Has the Energy 'Tsunami' Been Aborted?

Stocks are clearly in panic mode; prices no longer correlate remotely with valuations.  My son asks me, as the market tanks another 500 points, who is buying.  Someone has to be buying. It’s a brilliant question.  I suppose the answer is that people who think the price being offered discounts all the risks of continued panic are buying.  So the price must be dramatically lower - that’s the only price able to find a buyer. 

What started the stock market tanking is the global credit market chaos about which we seem to read a new chapter nearly every day and the fact that it has a certain open-endedness about it.  Open-ended risk is the most perverse sort of uncertainty.  If the market hates uncertainty it loathes an open-ended uncertainty.

As we’re told endlessly, banks are unwilling to lend to each other or nearly anyone else.  Why?  Because they can’t value the mortgage backed securities (MBS’s) that make up a big category of assets on their books and other banks’ books that could determine each bank’s creditworthiness.

The MBS uncertainty corresponds to nobody knowing how many U.S. mortgages will default which will depend on both how bad the U.S. economy gets (how many mortgage holders loose their jobs) and how low the prices of the homes fall.  But even more important, the MBS’s are leveraged to those factors so if the economy and home prices fall enough some of these MBS’s could actually become worthless.   That is part of the open ended nature of today’s uncertainties.  

A second source of lending risk is the fact that many institutions and even corporations may have underwritten credit insurance policies (called credit default swaps) which could become substantial liabilities that are now hidden from view.   There are over $60 trillion of those out there and nobody knows either who owns the insurance or who carries the default risk.  In a weak economy some of those defaults may well occur.  So not knowing where the risks are is sort of like walking around in a city where the plague is raging - you just don’t want to be in touch with anyone else.

The Lehman (LEH) default swaps are now being settled, others are coming.  I have no idea what the true risks are and it seems like nobody else does either.  All we can do is hope they don’t explode the markets further.

So the three legs of the open ended risk stool are:

    1. How low home values will fall,

    2. How long and deep a recession the U.S. will have, and

    3. How much damage to the credit quality of how many banks and companies will be done by toxic credit default swaps.

These three legs are also inter-connected, unfortunately. They are sort of like three suicide bombers strolling around a town square in explosive vests.   If one vest goes off it could also set off one or both of the other two.  So this is another part of the open ended aspect of the uncertain economic risks facing stocks.

The governments’ task is to isolate each risk and reduce it.  With the $700B “bailout plan” the U.S. decided to finesse the basic causes of the risk and instead simply transfer the ultimate risks - at least the MBS’s - from banks to the U.S. government.  That transfer will be useful if it helps enable banks to start trusting each others’ balance sheets again resume lending.  Unfortunately it takes time to implement and its success is not guaranteed.  

In case these are not enough risks for the stock market, we also face the more standard list of impacts from an economic downturn that always hurt stocks: 

   1. the risks are international (almost global)

   2. U.S. cities, towns, counties, and states will increasingly be under pressure from falling taxes and rising costs which could put their bonds at risk  

   3.  credit card and car loan defaults will increase from a weak economy and impact banks’ asset values

   4.  corporate earnings decline for most companies in a slow economy. 

The Good News

Probably the best news is that some experts think the current “mark to market” valuations of mortgage backed securities which are as low as 20 - 30 cents on the dollar vastly underestimate the true likely values.  A recent analysis by John Mauldin points out that even in the worst conceivable circumstances the higher-rated MBS’s may be worth at least 70 cents on the dollar.   

As Mauldin writes, “Let’s think Armageddon and that 50% of the mortgages default and they only recover 50% of the loans. That would only be a total loss of 25% to the entire collateral of the deal, but it would mean that the new investor still get all of my 70 cents plus another 13% back! The proud new owner could get up to 92% of the monies paid.”

Mauldin’s analysis supports many experts - including some at Treasury - who think the government has a generous amount of maneuvering room with its new $700B pool to buy the MBS’s from banks at a higher price than they are currently marked on the banks’ books and yet still have room to eventually turn a tidy profit for the U.S. taxpayer.

Some other strengths to bear in mind include the fact that governments around the world and particularly in the U.S. are truly focused on the need to take effective action.  Solutions will require government action - the problems are too large to simply “wait out the cycle.”  New programs will emerge.  While the election cycle may unfortunately add a few months to the time spent devising a full U.S. response, the Treasury has a $700B weapon that it will start using fairly soon.  If that has the desired effect of unlocking the credit markets, a necessary first step toward recovery, it could launch a huge relief rally. 

