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Technology Stocks : Broadcom (BRCM)

BRCM 54.67

0.0%

Feb 9 4:00 PM EST

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To: Stoctrash who wrote (5102)	1/10/2001 7:21:16 AM
From: Keith A Walker	Read Replies (1) of 6531

OT: THE U.S. A ‘NEW JAPAN’? But more broadly, it also raises the question of whether the economy will respond to falling interest rates much at all, raising the specter of whether the U.S. might become a kind of new Japan, where interest rates have fallen nearly to zero, yet the economy remains in a decline that has dragged on fitfully since at least the spring of 1997. msnbc.com ----------------------------------------------------------------- This is a tempting analogy, but, probably wrong. The American consumer loves to spend (as proven by our negative savings rate) The Japanese consumer loves to save. Interest rate moves in this country can be directly correlated to GDP growth and the Fed understands this. There are still plenty of people in this country who would like to own homes, start families and enjoy the American way of life. Does confidence need some rebuilding? You better believe it! Will it happen? I think so. A global meltdown or outright depression could happen. However, the likelihood is in the less than 1% range. 1990 was a pronounced yet short-lived recession and Greenspan saw the need to lower rates then and he did and we ended up with one hell of an expansion. Demographics and confidence are key: people need to save for their retirements. People want to have fun and enjoy life. If the consumer stops consuming, we are in trouble. My core belief is that America is a nation of consumers and that is what is likely to propel this "supertanker" along. Abbey Cohen has a 12-month target of ~1650 on the S&P 500 - BRCM is a component. Cheers, Keith P.S. I can't live/work without my broadband connection.

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