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

To: Amy J who wrote (68049)	6/16/2005 9:05:08 AM
From: RetiredNow	Read Replies (5) \| Respond to of 77400

Oil prices may crash. If that happens, large caps will take off. Check this article out. Morgan Stanley: Oil prices may crash Economist sees slackening global demand, increased use of alternative energy and market correction. June 16, 2005: 6:53 AM EDT SINGAPORE (Reuters) - The oil market may be quickly headed for a massive crash as global economic growth slackens, alternative energy gains ground and financial traders sense a price peak, an economist with Morgan Stanley said Thursday. His projection for a multi-year bear cycle stands in sharp contrast to the super-spike scenario envisioned three months ago by Goldman Sachs, Morgan Stanley's arch-rival in the world of oil derivatives trading, where they are the two biggest players. "As evidence of weakening demand and ample supply accumulates, the market may panic," Andy Xie, Greater China economist in Hong Kong, said in a report. "I believe it could correct in the most speculative fashion -- it could collapse." Oil prices have extended their two-year boom into the first half of 2005, gaining 28 percent since January to top $55 a barrel amid fears that already maxed-out refiners will struggle to supply enough fuel in the second half of the year. In March, Goldman Sachs Global Investment Research issued a report that said oil markets had entered a "super-spike" period that could see 1970's-style price surges as high as $105. The report said resilient demand in the United States and China, despite high prices, had forced the firm to revise its forecasts upward, predicting it could take several years of high prices to curb demand and rebuild spare capacity in the taut system. But Morgan's Xie said increased efficiency and conservation measures and the viability of alternatives like oil sands and liquefied gas and coal was already undercutting demand for oil. "As energy producers step up production from alternative energy sources...oil prices could stay depressed for many years when the current economic cycle turns down," he said. A deceleration in the world economy could gather pace in the fourth quarter, causing the oil bubble to burst, he said. China is key In particular demand from China, which accounted for more than a third of the increase in global demand last year, may have been inflated by an overheating economy. China's total oil imports eased 1.2 percent in the first five months of 2005, Xie said, and they could fall further next year as new power plants help prevent the electricity outages that inflated demand for diesel and fuel oil in 2004. Last year's fall in the U.S. dollar was often cited as a factor behind higher oil prices, since it makes fuel less expensive in non-dollar economies and as it wooed investment from speculative hedge funds. But with the greenback near an eight-month high versus the euro, that too has faded. As all these factors gather pace, the market may ultimately be doomed to crash by the growing dependence of financial institutions on oil trading profits, Xie writes. "As oil has worked for so long, the financial community is hanging on to this position," he says. Speculative funds have been increasingly active in commodity markets over the past two years and are often blamed by OPEC for keeping prices high. "They will likely keep prices up until an oil market collapse. That day is not too far away, I believe... What is occurring now is probably the final frenzy, in my view." Most fundamental oil analysts are less bearish than Xie, who gave no specific forecasts for oil prices. A rolling Reuters poll of 29 analysts forecast an average U.S. crude price of $48.71 a barrel this year and $44.18 a barrel next year. Prices have averaged $51.05 so far this year.

To: Amy J who wrote (68049)	6/16/2005 5:03:20 PM
From: pfalk	Respond to of 77400

AmyJ: "...the salient point is: something's up between Cisco and Microsoft" That's no news to me. Cisco and Microsoft have had a "rocky" relationship for years. There is too much overlap by Microsoft into Cisco's marketspace. E.g. MS boxes can do routing, now they have built-in Firewalls, they do VPN. MS offers several Radius-like services (AD) on their server stations, they offer DNS-servers, the list goes on. BUT Cisco needs windows for their Call Managers, and network admininstration offerings. The relationship is a bit lop-sided, in that Microsoft doesn't really need Cisco, but Cisco (occationally) needs M$. M$ also has the marketing clout to introduce new protocol, or "pervert" the way existing protocols work - Case in point: all Windows platforms handles DHCP requests in a way that isn't strictly correct according to the RFC. This confuses Cisco's router's built-in DHCP servers. The problem is relatively trivial: you don't get the same IP address when you restart your PC, but it is typical for how MS operates: They take what they like, modify it and force through "their" way by force of market presence. Cisco isn't really hurt significantly by this though, Sun, Netscape, Real Networks are much more at risk.