I was blasted for not being "patriotic"
A few days ago, before the opening of the market on Monday morning, I was blasted by several of the "patriotic buyers" here for advising against a rush into "buying to help prop up the market."
I argued that investments should be based on prudence, not jingoism. And that folks should realize their particular actions would NOT influence others (that to think otherwise is magical thinking, part of the "what if everybody does this?" error).
For this, I was chastised. Several of you claimed you would be rushing in at the opening bell to buy. I hope you're happy with your futile gesture.
Those who "patriotically bought" have lost substantial amounts of money in the areas where the patriotic buyers were most concentrated.
I said it would be bad for the airlines and Boeing, and it has been. (The airlines are now seeking a $20 billion subsidy to bail them out. Never mind that there problems will go on and on an on. And never mind that hotels, resorts, cruise iines, conference promoters, Disney, and a lot of others face equal problems. If government officials use tax money to bail out one industry, they have violated the Constitution, which simply does not permit such uses of the public treasury.)
Things are going to get much, much worse. The malls are way down in traffic, the layoffs at Boeing and all the airlines will cause huge ripples, and companies are (as predicted by me and many others) simply not buying upgraded PCs unless they have to...and most don't have to.
As revenues fall, many companies will fall below loan covenant requirements. This may already be happening to some chip companies. This will trigger a kind of paroxysm of calls for bailouts, for suspensions of loan agreements, and will thus trigger even more collapses.
AMD at $6, Intel at $15...and the war won't even start in earnest for another few weeks.
--Tim May |