My sister the real estate maven tells me there are a lot of home buyers “on the sidelines” waiting for the deals to get better and prices to stabilize.  She thinks we could be six months or so away from a bottom in housing prices.  Apparently Alan Greenspan recently make a similar prediction.  I’d trust my sister first.  While I don’t know if it’s 6 or 18 months to a housing bottom one thing that’s crystal clear, I think, is that when evidence of a bottom in home prices does emerge the stock market will bounce back like a trampoline jumper.  If it doesn’t do so based on other information available earlier.   

At some point a bottom will be reached.  If this is it one would love to have the courage to act because stock prices now seem crazy-low.  But so far all attempts to call a bottom have been wrong.  And the conventional wisdom is to give up the first 20% or so and make sure it’s the real thing (a few higher highs and higher lows) before acting.  Maybe that’s right or maybe it’s best to start buying in slowly starting next week and simply take your lumps if you are wrong because you know eventually you will be proven right.

Oil Pricing in the Coming Recession

What about the energy investor?  Has the energy “tsunami” been aborted?  No, but it has been put on hold for another couple of years, probably.   As readers know, my recent analysis of the Wikipedia oil production megaprojects compilation indicated that 2008 and 2009 will be years of plenty for oil supply relative to demand.   That analysis assumed oil demand levels that I now suspect were too bullish given the evolving recession.   Depending on how steep and long the recession is, oil prices could go lower than the $80 - $100 range I recently predicted.   

Limiting the price fall is the fact that some oil production could get shut in as uneconomical below roughly $80.  Also, OPEC might cut production as it is now starting to consider - although an oil supply cutback by OPEC during a global economic crisis would be the worst public relations move in history.  But markets tend to overshoot.  So it would not be outside the realm of likelihood for the oil price to decline into the $70’s or even the $60’s for a short time.   But I suspect oil is more likely to trade around the low end of my predicted $80 - $100 range and possibly stay there for a while. 

Other analysts think the oil price will fall much further.  Here is a prediction that oil will fall to $50 and the source is not without some credibility:  Merrill Lynch: 

“Oil May Fall to $50 in Global Recession, Merrill Says (Update2)

By Angela Macdonald-Smith

Oct. 2 (Bloomberg) — Crude-oil prices may fall as low as $50 a barrel next year, about half current levels, in the “unlikely” event of a global recession, weighing on shares of petroleum producers, Merrill Lynch & Co. said.

Such a scenario, where global growth in Gross Domestic Product falls to 1.5 percent, isn’t the base-case forecast, the bank said today in a report. Merrill cut its 2009 average price estimate for West Texas Intermediate, the U.S. benchmark oil grade, by 16 percent to $90, citing falling demand and the start of new fields in Organization of Petroleum Exporting Countries.”

Oil Investment Strategies

So what is the energy investor to do?   Well, it seem pretty obvious that in an environment of down-trending stocks and down-trending oil prices and with good reasons to think that both trends may continue for a while the better part of wisdom is to have plenty of cash.  And it suggests that energy stocks may not have the best upside when the turn comes.  

By that logic I should probably be just about 100% in cash.  Actually the funds I manage outside the EIS account that is referenced on this site are overwhelmingly in cash.  At a minimum I think an investor should  have at least three years of cash on hand based on the likelihood that by three years from now the economy will have started to recover.  Of course, the stock market will begin to recover sooner than the economy turns. 

As it happens, three years from now is also about the time when the megaprojects analysis suggest that oil supplies will begin to tighten.  Therefore I think that when we start to come out of the recession oil prices will likely rise much more rapidly than a normal economic expansion would cause.  So my best guess is that energy stocks will be in the second or third wave of the best stocks to own in a recovery.

Longer Term Oil Prices

Looking down the road 3 - 7 years we must adjust our vision of how oil supply and demand will be impacted by this economic crisis.  Following the logic of the below-listed impacts leads to what may be a surprising conclusion: when the oil supply crunch hits - starting sometime in or soon after 2010 - it will be much more potent because of the recession.   Here are the predictable impacts:

   1. Over the next few years of relatively low oil prices there will be less impetus to bring plug-in hybrid electric vehicles (PHEV’s) to market.  They only make real sense if gasoline is well over $4, much more sense at $6 a gallon.  But  at $3 gasoline or less which is likely for a couple of years PHEV’s are not economical.  So I won’t be surprised if next year some car companies decide to slow down their PHEV development programs and aim for introducing them a few years beyond the time set in their earlier plans. 

