I've been confounded by this
Dell (DELL) chart - obviously institutions piled in as the "safe haven play" - I mean it's technology after all and that's immune to problems (sort of like the US economy). Not so safe after all - down 10% after hours
due to "facts". (I hate facts; I much prefer sentiment driven opinion to drive stocks up that have no right being driven up). The chart won't be looking quite so pretty tomorrow. Hopefully we can brush it off and take this market up another 300 points since facts are just obstacles in the road to a rally based on hope/dreams/unicorns/Kool Aid we deserve.
- But the company noted that the continued "conservatism" in U.S. technology spending has spread to Western Europe and several countries in Asia.
- Dell's gross margin was 17.2% in the fiscal second quarter, vs. 20% at this time last year (boost sales by sacrificing margin = lower profits)
Why do we care about
Dell? We really don't - I just want to give you a preview of the coming plight of the US multinationals who rely on overseas sales.
Dell doesn't even have that much overseas exposure. So what should you do? Of course buy American-centric stocks where the economy is set to rebound "in 6 months" and again, is immune to the rest of the world's plight. Remember the current Wall Street thesis - the rest of the world will devolve just as the American economy bursts into the bright white light. Not that it was ever really weak in the first place - I mean 3.3% GDP growth baby - that's rockin'.
As I keep saying to these "strong(er)" dollar cheerleaders - be careful what you wish for - this (overseas strength) was the last leg the economy was standing on. (note this miss had nothing to do with the strong dollar, I'm just foreshadowing) So all these guys cheerleading how excellent the US is as a place to invest now that we've exported our crummy financial instruments worldwide - causing pain globally - I really wonder if they realize the implications of their "hopes". It should bear out the next 2-3 quarters. Or (again) just about the time the US economy rides a wave of Kool Aid back to world dominance.
No position
5 comments:
3.3% growth?
I was just wondering, do you know what inflation number they used in that estimate.
And what do you think the growth really was???
I was thinking it should be flat- 0%ish....and with GAAP, excluding one time items, rebate checks, it should be around -1%, that would seem more in line with Europe.
Ex exports it was 0.1%
but really how can you measure a trillion(s) dollar economy with any accuracy. It's all guesswork so to try to deconstruct it is useless. I haven't seen what inflation rate it is but it sure won't be 8-14% like it should be.
Mark, if you think inflation is understated by like 7% then that would mean our economy is contracting at a clip of 4-5% annually now. That seems a little dramatic. That seems depression-like, especially since all signs point to that rate accelerating.
that assumes the rest of the report has any accuracy - again measuring huge economies to a percentage point ? really? it's mostly guesswork.
go research what the misery index is
and then overlay the way inflation and unemployment were measured in the 1970s-1980s versus now
and compare the misery index in the 70s versus now. It's nearly identical.
The only part of the economy working is exports and natural resources, which are exports in fact.
CA alone would be the #7 largest economy in the world. How can it be contracting and the US economy sprinting forward? With MI, OH, FL, NV, AZ contracting
You can go look up on Wikipedia GDP by state. Then figure out which economies are doing well (TX, Wyoming, Iowa, Nebraska) and overlay it versus which are not. And then figure out how a national GDP can be up when many of the top 15 states are contracting.
There are many ways to get to the truth. Official GDP is not close to them
Go check the USA Today money section today about garbage contracting. Economic output anyone?
I'm sorry - I left out government expenditures (federal) and healthcare. Also booming parts of the economy. And Walmart.
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