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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (37485)	1/18/2011 7:58:09 PM
From: axial	Respond to of 46821

Good link. Reading through the article, I found myself constantly switching between macroeconomic views (not specifically stated in the article) and microeconomic views, i.e, company- and sector-specific. Generally speaking, the most prevalent macroeconomic forecasts (barring another crisis) predict a Japan-like decline for the US, with stimulus-related upticks. Debt is a key issue, but there's a qualitative difference between US debt and Japanese debt. Interest rates and the cost of capital will matter. Stimulus-induced high commodity prices are already proving troublesome, but that's not inflation in the accepted sense. The spectre of hyperinflation still lurks in the wings, with predictions that eventually it will appear as the economy returns to normal. Monetary intervention, including interest rate hikes, is mooted as the control when banks loosen lending, and supposed excess liquidity works its way back into the economy. The rationale for a high standard of living is disappearing. --- In telecomms, the fibre crunch is approaching; it appears that solutions will be incremental. As often noted upstream, nobody has enough money to make major inroads, though individual initiatives still succeed. The auto sector is challenged in the same way that other US industries are challenged: wages and prices are too high. Pressure on unions will continue; it should be noted that workers are being required to accept cuts, but management, which benefited equally from negotiated settlements, is not. Management demonstrates no leadership or willingness to adjust grossly inequitable compensation. How long that sort of tension can be maintained is open to question but the long-term effect will be continued erosion of the middle class and with it, the historical basis of a stable society. And so on ... We haven't even touched on global factors, though the article referred to the strain of currency volatility. Over the next decade individual corporations and the sectors in which they operate will respond to constantly-shifting dynamics as best they can. The US is still the world's dominant economic and military power, but anyone who isn't hearing footsteps just isn't listening. Jim