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AT THE climax of “The Day the Earth Caught Fire”, a science-fiction film made in 1961, the fate of the planet hangs in the balance. The world's great powers decide to detonate nuclear bombs, hoping to push the Earth off a collision course with the sun. Do they succeed? The final scene shows two versions of the next day's Daily Express: the headline on the first reads “World Saved”; the other, “World Doomed”.

In the 2007 sequel, “The Day the Credit Markets Seized Up”, Wall Street seemed this week almost to have made up its mind about the ending: World Saved, Probably. Financial markets had expected the Federal Reserve to cut interest rates by a quarter of a percentage point on September 18th, but prayed fervently for a half. When the half came, America's markets rejoiced: the S&P 500 index enjoyed its largest rise on a single day since January 2003; the next day share prices elsewhere jumped for joy and junk-bond markets sprang back to life.

But on sober appraisal, there is less cause for celebration. Global money markets are still bedevilled by banks' need for cash and mistrust of one another: witness the thousands of Britons who queued this week to take their money out of Northern Rock, a mortgage lender. The longer that money-market rates stay high, the greater the danger that expensive credit will start to hurt real economies. Central bankers still have work to do and reputations to make and lose—chief among them Ben Bernanke, the chairman of the Fed. Mr Bernanke may have been feted this week. But it will take more than one rate cut, with Wall Street and Congress screaming for it, to make his name. In the past the Fed has been too eager to cut rates repeatedly when markets gripe. Mr Bernanke has yet to show he is not making the same mistake.

The size of the Fed's cut and the statement that accompanied it signified fear more than hope (see article). The central bank hopes to “forestall some of the adverse effects” of the credit crunch on the economy. But trouble may be coming anyway. The housing market's malaise is deepening all the while. This week's symptoms were a 12-year low in housing starts and a doubling of foreclosures in a year. No wonder housebuilders are their gloomiest since the 1991 recession.

If America is set for a sharp slowdown, or even a recession, it is sure to import less from other countries. That, however, is not the main danger to the rest of the world. Both Europe and Asia are less dependent on American growth than they used to be. Europe is now on a par with America as a market for Chinese exports. Sales to America account for less than 3% of euro-zone GDP. And some rebalancing of the world economy—a smaller American current-account deficit, a weaker dollar—is no bad thing.

The real source of pain is the rise in borrowing costs in both America and Europe. Granted, things are a little better than they were. The gap between three-month interbank rates and Treasury bills, a measure of the risk of lending to other banks rather than Uncle Sam, has narrowed in recent days, helped by the Fed's cut. Sterling interbank rates also fell, notably after the Bank of England abandoned its refusal to intervene in the three-month money market. But the about-turn came only after the panic at Northern Rock—and has heightened criticism of the governor, Mervyn King. Central banks must hope that a turning point has been reached, but interbank rates are still high. There is a long way to go.

A lot of this pain, alas, is necessary. Central banks have been saying for months that risk had become underpriced. Well, now the repricing is at hand, and it is not going to be fun. Banks have to work out the cost of the damage done by years of easy credit and gorging on complicated financial products (see article). It could take months to put prices on the complicated mix of assets for which they are ultimately liable. Meanwhile, they will want to keep cash to themselves rather than lend to others. And in future they may be choosier about who they lend to, directly or indirectly.

This is not to say that securitisation is about to be uninvented. It cannot be and should not be. In recent weeks the dangers of financial innovation—the divorce of originator from ultimate lender; the sheer complexity of some derivatives—have become plain. The benefits remain, not least the increased ability of households to smooth spending over their lifetimes and of markets to allocate risks to those most willing to bear them (see article). But there are cycles in all things: underpricing begets excess, which begets a reckoning. For a while at least, many people and businesses will have to pay more to borrow, or will not be able to borrow at all. The results will be felt in markets for housing—America's was far from the frothiest—as well as junk bonds and corporate buy-outs.

To some extent, easier monetary policy may soothe the transition. Already some central banks have held off interest-rate increases that looked certain a few weeks ago. But even if some of these eventually cut rates, they are unlikely wholly to reverse the tightening of conditions just yet. The markets are in effect raising rates on the central banks' behalf. These monetary policymakers are unlikely to forget inflation in a hurry.

