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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (36104)	11/13/1998 11:36:00 AM
From: Earlie	Read Replies (4) \| Respond to of 132070

Hi Mike: Haven't had much time of late, and probably won't for another few weeks. Here are a few comments from our part of the boonies for what they are worth. Corporate buying of PCs has fallen dramatically this past three months. No one single reason cited. Personally haven't seen this kind of corporate fall-off since I've been in the game. We thought it might create some "mild disappointment" for Dell, and said as much earlier. Looks like it did. Next Q will not be a love-in for Dell. Good company, but the server game is getting very crowded (which is how they kept their ASP nos. up) and Michael doesn't know how to compete at the bottom of the consumer game, which is where the action will be this Christmas. The popular PC "sell" at retail will be $400 to $700 this holiday season. We see Dell "really disappointing" over the next quarter or two Next quarter is shaping up as a PC bust. Usually can't provide a solid forecast for the Christmas buying season until after the U.S. Thanksgiving, but we are close enough to be able to say that the consumer buying is not going to burn down any barns this time around, and with business on a buying holiday, January is going to see the PCs piled to the warehouse lights. Following this year's Spring/Summer efforts to unplug the channel, darned near every box-builder ramped up big and has over-produced in the belief that "we're going to take a big bite out of the competitions' market share". Not a few, ALL of them. This accounts for the "increased" semi sales (actually a negligible amount, .....not hard to pick up an "increase" coming off a summer when nobody was a buyer). N.Y. analysts have been calling the bottom of the semi market for over two years (this is not an exaggeration). So far, they have been as wrong as I have been in expecting the market to crater over almost the same period, so they are excused. (g) On the other hand, I can't see anything to suggest light at end of tunnel for semis. This recent run-up is a bear's dream come true. Greenspan did the unthinkable (a rate increase that was not "telegraphed"), but was facing an equal unthinkable, a bond market that was starting to resemble one of our Winters,.....FROZEN UP. He had to do something in a hurry so he did. Unfortunately, all his action accomplished was to delay the inevitable. Only stock market lambs fail to worry about why he did this, or what its ramifications might be. U.S. stock markets need big foreign fund inflows to stay in bullish territory. Foreign money that poured in this year (especially that which was provided by Japanese "big-bang" escapees) was badly burned in the "correction" plus the U.S. dollar cave-in. It is departing. This bodes ill for the next few months. Foreign central bank selling of T bills is starting to escalate as we expected and warned of. This is Greenspan's nightmare. Rates will move up later as every effort is made to keep this wall of paper from coming home. The Euro arrives in less than 7 weeks. It will be accepted and utilized as a new (and gold-backed?) reserve currency, which will place further massive pressure on the greenback. The dollar will wilt under the pressure, which will provide further wounds to foreign holders of U.S. assets. Deflation now controls the global economy. Six months ago when a few of us on this thread suggested that it might not be easily repelled, we were considered idiots (remember CNBC's "Asia is on the mend" baloney?). At this end, we have a simple question for the bulls,.....Half of the globe's consumers currently purchase little beyond essentials. A year ago, they were the big "growth-driven" buyers of everything. How does one replace them? "Show me the buyers" sums up the view at this end. With U.S. consumers "tapped out" and humping big debt loads, their "borrow-to-buy" capabilities are thin. When the market eventually does let go, those capabilities will vanish, which makes the big liquidity build-up a rather useless exercise. How long can the current madness last under these circumstances? Not long now. Greenspan will no doubt pull a few more rabbits from the hat, but sooner or later they will be depleted. It's a rearguard action at best. Best, Earlie

To: Knighty Tin who wrote (36104)	11/13/1998 12:25:00 PM
From: scaram(o)uche	Read Replies (2) \| Respond to of 132070

>> No, I am not ready to return CNBS's second C << Love it! IMO, however, Hanes has a very good BS filter. I've watched him grill biotech execs, with an obvious negative bias, for ages. He always mellows in the course of an interview if he's dealing with someone who is heading a sincere, targeted effort. Skepticism abounding, he has an open mind. Insana, OTOH and IMO, takes the easy route.... generalizations without sufficient background research. Go, Mike! Rick