Nouriel Roubini's Global EconoMonitor

RGE Monitor – Navigating Towards a Global Recession?

A few weeks back we surveyed a group of countries navigating towards (or through) recession. The list included the U.S., Canada, Spain, Ireland, Italy, the UK, the Baltics and New Zealand.

Now the growth engine of the EMU, Germany, is faltering, together with France. And a recession might be in the works for Japan as well. This essentially leaves us with a fully fledged G7 recession in the making.

After a long period of disinflation in the 1980s and 1990s, the rise of G7 inflation poses a dilemma for central bankers who must also grapple with credit crunch and risks of recession. The balance of risks is likely to keep G7 central banks from tightening aggressively, with some staying on hold for the rest of 2008. Others, like Australia and more so New Zealand, who have the luxury of high interest rates to start cutting from will likely loosen policy to stave off recession.

Last week we asked whether the U.S. economy is in recession or not. An official answer to this question is not likely to come anytime soon, but recent reports GDP and employment in particular are not auspicious.

U.S. inflation in its various manifestations PCE deflator, CPI, PPI, import inflation, inflation expectations – is at decade(s) highs and stands outside the Fed’s comfort zone. As much of this inflation is driven by a weak dollar and external demand for commodities, rate hikes in the U.S. alone won’t stop global inflation (though it may help). Moreover, the still benign trends in inflation and inflation expectations has left the Fed room to worry more about financial stability and a flagging economy at home. According to the consensus, fading stimulus from tax rebates and ongoing housing and financial crises will push back tightening to yearend or next year, however, a worsening of the growth outlook could even prompt the Fed to cut rates in the second half of the year.

While Canada may avoid a technical recession growth might be barely positive in Q2 after a contraction in Q1- output has been slowing. Buoyant domestic demand, spurred by a sustained terms of trade rise, could also now be fading as Canadian consumers and businesses are feeling the strains. With 75% ofCanada’s exports U.S. bound, it can’t escape aU.S.recession, and its financial links are significant too. Meanwhile housing and labor markets are starting cool. With the disinflationary effect of the Canadian dollar’s strength waning, the Bank of Canada looks to be firmly on hold for now after aggressive easing in H1.

In the UK, despite severe threats of a spike in inflation mostly due to higher food and oil prices, economic activity already shows clear signs of a slowdown. Measures of business and consumer confidence, the deteriorating housing market and the still quite fragile mortgage and credit markets might push the economy into a recession-like environment relatively soon. Surveys on the probability of a recession show an increase in the median forecast from 30% in Jun
e to 45% in July?, while many analysts already call for at least one reading of negative growth by the end of the first half of 2009.

UK’s fast-deteriorating inflation outlook has increased speculation of a BoE tightening cycle in the last couple of months. Nonetheless, the BoE will probably hold rates unchanged throughout the year as the economy is set to display much slower growth in the coming quarters. The BoE’s dilemma will most likely persist. So far the spike in CPI (+3.8%) has not affected average earnings, downplaying the case of a wage-price spiral fed by a self-fulfilling cycle of inflationary shocks and worsening expectations.

In the Eurozone economic indicators turned sharply lower after a buoyant Q1 GDP reading that fuelled hopes for a decoupling from the U.S. recession. Whether the ECB 25bp rate hike on July 3rd accelerated the business sentiment downturn or not remains an open question. The fact remains that many analysts now expect a negative Q2 GDP growth reading, and worries about persistently divergent growth paths among EMU members are emerging.

On a country basis, both Germany’s manufacturing and services leading indicators as measured by the PMI Survey point to slow but still expanding activity in July. After a decade of working through its post-reunification housing bust and restoring of corporate balance sheets, Germany finds itself in a relatively balanced macroeconomic position compared to its EMU peers. The combination of falling house prices, high inflation, and higher credit costs is particularly toxic for Spain whose leading indicators are hitting one record low after another. Economic analysts are also starting to sound alarm bells on Spain’s banking sector. Italy is the second laggard in the group of big four EMU countries. The lack of reforms and the continuing loss of competitiveness are clearly taking their toll now. France has seen the sharpest reversal in both consumer and business sentiment in Q2 coinciding with the turning of its housing market.

On the inflation front, headline HICP has been surpassed by its U.S. equivalent ‘s headline CPI. Like in the U.S., core inflation stands outside the ECB’s comfort zone. However, unlike the U.S., wage indexation has led to automatic second-round effects, with inflation leading to wage increases in a few Eurozone countries. With a wary eye on a further rise in inflation expectations, the inflation-targeting ECB is the most likely to hike rates among the G7 in the rest of 2008. Some analysts believe one more hike is in store but slowing growth and lower inflation due to base effects in autumn could keep the ECB from that rate hike button.

Is Japan’s longest post-war growth period coming to an end? Most analysts agree Japan is headed for a slowdown, but many expect the world’s second-largest economy to avoid a severe, prolonged slump. There is no doubt that high food and fuel prices are denting domestic consumption, while cooling global demand appears to have stalled Japan’s export growth engine. Nevertheless, Japan’s problems seem relatively minor compared to the U.S. and certain EU countries. It has no house price bubble, its financial sector is basically healthy, and consumer price inflation – while rising – is still under 2.0% yoy.

Japan has only recently exited deflation. So while consumer prices have risen almost 2.0% over the past 12 months and are likely to rise further, core inflation (excluding food and energy) is still barely positive. Consequently, most analysts see little chance of a rate hike for the rest of 2008. As long as wage growth remains sluggish and price gains do not spread to the overall economy, the Bank of Japan is expected to keep the target rate at 0.5%.

What are the implications for the main emerging markets? Between them Brazil, Russia, India and China (the BRICs) contributed about half of global growth in 2007 but they can’t escape a protracted slowing of G7 economies’ nor is their consumption large enough to propel global growth and if they slow, so might global commodity demand growth.

Inflation has been a global threat and it is not different for the BRIC economies. The inflation outlook and the responses to the worsening inflation are nonetheless different among those countries. Russia has the highest inflation figures and the least enforcing response, while Brazil has the lowest inflation figures with the most austere monetary policy response. Even though more than 20 Emerging Market central banks are following an inflation targeting regime as a monetary anchor, nearly every country is facing inflation figures above the center of the established target. The worsening of inflation readings in many cases is encouraging a more hawkish policy especially in cases where central banks are already behind the curve or where credibility needs to be boosted.