But might the Fed? It says not. And given the recent run of economic data, inflation hardly seems an imminent threat. That ought to help to protect Mr Bernanke from the charge levelled at Alan Greenspan, his predecessor. Under Mr Greenspan, whose memoirs came out this week (see article), the Fed won a name for being quick to cut rates when markets squealed but slow to raise them when the economy picked up. The housing boom—and today's mess—are the result.

Having delivered a half-point cut rather than a quarter, Mr Bernanke is not yet free of the suspicion that he will follow Mr Greenspan's path. Nor is he surely guilty. His Fed has cut rates with the economy looking ropy—but also with bankers and politicians trying to bully him. The hope is that he acted because he saw a gloomy outlook. The fear is that he did so because it is hard for central bankers to say no.

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“DEAR Valued Bloomberg User,” began an e-mail sent out recently by the information provider to the universe’s masters. “This is...to remind you that we can still provide complimentary access to our service should you find yourself temporarily in-between jobs.” Having the bad news broken by another firm’s computer could be a new low for an industry not known for letting people go tactfully (“Your pass stopped working today? I’m so sorry”). Happily things do not seem to be as bad as all that.

In London some jobs will probably go. The Centre for Economics and Business Research (CEBR) reckons that more than 5,000 people will be hauled in for a talk about career progression by the end of the year. For comparison, the City shed 20,000 jobs after the dotcom bubble burst and 40,000 after Black Wednesday in 1992. However, the CEBR reckons that 10,000 new jobs were created in the year to July, so any reduction would still mean a big net gain in jobs over a two-year period.

As for bonuses, one financial headhunter that specialises in finding drones rather than filling corner offices says that at least one City firm has told its managing directors (who are less senior than the title makes them sound) that a certain number of them will receive no bonus at all this year. This gloom is not widely shared: most report bonus expectations being managed rather than vaporised—provided, of course, that things get no worse.

In New York the picture is similar. Some areas that have been booming over the past year will be affected. Mergers and Acquisitions mbanking, where the pipeline of deals looks less than inspiring, leveraged loans and a few other corners of fixed income may do badly. Conversely, anyone who trades volatility, of which there has been plenty, or sells options, which should be a good business in uncertain times, will have prospered.

Even the people most at fault for the recent turmoil—the creators of the collateralised-debt obligations (CDOs) and conduits that spread subprime-mortgage debt around the financial system—may end the year with new Porsches. Headhunters on Wall Street report that some have been snapped up by hedge funds looking to extract some value from these illiquid instruments. Just as imprudent banks have been saved from their mistakes by indulgent central bankers, so CDO-makers could be rewarded for the mess that they helped to create. Vroom-vroom.

IN the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants.

Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.

The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them “Pigovian taxes.”

Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan, Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes.

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class.

But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

The case for a carbon tax looks even stronger after an examination of the other options on the table. Lawmakers in both political parties want to require carmakers to increase the fuel efficiency of the cars they sell. Passing the buck to auto companies has a lot of popular appeal.

Increased fuel efficiency, however, is not free. Like a tax, the cost of complying with more stringent regulation will be passed on to consumers in the form of higher car prices. But the government will not raise any revenue that it can use to cut other taxes to compensate for these higher prices. (And don’t expect savings on gas to compensate consumers in a meaningful way: Any truly cost-effective increase in fuel efficiency would already have been made.)

More important, enhancing fuel efficiency by itself is not the best way to reduce energy consumption. Fuel use depends not only on the efficiency of the car fleet but also on the daily decisions that people make — how far from work they choose to live and how often they carpool or use public transportation.

A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving. Increased driving not only produces more carbon, but also exacerbates other problems, like accidents and road congestion.

Another popular proposal to limit carbon emissions is a cap-and-trade system, under which carbon emissions are limited and allowances are bought and sold in the marketplace. The effect of such a system depends on how the carbon allowances are allocated. If the government auctions them off, then the price of a carbon allowance is effectively a carbon tax.

