Hi GV, RE: "there is a lot of worry within the Fed about this slowdown, "
I saw your article on the Cisco thread re: this being an investment bust induced recession (as oppose to an interest rate induced recession). I have to agree with the article's point about this being an investment bust and the looseness with which investors threw money at over-valued companies (myself included with respect to INTC last summer).
The article said an investment bust induced recession tends to last 22 months (rather than 11 months as normal interest rate induced recessions last).
What types of things are used to fix an investment bust induced recession? It basically said using interest rates wasn't the solution.
I tend to think that increasing the liquidity would be the right step based upon what I'm hearing from contacts about the extremes bankers are taking with respecting to bolting the doors to their banks and all (and I think the article may have said this). So, I'm not at all surprised the Feds are doing a liquidity study. Seems like they are about 3 weeks behind in actions relative to the market changes. I guess for the government, that's not too bad.
Btw, I think I may have everyone on our team pretty much convinced to not raise VC capital at this time. Doesn't make sense to, from my point of view. I'd rather focus time on extracting revenue from a beta. More risk in some ways, but less risk in other ways. It really doesn't make sense until we at least have a few customers that can validate the market for us. No sense in throwing a limited supply of equity down the drain, in VC gallons, if our market direction isn't correct. I think it pays to take small, focused, solid steps, and then shift gears when more of the unknowns are ironed out.
Regards,
Amy J |