Note also that cars have become a consumer discretionary purchase to a large extent.  People who turn in their car every 2 or 3 or 4 years for a new one do so out of boredom with the car and the desire for “something new” - not out of transportation necessity.   That motive for purchase will recede substantially in a long and deep recession.  So car sales may slow  for possibly 2 - 3 years.  So the next 12 - 24 months could see both lower oil prices and slow car sales.  That combination, I suspect, will reduce the car maker’s appetite for taking risks like introducing a PHEV or pure electric vehicle.

  2. The new and presumably more Democratic Congress may feel a reduced urgency to throw money and regulation at fuel efficiency. At a time of economic stress and enormous deficits due to lower tax revenues and greater social spending requirements Congress may well decide that subsidizing the purchase of PHEV’s or other spending to increase  fuel efficiency can be put off. 

For both of these reasons, then the transition of the fleet from gasoline to electricity is more likely to start in 2012 or even 2014 than in 2010.

   3. There will be some fall off in capital spending to develop oil properties.   For example, the price of oil may well fall below the estimated $80 - $90 level needed for the sub-salt Brazilian fields to be profitably exploited.  The same could be true of some Caspian production.  So we may well see some production plans being deferred.   Such deferrals could put off some fields now scheduled in the 2013 - 15 period.  Therefore, there could be less new oil coming on stream in the 2013 - 2015 time frame (which is already scheduled to be very tight) 

   4. Economic recovery may well begin in the late 2009 - late 2010 time frame.  Thus there could  be robust global demand growth in place by 2012.  

   5. Oil supplies, according the the Wikipedia megaprojects analysis and also to a number of analysts such as Charles Maxwell, will start to become constrained by increasing decline rates and reduced production from new fields in 2010, with the trend growing in 2011 and 2012 and becoming very severe in 2013 and 2014. 

What becomes obvious from this list of likely impacts of the recession and likely developments in global oil production is a sort of perfect storm coming to the price of oil in the 2010 - 2015 time frame.  With a year or so of oil prices below $100 and perhaps below $90 or even $80, a consensus will build that there was an irrational “oil bubble” in 2008 caused by speculation but that in reality there is no need to worry about oil scarcity.  Plenty of oil.  However, just as the economy begins to stabilize and resume growth (say in mid- 2010), the era of real oil shortages will begin.  Oil demand will grow just as people start thinking that oil is plentiful, just as oil shortages begin to start growing and just as the supply of fuel efficient PHEV’s has been delayed.

Given this revised outlook, I suspect my predictions for $200 oil by 2011 and $500 oil in 2014 are looking even more likely.  It is true that $200 oil will tend to cause the economy to slow again but I doubt it will push the global economy back into another recession for a while.  People think that $140 oil this spring was a factor pushing down the economy, but I think oil was a very small factor.  We are where we are now, I believe, because of the credit crisis and housing slump which started a year ago when oil was in the $70 - $80 area. 

There has been a roughly 6% reduction in U.S. oil consumption.  On the other hand, there has also been a huge increase in unemployment.  People who are out of work drive less.  For one, they do not drive to work.  For another, they restrict recreational driving.  So I suspect that a lot of the decline in U.S. gasoline consumption has been related more to economic weakness than to higher oil prices.   I don’t think $135 oil was an accurate data point for understanding elasticity of demand for oil; it was a very small contributing factor in our economic decline.       

Energy Policy vs. Environmental Policy

I was having dinner with friends last week when one of them asked about offshore drilling.  I said, “sure drill away - we’ll need it by the time it comes out of the ground in 2015.”  That led to a discussion of the fact that one should not mistake drilling for oil for an energy policy.   The only real energy policy is one that reduces oil dependence and the only way to do that is by transitioning to electricity for transportation - cars and rail.  So things that make that happen like new light rail lines or electric vehicles are part of an energy policy.

