Boy just think how hard it is to be a bear right now. You get up in the am and look at the charts of some sectors and gee it must be really hard to not go out and buy the semis.
I love Bill. He has real grit. Nothing has ever stopped him from shouting from the roof that the house is burning. Even the abscence of a fire department and water.
On the other hand...deflation continues. When in the last 20 years was oil down nearly so much?
The latest from Paul Erdman.
For Private Use Only
"By Paul E. Erdman, CBS MarketWatch
Last Update: 2:33 PM ET Dec 3, 1998 Kellner's Forecast
SAN FRANCISCO (CBS.MW) -- Boeing's shares have gotten hammered big time this week.
The cause was Boeing's (BA) announcement that huge layoffs would have to be made due to the fact that Boeing management badly underestimated the Asian financial/economic crises' negative effect on sales over the next three years.
The central banks of continental Europe all lowered their short-term interest rates today. They cited the same reason: they had all underestimated the negative effect that the global economic crisis would have on European economic growth.
I suggest this is why share prices on Wall Street have been retreating this week. Almost everybody has underestimated the severity of the economic crisis that's following the financial troubles in such key places as Japan, Hong Kong, South Korea and Brazil.
In the third quarter, Japan's real GDP contracted 3.6 percent from the year before. It's suffering from outright deflation, the first major country to experience this phenomenon since the 1930s. South Korea's economy contracted at a 6.8 percent annual rate in the third quarter as it sinks further and further into its worst recession since the Korean War ended in 1953. Hong Kong's economy shrank 7 percent in the July-September quarter, the biggest contraction in its history, caused by a continuing drop in consumer confidence and capital flight induced by the Asian currency crisis.
And just when Brazil seemed to be coming out of the woods after the IMF and US had committed aid to the tune of $43 billion, rumors are resurfacing that for the bailout to work, a major devaluation of the real may be necessary. This could trigger yet another round of competitive devaluation, a prelude to recession throughout Latin America.
To be sure, the United States continues to be in excellent financial and economic shape. It's the world's last stronghold now that Europe is starting to sink. But for how long?
Should what's happening to Boeing be a wake-up call?"
My best to you,
Clark |
