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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: limtex who wrote (36103)3/2/2002 12:44:25 PM
From: mishedlo  Read Replies (4) of 99280
 
There is huge pent up demand across industry which cut all forms of expenditure and when this choke hold is released the economy will be seen to be expanding normally again.


Huge pent up demand?!

In what?
The consumer never stopped spending.
We still have overcapacity.
Greenspan is still pushing on a string.
We have a veritable glut of fiber of which 95% is unused.

Even IF the economy recovers:
1) How long will it last
2) What will earnings look like

With oversupply and overcompetition we are going the route of Japan by not letting companies fail.

Demand?
There is no demand except at 0% financing of cars and 50-70% off retail prices. Yes the consumer has been willing to buy at these prices but where are the earnings? "Where is the cash cow?" (with credit given to Softie).

There are no profits, only lessening losses in most of tech.
The channels are being stuffed again and there is no visibility.

Businesses have shown little inclination to buy more PCs as the existing ones work just fine thank you. At some point replacement will occur, but it will be far slower than anyone thinks.

How can you dream of huge pent up demand, when housing is on a tear and consumer spending is still on a rampage and debt and corporate bankrupties are increasing? Junk bonds are not improving either. More troubles to come?

Lets take a look at what will happen when housing slows.
1) carpet sales will slow
2) appliance sales will slow
3) Home Depot sales will slow
4) Lumber sales will slow

Housing WILL slow, if not fall thru the floor.
Two years fow now we can talk about pent up demand.
Pent up demand is laughable right now IMHO.

M
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