But the history of cap-and-trade systems suggests that the allowances would probably be handed out to power companies and other carbon emitters, which would then be free to use them or sell them at market prices. In this case, the prices of energy products would rise as they would under a carbon tax, but the government would collect no revenue to reduce other taxes and compensate consumers.

The international dimension of the problem also suggests the superiority of a carbon tax over cap-and-trade. Any long-term approach to global climate change will have to deal with the emerging economies of China and India. By some reports, China is now the world’s leading emitter of carbon, in large part simply because it has so many people. The failure of the Kyoto treaty to include these emerging economies is one reason that, in 1997, the United States Senate passed a resolution rejecting the Kyoto approach by a vote of 95 to zero.

Agreement on a truly global cap-and-trade system, however, is hard to imagine. China is unlikely to be persuaded to accept fewer carbon allowances per person than the United States. Using a historical baseline to allocate allowances, as is often proposed, would reward the United States for having been a leading cause of the problem.

But allocating carbon allowances based on population alone would create a system in which the United States, with its higher standard of living, would buy allowances from China. American voters are not going to embrace a system of higher energy prices, coupled with a large transfer of national income to the Chinese. It would amount to a massive foreign aid program to one of the world’s most rapidly growing economies.

A global carbon tax would be easier to negotiate. All governments require revenue for public purposes. The world’s nations could agree to use a carbon tax as one instrument to raise some of that revenue. No money needs to change hands across national borders. Each government could keep the revenue from its tax and use it to finance spending or whatever form of tax relief it considered best.

Convincing China of the virtues of a carbon tax, however, may prove to be the easy part. The first and more difficult step is to convince American voters, and therefore political consultants, that “tax” is not a four-letter word.

Illustration by David Simonds

IF YOU believe what they say about themselves, big companies have never been better citizens. In the past decade, “corporate social responsibility” (CSR) has become the norm in the boardrooms of companies in rich countries, and increasingly in developing economies too. Most big firms now pledge to follow policies that define best practice in everything from the diversity of their workforces to human rights and the environment. Criticism of CSR has come mostly from those on the free-market right, who intone Milton Friedman's argument that the only “social responsibility of business is to increase its profits” and fret that business leaders have capitulated to political correctness. But in a new twist to the debate, a powerful critique of CSR has just been published by a leading left-wing thinker.

In his new book, “Supercapitalism”, Robert Reich denounces CSR as a dangerous diversion that is undermining democracy, not least in his native America. Mr Reich, an economist who served as labour secretary under Bill Clinton and now teaches at the University of California, Berkeley, admits to a Damascene conversion, having for many years “preached that social responsibility and profits converge over the long term”. He now believes that companies “cannot be socially responsible, at least not to any significant extent”, and that CSR activists are being diverted from the more realistic and important task of getting governments to solve social problems. Debating whether Wal-Mart or Google is good or evil misses the point, he says, which is that governments are responsible for setting rules that ensure that competing, profit-maximising firms do not act against the interests of society.

One after another, Mr Reich trashes the supposed triumphs of CSR. Socially responsible firms are more profitable? Nonsense. Certainly, companies sometimes find ways to cut costs that coincide with what CSR activists want: Wal-Mart adopts cheaper “green” packaging, say, or Starbucks gives part-time employees health insurance, which reduces staff turnover. But “to credit these corporations with being ‘socially responsible' is to stretch the term to mean anything a company might do to increase profits if, in doing so, it also happens to have some beneficent impact on the rest of society,” writes Mr Reich.

Worse, firms are using CSR to fool the public into believing that problems are being addressed, he argues, thereby preventing more meaningful political reform. As for politicians, they enjoy scoring points by publicly shaming companies that misbehave—price-gouging oil firms, say—while failing to make real changes to the regulations that make such misbehaviour possible, something Mr Reich blames on the growing clout of corporate lobbyists.

What will CSR advocates make of this? Few will dispute that government has a crucial role to play in setting the rules of the game. Many will also share Mr Reich's concern about the corrosive political power of corporate money. But Mr Reich has it “exactly backwards”, says John Ruggie of Harvard University. If citizens and politicians were prepared to do the right thing, he says, “there would be less need to rely on CSR in the first place.”

