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

To: Merritt who wrote (45103)	1/31/1999 11:47:00 AM
From: Earlie	Read Replies (3) \| Respond to of 132070

MB and Gang: Thanks to Dave, Tom, and Skeets, some very sharp broad-head arrows are now in the quiver with respect to bringing down one of the more bloated boars in this Alice-in-Wonderland forest. Gretchen fired off the first, a well-aimed shot that opened up an artery or two, but this pig has access to a well-supplied field hospital located on Wall Street, so the blood loss won't be excessive, and the infections will be quickly brought under control. Dr. CNBC is an expert at treating such wounds. To be serious, I shouldn't joke about something so disgusting. Here we have a large, high profile company that has been caught red-handed in a carefully crafted lie that was designed to mask serious problems. Why? Because a carpet bombing of heavy selling is about to begin (TXN and INTC) and as was the case aboard Titanic, the insiders know the extent of the damage, but want to avoid a panic while they quietly jump aboard the lifeboats and row well clear of the foundering. For the life of me, I couldn't figure out why these bounders would take such a chance, with the SEC on the prowl, but the filing of the secondary offering made it all crystal clear,....the rats wanted a bit of time to disembark before the hull filled with water. Micron is largely institutionally held, and the short position was very large. So long as some very dumb or very malleable high profile analysts could be mustered to concoct bullish fairy tales, the remainder of the analytical sheep could be counted upon to dutifully line up, money could be fire-hosed at the stock, momentum could be developed, and the shorts could be converted to cannon fodder. Fortunately this is about to change. While only barely so, both the lie and the motivation for same, is emerging. "Spin" will be employed, but will not carry the day as this one was simply too blatant and the press is going to have a field day. In passing, I should note that Tom Kurlak, (of whom I was critical last year, on the basis that "he's not that dumb, he knows what's unfolding in the semi sector") deserves some applause. Once all clients were extracted, he turned resolutely bearish last year and stuck to his guns until ML's management tied him to the stake and fired up the coals beneath his feet. Yes, he turned sullenly bullish, but he also quietly conveyed his true beliefs through the assigned ratings. An "accumulate" on INTC and a "neutral" on MU says it in neon. A couple of additional MU lies require wooden stakes. This "lowest cost producer" nonsense is actually believed by many. The oft-repeated drivel that "we're at the bottom of the cycle" while idiotic when the evidence is examined, nevertheless is also believed by those who don't know that this particular Simplot company's chip products are not edible. When a Dan Niles tells them that the company will make money next year, they believe that too, irrespective of his immediate past track record or the arcane nature of his parabolic extrapolations. "No one wants the party to end", says it all. At this end, the "dig" continues, focused on: - the all-up manufacturing costs per mbit of the various memory players. (The Asian crisis cratered the validity of all data that preceded it. The changes have been myriad since). - how much farther can the current shrink methods be pushed and to what actual cost benefit? - the extent to which the declining PC demand will impact on the still burgeoning supply. - the degree to which unused capacity ensures a continuation of price wars (as it is quickly brought back on stream even if demand were to crank up). One thing seems apparent,...in the absence of a miracle, MU will have trouble meeting its interest payments, never mind show a profit . Best, Earlie