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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: ajtj99 who wrote (15265)	5/1/2001 7:16:17 PM
From: Zeev Hed	Respond to of 30051

The feds cut all the way to 3% in the 1990/92 easing stretch and stayed at 3% until the end of 1993 (not changing stance for almost 1.5 years) and stayed, if inflation does not show up in the core (namely this summer energy cost are not being past to consumer somehow), then they may go that low if the earnings recession continues. As I said earlier this year, if Bush enact a tax scheme that puts in the hands of consumers (the demand side) $100 B this year (I had $160 B per year, but I'll take $100 B), that might change the demand side of the equation, but I still think that the supply side is over populated (excess capacity), and even increased consumer demand will not remedy that very fast. Take the semi equip, recent order rate is around 1.3 B monthly vs a peak of around $3 B last year, that is an indication of current overcapacity in that sector (and both TSMF and UMC are operating under 70% capacity if memory serves), it may take another two quarters or more until the semi capacity gets to the 90% level when they can start and think about adding some capacity. Thus the tax cut is another positive element in the "stimulus" picture, but it will take some time until true "bullish" momentum returns to the market (I still have the post August lows as the real start of the next bull move for technology stocks). Zeev