Vince,
Perhaps one reason why the statement doesn't sound right is that it is completely out of context.
First, look at the progression made by the Fed:
- Early December, "Economy too hot, tightening bias"
- Mid December, "Economy not so hot"
- Dec 19th, "Economy slowing somewhat"
- Jan3rd, "Economy's a crock, eased by 50 bp"
- Jan 31st, "Economy really sucks, eases another 50 bp"
By your logic, how could the fed have been so shortsighted. Obviously something just doesn't sound right.
Second, January is always a slow month with Xmas holidays, vacations, etc. It's not until the middle of the month before any decision makers return to the office. Thus a slow January didn't alarm anyone - the sales force or the management structure. This month NT became aware that their customers were reviewing their Capital budgets; and it was only last week's sales meeting where evidence of the extent of the slowdown was sufficiently convincing rather than just being an exaggerated seasonal slowdown. Thus the Thursday board meeting, the additional 6K of job cuts and the warning.
IMO, I suspect that NT thought they'd lowballed the estimates for the Q. The extent of the capital reduction has caught more than NT off guard due to its exceptionally sudden onset. It seems to have caught most manufacturers flatfooted as well as the Fed.
FWIW,
Ian. |