Thoughtful advocates of CSR also concede that companies are unlikely to do things that are against their self-interest. The real task is to get them to act in their enlightened long-term self-interest, rather than narrowly and in the short term. Mr Reich dismisses this as mere “smart management” rather than social responsibility. But done well, CSR can motivate employees and strengthen brands, while also providing benefits to society. Understanding and responding to the social context in which firms operate is increasingly a source of new products and services, observes Jane Nelson of the Prince of Wales International Business Leaders Forum. Telling firms they need not act responsibly might cause them to under-invest in these opportunities, and to focus excessively on short-term profits.

Intriguingly, Mr Reich looks back fondly to what he calls the “not quite golden age” in America after the second world war when firms really were socially responsible. Business leaders believed they had a duty to ensure that the benefits of economic growth were distributed equitably, in contrast to their modern counterparts, argues Mr Reich. What changed? Back then, big American firms enjoyed the luxury of oligopoly, he says, which gave them the ability to be socially responsible. Today's “supercapitalism” is based on fierce global competition in which firms can no longer afford such largesse.

Lenny Mendonca of McKinsey takes a different view of the post-war period. After the war business leaders realised it was in their enlightened self-interest to rebuild the global economy and reinvent the social contract, he says, and there is a similar opportunity today, given problems ranging from climate change to inadequate education, where firms' long-term self-interest may mean that they have an even greater incentive to find solutions than governments do. Certainly, in America, business leaders are advocating government action on education, climate change and health-care reform that is neither zero-sum nor short-termist, and which, indeed, may not differ much from Mr Reich's own preferences.

Though his book hits many targets, both bosses and CSR activists are likely to dismiss it as fundamentally unworldly and to agree with Simon Zadek, the boss of AccountAbility, a CSR lobby group. “The ‘whether in principle' conversation about CSR is over,” he says. “What remains is ‘What, specifically, and how?'”

THE costliest place in the world to get high is Japan, according to the United Nations Office of Drugs and Crime's annual World Drug Report. The street price of a gram of cannabis weed was $58.30 in 2005, over twice as much as in the next most expensive nation, Australia. Americans pay nearly twice as much as Canadians. Similar disparities occur in Europe. Although the Netherlands is the only Western country where cannabis can be bought legally, punters pay more there than in Germany or France. Prices are cheapest in developing countries, where enforcement is less strict.

AP

Satoshi Kambayashi

FOR several years, the darkest scenarios for the world economy have involved a dollar crash. The script was simple. America’s dependence on foreign capital was a dangerous vulnerability. At some point foreign investors would refuse to pile up ever more dollar assets. If investors were spooked, say by a crisis in American financial markets, they might ditch dollars fast. The greenback would plunge. A tumbling currency would prevent the Fed from cutting interest rates, deepening and spreading the economic pain.

Well, the financial shock has hit but where is the stampede out of dollars? The greenback has fallen, to be sure, particularly since it has become clear that the Federal Reserve is likely to cut interest rates on September 18th, and particularly against the yen and the euro—the dollar hit an all-time low of $1.39 per euro on Wednesday September 12th and its decline continued on Thursday.

But the decline, so far, has hardly been a panicked rout. Although the dollar has plumbed historical depths against an index of important currencies, it has fallen by less than 1.5% since the financial turmoil hit in early August. Measured against a broader group of currencies that includes all America’s main trading partners, the dollar is little changed from where it was before August’s tumult began.

As the first signs of trouble emerged, the dollar even rose. To some analysts this confirmed the dollar’s status as a haven in troubled times. More likely, it was the consequence of unwinding leveraged bets elsewhere. Whatever the reason, the dollar’s initial buoyancy did not last. In recent weeks the greenback has slowly fallen and the likely path of interest rates suggests there is more weakness to come.

Recent gloomy job statistics suggested that the economy was weakening well before the credit turmoil hit, and all but sealed the case for a cut in short-term interest rates on September 18th, certainly of a quarter point, perhaps by as much as half a percentage point. With the European Central Bank hinting strongly that euro-zone interest rates might rise again this year, it is no surprise that the dollar has hit new lows against the euro.

