Monday, 6 December 2004 3:30 pm
by Reid Watts
The financial press is abuzz today about the news that IBM is attempting to sell its PC division. I am not surprised at this news. In fact, in my 2001 book I anticipated this evolutionary path for IBM when I wrote: "Services have been the main source of revenue growth in IBM since 1990, which indicates that IBM will continue to evolve into a services company and away from being a product producer." More

Thursday, 16 September 2004 2:30 pm
by Reid Watts
Outsourcing can be dangerous to a company’s financial health.  That was the apparent conclusion of J. P. Morgan’s COO Jamie Dimon and CIO Austin Adams when they announced yesterday that they have decided to cancel their $5 billion outsourcing contract with IBM in favor of bringing their data centers, help desks, and networks back in house. More

Friday, 21 November 2003 8:30 am
by Reid Watts
There appear to be many misconceptions about globalization. To begin with, there is an unchallenged belief that we currently are at a historical extreme of free international trade and investment, and that further movement toward freer markets will push us into uncharted waters with unknown consequences. Politicians, reporters, and the demonstrators who are currently in Miami protesting the Americas free trade negotiations all appear to assume this, and focus their attention on whether they are for or against it, and what to do about it.  More

Wednesday, 29 October 2003 8:30 am
by Reid Watts
Yesterday's Wall Street Journal ran an editorial making the same points that my October 2, 2003 Making Sense of it All column made, but with some additional information. It is always nice when the Journal's editorial board agrees with your analysis and conclusions. In case you missed it, here is their editorial ...More

Thursday, 2 October 2003 4:00 pm
by Reid Watts
The U.S. Senate Finance Committee passed legislation today that creates a temporary “tax holiday” for U.S. multinationals, allowing them to repatriate their foreign profits at a 5.25 % tax rate rather than the normal 35% tax rate.   This is excellent news, as it will have a very positive effect on US tax revenues, the dollar, and corporate capital expenditures within the US.  The effect could even be significant enough to make the difference between a successful and a failed economic recovery.  More

Monday, 22 September 2003 1:30 pm
by Reid Watts
Much has been written about the current crisis at the New York Stock Exchange that has resulted in the firing of its chairman, Richard Grasso.   But I have seen only one article, written by John Bogle (founder of the Vanguard Group of mutual funds) and published last Friday in the Wall Street Journal, that accurately describes the real issues  and gives some clues of the reforms that are in store for the NYSE. In case you missed it, here is this "must read"   More

Tuesday, 19 August 2003 10:00 am
by Reid Watts
Yesterday, at a meeting in Aspen Colorado, FCC Chairman Powell proclaimed, "There is a mood shift in a lot of public policy. I see a rise again of a regulatory ethos." Powell was referring to the mood of the US Congress whose Telecommunications Act of 1996 effectively deregulated the US communications industry.    More

Monday, 11 August 2003 1:00 pm
by Reid Watts
The 53% (annualized) surge in computers and peripheral equipment sales included in the US government's second quarter 2003 GDP report was excellent news for the computer industry and appeared to herald the long-awaited return of corporate investment in information technology. Not only did the report show that the surge accounted for virtually all the growth in US business capital spending for the quarter, it also showed it accounting for a full 65% of the total increase in real GDP growth!    More

Monday, 21 July 2003 8:30 am (Vacation Edition)
by Reid Watts
The cruise liner, one of the largest, most modern and most luxurious liners afloat, had just exited a bay filled with the thickest ice in years, when it hit a large submerged boulder encased in a huge chunk of glacier ice. The boulder sliced across 140 feet of the 91,000 ton ship's hull, ripping a 10 foot  long by 5 inch wide hole in one section and damaging one of the props.    More

Friday, 27 June 2003 11:30 am
by Reid Watts
"Deflation will feel a bit like living in Lewis Carroll’s world of 'Through the Looking Glass' – some things will appear to work backwards from what we are used to.”  I wrote those words in my column on November 7, 2002.  Since that time the topic of deflation has moved from obscurity to become one of the top concerns for governments and central bankers.  This week we had some strong evidence that we have passed through the looking glass, with things working backwards from what we are used to.  Was it related to the onset of deflation?   More

Friday, 13 June 2003 8:30 am
by Reid Watts
On March 18, 2003, as we were on the verge of war and the market mood was dark, I wrote:  “For the immediate term, all attention will be on Iraq and al Qaeda. Don't worry, though - Wall Streeters will gun the markets to show their appreciation of the military campaign, and stock investors will be rewarded for the first time in three years. If the rally is sustained long enough, the bear market will be declared over, consumer and business confidence will improve, IPOs and acquisitions will return, pension funds will return to financial health, venture capital will get out of deadlock, and capital will become much more accessible to businesses large and small.”  Since March 18 the NASDAQ is up 18% and the Dow up 12%.   More

Friday, 6 June 2003 11:00 am
by Reid Watts
Yesterday, after days of G8 leader meetings in France and central banker meetings in Berlin, with multiple high-level speeches on the threats of deflation and weak dollar (or strong euro), and strong hints from Alan Greenspan that US rates would soon be cut further, the European Central Bank (ECB) announced that it was cutting its benchmark interest rate by one half of a percentage point. European leaders immediately praised the move, which was on the high end of expectations, hoping that it would end the rise of the euro.   More

Friday, 23  May 2003 8:30 am
by Reid Watts
This morning, as I sat at breakfast contemplating the declining dollar, aggressive currency intervention by the Bank of Japan, declining interest rates and a ballooning current account and budget deficient, my wife Therese was happily digging through the morning paper, circling every item marked as "Free" and planning her day of collecting the free loot. This gave me two insights ...  More

Friday, 16  May 2003 8:30 am
by Reid Watts
In my last column, published here on March 19, 2003, I announced that I would suspend this column until the war with Iraq is over. My rational was simple: the war would monopolize everyone's attention, so there would be few readers. Since that time I have been patiently waiting for President Bush to announce the end of the war, which, of course, he has so far failed to do. Not that anyone has noticed (other than myself) - everyone is acting as if the war is officially over, despite the lack of any formal declaration to that effect.  More

March 2003