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Politics : Formerly About Advanced Micro Devices
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To: Mani1 who wrote (112208)5/23/2000 9:58:00 PM
From: FJB  Read Replies (1) of 1570365
 
Mani,

According the BTB just released, the growth in the semi equipment has decelerated slightly. This is fact and not open to argument, I do not publish the numbers. I am just telling you why the semi's took it on the chin today.

A deceleration in equipment sales and bookings growth might have been more positive for semiconductor stocks. People are fearful that we are headed for recession and that the equipment coming online in 12 months will be pumping out chips for a projected demand that may not exist at that time. The only question remaining is whether we are headed for a recession or not. A few more rate hikes would certainly do it. If we get lukewarm economic numbers indicating a slowing of the economy, we are in fine shape because the FED make back off. If the numbers are still too high, look for more rate hikes and a recession.

Trivia note: In February of 1995 the equipment index hit a B-t-B of 1.41 and remained above 1.0 for 13 months. The subsequent downturn is considered the worst ever in the industry, although there was a minor blip up in '97 followed by the Asian crisis. The equipment industry had 42 months of a B-t-B above 1.0 for the months starting in Oct. 92 lasting through Mar. 96. We have currently experienced a B-t-B of greater than 1.0 for 16 months.

If we get a recession, the semiconductor upturn is short-lived. If not, there is a long way to go in the cycle.

I do not know whether we will have a recession or not. :-(

Bob
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