Investors received yet another indicator Monday that this is not your father's recession.

The global economy will likely contract in 2009 for the first time since World War II -- including a decline in trade - - the World Bank announced in its most recent report.

China apparently will announce a new fiscal stimulus package in an attempt to jump-start growth in the world's third largest economy.

Chinese Premier Wen Jiabao is expected to announce "a new stimulus package" in his annual address to the nation's legislature, Li Deshui, ex-statistics bureau head told reporters in Beijing Wednesday, Bloomberg News reported.

Following the instructions of President John F. Kennedy, "I appreciate candor almost as much as I appreciate good news," we're moving forward with candor, however unpleasant.

Investors take heed: the U.S. recession most likely just got longer.

The European Union, led by Germany, has rejected Eastern Europe's pleas for an aid package of about $228 billion, citing budget concerns in their own Western European countries, Bloomberg News reported Sunday.

The E.U.'s failure to provide aid and fiscal stimulus to Hungary, the Czech republic, Slovakia, Romania, Bulgaria, Latvia and Poland will hurt both the U.S. and global economies.

The plight of the US and global economy, and how it touches everyone, has most people believing we are in for a long drawn out period of sluggish growth, and that a lot of pain is still to come. For most companies and individuals this means they can not obtain enough liquidity, reduce debt or increase their net cash positions fast enough.

Japan, which boasts the second-largest economy in the world, is facing exceptionally large recessionary pressures as well, as its gross domestic product recoiled at a year-over-year rate of 12.7% in the fourth quarter of 2008.

This marked the nation's worst GDP number since the first quarter of 1974, when the oil crisis helped contribute to a 13.1% collapse. The dismal figure, worse than anything posted (yet) by the U.S. or struggling European nations, also exposes Japan as among the hardest hit by a sweeping global recession. (Well, at least misery loves company). Some are speculating that the crisis could prompt Japanese officials to write up another stimulus package, which would join two packages, together worth 50 trillion yen ($545 billion), that were announced late last year.

The manager of the world's largest bond fund, PIMCO, has laid-out in unambiguous terms the problem facing the global economy in the quarters ahead: The U.S. and global recession will worsen -- with a "second wave" of turmoil -- unless governments increase fiscal stimulus and spending plans.

"The economic setback is still in its early stages," Koyo Ozeki, head of Asia-Pacific credit research at Pimco's Tokyo office, wrote in a report published on PIMCO's web site. "Any further decline in housing prices could accelerate the downturn, intensifying the pernicious feedback loop and possibly leading to a second wave in the financial crisis in the next six to 12 months."

These days, most investors, executives, and economists know that there's no shortage of unpleasant news regarding the U.S. economy.

Moreover, some days it's hard to find those bright spots that we know exist amid the the snow storm of the recession. Here's one: U.S. worker productivity.

Underscoring that while there are no positives to job layoffs -- each job loss is a tragedy -- citizens and investors can at least point to the fact that the U.S. workforce is becoming more productive, and corporate efficiency is improving.

When they had the capacity to do so, they refused to increase production, preferring instead to reap ever higher revenue - - essentially extracting as much money for energy as possible out of the U.S. and global economies.

The result: Oil Shock III - - aided by the leverage financing boom - - which sapped disposable income, helping trigger the current U.S. and global recessions.

OPEC miscalculated and simultaneously choked-off oil demand - - and, once again, 'killed the goose that lays the golden egg.'

Now global oil demand is falling - - including real consumption declines in the United States, and, incredibly, flat demand in emerging markets. And the price of oil? Despite a record $100 plunge in one year, it continues to fall - - currently trading around $41 per barrel.

Globalization is, at most, two decades old and few would deny its benefits, which include: the transfer of production to lower-cost centers, an increase in trade and interconnectedness between nations, and the more-efficient deployment of resources.

But while the bulk of globalization research has focused on commerce and production changes and trends, the new world economy may also have ushered in another pattern that could be just as telling regarding national and regional economy GDPs: the era of the frugal consumer.

Has there been a consumption 'shift'?

Moreover, who better to ask about the above than economist David H. Wang, a macroeconomic modeler with more than 100 variables in his research arsenal.

The economic slowdown in the east continues. China's economy expanded at its slowest pace in seven years, as reduced demand for exports reduced production at manufacturing plants and idled others, China's National Bureau of Statistics announced Thursday.

China's economy grew 6.8% in Q4, the NBS said. GDP grew 9% in Q3. For the year, China's economy grew 9%, a seven-year low; China's economy grew 13% in 2007.

In Q4, industrial production grew 12.9%, down 5.6% percentage points from a year ago. Exports fell 2.8%.

Economist David H. Wang, a China expert, said China's economy is now growing at a rate too-low to absorb new entrants to the workforce.