What about wind, solar, geothermal, etc?  They produce electricity more cleanly but we actually won’t need a lot of new electrical capacity to allow for electric vehicles.   Studies have shown that the present electrical infrastructure is sufficient to power 80% of our car fleet if the batteries are recharged at night when normal spare capacity is huge.  Of course electric vehicles will increase the use of the present generating and distribution facilities.  More wind, solar, geothermal, etc would make the additional required electricity more clean and renewable.  But from an energy viewpoint, we could get along by using more of the existing coal and natural gas and nuclear capacity.  So wind, solar and geothermal are part of an environmental policy, not an energy policy.     

The EIS Portfolio

I refer you to the data on the home page for September EIS results.  Suffice it to say they are sad and do not shower any honor on my efforts.   I have found that even with a fair amount of cash, the downside volatility of my portfolio has been phenomenal.  For a while in September I had a much larger cash position than at the end (or now).  But around mid-month I talked myself in to putting back on a lot of my longs.   That was obviously a mistake.

With hope that values will ultimately prevail over panic,

Comments

[Grampa Jim:]

Many thanks, Jim, for your clear and well-reasoned perspective on prospects for oil and energy. I hope you're wrong on the the duration of that "open-ended" uncertainty in the markets and the upcoming over-supply of crude. Hopefully, the resolution of the "Who'll be president" question (regardless of whom) and restoration of confidence from the global bailouts will help many more energy investors "talk themselves back into" long positions earlier rather than later. Frankly, I couldn't resist doubling my long position in CVX this past Friday.

2008 Oct 12 01:23 PM

[yank:]

"Merrill Lynch calling for $50 oil"
Wait, you mean the same Merrill Lynch that closed their commodities trading desk in 2001 right at the beginning of the current commodity bull?
Or do you mean the Merrill Lynch that recommended selling gold and other precious metals in 2002, reight before gold moved from $200 to $900/oz? Perhaps it's the Merrill Lynch that perpetuated the "risk pricing model" that eventually pushed itself into a state of virtual bankruptcy?
Let's set the record straight. EVERYTHING that Merrill Lynch says or recommends is subject to huge scrutiny. These guys are simply not capable of correctly forecasting anything, whether it's commodity prices, strength of financial products, or anything else. I would not believe ANYTHING they say about anything. In fact, they are probably the best contrarian indicator of all the investment bankers. Oh, that's right. I forgot. They are not an investment bank anymore. They changed their stripes again. Take my advice and DO NOT use Merrill Lynch as a plug or indicator for anything. These guys are absolute clowns.

2008 Oct 12 03:06 PM

[Pretzel Logic:]

"My sister the real estate maven tells me there are a lot of home buyers “on the sidelines” waiting for the deals to get better and prices to stabilize. She thinks we could be six months or so away from a bottom in housing prices."

I know I'm not a family member, but I hear from a great many homeowners who are waiting for the market to go up so they can SELL. There is a huge overhead supply in housing, so I think the "technical damage" in the housing market will make it hard for prices to rise in the near future.

And we are still completely overbuilt. For years, the realtors told us, "They aren't making any more land!" Well, according to demographics, the problem is: they aren't making any more people, either. And the days of average Joe Speculators owning 27 houses are gone. There are tons of new developments that have huge vacancies. So demand will have to rise again to meet supply before houses can stabilize.

2008 Oct 12 04:35 PM

[Joshua Lacey:]

This would be a very good time for our government to go forward with a energy policy to start to put into place a plan to become energy independent. Utilize wind and solar energy as well as plug in electric cars, hybrid cars and bio fuels. There is no one easy answer, it will take a little bit of each of these sources of energy to devise a plan that will work. We are using oil at 2x's the rate it is being discovered and processed. It is not an infinite source of energy. I am in the middle of a great newly released book by Jeff Wilson called The Manhattan Project of 2009 . He takes you through each of these issues step by step with hard data and proposes a plan and legislative agenda. Amazing book!

2008 Oct 12 06:04 PM

[iyamwutiam:]

I would agree. The premise that they aren't making anymore land - has always been fallacious- and recently Dubai has proved that :)

I seriously doubt if Mr. Kingsdale has increased his scepticism -considering the deluge of false information foisted upon millions these recent years.

First- the issue has never been mortgages. What has been the issue is that securitized mortgages (MBS) were used as collateral to indulge in further speculation via leverage. When the original mortgages are re-valued in the face of declinging demand and price - primarily because of 'affordability' issues -as well as the increasing pallor of the so-called 'equity' play in housing-- obviously loaned leveraged at 30-40 times collateral (the MBS) must be called in proportionately.

