maverick
24-12-2007, 12:44 AM
Plenty has been said and written by Chris Wood and Dr. Jim Walker and others in relation to the current market sell off: growth scare, unwinding of carry trades, financial meltdown etc. The irony has not been lost of having managed to stagger through the Wall of Worry in October, markets have been lambs to the slaughter in November.
I would add a couple of things. Despite much speculation beforehand, the Grinch has never managed to steal Christmas in my 20 years as a broker. If we are going to get bad news on weak US demand, somehow I bet that it will be delayed till Q108.
Secondly, this must have been the longest predicted slowdowns ever. Unlike the pricking of the internet bubble, there can be few companies not primed for weaker US demand.
So while any recession may be as bad as ever, I am willing to guess that most companies will go into it in much better shape helped by inventory management tools and non-excessive recent CAPEX levels. This will not prevent the top line pain, but it should limit inventory write-offs and some of the working capital pressures traditionally seen
I would add a couple of things. Despite much speculation beforehand, the Grinch has never managed to steal Christmas in my 20 years as a broker. If we are going to get bad news on weak US demand, somehow I bet that it will be delayed till Q108.
Secondly, this must have been the longest predicted slowdowns ever. Unlike the pricking of the internet bubble, there can be few companies not primed for weaker US demand.
So while any recession may be as bad as ever, I am willing to guess that most companies will go into it in much better shape helped by inventory management tools and non-excessive recent CAPEX levels. This will not prevent the top line pain, but it should limit inventory write-offs and some of the working capital pressures traditionally seen