Mixed Signals

Kirt's Cogitations™ #198

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Mixed Signals

The most highly volatile factor in semiconductor sales is tied directly to how good people feel that they are personally doing financially. A person who does not fear that his next paycheck is in jeopardy, so the theory goes, is more likely to spend money on luxury or non-essential goods like cell phones, radios, televisions, cars loaded with electronic gadgets, second and third computers for a home wireless network, microprocessor-controlled washing machines and dryers, you name it. Good times finally appear to be back, and the roller coaster ride the entire world has been on since the 2000-2001 recession has finally come to an end. True to the old saying that, "Time heals all wounds," consumers have pretty much forgotten those scarier times and have become much more complacent about income risk.

Inflation (or the supposed lack thereof) has been in the news a lot lately, along with whisperings of how a possible worldwide housing price bubble bursting could spell disaster for, among other things, the electronics industry. A worst-case scenario predicts that the impending crash could be as harsh as the one that began in the spring of 2000. So, in the same news cycle, we have one group of learned prognosticators warning us that the sky is about to fall, while the other, equally learned group predicts a 6% year-over-year increase in semiconductor sales. Which experts do we believe?

Governments have gotten better at cooking the books to make figures appear rosier than they most likely really are, and the people have gotten better at blindly accepting the figures and at just ignoring them altogether. Everyone knows politicians lie, and besides, there's nothing the little guy can do about it anyway. Terrorists have been clustering for the most part in Iraq and Afghanistan where the troops are there to fight them, so there's nothing to worry about. Pot-bellied Kim Jong-il wouldn't dare launch any of his nukes, and China is only making empty threats about attacking Taiwan. W. and Vladimir are the best of buds, so the Iron Curtain threat is non-existent.

Don't worry. Be happy.

Where am I going with all this? Darned if I know, it's just that in searching out industry news headlines every day I am in constant amazement (and dismay) of the utterly conflicting stories coming often times out the same agencies. One day we're up, the next day we're down. Analyst A predicts scenario X one day and predicts -X the next, then revises his forecast to something in-between a few days later, and Analyst B predicts just the opposite. There is about as much real accountability as there is for a weatherman. Maybe a good idea would be implement a policy for market analysts similar to what the mayor of Moscow (Russia) reportedly has done for their weathermen: fine them.