Its path against the yen is harder to foresee. Japan’s economy, too, seems to be in a spot of bother making it much less likely that the Bank of Japan will raise interest rates in a hurry. That suggests the carry-trade (selling borrowed yen to invest elsewhere) will remain attractive, limiting the yen’s rise.

For true dollar pessimists, these cyclical considerations are only part of the story. Far more important, they argue, is the risk that the private investors and central banks that have been funding America’s gaping current-account deficit become permanently less keen on dollar assets. Ken Rogoff, an economist at Harvard University, and a dollar bear, argues that America’s image as a great financial centre has been tarnished by the subprime mess. The “mystique” that has allowed America to borrow lavishly and cheaply has suffered a blow. The result, he argues, must be a lower dollar and higher interest rates in America relative to the rest of the world.

Indeed, the complex structured-debt products that investors now shun have been an important source of financing for America’s current-account deficit. In 2006 foreign investors, on net, bought some $400 billion of corporate-issued debt (including mortgage-backed securities not guaranteed by the government-sponsored housing giants Fannie Mae and Freddie Mac). That is the equivalent of around half the current-account deficit.

It is hard to know what share of this debt was asset-backed, let alone mortgage-backed but the numbers are big enough that foreign flight from the mortgage-backed market, if not countered by eager buying of other types of American assets, could cause trouble for the dollar.

The lesson of the past few weeks, however, is that this is unlikely to happen all of a sudden. And if private investors fret, central banks may well pick up the slack. China, in particular, has little to gain from a dollar crash. With domestic inflation now at a ten-year high, China’s politicians may be willing to let the yuan rise somewhat faster against the dollar. But they are unlikely to add to a rout, not least because that would make their exports much less competitive in America.

Another argument against a sudden crash is that the dollar is already quite cheap. In real effective terms, it has slowly fallen by some 20% since its recent peak in 2002. That decline is already helping to shrink America’s external deficit. Add in the probability of sharply slower domestic demand in America, and the current-account deficit could shrink a fair bit over the coming months. A smaller need for foreign funds would itself put a floor under the dollar. All told, the doom-mongers’ script may play out in reverse. Instead of a financial crisis prompting a dollar crash, it may accelerate the unwinding of the imbalances that had the worrywarts so unnerved in the first place.

Alex, a 31-year-old African gray parrot, knew more than 100 words and could count and recognize colors and shapes.

He knew his colors and shapes, he learned more than 100 English words, and with his own brand of one-liners he established himself in television shows, scientific reports and news articles as perhaps the world’s most famous talking bird.

But last week Alex, an African gray parrot, died, apparently of natural causes, said Dr. Irene Pepperberg, a comparative psychologist at Brandeis University and Harvard who studied and worked with the parrot for most of his life and published reports of his progress in scientific journals. The parrot was 31.

Scientists have long debated whether any other species can develop the ability to learn human language. Alex’s language facility was, in some ways, more surprising than the feats of primates that have been taught American Sign Language, like Koko the gorilla, trained by Penny Patterson at the Gorilla Foundation/Koko.org in Woodside, Calif., or Washoe the chimpanzee, studied by R. Allen and Beatrice Gardner at the University of Nevada in the 1960s and 1970s.

In 1977, when Dr. Pepperberg, then a doctoral student in chemistry at Harvard, bought Alex from a pet store, scientists had little expectation that any bird could learn to communicate with humans, as opposed to just mimicking words and sounds. Research in other birds had been not promising.

But by using novel methods of teaching, Dr. Pepperberg prompted Alex to learn scores of words, which he could put into categories, and to count small numbers of items, as well as recognize colors and shapes.

“The work revolutionized the way we think of bird brains,” said Diana Reiss, a psychologist at Hunter College who works with dolphins and elephants. “That used to be a pejorative, but now we look at those brains — at least Alex’s — with some awe.”

Other scientists, while praising the research, cautioned against characterizing Alex’s abilities as human. The parrot learned to communicate in basic expressions — but he did not show the sort of logic and ability to generalize that children acquire at an early age, they said.

