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.