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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here
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To: MikeM54321 who wrote (9905)12/23/2000 4:39:08 PM
From: FR1   of 12823
 
Mike - I get the feeling that Nolle is making the mistake of taking today's environment and projecting it into the future. Naturally he sees evil.

What fuels the capital expenditures of the industry is either capital or earnings.

IMHO he had it right above but went on to say:

Nobody in the new-generation carrier space is going to get capital.

I think businesses adjust themselves to the economic world they live in. A year+ ago interest rates were not a threat. People like ATT took on great debt and enormous projects even though returns were a long way away because they felt they could handle the debt with the liquidity that was available. Lots of new IPOs were also coming to market and making available new ideas to the industry.

Then, unfortunately, the professors at the FED decided it as a good time to slow business to a crawl by draining the liquidity Nolle talks about out of the economy. It was a terrible misguided academic exercise since no meaningful inflation was ever there. It only happened because congress refuses to oversee FED decisions. The FED now admits the mistake and will lower rates. This will bring back the IPOs and capital funding. It won't take that long. 1/2 point down is a clear signal that the FED has decided to stop choking the market. The guys like ICGE and CMGI are still there - waiting and ready to go.

Note also that some major industry problems will be removed one way or the other in the immediate future:
AOL/TWX agreement will be resolved.
ATT the same.
JDSU/SDLI the same.

Probably all this in January/Feburary. This gives clarity to fund managers.

Lower US interest rates means stronger euro which helps.
Oil is down $10/barrel.

The only bad news is that businesses have been damaged by the FED exercise. However, IMHO, recovery will come quickly because there is a strong driving demand. If this was the 1970's we would go into recession for years.
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