"The quarterly grow rate is too low, and it obviously reflects the slowing global economy," Wang said. "If the slow growth rate continues China will need to provide more fiscal stimulus to maintain domestic demand." China has already announced more than $5,850 billion in fiscal stimulus in 2008, Wang said, but statisticians differ as to how much of that stimulus represents new spending.

Energy market professionals say that when assessing the oil market today, it's important to focus on one factor, demand.

Crude's rally from the low $30-range to above $50 per barrel in less than a month had visions of $60 oil dancing in the heads of oil bulls, but it was a rally that nevertheless flew in the face of demand fundamentals.

Declining demand is the key

Those fundamentals show, among other consumptions stats, real declines in both oil and gasoline consumption in the United States, and a decline in the growth of oil consumption in China -- two major energy markets, Energy Trader Jim Dietz said.

The consequence? Inventories are rising worldwide, he said. One example: oil inventories at Cushing, Oklahoma, where fuel for NYMEX traded contracts is stored, has increased to 32.4 million barrels, the highest level since 2004. Nations and other oil producers are also increasing their storage of oil at sea in supertankers, Dietz added.

It's a classic case of the trend outpacing the cutbacks.

Oil plunged more than 6% early Monday on concern the U.S. and global recessions will decrease demand faster than OPEC can cut supply.

Oil fell $2.57 to $38.26 per barrel -- its second dip below $40 in less than a month.

Energy Trader Jim Dietz said the long-term factors favor a continued move lower by the world's most important commodity.

"As I said earlier, we're definitely headed lower. The geopolitical problems in the Middle East and in Ukraine can't go on forever, and when they're resolved, oil will drop further," Dietz said. "The next minor support level is $35." Dietz added that he was currently short unleaded gasoline, with a monthly contract.

Those investors, including market absolutists, who interpret the current economic state-of-things as just a typical downturn that a few tax cuts and some good, old-fashioned, free market-based supply side economics can solve, may want to stop reading the economic data points in the months ahead. At least, that's the view of one economist.

Nouriel Roubini, the once obscure New York University economics professor, who two years ago predicted the current global financial crisis and recession, said the worst is still ahead for the U.S. economy and for economies around the world.

"In the next few months, the macroeconomic news and earnings reports from around the world will be much worse than expected," Roubini wrote in a column for Bloomberg News, adding that the aforementioned will put downward pressure on prices of risky assets.

Further, Roubini said the U.S. economy will remain in recession through at least the end of 2009, with only a mild recovery starting in 2010 -- with GDP growth in the initial recovery year of 1%. For 2009, Roubini also forecasts continued recessions for the United Kingdom, euro zone, Japan and Canada. Russia will also fall into recession, as will Brazil, and China will experience a hard landing, with growth slowing to 5%, he said. India's economy also will slow substantially.

Those investors and business executives expecting a return to 'giddy' global growth after the U.S. and global economies start to recover need to pay careful attention to one of the world's leading economists.

"Those expecting the world to return to 5% growth will be in for quite a surprise," Stephen Roach, chairman of Morgan Stanley Asia Ltd. (NYSE: MS) told Bloomberg News Friday. "We're maybe going back to 3% [global] growth but we're not going back to 5% growth for some time. So it's a wake up call. We've gone from boom to bust in one year."

Further, the International Monetary Fund agrees, by and large. The IMF now sees global GDP growth of 2.2% in 2009, which is down from solid 5.0% growth in 2007 and 5.1% in 2006. In 2008, the IMF expects the global economy to grow 3.7%, but only 2.5% on a Q4 2007 to Q4 2008, year-over-year basis.

A major unknown: China's 2009 economy

Economist David H. Wang told BloggingStocks Friday, economist Roach "is wise to both lower expectations and to sound the alarm" because economic fundamentals in all major economic regions of the world have deteriorated in 2008, and will continue to do so in 2009.

Add two more somber forecasts for the global economy -- each with its own ignominious distinction.

The World Bank said the global economy will enter a recession for the first time since 1982. Equally distressing, international trade will also decline from 2007 levels.

Incredibly, the bank said it now expects global GDP growth to decline to a scant 0.9% in 2009 from 2.5% in 2008. That is a recession for the global economy, as any global growth rate under 2.0% is tantamount to a recession, economist David H. Wang said.

"This is very concerning news, if the World Bank's forecast proves to be accurate," Wang said. "Up to now many forecasts had global growth in the 1.5-2.0% range for 2009. My own estimate was for 1.8-2.0% GDP growth. A GDP rate below 0.9% is a major recession, which will mean higher unemployment, lower corporate revenue, and decreased trade, in most nations."

Further, global trade is expected to decline 2.1% in 2009, the bank said, its first decline since 1982, on reduced global demand and export credits.