So if you have say 10M in MBS and leveraged those to speculate in energy/hedge funds/ etc to obtain 'leveraged' capital of say 300M to 400M - then guess what - your exposure on the downside is also 40 times. This means that you would owe 60M to 160M if the original 10M in MBS -now has a market value of say 8M. This is the 'heart' of the bailout and the 'necessity for the Fed to 'maintain'/stabilize housing prices. Housing prices are not the crux of the issue - indeed- it is the leverage built upon the MBS -that is the issue and would caude huge losses to I-banks, hedge funds etc - who used it as collateral to become 'leveraged'.

Therefore - it is NOT the homeowners oer se that are causing this tizzy- rather the speculators and probably now the the biggest donors to our corrupt politicians that have caused this debacle and also have the most to lose.

2008 Oct 12 07:34 PM

[iyamwutiam:]

Given that over the last two years - several measures to maintain these housing prices have failed compounded with a mortage default rate approaching 3-5% - leads to a dual problem of - banks losing asset value triggering in a calling in of loans and contributing to a decline in revenue- since you can't make money via interest on loans that are going bad- and AGAIN - these are not housing/mortages but loans made against MBS as security.

The bailout plan - has simply accelerated the process of decline in housing prices - as instead of being forced to wait on the sideline for years incurring losses - the take over of Freddie and Fannie Mae- simply 'insured' the original mortgage value of the home for banks (at no cost to them). The Fed- by taking any piece of tissue paper as collateral on other assets allow banks to borrow 'fresh' capital to regain their losses on bad loans based upon 30-40x leverage to investors, corporations etc.

But the problem is -- to regain their losses- they MUST charge a MUCH higher lending rate. This is WHY - there is a huge spread in LIBOR. It is not a question of trust - as most of these individuals/companies - are repeat customers rather it is the need of the bank to make new loans at lower leverage rates and higher interest to make up for a tremendous shortfall in revenue due to the previous loans that were backed by MBS.

This is why the bailout does not and will not work. First assume only a million homes which were bought for say 300K each =$30,000,000,0000 leveraged conservatively at 30x =9,000,000,000,000 (yes thats right -9 trillion) of which 4-5 trillion went to Fannie and Freddie Mac. That leaves -4-5 trillion dollars or so- throw in deleveraging in the market by the people who took the loans to get out of rising losses- gives you the close to two trillion dollars of wealth 'evaporating' in the markets. That still leaves you with 7 trillion dollars including the Maes which Paulson was so kind to put the tab on us. The two trillion dollars lost in the market is probably due to foreclosures driving up the losses and loans being called in (since the Case-Schiller index points to close to 20% drop in housing prices- (20% of 30 billion =6Billion x40= 2.4 Trillions)- - leading to defaults in Bear Stearns/Lehman, Hedge funds etc.

What is scary is that over 95 percent of that paper is still out there being used as collateral for leverage and that leaves close to 8-10 trillion dollars out there. So - the deleveraging is pushing out - 2-4 trillion because it was put in the market by hedge funds, brokerage houses etc. The fed simply can not buy every potential mortgage acked security - as this would be the equivalent of turning the US into the Weimar Republic.

This means that the US unlike Japan (who had a huge surplus) can not afford deflation and neither can Europe since they are all debtor nations. This is also why China can not rescue US. The only solution will be controlled hyper-inflation and cooking the books or in short stagflation. We are already there- and what will come is the transition to another financial system which is not dollar dependent - or in short the end of the dollar as a reserve currency.

Look to a formation of a reserve currency that is not in the control of any nation. Such as a Euro - and look for it to be electronic. Currencies will be calibrated to this new measure and watch the dollar's purchasing power plummet internationally as well as domestically.

So in terms of Present value of money and opportunity costs - the US governement and its taxpayers will ose trillions - end of Social security (used as collateral) by US government and probably selling a lot of our assets to the Arabs/Chinese - similar to what the US did in the 1990s.

So in short - commodities will rise , many people worried about immigration will not have to worry - as the best and brightest will be absorbed by other nations - already there is a huge influx of Poles, eastern Europeans into Russia.

