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Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 223.95+1.7%Nov 21 9:30 AM EST

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To: Steve Lee who wrote (2762)8/30/2002 10:30:11 AM
From: Sarmad Y. Hermiz  Read Replies (1) of 25522
 
>> Oversupply leads to lower prices
Lower prices lead to lower profits
Lower profits lead to lower personal incomes
Lower personal incomes lead to lower demand -> second dip

Hi Steve, there is a circuit interruptor in this system, which can mitigate this downward spiral.

Lower profits lead to exit of some suppliers, which stabilizes profits. And when the issue is rapid technology improvement through massive research spending, that process works even faster.

And still another issue for the US is that population is increasing. So demand is going up no matter the other factors. That is why personal income and personal spending never go down, even in a recession. Housing is voracious consumer of all kinds of goods.

So my money is on no double dip. Of course my money is only half of what it was a few months ago, so maybe that is a signal of some sort also.

Sarmad
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