Hi Mike,
Very interesting comments about the fascination that the poor of Thailand have for the boob tube, the pabulum of the masses. I recall a similar observation being made Laurie Garrett, author of "Betrayal of Trust", and Newsday science and medicine reporter. She was in Harare, Zimbabwe and she went to see Bette Midler and Danny De Vito in "The War of the Roses". Ms. Garrett was impressed by the reaction of the locals. They were not so much interested in the comedic aspects of the movie, so much as they were commenting on the opulence of the lifestyles portrayed. In spite of grinding poverty in their present lives, the aspiration to the lifestyle of the rich was a powerful force. I'm sure that if you had the opportunity to talk to the Thai people who were gawking at their CRTs, they would largely say the same.
As regards the situation with Telecom Capex and revenues for the carriers, I think it is undeniable that LD rates are going through the floor. What I see coming of this is a profitless prosperity, with too many carriers chasing too small a number of end customers and thereby needing to use price incentives to bring in any revenue. This is not conducive to a healthy industry. I think that your comment about simply looking at the last 3 months as a professional manipulation of the equity markets is not exactly a safe thing for the prudent investor, and may be indicative of some blinders you need to remove. The excesses in the financing arena have been coming for a while. As I stated, I believe looking back to the first re-liquification of the financial markets, post-LTCM, in October 1998, is a good starting point. That is when I see the excesses starting to be built into the system. I would refer you to an article in the Economist of Oct. 14 titled "Is the End In Sight?" Reading this was a watershed "ah ha" moment for me . Because I'd wondered since the British UMTS auction when the capital markets would get scared of the UMTS madness and, additionally, when they would pull the plug on the CLECs.
It all started to happen in earnest in September, and, to my mind,you are merely seeing the tip of the capital markets iceberg. You ask somewhat facetiously: . In reality can the world change that fast?
I would say in all sincerity, yes, it certainly did. This is what is called a "tipping point", or an inflection point. Every financier got scared at the same time. This is what panics look like***. The gears of the system lock up, and there has to be an exogenous event occuring to reset the game. This is almost invariably the role played by the FRB today. And, at present, they do not appear to be interested in bailing out the telecom sector or the equity speculator. The day I hear that Greenspan & Cie. start to drop the Fed Funds rate is the day I become a bull again. Between now and then, there's going to be more pain.
Best, Ray
***This has been a persistent pattern in the real estate/construction market for a couple of centuries, at least. One day everyone wakes up and realizes, hey, we're overbuilding. Then the bankers just stop lending. End of cycle. It regularly happens nearly overnight. |
