Gee, I just happened to see some comments in today's WSJ that tend to support what Fred said...
Regards,
John <ggg>
Investment Decline
And new numbers out Wednesday show that investment did drop in last year's fourth quarter. The government reported that the quarter's real, or inflation-adjusted, growth in gross domestic product slipped to an annual rate of 1.4%, its slowest pace since 1995. Household consumption, which makes up two-thirds of total economic spending, advanced at a respectable 2.9%. But business investment on equipment and software actually fell at a 5% rate -- a dramatic reversal from 21% growth in the first quarter of 2000. A big December drop reported last week in orders for capital goods, excluding aircraft and defense, suggests the capital retrenchment isn't over.
That's being felt by companies like Cisco Systems Inc., the giant Internet-gear maker in San Jose, Calif. "In November, when we first started to see a slowdown, we thought it would be a blip -- it looked like it wouldn't affect us," Cisco Chief Executive John Chambers said Wednesday, according to Dow Jones Newswires. "But then in early December it was obvious that things were slowing down with many of our customers much faster than people anticipated. I became concerned when the Fed didn't move, but now they're moving." |
