As this jobless "recovery" begins, the Obama administration has tried to spin the idea that at least, the worst is over. Our banks have been saved by the infusion of trillions by the Fed and Congress, and it appears that we will still have an auto industry - if you want to call it that. And the stock market has begun a slow, painful climb out of the doldrums.

Is all that true? Is the economy all set to turn around?

Not so fast. First of all, our own banks still have trillions in bad loans on their books. Treasury Secretary Geithner's "TARP II" plan is DOA - killed by the banks themselves - and nothing has emerged to take its place. Another bad spell in the financial markets could mean the kind of collapse all the trillions we've spent already was supposed to prevent.

That bad spell may be coming - as a tidal wave of bank failures across the ocean. Landon Thomas of the New York Times has the grim details about the sinking European banks:

Since October, KBC Bank has had to seek government relief three times. In all, it has received $41.5 billion in financing and guarantees to recover from disastrous mortgage bets that its financial engineers and traders made when times were good. For a bank with a balance sheet of just $425 billion, it is an astounding sum, exceeding the bailout of the Royal Bank of Scotland.

KBC is not alone. Souring loans and festering portfolios of securitized mortgages still plague a number of national banks.

Moody's, the rating agency that recently issued a warning about the credit risk at 30 Spanish banks, is expected to lower its outlook for the Greek banking sector because of a sharp rise in nonperforming loans. In Ireland, the nationalized Anglo-Irish Bank still has a contaminated loan book that has emerged as threat to the country's sovereign credit rating.

Nonperforming loans at Russian banks are even more worrisome, composing about 10 percent of the average bank's books, a figure expected to balloon to 25 percent by the end of the year, forcing banks to raise as much as $80 billion in new capital. And in Sweden, the imploding Latvian economy has hobbled Swedbank, a huge provider of loans in the Baltics.