Brian: re: hope for creative financing:
Abandon hope.
The Koreans have been doing creative financing, and creative accounting, for a long time now. That's how they got themselves into the current mess. The IMF is in charge now, not the Korean Finance Ministry, and they have outlawed all creativity. The IMF will keep them on a short leash for at least two years, and insist on a drastic reduction in debt-to-equity ratios, an end to expensive prestige projects, a focus on short-term cash flow rather than long-term market share. I think it is now inevitable that Korea will decrease planned semi-equip purchases by 25-50% for the next two years, from what they had planned.
Japan will probably buy about as much as previously planned. Their pockets are deeper, they haven't had to go to the IMF, and they will probably sell about as many chips internally and in N. America and Europe. They are not doing well, but probably won't get much worse.
Taiwan seems to be in better shape than Korea.
The rest of the countries in trouble (Thailand, Indonesia, Malaysia) don't build fabs and don't consume many chips, so from the viewpoint of an AMAT investor, they don't matter.
Hopefully, China and Brazil and Russia won't be pushed off a cliff with the others. They don't build fabs either, but if the bad-debt crisis extends to them, the global level of anxiety will rise, and few stocks will do well.
Hopefully, better-financed countries will build the fabs that the Koreans will cancel, but noone knows if or when.
Times of maximal anxiety and an opaque future are usually, in retrospect, the best times to buy. I'm buying now. If BB is right, then I'll continue buying for quite a while. |
