Joe,
>> Pardon my ignorance. A higher short interest means a more
>> pessimistic view of the stock. Am I wrong?
>> Thanks for your response in advance.
>> Joe
You are right in general "higher short interest means pessimistic."
However, there's great chance for short sqeeze for short term when
positive news/ press release comes out. So high short interest can
be good news for stocks like SYQT.:
For SYQT's case, it has been so pessimistic in general, it's no
brainer to be short in this stock. However given the positive outlook
in US economy, life span of pc(3-5 yrs), x-mas channel stuffing in
OEMs now and retailers in fall, are very positive for pc market in
general. SYQT has tendency to jump 1+ point @good news because so
many got burnned from this dog earlier and yet nobody can deny the
potential of this baby.
Combined with the excellency in SYQT's technology, new management,
huge market in China, and pc market condition, there's greater
chance for up trend for SYQT for 2nd half of 97.
This is from wsj for the US economy outlook:
The Outlook
WASHINGTON
This is one of those rare moments when
economists look for something, anything, that
looks like an imbalance in the U.S. economy. It is
getting difficult to find one.
The debt bomb, in its various manifestations, has
long been the specter haunting the U.S.
economy. The immense buildup of U.S.
government debt, standing at nearly $4 trillion,
used to be the main bogeyman, but today the
budget deficit is shrinking faster than politicians
can claim credit for it all. At various times,
business has gone on a debt spree. Some will
remember the bond boom of 1980s as the
decade of junk. In the 1990s, the worry has been
the U.S. consumer, maxxing out on home-equity
loans and credit cards.
Today, though, the American debt situation looks
well under control, and looking ahead, there is
little reason to expect a change. Even the
consumer problems look containable. Yes, debt
levels remain high and delinquency rates are
troublesome. But the past few months have
brought some good news about the problems of
deadbeat and delinquent borrowers.
As Federal Reserve Chairman Alan Greenspan
pointed to these problems in his testimony before
Congress last week, he also noted that banks
have tightened their credit guidelines, household
balance sheets are improving, mortgage
delinquencies are at very low levels and
consumers are adding debt at a slower pace.
Growth in household debt has fallen to slightly
above 6% this year, down from more than 8% in
1996.
To most economists, it means that the U.S.
consumer isn't going to spoil the party and
throw the U.S. expansion into the tank
anytime soon.
But the consumer-debt situation is one part of a
larger U.S. debt picture. It doesn't get much
attention these days, but it should, in part
because it suggests just how well-balanced the
economy is at the moment.
Buried in Mr. Greenspan's full testimony last
week were his comments on what is called
aggregate-credit growth. This is the sum of
government, business and consumer borrowing.
The total outstanding is about $15 trillion, broken
down roughly into one-third government debt,
one-third business debt and one-third consumer
debt.
Good news here. Credit growth has been slow
and stable, a sharp change from the 1980s.
Today, the annual rate of total debt growth in the
U.S. economy is about 5%. That's about the
same rate as economic growth, unadjusted for
inflation. Moreover, in his testimony last week, Mr.
Greenspan indicated that in 1998, credit growth
should remain around the middle of the Fed's
target range of 3% to 7%.
"It's part of this wonderful economy we're in," says
W. Van Bussmann, chief economist at Chrysler
Corp. "You look for imbalances and you can't find
them. It's unbelievable."
In short, the deleveraging of the U.S. economy
continues. After rising at double-digit levels
through the 1980s, credit growth has really come
back to earth in the 1990s. Most of the change
has been by government, spending less in the
wake of the Cold War, and taking in more tax
receipts both at the federal level and in the states.
Then there is business, where balance sheets
are generally in good shape. It is the consumer
who has been the worry. But in the larger scheme
of things, even the big run-up in consumer debt
doesn't really alter the picture of slow, stable and
not very scary credit growth.
One analyst of the debt scene, Robert Marks of
SOM Economics Inc., Dobbs Ferry, N.Y., notes
that consumer-installment debt is probably only
about 8% of the country's total credit, and if even
5% of that is shaky, it is worth some worry. Yet it
needs to be kept in perspective. It's small.
It is tempting to ask, so what? If credit
growth is slow, what does it mean? This is
where economists disagree.
To some, including Mr. Marks, credit is the jet fuel
of the economy and sets the limit on the
economy's nominal growth. Moreover, he says,
"The slow and steady credit expansion largely
explains both the 'mystifying' dormancy of
inflation" and the long duration of the current U.S.
expansion, currently in its seventh year.
Others disagree, to put it politely. Wayne Angell,
a former fed governor and currently chief
economist at Bear, Stearns & Co., says the debt
growth is just a symptom of stable economic
growth, not a cause. Still others, such as Victor
Zarnowitz, a business-cycle expert, says it is hard
to isolate cause and effect.
In any event, the fact remains that the debt bomb
of the 1980s has been largely defused, for now.
The defense reduction after the Cold War, the
rising tax receipts of the 1990s prosperity, the
deleveraging of American business have all
played a part. While some U.S. households
continue to struggle with debt, debt growth is
unlikely to move the U.S. economy out of the
economic sweet spot anytime soon.
-- BERNARD WYSOCKI JR.
regards,
BPP |
