We live in one very tightly connected economic system, so what happens elsewhere matters a great deal. Today, the news out of Europe is gruesome.

A report in the Telegraph.co.uk graphically illustrates just how sick the Continent has become.

German exports and industrial orders have both plunged at the steepest rate since modern records began and Spain’s unemployment has surged above three million, capping one of the most disastrous days for Europe’s economy since the Second World War.

Joaquin Almunia, the European economics commissioner, warned that the picture would turn “dramatically worse” this year. The eurozone’s confidence index collapsed from 74.9 to 67.1, the lowest since Brussels started collecting the data in 1985.

“It makes truly dismal reading,” said Julian Callow, Europe economist at Barclays Capital. “Industrial sentiment has never experienced such a rapid slump. There is an implosion of demand.”

Spain lost almost 140,000 jobs in December, pushing unemployment to 3.1m or 13.4pc. The Labour Office said the country had shed a million in jobs in 2008 as the building boom collapsed. This is equivalent to 7m job losses in the United States.

The article goes on to note that the level of contraction of the European Community’s economy is running at a pace last seen in 1930. That’s a year one usually doesn’t want to hark back to.

I have no idea if Europe is leading or following the worldwide recession. I suppose I should hope it is following while the rest of us have been through the trough. I think you call that whistling past the graveyard.

more: here