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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (58294)	11/30/2012 4:46:42 PM
From: Jacob Snyder	2 Recommendations Read Replies (1) \| Respond to of 95790

re profits, profit margins, and the next recession: profits and margins are probably about as good now as they can get, near the top of the long-term trend channel. Another recession will happen, but probably not in 2013. We won't see a recession, till the next credit bubble bursts. Too much borrowing by consumers and home-owners in 2005-8, has been replaced by too much government and corporate borrowing. Companies are doing irrational and unsustainable things like borrowing money to pay dividends. That is the kind of behavior that will be seen (only in retrospect) as obvious evidence of a credit bubble. Another example of irrational behavior, is grossly overpaying for acquisitions, especially with borrowed money. With interest rates irrationally low, irrational borrowing behavior is encouraged; rational behavior is punished. Debt has been shifted around, from home-owners and banks to government, from Southern Europe to the north. The problems will recur, until the bad debts are written off. As always, the survivors and winners will be those who didn't participate in the bubble: individuals, companies, and governments who don't borrow more, no matter how low interest rates go, and who don't try to solve all problems with more debt. I now think 2013 will continue the pattern of 2010-2012: modest upward trend, with 10-15% dips at least once a year. The warning signs of the next recession, will be when the lenders of last resort (U.S. and Europe Central banks) see LT interest rates rising steadily. That will signal loss of confidence. Today, with 30-year U.S. Treasuries at below 3%, we are nowhere near that point.