Rodent Regatta

THINGS MAY GET TOUGHER

For those people who believe a sudden uptick in this country’s economic fortunes might be just around the corner, I offer this dash of cold water:

Lucent is today announcing the layoff of 10,000 (additional) people. They are seeking to lower their breakeven revenue point. They are taking huge write-off’s. They are battening down the hatches.

No economic forecast should be based on a company in the midst of the telecom depression. Nor should any single company’s fortunes be used to extrapolate the economy’s direction. However, taken with other indicators, like retail sales dropping last month, auto sales dropping last month and other layoffs announced this week. Sure, GE announced a 25% increase in quarterly profits, but it remains to be seen how many other companies will post similar results.
Next week is a big week for third quarter earnings announcements. Stay tuned. We’ll see what the mood is coming out of those announcements and heading into the Christmas selling season.