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Strategies & Market Trends : Classic TA Workplace

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To: AllansAlias who wrote (26793)	1/5/2002 10:00:08 PM
From: yard_man	Read Replies (2) of 209892

nice post, but ... >>Consumers are determined to go beyond any reasonable limit in personal liabilities, so I expect spending to remain fairly strong. All of this will be in the face of a continuing slow rise in unemployment. On the corporate side, I expect a bounce in capital spending for tech only, as a small upgrade cycle is bound to kick-in soon. << Consumers have already went beyond reasonable -- witness -- no payments for 3 month deals -> no payments for 6 months -> no interest for 1 year -> no interest for 18 months. I just purchased a washer at BBY -- no interest for 18 months with a rebate up front. We are already past the pt of diminishing returns for the retailers that are so desperate for sale they are willing to do this. Autos, Home and electronic goods are all there now ... we simply haven't gone over the abyss there, but we are very close. here's my theory on tech capital spending which is a little different -- and consistent with the news item the other day from Corning -- These firms were just plain freaked out by the rapidity with which business fell off -- remember Chambers 100 year flood. Because they were so freaked out -- they simply went ape. They mouthed "bottom, bottom" while they thought it was the end and acted accordingly -- layoffs, cutting expenses (part of the feedback which has destroyed capital spending). Now with inventories either moved at reduced prices or written down ... and a slowing in the descent, some tech cos are realizing the extent to which they freaked ... so these firms may pick up spending thinking slower desecent really does mean bottom, but I agree with what someone else posted on the subject -- there is nothing to encourage businesses to make additional capital investment now: I think => Any bounce is probably a year away at least. This is simply pundits seeing what they want to see and selling it to J6P, IMO.

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