Marvell Technology Inc (MRVL)

[DJinNJ]

I normally don't disagree with you guys, but this time I do.

IMO many of the "high profile/close to home" economic data is starting to become negative and is being hyped by media. This big cut will help to change perception and ease credit to the consumer. In essence, this is a PR move by the FED. It should also protect the spending during this holiday season which the retailers need to make their profits.

As smalls states, the US consumer doesn't seem to be stopping, but I think if the FED didn't cut, eventually the spending would come to a screeching halt that would be catastrophic to the US economy. S2 pointed out that historically a Fed Fund rate of 4.75-5% is consider neutral, so basically we are at neutral. Even if we get another .25 in Oct., we're still close to the neutral. I don't see this FED going below 4.25% (unless a major even occurs), because inflation is too important to them. They know what can happen, even if the general public doesn't get it. To me, this is just letting a little pressure out of the pot so it doesn't explode. The consumers that are in trouble will get a little relief, hopefully this will start to unwind the housing/credit mess we are in, especially the people that are on the fringe. Hopefully the consumer can "purchase" us out of this mess. This message should also be welcomed by business because they can continue or resume their growth plans which in turn should keep the markets happy.

As to MRVL, I think the stock is being held down on purpose, especially here in the short term. Maybe its options related, maybe an attempt at a MBO, but as S2 stated, the stock is currently broken. In any case, unless mgt is doing this on purpose, it should break out with the next CC. The rate cut should only help MRVL sell more product this holiday season!

Just my humble opinion.
Good luck all,
DJ