[jyl]

Well, I just had a depressing call w/ a friend who argues persuasively for the global recession, or at least global slowdown, scenario. He works for a largish company, and part of his job is to monitor the outlook for the banking industry. He expects financial industry writedowns to exceed 10X current levels (appx $50BN to date); that would put many banks below regulatory minimum capital levels, which will have serious implications. This is partly due to mortgage delinquencies, but also rising delinquency rates in all types of consumer lending, including credit cards and auto loans. He pointed out that in 2008 consumers are likely to lose nearly $2 trillion in wealth (8% decline on $22 trillion residential RE value), while consumer debt/income levels are already at historical peak levels. And so on. None of this hasn't been mentioned here on PPOT, but it's depressing to hear it all together.

I also had a depressing talk last night with another friend. He is the CEO of a company that makes a particular type of sporting product that is fairly ubiquitous. His market grows mid-single-digits on average, so high-single-digit in good times and low-single-digits or slightly negative in bad times. He is planning for a zero-growth 2008.

Sigh. I am going to have a glass of cheap wine. Can't afford to open the good stuff.