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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Joseph Pareti who wrote (120395)	12/4/2000 11:09:19 AM
From: WTSherman	Read Replies (3) \| Respond to of 186894

<Gateway's problem is really Gateway< Unfortunately,that's been the tune with each of the "first confessors" in wireless, optical, networking, etc. Truth is, over the past several months the claims that the problems which were first reported by one company(and claimed by many to be specific to that company) turned out to be very widespread. Remember, GTW is a direct operation so they are most likely to see these things first. Today's ESST warning shows that the PC industry as a whole and consumer electronics is suffering. I expect many more PC mfg's to have the same sort of "confession" before this month is out. Each one will whack INTC. Moreover, there is obviously a very rapid economic decline underway. Company's haven't started laying off people in huge numbers, yet, because they aren't convinced that its more than an aberration. But, all the factors are conspiring against the economy: 1)Economic expansion has lasted longer than anyone could have predicted 8 years ago. Sooner or later it has to go through its natural decompression cycle. 2)Rapid destruction of NAZ has created a reverse "wealth effect" that leads people to feel "poorer". This will impact spending in a big way. Just watch what the Christmas numbers look like. Warnings from retailers will start pouring in as we get near Christmas. 3)Energy prices continue to drain the economy on a week by week basis as people slowly start to realize that their cash flow is a lot less than they are used to. This will be exacerbated by the winter. Up till now its been pretty much a "gasoline" issue. Now its going to be heating oil, natural gas and gasoline. 4)Fed is historically very aggressive about rate increases when it perceives "inflationary pressure" but, very slow to react to "recessionary pressure". It will probably be March before the Fed wakes up and lowers rates. This will be way too late to head off the pending recession. Like most generals through history, the Fed is fighting the "last war" and will continue to fight it until it hits them right in the forehead that this is a new war. I would not be surprised to see the NAZ break below 1500 in Q1 '00 and even blue chip tech co's set very dramatic lows. When INTC comes to confession time it will lead to revised earnings estimates for next year below $1 and a stock price below $20.