Japan’s economy contracted at an annual rate of 12.7% in the Q4 of 2008. Those are numbers more than a recession, they are near implosion, so I would take the Confederation of British Industry’s prediction that the UK economy will shrink 3.3% in 2009 with a grain of salt.

The UK is far more dependent on banking and investment than Japan is in its economy, the Japanese actually make stuff and sell it to people.

A further indicator of the likelihood of a brutal downturn is that the companies in the S&P 500 just turned their first ever aggregate quarterly loss ever, with something like 400 of the 500 companies declaring a loss.

However, today was not without good news, as junk bond sales hit a 6 month high, which implies that people are no longer fleeing so strongly to safe havens like US treasuries, though there is still enough uncertainty to push the dollar and the Yen higher.

Still, demand concerns are driving oil down, even as retail gasoline prices continue their march back towards $2.00 a gallon.