With less credit available, less growth is possible. So we are looking at a bad situation here that we fear can only get worse.

Rising energy prices will further subtract from already-falling real income growth in Japan. In our view, a one or two percentage point subtraction from the growth rate of consumer demand at the margin will prove catastrophic to all hopes of substantial economic expansion.

European growth is projected to average less than U.S. growth for a tenth consecutive year.

If the euro does tumble again -- and we think it will -- we must expect the ECB to orchestrate another round of currency intervention.

The growing perception is that Japan is falling back into a dark hole of recession again.

We do not see any fundamentals strong enough to keep it up there --unless there is a lot of intervention with other governments joining in. We expect the move will fail.