Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: Siddhartha Gautama who wrote (32888)	3/1/2002 9:41:01 PM
From: patron_anejo_por_favor	Respond to of 209892

<<patron, what are your favored time lines for this process to play out?>> The next part (barring any more major corporate debt implosions, a la Enron or Global Crossing) should be with the retailers, as consumer debt meets "odd Todd" (aka, rising unemployment). This should become easily noticeable within 4 months, IMO, as much consumption (especially in durable goods) was borrowed (stolen?) from Q2 and Q3 to feed Q4 '01 and Q1 '02. An extra catalyst for this will be what happens with audited statements of leveraged companies in the next quarter. With Andersen on the ropes, will other accounting firms be more vigilant in their audits? One would think so, although these are strange and wonderous times. Even if we get past the next round of financial statements, the debt load carried by the consumer and by businesses is extremely high for this part of the cycle. Traditionally in recessions, companies and individuals cut debt DRAMATICALLY. Companies have delvered a bit, but individuals are at record debt loads...and unemployment keeps rising, a VERY bad state of affairs for multiple consumer oriented industries, including automakers and credit card companies (whose very survival depends on expanding their balance sheet at exponential rates). By mid-summer, I don't think there will be any doubt about this in anyone's mind, if not sooner. (Roach for one thinks it will happen no later than the spring, which would be buy late June at most). In addition, the inventory channel-stuffing process should be completed by the end of Q2 for most but the longest lead-time businesses (ie, aircraft mfg). Some of the heavy manufacturing equipment companies being touted in this "recovery" (for some reason, CAT comes to mind) should smell the glove no later than the fall as it becomes more obvious that end-demand of their customers isn't there and order cancellations roll in. Oh yeah, and if BubbleBoy has to raise ST rates before September, move everything up a month or two. My Very Humble Opinion only. Have a great weekend, Patron