Now, here’s some good news:

“US cattle herd falls to ’58 levels.”

That’s good news because it means that maybe we’ll be able to make some money from our scrawny ‘sand fed’ cows in Argentina. We bought the farm down there 4 years ago. Then, we had about 1,000 head. But we called in an expert – a tall, good-looking blond fellow named Juan Anderson. He told us to reduce the number of cows so they’d get enough to eat in our desert pastures. Now we’re down to 600 cows. That leaves us with a crew of 7 gauchos with not enough work to do. So we’re planting grapevines and walnut trees. Plus, we’re going to build a masterpiece – a cottage of stone and adobe, with solar heating and a vaulted roof. But that project is for the future…stay tuned. In the meantime, we’re trying to keep the gauchos busy…and hold down the losses.

Is this a good business model? Of course not. It’s a hobby.

But there must be millions of hobby/businesses all over the world – marginal enterprises…struggling…barely making ends meet.

“Everything happens at the margin,” said Keynes. A big, well-funded business, especially one with the government behind it, has the resources to survive a downturn. Even our little hobby business in Argentina can limp along for a few years – or until we go broke – whichever comes first. But there must be millions of other small entrepreneurs who are already at the end of their ropes. They can’t get financing from banks. And they’ve run out of their own money. Every month the depression continues, more of these marginal businessmen must give up.

We have no statistics on this. Many of these small business people are not on the employment roles. They’re entrepreneurs, not employees. So they don’t get laid off…and don’t get counted in the jobless figures; they never had jobs in the first place.

The official jobless numbers tell us that 10% of the workforce is unemployed. But here at The Daily Reckoning mobile headquarters, we don’t believe any statistic…unless we twisted it ourselves. Even then, we have our doubts. What seems likely is that the number of people counted as ‘jobless’ understates the number of people who are not earning money the way they used to. That’s why tax receipts are down…and why so many states are going broke.

Likewise, the latest statistics on housing were mixed – one up, one down. And now comes news that the number of used houses sold in December was disappointing – down 7.6% from a year before. The Washington Post says a housing recovery could take a decade. They’re optimists at the Post. Most likely, there will be no recovery to Bubble-Era levels in our lifetimes.

Of course, that is not what the President of the United States of America thinks. He believes a recovery is underway…and that he can now take action to reduce the feds’ stimulus. He’s announced a partial spending freeze. This spending freeze is not exactly glacial. It’s more like a spending breeze. Over the next 10 years it’s expected to trim $250 billion from federal spending. Yet, the budget deficit for this year alone is $1.35 trillion. The cuts are negligible, in other words.

Just as we expected. The feds can talk the talk. But they can’t walk the walk. Instead, they stumble from one error to a bigger one. From inciting a credit riot in the private sector…they’ve moved on to instigating a credit revolution in the public sector. When it is finally over…many nations will be broke…and the dollar will be worth a fraction of what it is worth today. What else could possibly happen? Well, nothing that we can see now. But there are always surprises, aren’t there?

Most economists think the recession is over. And more investors think there is a bull market on Wall Street, and they expect it to continue. They are all going to be surprised. We are in a depression. It will cause stocks to fall again…probably pushing below their lows of March ’09, down to the final bottom.

How can we be so sure? Well, we’re not sure of anything. It’s just an educated guess. Markets tend to oscillate between fear and greed over long periods of time. In the greed stage, credit generally expands. In the fear stage, it contracts. Obviously, there’s a lot more to it than that. But people are –grosso modo – either optimistic and expansive or they are depressed and hunched over. When they are optimistic, asset prices rise…because they expect everything to get better. When they are depressed, asset prices fall…because they can’t imagine that things will ever get better.

That’s why August 1982 was such a great opportunity. BusinessWeek announced that the outlook for stocks was so bad it was the “Death of Equities.” Death is about as bad as it gets. It couldn’t get worse. So, it got better – a lot better, with stocks up 11 times over the next 20 years.

Then at the end of the ’90s, a similar announcement was made about gold. We can’t remember the source; perhaps it was Newsweek Magazine that pronounced gold ‘dead’ as an asset class. Then, what do you know? Gold rose from the dead and outperformed stocks by five to one.

What’s dead now? What’s so dead it’s beginning to stink? The only thing we can think of is Japanese stocks. Every time we mention them, dear readers write to ask if we’ve lost our mind. The Japanese are growing old. They are up against not just a retirement crisis; they face extinction. They are not just figuratively dead…but literally dead. The government is headed toward monster debts…with no way to finance them. Already, they borrow more than a dollar for every dollar of tax receipts. Besides, the Chinese work cheaper. And the Chinese have the same technology…and the same access to capital…and a much bigger market.

As if to prove that Japan is dead, Toyota seems to have fouled up its accelerator mechanism. According to press reports, some Toyota automobiles go faster and faster even when you tell them not to. Drivers do not like that kind of insubordination. Only vulture lawyers do. So Toyota has had to shut down its assembly lines in order to mitigate the damages. So investors took a whack at Toyota shares yesterday; they fell 9%.

Is it the end of the road for Toyota…and for Japan?

Probably not. But we wait to see what happens…just like everyone else.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.