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

To: RMP who wrote (42342)	2/18/2001 9:48:06 AM
From: michael97123	Respond to of 70976

Ron, It took about 8 months for Nasdaq to react to the rate increases last year but the topping process began in about 6 months from the first increase. Historically rate cuts work faster so I am making the assumption here that we are still in the bottoming phase. We really dont want to go to new lows here and if the fed increases its agressiveness we should move away from the lows and continue to accept the bad corporate numbers without panic. But the NT news requires an immediate jolt from the fed or we could be in trouble. Mike

To: RMP who wrote (42342)	2/18/2001 3:08:55 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

re: There is just too much negative sentiment No, actually, the dominant mood is uncertainty, not despair. Everyone is uncertain: whether we'll have a recession or not, whether capacity buys for semi-equip will resume in a few months, or not till after the recession. There has not been the wave of margin calls, like we saw in October 1998. There has not been capitulation. And a lot of what's happening in the real economy, has yet to be reflected in stock prices. For instance, the telco/network equips (LU, CSCO) have put aside larger reserves against their mountain of bad debts, but they haven't yet written those debts off. They are still hoping that all those CLECs aren't going to go under. Interest rates may be falling, but a lot of companies (telcos, dotcoms) now can't get any new capital from any source at any interest rate. 100s of billions in capital was thrown at goofy ideas in the 1996-2000 period, and the process of writing it off has just begun. In a very volatile sideways market, the way to make money is to buy the dips, and be very quick to take profits. Assume all rallies will be false rallies, until you see some hint that either: (1) the fundamentals are improving, or (2)investors have capitulated.