Brazil’s economic prospects are still favorable as domestic output growth continues underpinned by high business confidence and high commodity prices. So far Brazilian economic growth is expected to continue unabated in 2008. The pace of the expansion in Brazil is bound to be moderated by persistent inflationary pressures, as disposable incomes start to erode and business confidence is dented by tighter credit conditions. Brazil’s consumer prices increased 0.74% during June, taking the twelve-month inflation rate to 6.1%, with the food and drink category increasing 15%. The Brazilian Central Bank increased interest rates by 75bps to 13% in July and possibly more hikes will come soon to curb inflation.

Inflation is now eating away at Russia’s oil-fuelled consumption growth with the recent data showing flat real wage growth, slowing construction, retail sales and investment suggesting growth will slow in the second half of 2008. Meanwhile Russia’s human and physical capital constraints are real planned infrastructure investment hopes to make up for decades of under investment. Yet, 10 years after its financial crisis, Russia is in a much sounder financial position, having amassed $500 billion in foreign exchange reserves. With growth likely to slow and productivity low, the central bank is reluctant to engage in real monetary tightening, lest it bring a return of the liquidity problems it faced earlier this year or slow growth. Despite raising interest rates four times this year, interest rates remain very negative in real terms, likely contributing to the frothy Moscow office market.

After the stellar 9%-plus growth in 2006-07, India’s 2008 growth forecast has been lowered to 7-8%. In spite of being labeled as a domestic-demand driven economy resilient to global slowdown, the recent investment boom and above-potential growth were buoyed by imports and benign global liquidity conditions. Global financial turmoil and oil price shock have exposed India’s vulnerability to capital outflows and financing of twin deficits, posing the risk of asset market correction and currency depreciation even as domestic demand trends down on high inflation. India’s double-digit inflation running at a 13-year high is led by food shortages, commodity prices and government’s reduction of oil subsidies. But inflation risk is exacerbated by strong domestic demand and liquidity fueled by pre-election fiscal spending, credit growth and incomplete sterilization of capital inflows. Price controls, trade restrictions and ban on futures trading have only angered the private sector. After a series of interest rate hikes, further tightening is constrained by risks to demand slowdown so that only an easing of global commodity prices may be a blessing.

China’s growth has been decelerating for the past four quarters to reach just over 10% in Q2. While private consumption is now contributing a bit more to growth (though investment is still the biggest driver) and incomes are on the rise, inventory pileups could indicate overcapacity in some sectors. Exports to Europe, which marked double digit growth last year are now falling, manufacturing output seems to be contracting and exporters are complaining of higher labor and input costs. With a focus on growth, and headline inflation stabilized, the Chinese government is shifting away from its ‘tight’ monetary policy some lending curbs have been lifted and RMB appreciation has already stalled. See “Chinese Economic Outlook: China’s Triple Threat of Slowing Growth, Inflation and Falling Asset Markets” and Rachel Ziemba’s “Is China Suffering an Olympic Shock?

Also in the Monitor:

85 Responses to “RGE Monitor – Navigating Towards a Global Recession?”

GuestAugust 7th, 2008 at 9:11 am

Don’t panic folks…remember…US stocks can’t fall, it is too “free market” for the socialists who run this country now. The dealer desks are applying for loans form the Fed and it should be approved just in time for the 2:00 witching hour.

GuestAugust 7th, 2008 at 9:21 am

LOLOL losses already cut in half! Weekly jobless claims surge for second week ina row and continuing claims set another new high, both confriming deepening recession yet, evidently, a fake pending home sales number trumps recession! LOLOLOL

richinarAugust 7th, 2008 at 10:09 am

@ Gloomy.You have mentioned that you want everyone to do the patriotic thing by shorting the banks… why not have them simply go and try to withdraw all of their funds. Talk about a banking crisis!!! Do you think even the first 10 percent would get all of their money?

richinarAugust 7th, 2008 at 10:20 am

Does anyone know how the 29 billion of BS crap stacks up against the 30 billion of ML crap they just sold at 5.5 cents on the dollar? Just wondering if the FED will have to write down that debt in a similar manner???

GuestAugust 7th, 2008 at 10:26 am

11:07 a.m.[C] Citigroup to pay NY state $100 mln in penalties: reports11:06 a.m.[C] Citigroup settles with NY atty general for $7 bln: reports

