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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (4604)	9/29/2000 9:12:35 PM
From: LLCF	Read Replies (3) \| Respond to of 65232

<JDSU chart looks sick doesn't it. However, I have not changed my view on it. Bullish. > Here's the problem [perceived? real?] with the sector: <we read with great interest a recent research report on the telecom equipment industry from Sanford Bernstein analyst Paul Sagawa. Quoting from the report: "Free cash flows have turned sharply negative – only four of 41 US (communications) carriers showed positive cash flow during (the first half) – making it painful to fund further capex acceleration without external financing…Increased scrutiny of equipment suppliers’ balance sheets has made it more difficult to secure vendor financing. In this environment, we believe we are likely to see few new-build network projects funded, more carrier bankruptcies and a trend toward capex unfriendly industry consolidation.” All we can say is that the “communications arms race” has provided the (in the spirit of Hyman Minsky) ultimate in “Ponzi Finance” (see May 26th CB Bulletin). This scheme, however, is now faltering. Reiterating our point from last week, this is an absolute credit nightmare in the making. With rapidly deteriorating fundamentals, it is not surprising that financing sources are rapidly running dry. That is the nature of credit bubbles. As junk debt badly lags other sectors, junk bond funds are suffering outflows. According to AMG Data Services, almost $450 million exited junk funds this week, bringing to $7 billion the outflows so far this year. With investor demand waning, issuance of junk debt during the past nine months dropped by almost 50% to $38 billion (investment grade debt issuance jumped 8% to $335 billion). So, the predicament should be obvious: A massive telecommunications sector whose lifeblood is junk debt and leveraged lending, finds itself running increasingly cash-flow negative, at the same time increasingly nervous investors flee the sector and heavily exposed bankers begin to panic.>

To: RR who wrote (4604)	9/29/2000 9:36:14 PM
From: Cactus Jack	Read Replies (1) \| Respond to of 65232

RR, Why not buy SDLI calls and get the spread amount as well (as opposed to JDSU)?

To: RR who wrote (4604)	9/29/2000 9:36:58 PM
From: synchro_fan	Read Replies (1) \| Respond to of 65232

RRie: This is probably old news on JDSU but do you know J Strauss's favourite book? Yes, a children's book called "The Little Prince". While doing some reading today after another delightful day with my internet company, I found this on how to live with an open heart. The article was called 12 tips on how to love out loud! Now, I have never read this book. I do make regular visits to the second hand bookstore to find a copy. So just maybe I will spring for the regular price one at Chapters tomorrow. The fox's secret in The Little Prince to learning life's lessons is contained in this phrase. <<< It is only with the heart that one can see rightly; what is essential is invisible to the eye. >>>> Your heart has always been in the right place. If the chart looks wonky, so be it! Faith is the key! Have a good weekend with the Ranger crew; all 2 and 4 legged ones! Cheers Syncie