Actually, the issue at this point goes way beyond Intel, AMD, or any individual company out there at this point. We're back to the "it's the economy..." bit. Right now we're stuck in a bit of a cycle that is going to require some fundamental changes to break…
Y2K and the “dot com” craze created an inflated growth and demand picture. Tech stocks took off. People invested in techs in the internet. People got rich quick (on paper). Once Y2K passed, IT didn’t need to spend immediately on infrastructure, so the techs began to see a slowdown. The techs no longer had the inflated growth potential of a year earlier and the stocks began to waiver. With the tech companies starting to feel the pinch, their cash flow into the dot coms dried up. With no more free bankroll, the dot coms suddenly had to produce a profit, which was beyond 90% of the companies ability. Most of the dot coms died a quick and unceremonious death. This was a solid one-two punch to the techs again after the Y2K haymaker. They not only lost their shits on investments in the dot coms, but one of the fastest growing markets for their products vaporized as well. Many of those who were once rich on paper, are now holding worthless stock certificates and/or options. Some have been laid off or will be. I
n short, a large segment of the U.S. population that was fueling economic growth is now holding on to their cash with an iron fist. Lower interest rates are NOT going to make these people start spending again. Most of their wealth and ability to spend is tied up in the stock market. The stock market is low because sales are low. Sales will be low until that chunk of the population has money to spend again… hence the cycle… and a $300 check from Dub-ya isn’t going to fix the problem. In order to get the economy moving forward again, technology must be selling… either to business or the consumer. Once sales start to increase (or once they start being compared to this year’s dismal sales), the stock market will inch upward. As the stock market inches upward those individuals hardest hit by the drop will once again have some wealth on paper which will increase their consumer confidence… etc. |
