Record Car sales while employment income dropping along with hours worked. Add in the record credit card balances owing and the highest rate of delinquincies and foreclosures in decades , in a recession that has only just been recognized, and it would seem that the Market has gotten way ahead of itself.
AMAT traded over $100 at the peak bubble years 99-2000 and only had a PE of 46, now it at $42.00 has a PE of 187 for 2002 earnings and 29 PE for 2003 if you can believe that AMAT will go from a $0.21 earnings per share in 2002 to $1.40 in 2003. Seems very optimistic on their part <ggg>
What will FORD , GM , and Crhysler do after Xmas to boost sales? Will they ever be able to get the consumer off the 0% crack cocaine that they are so used to waiting to see advertise before they will buy now?
I have never expected a rebound in the SOX index to begin at a PE of 158. Welcome to bubblevision 2, the second coming. First was 99-2000, now again in 2001-2002 but this one is beginning from high debt levels, declining sales and an IPO market that is non existant. Sure makes you want to go out and pick up some CSCO shares <ggg><sarcastic grin>
Speaking of CSCO, trading at Market cap of a mere $145 billion , and a PE 90 based on $0.21 earnings per share in 2002 and PE of 51 based on $.39 /share in 2003. All this and the CEO can only say that orders are stabilizing and can not see beyond current quarter LMAO!!
This rally can go on as high as it wants but I am not going to be the one that is stranded looking for an empty chair to take when the music stops,because there are NO chairs . I saw an opportunity to make a quick flip at the end of Sept, the stocks had dropped too fast and the governement was making doing everything to get the market back to pre-Sept levels. Its like a ballon that gets dragged under water, sooner or later it will pop up again.
Now how much hot air is left in this ballon to get it airborn again?
washingtonpost.com
As layoffs spread across the country, the portion of U.S. homeowners falling into foreclosure reached its highest recorded level in the third quarter, and the percentage slipping behind in their mortgage payments was the highest in 10 years, the Mortgage Bankers Association said yesterday.
At the same time, economists said other economic figures showed that while some Americans are suffering in the recession that began last spring, others have been left relatively unscathed. Consumer spending rose by a record amount in October, and motor vehicle sales remained strong in November, according to reports released yesterday.
..................also from article ....
But while consumers were spending freely, the recession was evident in the fact that personal incomes were flat for the second month in a row and were only slightly higher than in June. With payroll employment and the number of hours worked both down in October, the key wages and salaries component fell 0.3 percent. And with income flat while spending jumped, savings as a share of disposable personal income fell 0.2 percent.
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