Whip, Earlie, MB, Magner,
Now I'm a believer. Though I must thank you all for opening the door with your thought-provoking observations and analysis, it was a pretty dull guy I met while getting my tile cut at Home Depot who pushed me through.
It's been a long time since I have seen fear - especially here in the Valley. This guy was scared. He wants to sell his house and his stock, and move before the impact of layoffs and job relocations to the Pacific Rim take effect. "Order's just not there" (he works for a semi company). He described in enough detail the companies in trouble (has friends there) - equip mfgs, semis, etc., pretty much an overlap of the companies you've been talking about. Got me thinking.
Of course, the dumb ones are always first to go, but often aren't the last. Given the results we are seeing, perhaps the L-word (layoffs) will be the straw that breaks the camel's back. There's really no way a company can candy-coat this, unlike financial results. This marks the beginning of the end, because the layman understands this. Layoffs? Business must not be so hot.
Then it's downhill fast. Dumb ones get to sell their houses while things are still high, then I think it's likely they'll sell their company stock as well (everyone here has stock). Selling company stock signifies the concern, then the money they have in the stock market (everyone is also in the stock market), become questionable investments as well - and are quickly sold. Margin accounts, equity loans, cash, it all comes back, as people who didn't really know what they were doing in the first place see their paper positions and housing values at risk for the first time. They see the light!
Layoffs. Can't lie about that. Or can they? |