SeanAugust 7th, 2008 at 10:28 am

This is a great article about how a TOP 5 bank is now in trouble with Option Arm , with great analysis on the mindset and the actions of CEO to join the crowd in lowering the lending standards. Either they closed shop then with high lending standards, or they closed shop later — it’s a hard choice.Look at the attitude of the Klownifornian who think he is a “good customer”, after lying 2x about his income and use the home as rental instead of primary residence. Good customer, or a criminal?============================================================== Grapples With Payment-Option MortgagesLoans Could Be Next Nightmare For Banking SectorBy RUTH SIMONAugust 6, 2008; Page A2LOS ANGELES — Like many mortgage lenders, FirstFed Financial Corp. is struggling with rising losses. The bank posted a loss of nearly $70 million in the first quarter — reversing years of profit. Forty percent of its borrowers became at least 30 days delinquent after the payments on their adjustable-rate mortgages were recast. The number of foreclosed homes held by the bank doubled in the second quarter from the first quarter.But FirstFed isn’t another bank grappling with the fallout from subprime mortgages that went to less-creditworthy borrowers. In fact, FirstFed was ranked last year as one of the top five banks in the nation by a trade publication , partly because it appeared to have pared back on risky mortgage loans. Yet this year, the Los Angeles bank is on the front lines of what could be the next big mortgage debacle: payment option mortgages. These loans went mainly to people with good credit, but they are likely to experience defaults that are nearly as high as — in some cases higher than — those for subprime. Barclays Capital estimates that as many as 45% of option ARMs, as they are often called, originated in 2006 and 2007 could wind up in default. Another analysis, by UBS AG, suggests that defaults on option ARMs originated in 2006 could be as high as 48% , slightly higher than its estimate for defaults on subprime loans. Both studies looked at loans that were packaged into securities.Option ARMs typically carry a low introductory rate and give borrowers multiple payment choices, including a minimum payment that may not even cover the interest due. Borrowers who make the minimum payment on a regular basis — as many do — can see their loan balance rise, known as negative amortization. Monthly payments can increase by 60% or more once borrowers begin making payments of principal and full interest. That typically happens after five years or earlier if the amount owed reaches a preset amount, typically 110% to 125% of the original loan balance.FirstFed’s experience highlights the challenges lenders face as option ARMs recast. That is happening earlier at FirstFed than at some other banks because it set a 110% cap on many of its option ARMs, while many other lenders have higher caps.FirstFed is a relatively small lender, with just $7.2 billion in assets. Babette Heimbuch, FirstFed’s chief executive, says that option ARMs were “a very good loan for the borrower and the bank” for more than 20 years. But that changed, she said, when investment-banking firms entered the industry and set lower lending standards, which FirstFed and others followed.For most of the product’s history, Ms. Heimbuch says, the introductory rate on an option ARM was one to two percentage points below the actual interest rate on the loan. As long as interest rates were flat or falling, the minimum payment was enough to cover the interest due, making the option ARM equivalent to an interest-only loan in the early years of the mortgage.But around 2003, as home prices accelerated, lenders began pushing mortgages that made payments more affordable. As competition increased, lenders dropped the introductory rate on option ARMs to 1% or even lower and made more loans to borrowers who didn’t fully document their income or assets. FirstFed was initially reluctant to follow the crowd. But as mortgage brokers took their business to other lenders with easier terms, FirstFed’s mortgage originations declined to $366 million in the second quarter of 2003, from $389 million a quarter earlier. At the same time, its existing borrowers refinanced into new loans at other banks that offered easier terms. “The fear was that at the rate loans were paying off we were going to have to close the company down,” says FirstFed President James Giraldin. Rather than shut its doors, FirstFed joined the crowd and business boomed. But as the Federal Reserve boosted short-term rates, the gap between the introductory rate, used to set the minimum payment, and actual rates swelled to as many as 7.5 percentage points. That meant that borrowers making the minimum payment weren’t covering even the interest due.FirstFed started to pull back in mid-2005 and, as a result, didn’t see a big jump in delinquencies until loans began recasting in the second half of 2007. Others lenders are seeing borrowers fall behind even before recasts.Now, as loans are recasting, FirstFed is scrambling to modify the loans of borrowers who can’t afford the higher payments. As of the end of June, nonperforming assets climbed to 8.2% of total assets, compared with 0.85% a year earlier.Instead of waiting for borrowers to fall behind, the company sends borrowers letters as their loan balances swell, offering them a chance to modify their mortgages. From January through June, the company had modified 705 loans totaling $345 million.There have been unexpected hurdles. Many borrowers took out home-equity loans with other lenders after getting an option ARM from FirstFed. These borrowers account for 25% of FirstFed’s mortgage loans but represented nearly 50% of its delinquencies in the third quarter of 2007, the company says. It is harder to modify the terms of these loans because FirstFed often needs the approval of the holder of the home-equity loan.In addition, many borrowers submitted loan applications that overstated their financial condition, making it more likely that they won’t be able to afford even a modified loan. FirstFed figured that some borrowers had fudged their incomes and tried to protect itself with tighter credit standards. “But we were shocked by the magnitude of the lies,” Ms. Heimbuch says. “You expect a 20% fudge. You don’t expect 500%.”Dien Truong, a 35-year-old, water deliveryman, pulled out $156,000 in cash when FirstFed refinanced the $628,000 mortgage on his Richmond, Calif., home in 2005. Mr. Truong used the money as a down payment on another home and turned the FirstFed home into a rental property. But the $2,500 a month he collects in rent is no longer enough to cover his mortgage payments, which have climbed to roughly $5,100 from $1,618.FirstFed offered to refinance him into a new loan with payments of roughly $4,250 for the first five years, but Mr. Truong says he can afford only to pay the $2,500 in rental income. Because he has been making the minimum payment, his loan balance has climbed to more than $690,000, which is more than the home is worth.”I’ve been a good customer,” says Mr. Truong, who hasn’t made a loan payment since March. “This time my credit will be screwed up for good.” His loan application shows that Mr. Truong and his wife earn $165,000 a year, more than double their actual income, says Katrina Vizinau, a housing counselor with Community Housing Development Corp. of North Richmond. Like Mr. Truong, she says, many borrowers say they didn’t read the application until later.Frederick Cannon, an analyst with Keefe, Bruyette & Woods, believes the company should be “well enough capitalized” to absorb the losses.

GuestAugust 7th, 2008 at 10:32 am

11:28 a.m.[C] Citi will buy back auction rate securities at par11:28 a.m.[C] Cit may face civil fine from SEC, to be determined11:26 a.m.[C] Citigroup settles aution rate securities probe with SEC

tutterfrutAugust 7th, 2008 at 10:34 am

7 billion, pff, spare change, just tap Fed ATM machines…Nor markets, nor US$, nor anyone or anything doesn’t care anymore.They’ve all become billion proof, except maybe some of the Roubillions, er…Roubinies!

GuestAugust 7th, 2008 at 10:35 am

why is foreigner supporting USA debt (Treasury debt or USA debt?)it is lose and lose for both bailout or no bailout. if government bailout FNM and FRE, then dollar will plunge. if government doesn’t, then mortgage debt will be default. makes no sense that they haven’t start selling USA debt.

GuestAugust 7th, 2008 at 10:44 am

“But we were shocked by the magnitude of the lies,” Ms. Heimbuch says. “You expect a 20% fudge. You don’t expect 500%.”Mr. Truong, who hasn’t made a loan payment since March. “This time my credit will be screwed up for good.” His loan application shows that Mr. Truong and his wife earn $165,000 a year—–Screw these speculator losers for lying on their loan. do they deserve bailout? NOT!!!!

AlessandroAugust 7th, 2008 at 10:45 am

Guest: “The dealer desks are applying for loans form the Fed and it should be approved just in time for the 2:00 witching hour.”Witching hour is 3 o’clock. When times are really tough or particularly festive witches work over-time and start at 2 o’clock.richinar: “Do you think even the first 10 percent would get all of their money?”You kidding? The lucky ones will not be more than 4%. See Mish post on the subject: (uses data from and current table has different line numbers).Quick summary $6.8tn of deposits are backed by $274bn of “cash assets”.

GuestAugust 7th, 2008 at 10:48 am

we shouldn’t bailout FRE or FNM too. the interest on FRE and FNM debt well compensate debt holders in event of default. or debt need to be modified at much lower interest rate if guarantee by USA government. if guarantee by USA gov, why should interest be significant higher than Treasury yield? Stop asking tax-payer to be responsible for other people’s mistake or loss.