“There’s no evidence of recursive logic, and without that you can’t work with digital numbers or more complex human grammar,” said David Premack, emeritus professor of psychology at the University of Pennsylvania.

Dr. Pepperberg used an innovative approach to teach Alex. African grays are social birds, and quickly pick up some group dynamics. In experiments, Dr. Pepperberg would employ one trainer to, in effect, compete with Alex for a small reward, like a grape. Alex learned to ask for the grape by observing what the trainer was doing to get it; the researchers then worked with the bird to help shape the pronunciation of the words.

Alex showed surprising facility. For example, when shown a blue paper triangle, he could tell an experimenter what color the paper was, what shape it was, and — after touching it — what it was made of. He demonstrated some of his skills on nature shows, including programs on PBS and the BBC. He shared scenes with the actor Alan Alda on the PBS series “Look Who’s Talking.”

As parrots can, he also picked up one-liners from hanging around the lab, like “calm down” and “good morning.” He could express frustration, or apparent boredom, and his cognitive and language skills appeared to be about as competent as those in trained primates. His accomplishments have also inspired further work with African gray parrots; two others, named Griffin and Arthur, are a part of Dr. Pepperberg’s continuing research program.

Even up through last week, Alex was working with Dr. Pepperberg on compound words and hard-to-pronounce words. As she put him into his cage for the night last Thursday, she recalled, Alex looked at her and said: “You be good, see you tomorrow. I love you.”

He was found dead in his cage the next morning, Dr. Pepperberg said.

Torsten Silz/Agence France-Presse/Getty Images

The Mercedes-Benz F700 concept car is a rolling test bed of new environmental technologies, including the DiesOtto engine, which produces 238 horsepower and 295 foot-pounds of torque from just 1.8 liters.

FRANKFURT

European automakers, stung by criticisms from environmentalists and government regulators that they are late to the green party, will be using the 2007 Frankfurt motor show to showcase everything in their alternative fuel and powertrain arsenals.

The biennial show, the 62nd Internationalen Automobil-Ausstellungen Cars, will be held at the mammoth CongressCenter Messe Frankfurt convention center from Thursday through Sept. 23. Press preview days began Monday night and continue through Wednesday. Angela Merkel, the German chancellor, will open the show to the public on Thursday.

Organizers boast the show will be “the leading international fair for sustainable mobility,” and millions of euros will be spent on lavish displays touting environmentally responsible motoring. The show, spread throughout 2.5 million square feet of exhibit area, is always brutal on the podiatric health of journalists, some 10,000 of whom have reportedly received credentials. They will have to hustle to see how many of the 88 world premieres they can attend; perfect attendance is impossible because with so many introductions packed into barely two press days, multiple introductions are scheduled simultaneously, at widely disparate locations.

To pound home the sustainability theme, press shuttles are various alternative fuel and propulsion vehicles. Journalists are also being offered “eco-training” classes to learn economical driving techniques. A BioFuels Bar has information about the advantages and possible uses of biofuels and also dispenses biofuel-themed drinks. And the physically fit can hike an “Environmental Trail” around the convention center (a complex of buildings so sprawling it is served by three train stations).

The stars of the show, not surprisingly considering the host country, figure to be the German automakers. Mercedes-Benz is planning to unveil as many as 18 products, including Bluetec diesels and hybrids with both gasoline and diesel engines.

The centerpiece of the newly emancipated DaimlerMinusChrysler is the F700 concept, an S-Class-sized vehicle with five doors and 40 miles per gallon economy. The F700 is a rolling test bed of new environmental technologies, including the DiesOtto engine. This four-cylinder gasoline engine, pronounced “Dees-Otto” (not De Soto), produces 238 horsepower and 295 foot-pounds of torque from just 1.8 liters , using a new technology known as homogenous charge compression ignition. The engine has two ignition modes — compression, under light loads, and spark at other times — to boost fuel mileage. The company said the DiesOtto engine has the strong low-end torque and fuel savings of a diesel, but with emissions that are lower than a diesel.

