Applied Micro Circuits Corp (AMCC) Message Board

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Technology Stocks : Applied Micro Circuits Corp (AMCC)

AMCC 8.450

0.0%

Feb 3 4:00 PM EST

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To: Don Miller who wrote (1512)	4/26/2001 4:53:18 PM
From: FR1	Read Replies (1) of 1805

I think he is worried more about the fact that there is not as much lending by banks as is needed to end things. Something like this: 1) Telcoms will continue to fire tens of thousands if they can't get their hands on the massive financing they need (it's real expensive to buy & deploy telcom equipment). 2) Banks won't lend if there are better places to put their money. I can not remember specifically how it goes, but basically the banks can put money in totally safe paper and make profit. You make more making commercial loans, but why take any risk? 3) AG understands that he has to make lending rates so cheap that money will flow to the telcoms, IPO markets will start up again, etc. The bottom line is that without a healthy telcom industry, your economy is bound to have really big troubles. If nothing else, the massive layoffs will continue. If every day you open the paper and see another ten thousand laid off, you are not going to buy anything. You are going to hoard. So sales go down, causing more layoffs, etc. I think that is the biggest fear. Once you start a panic cycle in the public it is really hard to stop. Deflation is every bit as bad as inflation. Of course, the brokers don't help at all. They continue to downgrade even though the stocks are beat all to hell. Another analyst out today with a big paper showing how telcom is dead. I believe more in the business people. In January the Tiawanese fabs said that the chip sector would hit bottom in April. They were right. The brokers were wrong. Most of the optic business guys are guessing a bottom at June-July. They will probably be right too. Brokers are always pointing out the enormous debt held by most telcoms and how they can't possibly service the debt. If you follow their logic banks won't lend to anybody and everybody will go bankrupt. If you followed their logic one year ago you would believe that stocks would just keep going up.

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