AfAAugust 7th, 2008 at 11:16 am

Written by Guest on 2008-08-07 10:35:48″why is foreigner supporting USA debt (Treasury debt or USA debt?)”They don’t really have a choice now, they are trapped. They are not particularly fan of US dollar-denominated debt securities. But they invested too much in the past (in order to finance US and other countries consumption of their goods). Dumping (or even stoping purchase of) treasuries and notes means that they should give up the hope all that debt will ever be paid back. IMO, they are all now in standby mode, hoping that the current crisis would just pass without hindering their dollar-denominated assets and that we could go back to the status quo soon. Once one or few realize it won’t be the case and start looking for an exit, things could go bad very fast.Written by Guest on 2008-08-07 10:48:39Too late to give opinion about whether FNM and FRE should be bailed out or not. We are already screwd.

GuestAugust 7th, 2008 at 11:22 am

“Thar she blows: The last hurrah for the banking system” by Mike Whitney ( EXCERPT)When the Fed runs out of US Treasuries, they’ll have to rev up the printing presses and monetize the debt. That’ll be doomsday for the dollar. When foreign central banks see the greenbacks a-gushing like the blood from a harpooned whale, they’ll have to sell off their dollar stockpiles and take the loss. That will trigger a period of hyperinflation in the US. Everyone will pay for the excesses of the few.The whole system has been rejiggered to serve the needs of a few greedy bankers on top of the food chain. They could care less whether the whole country blows up or not as long as they get their slice of the pie. That’s all that matters. Congress is just as bad.They abdicated their most important responsibility by giving Paulson the authority to take whatever money he needs to do whatever he wants. If that’s their attitude, then what do we need congress for? Let’s just board up the House of Representatives and Senate and send them all home. It would be a lot cheaper.The truth is, the big money guys have taken a wrecking ball to the financial system and have now moved on to the real economy. By the time they’re done, we’ll all be picking through the rubble just to feed our families.

dreamerAugust 7th, 2008 at 11:24 am

“And as we know, it is much easier and faster to destroy than to rebuild.”cylic economies that follow nature opposed to linear:The “undisclosed locations” for dumping garbage in the world are no longer undisclosed – transparency is here. industrial pollution has met it’s end…industrial ecology is IN!The behaviour change is here. Innovation will/is inspired by nature.

GuestAugust 7th, 2008 at 11:34 am

@ Guest “Stop asking tax-payer to be responsible for other people’s mistake or loss.”The government and bankers can’t steal the people’s money and expect the people to do well, i.e. maintain their consumption level at 72% of GDP.

GuestAugust 7th, 2008 at 11:40 am

Stop whining and buy stocks-double bottom is now in and the NASD is about to turn green!!! Don’t worry, be happy!

AnonymousAugust 7th, 2008 at 11:53 am

“Beginning in December 2007, the Federal Reserve System has sold Treasury debt whenever it has increased its purchase of questionable assets that it has bought from banks and large financial institutions. It has unloaded about 40% of its holdings of liquid Treasury debt. This has kept it from inflating the money supply at a dramatic rate. At some point, it will run out of Treasury debt to sell to the general public in order to offset the increase of its purchase of questionable assets held by the financial system. At that point, the great inflation will begin. This could be a year away. This could be a month away. All we know is this: when the Federal Reserve System runs out of Treasury debt to sell, its purchase of all assets will be inflationary. The banking system as a whole is protected. What is not protected is the purchasing power of the dollar.” (Ben Bernanke’s Hush Money, Gary North,

GuestAugust 7th, 2008 at 12:05 pm

Soil IS nice if it is highly defensible and you can weather out the onerous taxes a-comin’. Hard to pack and carry at a moment’s notice, though. Harder still to make liquid and use for exchange in a real catastrophe. But catastrophes don’t happen here, this is the USA.

GuestAugust 7th, 2008 at 12:13 pm

“Tax revenues go missing” by Richard BensonIn America, Uncle Sam spends a lot of money! At the end of this fiscal year (in two months), it is projected that our federal government will spend about $2.8 trillion, but take in only $2.4 trillion in tax revenue. This shortfall will need to be borrowed, and by the fall of 2008 borrowing could exceed $400 billion. Borrowing and spending is a tax collected through inflation.When Congress gets around to passing another major stimulus package and more government bailouts, the US Treasury deficit will continue growing at an exceedingly rapid pace, and the American taxpayer will be forced to foot the humongous bill. Just remember this: When you’re talking about governments, a dollar borrowed is a dollar taxed. When tax revenues drop, Treasury borrowing goes up.So, what’s happening to government revenues? First, millions of small businesses are either losing money and closing their doors, or making much less. Earning less means less tax, while losing money means a business is entitled to a tax refund.A source that tracks retail stores, expects 144,000 stores to close this year – there goes another 500,000 jobs, at least! Profits at financial services companies have swung to massive losses. Major industries like the airlines, automobile manufacturers and retailers, are feeling the big squeeze, too, and are closing stores left and right and cutting back.Lower corporate revenues and massive corporate refunds could dig a $100 billion hole in the tax receipts for 2009. Even the Federal Government will find it hard to get blood from a stone, especially if it’s a money-losing corporate stone…What about the individual taxpayer? Last year, we coughed up $1,117 billion in income tax and $838 billion in employment taxes, i.e. social security. When you throw in a few billion dollars more in estate taxes, individual taxpayers are carrying more than $2 trillion of federal taxes – or 85 percent of all taxes paid – on their backs.With Individual tax receipts running at $8 billion below last year, you may fantasize that it doesn’t sound so bad. But when you consider the recent upturn in unemployment, coupled with the thousands upon thousands of layoffs on Wall Street and elsewhere, you may change your way of thinking. (The New York Times also reported recently that tips at restaurants and resorts were down by 20 percent affecting the millions of workers who rely on them so heavily.)Taxpayers locked into making quarterly payments based on last year’s income will be paying much more in tax than they need to. Because incomes are down and unemployment is up, when April 15th comes rolling around next year, many taxpayers will be entitled to a refund. This, of course, means lower tax revenues received by the government. Our estimate is that income taxes for wages and salaries could be down by $40 billion in 2009.In addition, there’s a disaster looming in capital gains receipts. In 2006 – a great year for stocks and housing – individuals recorded $675 billion in capital gains and only $18 billion in capital losses. A large portion of the capital gains were spent, boosting economic spending. The current capital gains tax rate is 15 percent, so in the fat years (2006 and 2007), the US Treasury collected about $120 billion each year. But capital gains tax receipts are highly variable. When looking back at 2002 and 2003 – two rather lean years by comparison – the US Treasury collected much less; $49 billion and $51 billion, respectively. The current bear market in stocks, and the freefall in housing prices, will severely reverse the capital gains receipts of previous years. When you consider recent history, the capital gains tax receipts in 2009 could easily fall by more than $60 billion. For Fiscal 2008, the US deficit is on pace to be more than $400 billion.Let’s see what the baseline deficit starts to look like for 2009.Baseline Deficit (in billions of dollars) 2009: Deficit 2008 — 400; Drop in Corporate Tax Receipts — 100; Drop in Individual Payroll Tax — 40; Drop in Individual Capital Gains Tax — 60; Baseline 2009 Deficit — $600,000,000,000.

