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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 233.22+1.8%Nov 28 9:30 AM EST
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To: schrodingers_cat who wrote (129815)8/9/2001 4:43:34 AM
From: GST  Read Replies (1) of 164684
 
"Of course if consumer spending rolls over then I'd get bearish real quick" The common perception is that the economy suddenly and unexpectedly slowed in the fourth quarter of 2000 and the fed began cutting in early 2001 and that will lead to a recovery in 6 to 9 months. What this does not take into account is: A) Rate cuts kept the consumer in the game for the past six months, and B) The effect of rate cuts has now largely been factored into consumer spending and is LOSING its impact rather than gaining impact. We did not go into recession last fall, we went into a bubble deflating slowdown which is only now at the point where we are entering a consumer-led recession -- and the fed has already used most of its anti-recession ammo. Add to this the fact that the rest of the world is now slipping into the economic pit with no sign of recovery in capital spending because there is no prospect for an increase in consumer demand, and because of past bubble-related excesses, and taken all together you get a recession in the second half of 2001 and into 2002 instead of a recovery. To say that rate cuts "work" in some time period glosses over the real dynamics of the economic situation we are in -- it is wishful thinking.
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