Top of the News: The stock market has become such a stoned-in-the-dorm-on-derivatives place in recent years that it's no longer an indicator of much of anything but the day's casino payout and hidden trends such as the carry trade. (Captain Greenspan Renault: "I'm shocked, shocked to find that gambling is going on in here!" Your winnings, sir. "Oh, thank you very much."). Today is different.

Stocks nosedived after Chinese authorities did an about-face and ordered banks to temporarily halt lending. This is the starkest evidence yet of the dangerous asset bubble that has been building in China, a result of a stimulus that relied heavily on pushing money out the door of state banks into state-controlled industries and elsewhere. One of the biggest danger zones is in -- surprise! -- real estate, as well as stocks.

With the U.S. economy so badly damaged, economists had hoped that China could lead the world out of recession. That won't happen if Chinese regulators are too late to avoid a bubble collapse. The consequences for trade-dependent Washington state would be nasty, too.

And remember, the imbalances between China and the U.S. haven't been worked out by the downturn -- which is one of the few good things recessions are supposed to do. China's reserves climbed to $2.4 trillion in the fourth quarter, vs. $1.9 trillion a year earlier.

The Midweek Briefing: Things are tough all over, but blue-collar workers are among the hardest hit by the recession. According to Northeastern University's Center for Labor Market Studies, blue-collar industries have cut one in six jobs vs. one in 20 for the economy as a whole.

-- On the other hand, job cuts by tech companies last year reached their highest level since 2005, according to Challenger, Gray & Christmas. At more than 174,600, the planned cuts would be 12 percent higher than in 2008.

-- "We're more strict with our poor than with our banks." So says Nobel laureate economist Joseph Stiglitz in a new interview on Huffington Post. Stiglitz warned of the systemic risk of the casino financial system early on and events have proven him right. He distills his critique in the new book, Freefall. One big difference: The American poor don't have the ability to collapse the world economy.

-- You'll hear much about "sovereign debt" in the months ahead: the massive amount of government borrowing worldwide that is, along with China, the next big bubble. A foretaste came with the crisis in Greece. Zero Hedge looks at a new McKinsey report on the issue. Writes blogger Tyler Durden, "If you were wondering why everyone is on pins and needles every time there is a new (U.S. Treasury) auction, now you know." This is what happens when, among other things, losses at the too-big-to-fails are socialized on government balance sheets.

Today's Econ Haiku:

'Commie' Obama
Also in bed with the banks!
Whatever...We're mad!