9 ms·

If you pick and choose stocks, you can tell any story you want. Intel cutting its workforce is more of a reflection on the state of the PC market rather than th

by dntrkv 11y ago

If you pick and choose stocks, you can tell any story you want. Intel cutting its workforce is more of a reflection on the state of the PC market rather than the US economy as a whole. I'm not saying the market is overvalued or not, but this is in no way indicative of that.

adrenalinelol 11y ago
^ To add to this I'd lay say the over-valuation(s) are a side-effect of our monetary policy being in never-ending "stimulus" mode. On Intel I think the "everything is going mobile" is PR for investors, the PC market doesn't have any foreseeable growth potential atm.
- mizchief2 11y ago
  Why make things when you can borrow money for nothing and move paper around for profit.
- cft 11y ago
  The stimuls mode is a permanent regime now. It's good in the short term, but I do not know if anybody understood mid- and long-term consequences of this new permanent mode.
  - wuliwong 11y ago
    There is nothing mysterious about the short, mid or long term effects of artificially low interest rates and quantitative easing. edit Here's a link to read about it. https://mises.org/library/unseen-consequences-zero-interest-rate-policy https://mises.org/library/unseen-consequences-zero-interest-...
  - criley2 11y ago
    "The stimulus mode is a permanent regime now" As a general FYI to those reading -- please fact check before commenting. The Federal Reserve's quantitative easing program ended on Oct 29th, 2014 (538 days ago!) It is difficult to assert that a program which ended over 500 days ago is permanent. Additionally, one may be willing to assert that "ZIRP is permanent regime now" too, to tack onto the culture that central banking has entered a new era. For anyone who did not see that news, ZIRP (zero interest rate policy) ended on Dec 15, 2015 with a rise, and is currently believed to rise again at the next meeting.
    - cft 11y ago
      Just take things in in a perspective, not just based on the latest quarter news: http://b-i.forbesimg.com/jessecolombo/files/2014/01/united-states-interest-rate.png http://b-i.forbesimg.com/jessecolombo/files/2014/01/united-s... http://moneymorning.com/wp-content/blogs.dir/1/files/2015/09/9-16-15-u-s-interest-rate-history.png http://moneymorning.com/wp-content/blogs.dir/1/files/2015/09... http://www.naic.org/images/capital_markets_archive/2013/130521_graph1.png http://www.naic.org/images/capital_markets_archive/2013/1305... whether they do a token 0.5% hike (they probably won't), it's obvious that something very basic has changed, and quite likely irreversibly.
      - bduerst 11y ago
        Why did you link three pictures of the same graph? They also don't support your hypothesis that something has changed irreversibly. Raising the interest rate more than 0.5% would have likely had a negative impact. It's very likely the Fed will raise it again later this year.
    - tma-1 11y ago
      Yes it's permanent. Interest rates are still super low, meaning companies can still take on debt to buy back their stock. The effect of quantitive easing remains until interest rates start going up and the Fed start buying government bonds from the banks.
      - dgemm 11y ago
        Interest rates have already started going up.
        turnip1979 11y ago
        They went up once and the fed is signaling a lot of caution. The earlier analyst consensus was 4 hikes this year .. it is down to 2. The latest commentary I'm hearing says normal rates by 2019 .. which is psycho IMHO.
      - 11y ago
tma-1 11y ago
Have you been following the current earnings season? We are witnessing horrible earnings while stocks keep going up and up. All the losses in August 2015/February 2016 have virtually disappeared after the oil price recovery.
- dev1n 11y ago
  oil is a leading indicator of demand. The fact that it picked up is a sign that demand picked up. stocks are continuing to rise because investors see the current drop in earnings as a blip, not as a market catastrophe.
  - dismal2 11y ago
    no, oil has been spiking up due to incessant rumors of production cuts. even though the latest talk about a production cut was a no go, oil spiked a bit earlier this week due to kuwaiti oil worker strike.
  - VLM 11y ago
    In the old days broad economic demand moved faster than production declines. So production being vaguely constant the price told you a lot about main street employment. In the modern era of frac wells where depletion rates are like 50% in 2 years, broad economic demand is now much slower than production declines. That's the problem with secondary recovery... The "balance sheet" looks good in that you'll profit (unless prices tank) but the cashflow is terrifying you don't dig a well and collect for 30 years like the old days, you do exotic processes and get high production rates for like two years, then production drops to zilch. On a large, century size scale it screws up Hubbert graphs. You can ramp up for a century, but extensive secondary production means the decline slope will be just a couple years instead of a nice symmetric century or whatever. By analogy its like switching farm land from an olive orchard to corn production and being surprised at fundamental shifts in the financial sheets. (Yo its just another plant, right, well theres a bit more to it...)
- Zigurd 11y ago
  You also have a large increase in corporate debt, some of which, maybe a lot, has gone into stock buybacks. It's a way of translating ZIRP into stock price while nothing was created.
ranci 11y ago
If they can't sell computers in the digital age where software has taken over everything, you can think whatever you want but that does reflect poorly on the economy. Yes, many factors are at play. It is still a terrible sign.
- TallGuyShort 11y ago
  Given the growth in trends such as ARM for mobile devices and dynamic resource allocation on the cloud, I still don't think you can make that broad a statement.
  - ranci 11y ago
    Can you make the statement that the economy had nothing to do with it? A business' success or failure is reliant on the economy on a fundamental level. I imagine if college graduates weren't struggling to find jobs and pay off their massive student debts they would have sold more computers, despite the trends working against them.
    - Spooky23 11y ago
      Because it isn't relevant. This is the impact of moving to the cloud. Those broke and indebted college kids are buying $800 iPhones instead of $800 PCs, because they don't need the hassle. I'm a power user. I have a 4 year old MacBook and a 2 core * 4GB VDI session. I won't replace the MacBook for another 18 months. Even in enterprise IT... Every project we did in 2004/2005 required a server purchase with two Xeon sockets and a NIC that might be Intel. Now the average marginal unit of virtual server needs 1/50 of an Intel Xeon. And a lot of those Xeons are at AWS, which squeezes the margins.
- osweiller 11y ago
  More computers are being sold than ever before. The market is absolutely saturated with computing devices. And aside from the intense competition Intel is facing, they're suffering the same issue that the GPU makers face -- I once upgraded yearly because the gains made it worthwhile. Now I upgrade pretty much only when something fails. It is absolutely picking a narrative.
imtringued 11y ago
>state of the PC market This is funny because the margins on ARM processors are razor thin since everyone and their grandma compete with each other. Meanwhile Intel can charge a healthy markup for their server processers which are increasingly more in demand as more people on the planet have smart phones.