2008 Oct 12 08:15 PM

[iyamwutiam:]

Seems we can't edit- so sorry a few mistakes. One- the governement can not insure all loans made out against MBS- is what I meant - but basically - it would have been cheaper to buy every single mortgage in the US from the private banks sold in the last two years or so- since this woud have prevented the losses of loans levered at 40x . Instead - the govt. basically guarantees them and lets the banks keep the money while we are on the hook for the losses.

Also - I meant the US in the 1980's -when it seemed like the Japanese were buying up everything in sight - particularly Rockefeller center. But -in that regard - the US is particularly good at making foreign investments go sour - as the Japanese will heartily attest to.

2008 Oct 12 08:23 PM

[john s. gordon:]

again we have the predatory lenders & speculators & hedgie funds causing the problem.
> jack

2008 Oct 13 10:48 AM

[Paul Killinger:]

The market has put in its bottom, and so has oil at +/- $80. Tight worldwide supplies and OPEC will help ensure that.

The talk now is the D's will REINSTATE the OCS moratorium after the election. That should be good for a $10 bump by itself.

Between world demand, OPEC and Congress, then, there's nothing but blue skies ahead for Black Gold now.

2008 Oct 13 11:10 AM

[WayneS:]

History repeats itself. In the 1980's, over 400 of the less than 700 homes in my subdivision along were foreclosed on. 300,000 people lost their jobs in the metroplitan area I worked in. I couldn't sell my house for 10% of what I owed. I had a 15.5% mortgage. I was advised, by a lawyer, to walked out of my house and only pay income taxes on the difference between what I owed at the foreclosed price. Unfortunately, my father taught me ethics and I couldn't break my word to the mortgage company to repay my loan. I am now retired and can't sell this same house for any price. Now that oil prices are dropping, the government will forget their promises to back alternative energy, just as they did in the eighties.

2008 Oct 13 11:36 AM

[iyamwutiam:]

The price of oil will be directly proportional to US debt. Otherwise why would Asia/Russia and Germany/Japan hold onto those things. Now that the printing press is at full tilt - the price of oil will be much higher.

What we are seeing is the pre-election 'favor' to the people -so that the fix is in between two equally horrific candidates.

Ron PAul for President

2008 Oct 13 11:44 PM

[yank:]

The constant drumbeat of "demand concerns" over oil is nothing but hype and false propaganda. Go to Bloomberg.com and pull up today's article, "China Increases September Oil Imports 10% on Demand". Oh I guess the oil bears didn't read that one. Pathetic.

2008 Oct 14 04:37 PM

[Steven Ward:]

Jim, your $500.00 oil implies a military crisis. No nation on earth can survive that impact without reductions in the economy on a depression level. Even rRssia has found out the limits of oil power.

However, I agree with your scenario of oil going back up and way up in the 2010 to 2012 range. I agree the crunch is there.

On the alternative energy front the Democrats are playing a foolish game. Maybe they don't get it and this is sincere stupidity on their part. All the talk they have mustered up about alternative energy is all in power production, not in transportation fuels. That's the rub.
The US imports no coal and the uranium comes from dis,antled Soviet nuke weapons.
So we have a 4 trillion dollar state and Fed highway system with distribution points for transportation fuel inundating the country but Obama and McCain will save us from inported oil with tax credits for solar and wind power.
Additionally, Pickens' plan on compressed NG has to come from shale and other un-conventional sources that require alot of water to frac. If the enviro jihadists are controlling the Dems on offshore drilling wait until the Obama Admin. trots out their land based gas drilling program and all the enviro effects it brings. It will make the offshore controversey look like a Southern Baptist Sunday School Picnic.

So, no additional gas, no additional oil but all the carbon credits you can borrow on.
Now that I read my own posting I take everything back Jim, you might be right on $500.00 oil.

2008 Oct 15 07:04 AM

[Kunst:]

The only "way out" is major inflation via expansion of the money supply. If prices and incomes doubled, asset values would do the same. Now all those underwater mortgages have positive equity again, house payments are a smaller percent of income, MBSs cease to be a problem, and everyone is happy again. Well, almost everyone. Lenders won't be happy (e.g, CD owners, or our foreign creditors). Anyone living on a fixed income is screwed.

The situation is so messed up that this form of national bankruptcy seems virtually inevitable. Can anyone really believe we are going to pay off the myriad debts we have piled up?

2008 Oct 23 12:55 AM