Tommaso: you forgot Carter "cardinal sin", "only in thought" (sounds like not inhaling <VBG>). As far as the joke goes, the first time I heard it the pompous guy was none than Blum the prime minister of France (pre WWII), so this one is indeed attributed to many.
Mind you ladies and gentleman of the bearish inclination. About two weeks ago the SI BTB hit a daily nadir under .7 and has since reversed completely. My visits to few of the semi threads in which I preach caution and reduced exuberance are met with "How come you have only bad news". This indicates to me a major shift from the over pessimistic (the gloom could be cut with a knife) mood a fortnight back, to almost irrational exuberance. People are talking about CYMI at 50, and GATE at 10 as if there is no impending contraction in demand of semi equipment and other high tech ware in the rim. The fact of the matter is, IMHO, that the rim is being hit by a plague, a liquidity crisis. In order to stay competitive these countries have and will continue massive devaluation of their currencies. One thing they will not do in the next six to 18 months, is invest heavily in new technology to stay competitive. It is not for lack of will, it will be for lack of "equity" to back the loans required to buy such equipment.
Take Korea, on the average (and in most good cases) their corporations have three times as much debt on their books as assets in their US counterparts, mind you, a large portion of these debts is dollar denominated, but the largest portion of their assets is WON denominated. You guessed it, under a devaluation scenario of the WON, once you mark the assets and liabilities to the book (I mean to say to the dollar), a bad ballance sheet becomes UGLY. Any new money will be used to shore up balance sheets not to buy expensive semi-equipment (or at least, not at the torential rates they are still engaged in, I just noticed few major chunks of orders getting under the closing gate before it closes).
Therefore, friendly bears, rejoice, your hour is commeth again, maybe as early as next week. Of course, the nimble amongst you will remember that the day before a long weekend, the market has a small seasonal strength, but I know you do not care too much about those small blips on the radar screen.
Zeev |