by dntrkv 11y ago

adrenalinelol 11y ago

^ To add to this I'd lay say the over-valuation(s) are a side-effect of our monetary policy being in never-ending "stimulus" mode. On Intel I think the "everything is going mobile" is PR for investors, the PC market doesn't have any foreseeable growth potential atm.

mizchief2 11y ago
Why make things when you can borrow money for nothing and move paper around for profit.
cft 11y ago
The stimuls mode is a permanent regime now. It's good in the short term, but I do not know if anybody understood mid- and long-term consequences of this new permanent mode.
- wuliwong 11y ago
  There is nothing mysterious about the short, mid or long term effects of artificially low interest rates and quantitative easing. edit Here's a link to read about it. https://mises.org/library/unseen-consequences-zero-interest-rate-policy https://mises.org/library/unseen-consequences-zero-interest-...
- criley2 11y ago
  "The stimulus mode is a permanent regime now" As a general FYI to those reading -- please fact check before commenting. The Federal Reserve's quantitative easing program ended on Oct 29th, 2014 (538 days ago!) It is difficult to assert that a program which ended over 500 days ago is permanent. Additionally, one may be willing to assert that "ZIRP is permanent regime now" too, to tack onto the culture that central banking has entered a new era. For anyone who did not see that news, ZIRP (zero interest rate policy) ended on Dec 15, 2015 with a rise, and is currently believed to rise again at the next meeting.
  - cft 11y ago
    Just take things in in a perspective, not just based on the latest quarter news: http://b-i.forbesimg.com/jessecolombo/files/2014/01/united-states-interest-rate.png http://b-i.forbesimg.com/jessecolombo/files/2014/01/united-s... http://moneymorning.com/wp-content/blogs.dir/1/files/2015/09/9-16-15-u-s-interest-rate-history.png http://moneymorning.com/wp-content/blogs.dir/1/files/2015/09... http://www.naic.org/images/capital_markets_archive/2013/130521_graph1.png http://www.naic.org/images/capital_markets_archive/2013/1305... whether they do a token 0.5% hike (they probably won't), it's obvious that something very basic has changed, and quite likely irreversibly.
    - bduerst 11y ago
      Why did you link three pictures of the same graph? They also don't support your hypothesis that something has changed irreversibly. Raising the interest rate more than 0.5% would have likely had a negative impact. It's very likely the Fed will raise it again later this year.
  - tma-1 11y ago
    Yes it's permanent. Interest rates are still super low, meaning companies can still take on debt to buy back their stock. The effect of quantitive easing remains until interest rates start going up and the Fed start buying government bonds from the banks.
    - dgemm 11y ago
      Interest rates have already started going up.
      - turnip1979 11y ago
        They went up once and the fed is signaling a lot of caution. The earlier analyst consensus was 4 hikes this year .. it is down to 2. The latest commentary I'm hearing says normal rates by 2019 .. which is psycho IMHO.
    - 11y ago

