Rick, as I have stated too many times, we are not going to get a real recession here (2 consecutive quarters of negative growth), we are, IMTO, in a multi year adjustment of valuation expectations, the trigger might have been the fed tightening moves last year, but that excess capacity build up was the main cause (I mentioned that last April as one of the main future casues of the current debacle in semi land). Sure, better consumer confidence and thus better end demand will alleviate the problem of excess capacity, but that will take time. The real recession will probably be next year, when the fed's try to undo some of the excesses in liquidity it is forced to create here and now to avoid a melt down. We can expect a real bull market to start (and I believe from lower levels than today's levels) later this year (still either August or October, depending a lot on the rest of the wrold's economies and our own new tax policy), but right here, unless the psychology change we will get few "bear traps" and massive short covering by over confident bears running for safety. Not a good fodder for a solid bull market. I think that real smart bears already covered a lot and will short the rally here.
Zeev |
