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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (15083)	9/17/1998 11:47:00 AM
From: dougjn	Read Replies (2) \| Respond to of 152472

Unfortunately I think there are real limits to how much some interest rate cuts in the US will help. The sectors which are most rate sensitive, such a house building, are already going full tilt boogie. But unlike other post WWII U.S. slowdowns, the looming problems have nothing to do with the cost of credit here. Or even levels of consumer demand. The looming pressures have to do with large falloffs in U.S.exports all over the world, in a cascading fashion. (Not just to Asia, but also to Canada, because IT is earning less money selling timber and wheat to Asia, etc., etc.) Incremental US rate cuts won't do much to help the revenues or profits of commodity producers in our economy. Won't help the commodity semiconductor companies, or Coke, or Gillette much. It won't put more money in the pockets of the Asian and LatAm middle classes. Where credit is still non-existent and will remain so for some time. I.e., in an overcapacity deflationary environment I don't know how much some reduction in rates at the center helps, even if Europe follows suit. More demand needs to be generated overseas. Which will require new credit for overseas. Which will first require more destruction of excess capacity, where it is least rational and least efficient. What should happen is a lot of foolish rich people in Asia and Japan esp. should loose their shirts. What does seem to be happening instead is that all possible efforts are being expended to prevent that horror from occurring, and instead the whole economies and massively contracting. I'm not sure all that much can be done about it until there is more destruction. Sadly. Unless, of course, the U.S. were simply allowed to march in, apply U.S. bankruptcy laws and principals (hopefully, actually, in a more streamlined process given the very late and systemic distress), and restructure away. That of course won't come close to happening, and the U.S. running it part shouldn't. I think it will get a lot worse before it gets better. I would greatly appreciate anyone who can brighten up my outlook. <g> Seriously. Sold half my trading positions yesterday, almost all the rest today when the market came back a little bit around 10:30 am NYC time. It will be time to buy in to trade again before any cataclysm. But I just can't see any sustained bull resuming for some time. And I see lots and lots more that can go wrong. Aside from a Brazilian devaluation, I have the sense that the Japanese banks are just barely hanging on. And that the Japanese government not only isn't acting now worth a darn, but couldn't even get its act together for some time if a real cataclysm, such as cascading bank failures, started to happen over there. What if we get some derrivates based huge losses at one of the weak banks. Which then can't meet its obligations to U.S. and European counterparties? That could not be kept quiet. U.S. banks would start to try to unwind most of their involvements with Japanese banks. And so on and so on. (Still have some Q. left. Q is acting remarkably strong today, considering.) Doug