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Technology Stocks : Semi Equipment Analysis

SOXX 296.74

+1.8%

Nov 28 4:00 PM EST

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To: Cary Salsberg who wrote (5234)	9/1/2002 12:00:13 PM
From: robert b furman	Read Replies (1) of 95488

HI Cary, Bank One estimates that the recent wave of refinancings will unleash 40 - 50 BILION in consumers capability to spend in the economy. This unleashed money is now discretionary as before it was pledged to the banks. The increased debt load is made more affordable by a lower interest rate.Even though many do in fact add more debt to the mortgage when refinancing (I think it is around 60% add more debt) the other 40 % have in fact more after tax money to spend. This has been one of the key drivers to an unexpected surge in auto sales - which have predominantly been financed by free money or at the very worst below 5%. Two years ago people were paying 10 % plus.Many people have refinanced their car loans in a similar fashion.They are in fact, paying less to be driving a newer car. Seldom mentioned in all this is the somewhat stealth "plus" that, as these low interest payments are being maintained, the principle that is outstanding is being reduced in an extremely fast rate. People who financed new vehicles before (36 months) 9/11 have paid off 1/3 of their vehicle - they can trade any time they desire.After 9/11 - 0.0 % was available for up to 60 mnoths.In those post 9/11 months our finance rate penetration was literally 100 % vs normally 70%. Without going into a lot of numbers, the magic of these low rates is that it pays off a lot of debt quickly.In the time period you reference for a recovery, there will be a lot of people who have eliminated much debt or in the case of vehicles will have built equity. The longer this economy stays sluggish the better(rates will stay low) and stronger the outlying recovery will be(increased equity and/or faster reducing debt).The patient is being administered more medicine for a fuller and more robust recovery. These are excellent times to be accumulating additional stock at great values.The good times are out there - the longer it takes to get there the better it will be. I think many of the politicians at the helm know and understand this.It sure wouldn't surprise me to see Nov of 2004 miraculously be a very robust time. Those who have refinanced during this interest rate decline would have no debt on their vehicles and a good chunk of a 15 year mortgage behind them. Couple that with a boost in confidence and corporate earnings on the uptick and we've got a very nice bull. Now to just buy these stocks as low as possible.gg Bob

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