Max, where does that guy lives? On a deserted moon? CSCO has a market cap of $130 B and a quarterly sales rate of $4 B (annualized to $6 B) is a reason to "Party"? Sure they'll spin for a day the CSCO story, but not much more. As for George question on the impact of the elimination of the 30 years treasuries auction, I think that you pointed out to the right direction. The turnips did not expect that move here (nor later for that matter), but rather more of the liquidity injection by the PPT. That treasury action acted in a similar fashion. What is important to remember, however, that orderly declines in markets are "acceptable, but sudden drops not so much. All these actions are aimed at further liquifying both the consumers and corporations. We have a 16 trillion dollar debt structure, and getting long and intermediate interest rates lower by .5% to 1% serves as a stimulus of between $50 to $100 Billions (corporates also trade in old debt at high interest rates with new debt at lower rates, MRK just did that with $1.5 B and Ford went to the well for some $7 B if memory serves just in the last few weeks). The fed actions was not "doing it", so the treasury stepped in. Unfortunately, all these "liquifaction" steps, and liquidity additions will have to be paid for in the next bear move. If you remember, I see the current period as a "double dip" recession, starting with corporate retrenchment (due to excess capacity) in the first dip, followed by consumer retrenchment, in the second dip. I am not sure yet if the Sep. 11 events will not cause acceleration of the consumer's retrenchment. Recent data do not suggest that to be the case, thus my current model of a strong rally post the December lows still hold.
Zeev |