BMW is taking the wraps off a new X6 crossover, an X5-based S.U.V.-type vehicle, powered by a gasoline-electric hybrid engine. The “sporty, coupe-like” X6, to be built in Spartanburg, S.C., seats four and has five doors. Of interest here to enthusiasts is the much anticipated 1-Series coupe. The 1-Series offerings, the 128i and 135i, are throwbacks to the nimble, quick, shoebox-sized BMWs of 30 years ago. With the same 300-horsepower turbo engine that is in some 3- and 5-Series models, the 135i should be a rocket, perhaps even “a modern BMW 2002”, as Car and Driver magazine gushes.

Another important newcomer is the Volkswagen City Expert concept, which could be VW’s most important new vehicle since the New Beetle. VW will also show the production-ready Tiguan, a smaller Touareg-themed S.U.V., and BlueTec diesel models.

Audi is displaying a new line of diesel engines that the company said have the “cleanest diesel technology in the world.” The turbodiesel powerplants employ a fuel-saving, hybrid-like stop-start system and a chemical injection system to reduce nitrogen emissions. An all-new Audi A4 sedan is also making its debut, as is the A8, the brand’s flagship sedan that has had a facelift.

Not to be outdone by all this emphasis from German automakers on green technology, even Porsche is bringing out a gasoline-electric hybrid version of its Cayenne S.U.V. here. Relax, Porsche-philes, also on tap is the new 911 GT2, the most powerful street-legal 911 ever.

General Motors’s Opel division is in fact headquartered in Frankfurt and is introducing here an Agila minivan and a hybrid concept that will have G.M.’s E-Flex propulsion system (first shown on the Chevrolet Volt concept at the 2007 Detroit auto show). In this variation, an Opel Astra-like vehicle is equipped with the electric motors and a turbodiesel engine. Since Saturn seems to get everything Opel brings out, is this related to the Saturn plug-in hybrid that was announced at the ’06 L.A. Auto Show? Hmmm.

American manufacturers certainly have increased their presence here in recent years. G.M. is expanding its Euro-only Cadillac BLS line with an “estate” or station wagon version of the sedan. The Swedish-built car is essentially a Saab 9-3 wagon in a Caddy-lite disguise. Also showing here: A Chevrolet Aveo hatchback. No crowding, please. Over at Saab, there’s a hot new Turbo X to ogle.

Dodge continues to expand its offerings here with a new Journey crossover that it will sell in Europe. The Journey is built on a stretched Avenger platform and will replace the short wheelbase Chrysler Voyager minivan sold here.

Ford, in the midst of a product realignment that will bring many European versions of its cars to America, is showing two new concepts here. The Verve is supposed to be a sneak preview of the upcoming Fiesta subcompact, due in Europe next year and North America and Asia a year or two later. The Kuga concept is a Focus-based crossover that is nearing production form.

Jaguar, which Ford has on the block, is bringing out the latest vehicle that is supposed to save the company (after previous models failed to do so): the new XF sedan. Shown at Detroit as the sleek C-XF concept, the XF has been plumped up a bit — so people will actually fit in it — and equipped with a high-horsepower V-8. Can the XF make people forget the S-Type? What couldn’t?

Aston Martin, a company also already sold by Ford, is showing that there is indeed life after Ford, with the unveiling of its DBS flagship.

Rounding out the Brit contingent here is the new Mini Clubman, which is 10-inches longer, with three more doors, than a Mini. Alas, no wood-trimmed “shooting brake” wagon.

Other European manufacturers, which don’t sell in the United States, such as Peugeot, Renault, Fiat, Skoda, are also having important debuts here. Of special note is the too-cute Fiat 500.

Asian manufacturers have a solid lineup of Frankfurt introductions, too, including the Mazda6, Mitsubishi’s Concept-cX, Toyota’s unfortunately named Endo microcar, Nissan’s Mixim electric car, and a Honda Accord wagon that may be a design precursor for the next Acura TL. Hyundai has a Veloster coupe to show here, and Kia has a Sports Coupe Concept. Chinese automakers, two of which are already selling cars in Europe, also have displays.