GuestAugust 7th, 2008 at 12:25 pm

@Guest on 2008-08-07 12:13:07My understanding is that the actual projected deficit is a couple of hundred billion more than the 400 figure, because the war in Iraq and a few other items are somehow “off balance sheet”.

GloomyAugust 7th, 2008 at 12:34 pm

NOURIEL SIGHTINGFrom the Naked Capatilism web site:”In case your dog died, your wife left you, and your truck broke down, Prof. Roubini is here to tell you it’s okay. The rest of the world is going to be doing much, much worse than you:Two CNBC Interviews: $2 Trillion of Credit Losses, a Severe Banking and Financial Crisis, a Severe US Recession and a Broader G7 Recession”

GuestAugust 7th, 2008 at 12:51 pm

The Euro appears to be dropping today on the thought that the ECB will lower rates in the future. Like the Fed will not! LOLOLOL

GuestAugust 7th, 2008 at 1:08 pm

Deutsche Bank diversifying into casinos. Liked Wall Street’s model apparently and decided to run book in the open. Ha-Ha

GuestAugust 7th, 2008 at 1:28 pm

Soil IS nice if it is highly defensible and you can weather out the onerous taxes a-comin’We all live in a BELL JAR …the system is dependAntYES WE CAN – many companies are already do this by mutual DESIRE(85% of manufactured items became waste.)take back laws”We recycle our products and packaging” on the label it is now the companies and manufacturers onus STREAMLINING is in.There are lots of examples around the worldgo to the town of kalundborg (ecoparks) “no waste economies are working!” another man’s waste is another man’s treasure!ten lessons for mature ecosystem:1)use waste as a resource2)diversify and cooperate to fully use the habitat3)gather and use energy efficiently4)optimize rather than maximize5)use materials sparingly6)don’t foul their nests7)don’t draw down resources8)remain in balance with the biosphere9)run on information10)shop locally

AlessandroAugust 7th, 2008 at 1:43 pm

I repost an interesting comment from late last thread. The FT article is very interesting.”@ all readers and contributorsThe noted Financial Historian, author and Professor, Niall Ferguson, contributed this piece to the Financial Times in the beginning of 2008. Some of the comments in this forum resemble the well-articulated history lesson at the link below the caption:An Ottoman warning for indebted AmericaBy Niall FergusonPublished: January 1 2008 18:37 | Last updated: January 2 2008 08:07Future historians will look back on the current decade as a turning point comparable with that of the Seventies. No, not the 1970s. This is not going to be another piece pointing out the coincidence of an unpopular Republican president, soaring oil prices, a sagging dollar and an unwinnable faraway war. I am talking about the 1870s.Entire article => by PhilT on 2008-08-07 11:19:00″

bythewayAugust 7th, 2008 at 1:49 pm

Deutsche Bank to Foreclose on $3.5 Billion Casino…“No doubt the banks will take on more homes, casinos and even ski resorts before this is over,” said KBW’s Clark.This is the new business modell for banks.Open casinos is more honestly than what they are doin now.They can use the investment guys as clerks in ski resorts:-)))

GuestAugust 7th, 2008 at 1:55 pm

The latest from Mike MorganGold Confiscation – Can It Happen Again?For those folks that think Gold is a safe haven, history may repeat itself. The other night Greenspan spoke about solvency problems and recapitlization. As usual with Greenspan, he left out the most critical part of his blabbering . . . how. How do we recapitalize? If the economy melt down far enough, the only way will be a repeat of what you will read below . . .From: President of the United States Franklin Delano RooseveltTo: The United States CongressDated: 5 April, 1933 Presidential Executive Order 6102Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitledAn Act to provide relief in the existing national emergency in banking, and for other purposes~’,in which amendatory Act Congress declared that a serious emergency exists,I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:Section 1. For the purpose of this regulation, the term ‘hoarding” means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term “person” means any individual, partnership, association or corporation.Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933

AlessandroAugust 7th, 2008 at 2:03 pm

Investment guys look much more appropriate as casino operators than ski resource clerks 🙂

AlessandroAugust 7th, 2008 at 2:05 pm

Speaking of casinos, what’s happened to wall street? Somebody shouting “The casino is on fire”?

tutterfrutAugust 7th, 2008 at 2:06 pm

“Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933″Written by Guest on 2008-08-07 13:55:57Difference with 1933 is people have better use of their middle finger nowadays…

AlessandroAugust 7th, 2008 at 2:24 pm

Breaking on CNBC: American Express Is Downgraded By Moody’s. (Story to Come)You mean credit cards debt… consumer on the ropes… increasing defaults… hoocoodanoda?

AlessandroAugust 7th, 2008 at 2:27 pm

3:15 p.m. S&P lowers Chrysler ratings to ‘CCC+’ from ‘B-‘What’s up with the rating agencies today?

