"For 35 months, everything that could go wrong for the bulls went wrong. Now in 4 days we have msft, the election, the fed actually waking up, and now csco by some miracle beating the rev number.(How in hell they are making their numbers selling telco equip in this environment is a miracle.)The point is everything has gone right for the bulls the last few days only. It could go on for awhile."
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wahz...
Don't kid yourself - in my opinion (could be wrong, of course) you have not begun to see and hear the end of the bad news, and frankly I have not heard any good news yet.
-- MSFT - The ruling was literally no news at all. It reaffirmed the old ruling, and folks all over the world still want to sue MSFT. So what has changed?? MSFT is a great company that is very overpriced with a PE that is far higher than any growth rate it will ever see again. I fully expect it to be cut 30-50% from here before all is said and done.
-- The election is good news, but in some ways a mixed blessing (there is something to be said for gridlock in Washington.) It makes the showdown with Iraq more likely and more apt to be sooner rather than later. The Dems can still block things with filibusters, and Washington will be acerbic and more partisan as the Dems turn to the populist left to energise their base. The economy is still declining and Washington cannot change that any time soon.
-- A half point rate cut is going to bring a massive turnaround in the economy when 11 previous cuts have done nothing?? I think not. Rate cuts do not address the problems in the economy which is why they have not worked each of the previous 11 cuts. If things were not attractive to spend money for expansion at 1.75%, cutting to 1.25% is not going to make them any more attractive. Both the consumer and corporate America are at all time highs on debt and a half point rate cut does not help that problem. I think you can bet your rear end that the rate was cut because the Fed saw a serious slowdown in the works and it is one more desperate measure to try to stave it off - the chances of it working are about zero, in my opinion.
-- CSCO made its numbers - right. After another huge charge off, they claim to beat estimates by a penny. How gullible folks are to believe such garbage. All their customers are cutting capex and are in financial trouble, their suppliers and competitors are in the tank, yet CSCO is the only tech company on earth that has not been affected by this economy. Right. Grimm's book of fairy tales. Your own quote: "How in hell they are making their numbers selling telco equip in this environment is a miracle." says it all. They are making their numbers by selling previously charged off equipment (using a zero cost base) and throwing all expenses into "one time charge offs" that recur quarter after quarter. It's no miracle - it's all smoke and mirrors.
I look ahead and see more bad earnings, more warnings, a very bad holiday selling season, war, terrorism, a deteriorating economy both here and internationally. What is this rally based on other than wishful thinking and intervention at opportune moments whenever there are signs of selling??
The bear is not dead, in my opinion.
(but he is hurting a bit)
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