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Technology Stocks : All About Sun Microsystems

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To: JDN who wrote (44507)	8/18/2001 7:14:57 AM
From: Steve Lee	Read Replies (2) of 64865

I would rather everything be rosy JDN. I just don't see how lowering interest rates would help. Factory/fab utilisation is low according to industry figures. Consumer confidence, spending and debt are high, according to Fed figures. We don't have a demand problem here (we will have though - that comes next year). Prices are low because there is too much supply in the market. That is why dollar declines in revenues are much greater than unit shipment declines. Look at the DRAM market. In terms of dollars, the 2001 DRAM market is half what it was in 2000. But prices now are many times lower, perhaps about a tenth of a year ago. That tells us that actual unit shipments have grown strongly, much faster than Moore's law. Are interest rate cuts and high stock market valuations gonna get people to buy more RAM? No, they are going to encourage the likes of MU to issue more debt and build more capacity. I don't want to see layoffs everywhere, but that is what is hapening. If you see any easier solution to capacity reduction, tell me what it is. We are reaping the reward of the bubble. And all those here who kept proclaiming that PEs don't matter were contributing to the problem. Blame them, not me.

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