GuestAugust 7th, 2008 at 2:45 pm

Many observers now note the fraud that is forcing taxpayers to bail out Fannie and Freddie. Law professor James P. Tuthill goes further; he quotes chapter and verse. Here’s an excerpt from “Fannie Mae and Freddie Mac investors should pony up too”:Do you really know what an easement is, an appurtenance, or a fixture? Even if you do understand all the terms in your mortgage, do you think your lender would have agreed to change any of those terms at the time you signed your mortgage? Of course not. You, the individual and personal borrower, as lawyers say, will be held to the letter of the law.But Freddie and Fannie investors, who do have the legal and financial resources to understand the agreements they accepted and evaluate the risk they took, will not be held to the precise terms of their agreements. The bailout unilaterally gives those investors a major benefit that was not part of the original written agreement: the guarantee of the United States Treasury.If these investors knew or should have known there was no federal guarantee despite any contrary verbal statements, and we now bestow that valuable benefit upon them, they need to provide something of value in return. If they don’t, then the written agreements are virtually meaningless.Investments with a federal guarantee are Treasury bills. They carry a lower interest rate than other investments because of that very guarantee. There’s less risk, so there is less return. The bailout effectively converts the Fannie and Freddie debt to Treasury debt, even though Fannie and Freddie pay higher interest than T-bills because of the supposedly higher risk.James P. Tuthill is an adjunct professor at the University of San Francisco School of Law f=/c/a/2008/08/06/ED36126FHS.DTL

GloomyAugust 7th, 2008 at 2:59 pm

GOLDWell, the alure of gold finally got me, as I’ve begun seriously accumulating GDX and decided to advise 85 year old parents to do the same. Through the mist, it is now clear to me that there is ultimately no other place to turn than gold and I can see the end game will be played in the coming months rather than years. Foreign purchases of US debt will dry up due to lack of export sales to the US (see Walmart). Tax revenues will plummet as the recession deepens. Fan/ Fred / GM/ Ford/ Chrysler as well as scads of bank bailouts will start in torrents this fall (watching banks recapitalize at lower and lower prices and with greater and greater dilution is a painful comedy). CDS counterparty risk means that federal bailouts are of any large company in any industry are required, and there will be lots of them. Gradually the public will start to ask the question, “Why is this paper in my wallet worth anything?”. Regarding the dollar, there is only one way this fiasco can end.

ptmAugust 7th, 2008 at 3:00 pm

Guest on 2008-08-07 13:55:57 – All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933However, the Executive Order exempted “gold coins having a recognized special value to collectors of rare and unusual coins,” but it did not define special value or collector, and certainly not collectibles.But, just because Roosevelt exempted “gold coins having a recognized special value” does not mean that any future call-in would exempt collectibles. Roosevelt’s Executive Order would have no legal binding on another gold call-in. Besides, on December 31, 1974, with Executive Order 11825, President Gerald Ford repealed the Executive Order that Roosevelt used to call in gold in 1933. This was necessary because on the same day Congress restored Americans’ right to own gold. Furthermore, in 1977 Congress removed the president’s authority to regulate gold transactions during a period of national emergency other than war. Even if a law did exempt certain coins from future confiscation, the government could change that law. Sadly, the government often simply ignores laws.

ptmAugust 7th, 2008 at 3:05 pm

So how about gold jewelery? If one were to melt their gold bullion and cast into the shape of a golden calf. That would be art, right? They would not confiscate art!?!

GuestAugust 7th, 2008 at 3:20 pm

My understanding is that gold increased around 10x within a small time frame prior to the Gov purchasing it. I hope they would not tax it at some crazy rate.

GuestAugust 7th, 2008 at 3:50 pm

Read your Bibles- what is going on in the World today was predicted thousands of years ago- not just economically but politically and spiritually.What we are witnessing is the New Age plan for a new world order and the preparation for the new age “Christ” AKA Antichrist.I was never one to believe in conspiracy theories- but after some considerable research concerning the new age movement- it sure seems that their plan is coming together neatly of late.So while you are preparing for the economic crisis to unfold make sureyour spiritual house in order.

GloomyAugust 7th, 2008 at 5:03 pm

ARE FALLING OIL PRICES GOOD FOR THE ECONOMY?While falling oil prices support consumer spending, there are few petrodollars available to purchase our debt, causing interest rates to rise. Zero sum game?

GloomyAugust 7th, 2008 at 5:15 pm

THE REAL CDS NIGHTMARE…Will not be from risk associated with counterparty exposure, as many have posited. Our interventionalist government will not allow corporate failures, but instead will resort to bailouts galore. Mountains of treasury debt associated with this effort to plug the holes in the ship, and rates will ultimately skyrocket. This is the true CDS nightmare.”A default by one of the automakers would trigger writedowns and losses in the $1.2 trillion market for collateralized debt obligations that pool derivatives linked to corporate debt, Felsenheimer said. Credit-default swaps on GM and Ford were included in more than 80 percent of CDOs created before they lost their investment-grade debt rankings in 2005, according to data compiled by Standard & Poor’s. “

RedCreekAugust 7th, 2008 at 5:22 pm

Marc Faber predicted it all in 2005.See

RedCreekAugust 7th, 2008 at 5:25 pm

extract…Why the Fed has no other Alternative but to print Money!In the past, I have demonstrated that economic growth and deflation isentirely compatible. The entire economic expansion of the US in the 19thcentury was a deflationary boom. Declining prices led to strong real incomegains. As time went by, workers could buy with their incomes a larger andlarger basket of goods because prices for consumer goods and commoditiesdeclined. I other words, whereas inflation is the equivalent of a loss ofpurchasing power of money, in deflationary times the purchasing power ofmoney increases. In deflation my 100 dollars today are worth more in ayear’s time since they will buy a larger basket of goods and assets, whoseprices are declining. In my opinion, there is, therefore, nothing wrong aboutdeflation. So why is the US Fed so concerned about deflation that Mr.Bernanke even suggested dropping US dollar bills from a helicopter in orderto combat it?There is one condition under which deflation is a disaster and this is whentotal credit market debt is high as a percentage of the economy (see figure 1)Figure 1: Total US Debt as Percentage of GDP, 1916-2005Source: Bridgewater AssociatesWhen debts are as large as there are now, deflating prices and especiallydeflating asset prices would wreck havoc in the economic system and lead tomassive defaults and bankruptcies. I may add that, as can be seen fromDr. Marc Faber Market Comment: October 9, Page 2 of 9© Copyright 2005 by Marc Faber Limited – All rights reservedfigure 1, between 1950 and 1980 the debt to GDP remained largely constant.But after 1980, and in particular after Mr. Greenspan became Fed chairmanin 1987, debt to GDP exploded. Therefore, it is not deflation that is theproblem, but the preceding debt inflation for which the Fed’s expansionarymonetary policies are fully responsible. So, having created a monetary anddebt monster, the Fed embarked starting 2001 in a huge money printingoperation in order to avoid deflation.

