Friday, April 13, 2007

Links of the day

He Said, She Said: Someone in the Chipmaker Chain is Crazy..."the last thing Micron needs is more equipment to build more memory chips to sell at an even larger loss"..."When Micron is bleeding earnings and already spent two thirds of its allotment for the year? Are they nuts? In the call, that very question was asked (albeit in a more diplomatic fashion):

Jim Covello - Goldman Sachs
On the memory spending, Steve, do you think the DRAM guys are going to continue if they fall into significant loss-making in Q2 and Q3?

Steve Newberry
Well, that's a good question. I think historically you would say that they would most likely not continue to invest at"...

Navy Cancels Lockheed Ship Contract After Failure To Agree On Costs..."
The cancellation came after more than a month of negotiations in which Navy Secretary Donald Winter demanded Lockheed accept a fixed-price contract, part of the Navy's attempt to stem chronic cost overruns. According to Adm. Charles Goddard, the Navy's top program officer for ships, "We would like to have had this ship, but we have to have it at a price we can afford."...way to go, Navy...this is a good precedent...

Read it here first: Slow CapEx Spending Worries Economists...

From this morn's WSJ:

"Weakness in business capital spending is edging out housing as the dark cloud on the U.S. economic horizon.

A new survey found that 20 of 54 economic forecasters responding to a query cited soft capital spending as the chief risk to their forecast that the U.S. economy will grow slowly but avoid recession this year."

When there exists overcapacity in numerous sectors of the economy, capital expenditure doesn't make sense, hence slow capital spending...
"Interestingly, the change in U.S. home mortgage debt over the past half-century correlates significantly with our current account deficit. To be sure, correlation is not causation, and there have been many influences on both mortgage debt and the current account."
Alan Greenspan, Feb, 2005

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