Just before the start of Ralph Lauren’s 40th anniversary show, as guests like Mayor Michael R. Bloomberg, Police Commissioner Raymond W. Kelly and the actors Robert DeNiro and Dustin Hoffman took their seats, there was music from “My Fair Lady.”

A tug of Broadway, and then the show began, the music shifting to a faster contemporary beat as the first model stepped out in a white silk gown with a frilly black-edged hem and a wide black straw hat. Masculine coats, satin jodhpurs, trim vests and long polka-dot skirts with romantic white blouses seemed to animate the racecourse painting in the background.

The show, on Saturday night in the Central Park Conservancy, was a vigorous display of Mr. Lauren’s imagination and wit, from the veiled bowlers and snow-white riding boots tipped in black to the long ruffled dresses in pastel garden prints, and the only location that might have better served his purposes than the park would have been Fifth Avenue itself. The clothes, while far from being costumes, had the pomp of an aristocratic parade.

Mr. Lauren could have gone in any number of design directions to mark his 40th anniversary. To Newport, the American West, the Adirondacks. Instead he chose New York, reflecting its energy and sophistication with crisp tailoring, a black leather coat banded in taxi-bright yellow, and a silver chain-beaded gown as cosmopolitan as the Chrysler building.

He could afford the schmaltz of Frank Sinatra’s “The Best Is Yet to Come,” as he came out to an ovation and personally greeted guests like Barbara Walters, Barry Diller, Martha Stewart and the designers Donna Karan, Vera Wang and Carolina Herrera.

How many other, younger designers will reach such a milestone? There has been a shift in perspective in the last few years as stores and magazines seemingly burn through new names in the business. The same is true of the music and film industries. The process inevitably anoints the superficial.

Designers like Benjamin Cho and Kate and Laura Mulleavy of Rodarte have their distinctive pool of admirers, but despite their best efforts — and in the case of Rodarte, the help of editors and fashion plates like Liz Goldwyn and Lisa Airan, who came to the show dressed in a fanciful Rodarte suit — the pool essentially remains the same. One has the impression that a lot of retailers have figured out how to sell the idea of new talent without actually having to commit to any one name for the long haul.

The most inventive looks in Mr. Cho’s collection included jersey tops that had been twisted around the neckline into rope coils, narrow jackets inspired by trench coats, and slim black silk dresses that incorporated into the bodice or neckline smooth, cross-sectioned stones that had been wired together.

As always, Mr. Cho’s clothes answer some design question that absorb him exclusively, and with perfect craftsmanship.

Ohne Titel, a new line by Alexa Adams and Flora Gill, who previously worked for Karl Lagerfeld, offered lanky pantsuits in neutral tones, bustled silk skirts and some fine, body-hugging knits in textured patterns that evoked tribal art.

Though still cloyingly precious, Rodarte looked less lunatic than usual. Some of the tulle and chiffon dresses, in cloudy shades of pink and blue, had a wispy effect, as if the Mulleavy sisters were attempting to give the clothes the lightest possible structure.

Shapes were engaging, notably a rounded jacket in ivory organza with wandlike sleeves and a coppery pleated skirt. I couldn’t make out if a slim dress and matching jacket in broken waves of blue, gold and beige were embroidered or knitted, but the outfit was beautiful, nearly evoking body art.

Jack McCollough and Lazaro Hernandez are widely acknowledged to be among the most promising of the new generation of brand-builders, blessed with talent and charm. On Friday, they took their Proenza Schouler collection to the Armory on Park Avenue, a good place to display military-precise tailoring and braid, fitted jackets in pieced sections of ivory and black linen ( the garments were shown inside out for better effect, the designers said), and two-toned pumps with chunky straps and nailed-studded heels.

On the demerit side, a detectable Balenciaga influence in the proportions and layers cast a degree of doubt over the designers’ ability to establish a clear brand identity.

But their use of fabrics like rough cotton was very appealing, and the mix of masculine elements like belted vests with poplin shirts and short flaring skirts in washed organza helped give them the primary silhouette for spring. So in that sense they were on the right track. And short dresses embroidered in matte-gold sequins and feathers (by the Paris house Lemarié) added to their sophisticated capital.