Peter Yastrow is possibly the most bearish trader on earth.

Yastrow is the “world’s largest LIBOR trader,” according to CNBC. His trading focuses on equities, currencies, and interest rates.

In light of the terrible economic data on Wednesday and weak data in the last couple of weeks, Yastrow had the following to say in an interview on CNBC.

“What we’ve got right now is almost near panic going on with money managers…They cannot find a yield and you just don’t want to be putting your money into…things that are punts that might work out or…not depending on what happens with the economy,” he said.

As a result, they’re putting money in Treasuries, the classic fear trade.

Investors only bet on risk-assets (what Yastrow calls “punts”) when they think the economy is going to do well. If they’re not sure, they rush into the safety of Treasuries, which guarantee a fixed amount of return.

So how bad is the economy?

Yastrow said “we’re on the verge of a great, great depression” and the Federal Reserve “knows it.”

Why is the economy so bad?

First, “many homeowners…are totally underwater here and cannot get out from under,” which is why the housing market is double-dipping.

Second, the “technology frontier is limited right now,” so there won’t be any booms in productivity to rescue the economy.

Third, we don’t “have a labor [cost] that’s in line with the rest of the planet,” so there is no justification for globalized production and jobs to remain in the US. 

Lastly, Yastrow said the US registered respectable GDP growth numbers in 2010 only because of the massive government stimulus measures. Without them, he believes the GDP growth rate will dip below an annual pace of 1 percent.