<Guys the market will slow.>
Well, I was on the micro level talking about whether Intel's delay of Merced was market-related or development-related, and you have jumped to the macro level, talking about Greenspan et al.
On the micro level, perhaps the point is moot. Intel is having a problem adapting its current product offerings to a market that has swung heavily in the direction of sub-000 PC's. Result: lower ASP's (with or without Celeron) and lower profits.
Re the macro level, I can't see Greenspan lowering short term rates, though long term bond rates may drift down in the market to 5.25%. The problem for stocks, especially techs, may not be interest rates, however, but profits (see lower ASP's above).
Also see the interview in Barron's (print edition -- may also be on the web) with Albert Edwards. Liquidity (a monetary aggregate designated as L, which equals M3 + Liquid Assets) is up 12.5% in the past year. IMO, this excess liquidity:
1. Partly explains why U.S. stock prices are so high, in spite of the likelihood of slower profit growth rates ahead.
2. Also means that there will not be any short term interest rate cut in the months ahead, as some on this or other threads have suggested, despite deflation in CPU and PC prices.
But should the Fed raise rates to cure the liquidity and financial asset (stock price) inflation problem? May not be necessary: (1) tech stock prices already in a down trend, broader market on the verge; and, (2) drop in Asia imports and rise in Asia exports will slow U.S. economy.
Conclusion: Sell stocks, buy T-bonds. Which stocks to sell? Well, AMAT is a prime candidate and a contributor on the AMAT thread thinks MU has far to go -- on the downside. Looks like INTC will break 70 here, but I don't have a lot of conviction about how far down it can go from here.
The failure of Friday's early rally has reinforced my downside bias here.
Excuse my ramblings. Charlie. |