GuestAugust 7th, 2008 at 7:00 pm

Written by Guest on 2008-08-07 10:35:48why is foreigner supporting USA debt (Treasury debt or USA debt?)China for one, is buying silver mines and oil wells, cutting out the middle man. IMO they should be spending those dollars while they have value. Lets see what happens (if anything) after the olympics.hlowe

HubbsAugust 7th, 2008 at 7:37 pm

@RedCreek on 2008-08-07 17:25:18I think you have cited one of the most important statements from Faber. It is even more difficult to pay off debt in more expensive dollars. So the govt has to inflate. Obviously foreigners will no longer loan money to see it evaporate. This invites foreign interests to buy hard assets…farmland, factories, etc only. The US will effectively monetize the debt, but how do US citizens deal with this debt monster? The Government sets up export barriers to keep what limited production from leaving the country and preventing even greater scarcity of goods…ala Rice export bans in Asian countries, and higher prices. Nixon established price controls in the past…no not good economic sense when an economy still has flexiblity. But that’s the rub, we really don’t have any more flexibility. We can vote for whom we want: McCain v Obama, but the vote is a meaningless joke (Steppenwolf’s Monster). It is the outsiders who will ultimately decide what we must/can do. No, our home grown financiers will have effectively left the country with their plunder.I can almost see a system of price controls and some sort of gasoline rationing. I already see blatant price control with with Medicare reimbursements,(but not with our overhead). Thus we can live in isolation with our fiat currency, good only here in the US. After years of competition between domestic industries to the point where they are strong to compete with the rest of the world, can the US come out from under the protectionist umbrella.

AnonymousAugust 7th, 2008 at 7:37 pm

From the article about First Fed:”The fear was that at the rate loans were paying off we were going to have to close the company down,” says FirstFed President James Giraldin.”Disgusting. People were trying to get out of debt, so the system in the form of individual banks upped the ante to keep them in debt. It’s like how under Clinton, the national debt was going down and there was fear that the 30 year bond market would disappear, so to prevent that he went to deficit spending.The vast majority of people want to do the right thing and move toward debt freedom. The system will do anything to prevent it. Those who participate in that, and especially the leaders, deserve any punishment they can get and must not be bailed out.That includes especially the international investment banks. Also from the same article: “… option ARMs were “a very good loan for the borrower and the bank” for more than 20 years. But that changed, she said, when investment-banking firms entered the industry and set lower lending standards, which FirstFed and others followed.”Those people who keep us in debt deserve hell on earth and I hope they get it. They should work overtime flipping burgers, desperate to make the rent and credit card payments they cannot eliminate even thru bankruptcy, while they have to send their children to a poor public school district. That way they can work off some of their karma as we watch, in public. They wouldn’t want to leave this life in too much karmic debt after all …

GLOOMYAugust 7th, 2008 at 7:38 pm

TONIGHTS BLOOMBERG HEADLINES•U.S. Consumer Borrowing Jumps as Banks Rescind Home-Equity Lines of Credit•Merrill to Buy Back About $10 Billion of Clients’ Auction-Rate Securities•Japan Stocks Fall a Second Day on Signs Economy Faltering; Nintendo Drops•Westpac Says Bad Debt Provisions Set to Rise in 2nd Half as Economy Slows•Telecom New Zealand Profit Falls 31%, Sending Shares Down Most in 2 Years

GloomyAugust 7th, 2008 at 8:05 pm

WHAT’S WRONG WITH THIS PICTUREAug. 7 (Bloomberg) — Merrill Lynch & Co. said it will offer to buy back about $10 billion in auction-rate securities from retail clients after Citigroup Inc. agreed to take similar steps under a settlement with U.S. and state regulators.What’s wrong?1. John Thain is a liar. He keeps saying that the writeoffs are behind Merrill and then turning around and writing off more stuff he obviously knew was coming.2. Why should auction-rate securities holders get their money back? They were getting higher yields than treasuries-didn’t they wonder why? I guess this is just the Socialist States of America now.

AfAAugust 7th, 2008 at 9:33 pm

MOMENT OF TRUTH by Gang StarrNo matta wat we fayceWe mus face de moment of trut baybeChorus:They say it’s lonely at the top, in whatever you doYou always gotta watch motherf**kers around youNobody’s invincible, no plan is foolproofWe all must meet our moment of truthVerse one:The same sheisty cats that you hang with, and do your thang withCould set you up and wet you up, n*** peep the languageIt’s universal, you play with fire it may hurt youOr burn you, lessons are blessings you should learn throughLet’s face facts, although mc’s lace tracksIt doesn’t mean behind the scenes there ain’t no dirt to trace backThat goes for all of us, there ain’t nobody to trustIt’s like sabotage, it’s got me ready to bust….But just as you’ll receive what is comin to youEverybody else is gonna get theirs tooI ain’t no saint, therefore I cannot disputeThat everyone must meet their moment of truthChorus:Actions have reactions, don’t be quick to judgeYou may not know the harships people don’t speak ofIt’s best to step back, and observe with couthFor we all must meet our moment of truthVerse two:Sometimes you gotta dig deep, when problems come nearDon’t fear things get severe for everybody everywhereWhy do bad things happen, to good people?Seems that life is just a constant war between good and evilThe situation that I’m facin, is mad amazinTo think such problems can arise from minor confrontationsNow I’m contemplatin in my bedroom pacinDark clouds over my head, my heart’s racinSuicide? nah, I’m not a foolish guyDon’t even feel like drinking, or even gettin highCause all that’s gonna do really, is accelerateThe anxieties that I wish I could alleviateBut wait, I’ve been through a whole lot of other shit, beforeSo I oughta be able, to withstand some moreBut I’m sweatin though, my eyes are turnin red and yoI’m ready to lose my mind but instead I use my mindI put down the knife, and take the bullets out my nineMy only crime, was that I’m too damn kindAnd now some skanless motherf**kers wanna take what’s mineBut they can’t take the respect, that I’ve earned in my lifetimeAnd you know they’ll never stop the furious force of my rhymesSo like they say, every dog has it’s dayAnd like they say, God works in a mysterious waySo I pray, remembering the days of my youthAs I prepare to meet my moment of truth

GuestAugust 7th, 2008 at 9:45 pm

A comment on oil: We now hear a lot about the “demand destruction” that’s lowering the price of oil. But the disruption of a single pipeline in Turkey caused the price to jump back up more than 1% today. To me this nervousness implies the continued existence of a delicate balance between consumption and production, with the consumption possibly still winning. Otherwise, if there were any slack due to significant decrease in demand, the market wouldn’t have cared so much about the loss of one pipeline. In short, I’m not sure if I buy into this idea that the oil will keep going down. It appears that even if there is some demand destruction, the production is still having a tough time keeping up, and as a result the price of oil may not go down much further.

