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Technology Stocks : All About Sun Microsystems
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To: Robert Scott who wrote (47215)2/4/2002 8:28:14 AM
From: Steve Lee  Read Replies (1) of 64865
 
"a company defaults, it's the bondholders that absorb the loss, not the banks, so it does go away"

So why was there a raft of Enron exposure preannouncements from major banks?

You are right that bondholders lose too. So people's nest eggs go down. That isn't debt going away.

If semi sales are consistent with seasonal patterns, then that at least tells you the latest figures do not indicate a rebound. At best it shows we are flat with record low levels.

No doom or gloom. Just facts.

The recession is just starting comment is based on the recent GDP figure of +0.2% (which I expect to revised down). GDP is based mostly on consumer activity so the manufacturing recession hasn't even factored into GDP while consumers continue to purchase through taking on record levels of debt.

The manufacturing data shows we are still contracting. That data is counter to your rebound argument. In this supply side recession, the consumer will lag. Consumer confidence is still high, the consumer recession hasn't long started. but it will gather speed over the next couple of years.

Anyway, here's some more "data" from this morning:

Trim Tabs notes that while sentiment indicators show Americans are increasingly optimistic about the future of the market, Corporate America continues to heavily sell shares. "Several liquidity measures have not been this bearish since August 2000. Sell-side market strategists are saying that since the recession is over, investors should be buying stocks here. The only problem with that is corporate investors -- who have a better view of the U.S. economy than Wall Street -- are heavy sellers," president Charles Biderman said in a research note.

cbs.marketwatch.com
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