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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Eric who wrote (56821)	1/20/2002 8:03:43 PM
From: Eric	Read Replies (2) \| Respond to of 77400

Another Barron's story... JANUARY 21, 2002 Business Outlays: No Delays Why capital spending consensus is wrong By Gene Epstein In pursuit of a dubious thesis, truth can often be among the first casualties. Consider a recent article summarizing the consensus view that growth in gross domestic product will run an anemic 2.5% through the current year. According to the authors, one of the brakes on a strong recovery is capital spending, for which "a full recovery ... may not come until 2003." The principal reason: "Business outlays for equipment and construction typically turn up after the economy does, as companies wait to see demand and profits improve before shelling out for new projects." Considering that this statement appeared in Business Week (December 31), readers might assume the authors know a bit about the timing of business outlays. But what "typically" happens is that, far from waiting for demand to improve, business starts shelling out almost right away. There have been nine recoveries since the end of World War II. In eight of the nine, business investment in plants and equipment rose either in the same quarter, or just one quarter after, the rest of GDP. interactive.wsj.com