AnonymousAugust 7th, 2008 at 10:32 pm

yes agree with you that oil supply/demand situation looks tight…this is also being manifest in the changeover from growing contango to growing backwardation (indication of tight supplies) in the oil futures foward curve…I think we may head higher here a bit more up to around 123/barrel in the next few days, then back down towards 113/barrel towards end of next week at the likely lowest value, based on technical analysis…

AnonymousAugust 7th, 2008 at 10:50 pm

Can anyone explain the difference between the 29 billion of Bear Stearns debt vs the 30 billion of Merrill Lynch debt they just sold at 5.5 cents on the dollar? Will the FED will have to write down that debt?

AfAAugust 7th, 2008 at 11:31 pm

Written by Anonymous on 2008-08-07 22:50:33Why do you keep asking political questions? Remind you that Blair, Cox and Bernanke are watching you. And signing under Anonymous would not save you.More seriously, I don’t know and don’t think others know exactly what was in BSC’s books, but we should be sure that they are at least as bad as Merrill’s. The loss would most probably be higher than the $1B “collateral” by JPM, which leaves the Fed on the hook for the rest. Now, Merrill’s write down of it’s CDO’s book was somewhat volontary (put as many “” marks as you like). But that won’t force BSC, thus JPM, thus the Fed to mark them down for now as they can just keep them in their Level III black holes (no offense intended) as other banks are still doing, which does not force the Fed (and other banks) to publicly acknowledge they screwd everybody up.

AlessandroAugust 8th, 2008 at 2:17 am

@AfA and Anonymous on 2008-08-07 22:50:33The FED $30bn are potentially even worse than Merrill’s because the number it’s not the nominal value but it is the “value” (level III, we may guess since JPM didn’t want it) of the securities plus hedges as estimated by the seller (Bear Stearns). Except the FED, JPM and BlackRock none has the slightest idea of what’s in the pile. For what we know it could very well be $200bn of nominal value of CDOs wrapped in $170bn of monoline insurance (the hedges). There is no assurance whatsoever that losses will be limited to $30bn!I don’t say losses will be higher than the nominal $30bn, but the fact that they refuse to tell the public what exactly is in the deal (and to use mark-to-market accounting) is a good indication that things smell really bad.See Steve Waldman on the subject:

Friedrich von HayekAugust 8th, 2008 at 8:33 am

I sure hope to see Marc Faber and Nouriel together too!! Basically, the only two telling the world how it is. But Roubini is on the deflation side while Faber is definately on the inflation side. Moreover, I never heard Nouriel discussing gold as an investment, safe haven or whatever…Meanwhile my investments (75% gold and 25% cash/Euros) are dropping like a rock…

GuestAugust 8th, 2008 at 9:14 am

I guess falling oil trumps massive credit losses, earnings woes, global slowdown, war in Russia and consumers on the ropes…man, this investing game is easy!

randyAugust 8th, 2008 at 9:26 am

WTF is happening with the DOW? up 210 in less than an hour after fannie losses and dividend cut? I don’t understand why gold is tanking either. someone please explain this to me. What has happened that I don’t know about??????

GloomyAugust 8th, 2008 at 11:50 am

@RandyAt the moment, it’s all about oil price drops. Personally I’m happy to get this predictable oil drop-stock rally over, because once it is finished there will be nothing left which might concievably hold up the market. Oil demand destruction is bad news for the economy. It means everything is grinding to a halt. Let the myopic have their day.

PhilTAugust 8th, 2008 at 12:02 pm

@ Alessandro on 2008-08-07 13:43:50Thank you for reposting the Niall Ferguson article from the previous thread.Best ~

GloomyAugust 8th, 2008 at 12:14 pm

YOU CAN’T MAKE STUFF LIKE THIS UP“This is a rout,” said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. “All those people who were bearish the dollar and bullish gold are getting their heads handed to them.”And the reason for this profound shift?“The straw that broke the camel’s back was a rather innocuous statement by Trichet, which turned the sentiment of the market around 180 degrees,” Kaplan said. “With the ECB not raising rates and the Fed saying that the next move is probably higher, kaboom! This is gruesome. All the positions that have been held by a majority of people are being wiped out.”The lunatics are running the assylum.

PhilTAugust 8th, 2008 at 12:25 pm

@AfA and Anonymous on 2008-08-07 22:50:33@ Alessandro on 2008-08-08 02:17:00@ ALLI think that Elisa Parisi-Capone does a fine job of explaining this issue in her recent article on this site entitled:Is Merrill’s CDO Transaction With Lone Star Consistent With Markit ABX Pricing?Entire article ==> asked a similar question to her in her blog and her answer is available there.Best ~

GuestAugust 8th, 2008 at 12:30 pm

the more blood vessels you add to a system, the more complex it becomes, and the more cooperation you need for proper functioning.With biomimetic materials high energies will no longer be needed for manufacturing.photosynthesizers siphon their radiant energy from the sunis planned obsolescence obsolete!

PhilTAugust 8th, 2008 at 1:55 pm

From previous thread@AfA and Anonymous on 2008-08-07 22:50:33@ Alessandro on 2008-08-08 02:17:00@ ALLI think that Elisa Parisi-Capone does a fine job of explaining this issue in her recent article on this site entitled:”Is Merrill’s CDO Transaction With Lone Star Consistent With Markit ABX Pricing?”Entire article ==> posed a similar question to her in her blog – her answer is available there.Best ~Written by PhilT on 2008-08-08 12:25:52 (Original)

GuestAugust 9th, 2008 at 10:54 am

1870swhy do historians leave climate changes out of the history…didn’t a lot of heads roll from the temples and hearts get eaten due to unhappy weather gods?I have never drank flour soup or ate tree bark but i have read my ancestors have and thank goodness for america since one my grandmothers was born there. for i would not be typing on these keys today continually thinking what an awesome idea.