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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (42103)	2/13/2001 2:57:08 PM
From: John Trader	Read Replies (1) \| Respond to of 70976

Michael, Good thoughts. Also the fact that the Cisco warning caught many by surprise, may have shifted sentiment such that the worst is being expected from AMAT. Also, maybe Cisco was very negative on the next two quarters because they don't have experience with such drastic slowdowns, for Cisco it has been pretty much full steam ahead for almost 10 years vs AMAT is about as experienced at cyclical downturns as any company out there. Therefore the forward looking comments from AMAT may show more visibility, which would be encouraging to investors. The link below is for an article which has what I consider to be some fascinating comments from our Fed chief: cbs.marketwatch.com ... "Greenspan said the same technological forces that have helped push the economy forward are now holding it back. They have "accelerated the process of cyclical adjustment." Businesses have better information about sales and are adjusting quickly to changes in demand. Consumers also are reacting quicker, perhaps because more of their wealth is tied closer to the fortunes of the stock market. The Fed, too, "has seen the need to respond more aggressively than had been our wont in earlier decades," he said. Greenspan did warn that the compressed business cycle raises "some warning flags." With real-time news and reaction, there's a danger that everyone will retrench at the same time, becoming risk averse, and thereby squeezing the economy more than they would have in earlier decades. This is where economic policymakers run out of tools. Consumer and investor confidence can erode suddenly and with little warning. "There may not be a seamless transition from high to moderate to low confidence," he said. Forecasting recessions has proven almost impossible because "our economic models have never been particularly successful in capturing a process driven in large part by nonrational behavior." The above makes perfect sense to me. This downturn could be unique in that it is the first one to happen in an age of widespread real-time information, coupled with the coupling of consumer sentiment and the financial markets (we have all taken Peter Lynch's advice and become the owners of the companies). (I am trying a little "Greenspeak" here, wish I could say things like he does.) So, is it possible that this downturn will be way shorter than anyone expects? If that is the case, stand by for an "explosive rally", something that Frank C. on WSW Friday night predicted for the Nasdaq (he did not say when though). The flip side though is that it may also be a bigger pullback than we are expecting. I am hoping this is priced in to the market here. I am not sure if my comments here are on target at all, just sort of thinking out loud. Amat just broke through support at 42 a few moments ago. The price action over the next 24 hours should be very interesting. John