tma-1 11y ago

Have you been following the current earnings season? We are witnessing horrible earnings while stocks keep going up and up. All the losses in August 2015/February 2016 have virtually disappeared after the oil price recovery.

dev1n 11y ago
oil is a leading indicator of demand. The fact that it picked up is a sign that demand picked up. stocks are continuing to rise because investors see the current drop in earnings as a blip, not as a market catastrophe.
- dismal2 11y ago
  no, oil has been spiking up due to incessant rumors of production cuts. even though the latest talk about a production cut was a no go, oil spiked a bit earlier this week due to kuwaiti oil worker strike.
- VLM 11y ago
  In the old days broad economic demand moved faster than production declines. So production being vaguely constant the price told you a lot about main street employment. In the modern era of frac wells where depletion rates are like 50% in 2 years, broad economic demand is now much slower than production declines. That's the problem with secondary recovery... The "balance sheet" looks good in that you'll profit (unless prices tank) but the cashflow is terrifying you don't dig a well and collect for 30 years like the old days, you do exotic processes and get high production rates for like two years, then production drops to zilch. On a large, century size scale it screws up Hubbert graphs. You can ramp up for a century, but extensive secondary production means the decline slope will be just a couple years instead of a nice symmetric century or whatever. By analogy its like switching farm land from an olive orchard to corn production and being surprised at fundamental shifts in the financial sheets. (Yo its just another plant, right, well theres a bit more to it...)
Zigurd 11y ago
You also have a large increase in corporate debt, some of which, maybe a lot, has gone into stock buybacks. It's a way of translating ZIRP into stock price while nothing was created.

ranci 11y ago

If they can't sell computers in the digital age where software has taken over everything, you can think whatever you want but that does reflect poorly on the economy. Yes, many factors are at play. It is still a terrible sign.

TallGuyShort 11y ago
Given the growth in trends such as ARM for mobile devices and dynamic resource allocation on the cloud, I still don't think you can make that broad a statement.
- ranci 11y ago
  Can you make the statement that the economy had nothing to do with it? A business' success or failure is reliant on the economy on a fundamental level. I imagine if college graduates weren't struggling to find jobs and pay off their massive student debts they would have sold more computers, despite the trends working against them.
  - Spooky23 11y ago
    Because it isn't relevant. This is the impact of moving to the cloud. Those broke and indebted college kids are buying $800 iPhones instead of $800 PCs, because they don't need the hassle. I'm a power user. I have a 4 year old MacBook and a 2 core * 4GB VDI session. I won't replace the MacBook for another 18 months. Even in enterprise IT... Every project we did in 2004/2005 required a server purchase with two Xeon sockets and a NIC that might be Intel. Now the average marginal unit of virtual server needs 1/50 of an Intel Xeon. And a lot of those Xeons are at AWS, which squeezes the margins.
osweiller 11y ago
More computers are being sold than ever before. The market is absolutely saturated with computing devices. And aside from the intense competition Intel is facing, they're suffering the same issue that the GPU makers face -- I once upgraded yearly because the gains made it worthwhile. Now I upgrade pretty much only when something fails. It is absolutely picking a narrative.

imtringued 11y ago

>state of the PC market This is funny because the margins on ARM processors are razor thin since everyone and their grandma compete with each other. Meanwhile Intel can charge a healthy markup for their server processers which are increasingly more in demand as more people on the planet have smart phones.