly took place along the coasts, but when the bubble burst, demand for manufactured goods, especially cars, collapsed — and that has taken a terrible toll on the industrial heartland. Similarly, Europe’s bubbles were mainly around the continent’s periphery, yet industrial production in Germany — which never had a financial bubble but is Europe’s manufacturing core — is falling rapidly, thanks to a plunge in exports.

If you want to know where the global crisis came from, then, think of it this way: we’re looking at the revenge of the glut.

And the saving glut is still out there. In fact, it’s bigger than ever, now that suddenly impoverished consumers have rediscovered the virtues of thrift and the worldwide property boom, which provided an outlet for all those excess savings, has turned into a worldwide bust.

One way to look at the international situation right now is that we’re suffering from a global paradox of thrift: around the world, desired saving exceeds the amount businesses are willing to invest. And the result is a global slump that leaves everyone worse off.

So that’s how we got into this mess. And we’re still looking for the way out.