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The Coming Generational Storm |
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| Topic: Economics |
9:52 pm EST, Feb 16, 2004 |
In 2030, as 77 million baby boomers hobble into old age, walkers will outnumber strollers; there will be twice as many retirees as there are today but only 18 percent more workers. How will America handle this demographic overload? How will Social Security and Medicare function with fewer working taxpayers to support these programs? ... we'll see skyrocketing tax rates, drastically lower retirement and health benefits, high inflation, a rapidly depreciating dollar, unemployment, and political instability. But don't panic. Raise your little finger to your lips and repeat after me: "$44 Trillion Dollars" Now follow this link, and click on the "endorsements" link, and look at the credentials of the people listed there. Recognize any names? "It is the dawning of the age of aquarius, the age of aquarius... aquarius!!!" The Coming Generational Storm |
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As Post-Boom Dust Settles, the South Grimly Downsizes |
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| Topic: Economics |
12:11 pm EST, Dec 16, 2002 |
If the nation boomed in the 1990's, Atlanta exploded. But what fueled Atlanta's eye-popping growth in the 1990's has proved the city's economic undoing in the last year and a half. The most poignant illustrations of the downturn are the roughly 20,000 highly skilled but suddenly unemployed workers who were laid off from telecom and technology companies with headquarters or major operations in Atlanta. The companies include ... Internet Security Systems ... "What does the future hold when every garage has got a new car in it?" As Post-Boom Dust Settles, the South Grimly Downsizes |
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Telecom Sector May Find Past Is Its Future |
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| Topic: Economics |
2:07 am EDT, Jul 8, 2002 |
About 500,000 people have lost their jobs. Dozens of companies have gone bankrupt. As much as half a trillion dollars in investments have evaporated. An accounting scandal threatens to bring down WorldCom Inc. and federal authorities are investigating the books of other former highfliers. There is another casualty of the implosion of the telecommunications industry: a grand vision of the future. At least 63 telecommunications companies have landed in bankruptcy since 2000, ... [but] the most expensive failures may still be ahead. Former FDIC chairman: "... the largest single meltdown ... I've ever seen." This article is generally a good summary of the events to date. It references 19th century railroad construction and contains the obligatory Reed Hundt quote, of course. But they get some things wrong, IMO. It's suggested that the big legacy telcos (the baby Bells, in the US) are safe investments, out of harm's reach. I'm skeptical. And then, they pose this question: Who needs Internet video when HBO and Showtime seem to add more channels by the minute? It's as if the author has never even used the Internet. And trying to sell broadband on the basis of multimedia content distribution only magnifies such misconceptions. A huge amount of very expensive wiring and electronics is going to rust, waiting for new ideas that can harness it. Maybe waiting forever. Telecom Sector May Find Past Is Its Future |
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The COOK Report On Internet |
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| Topic: Economics |
2:03 am EDT, Jul 2, 2002 |
Debt "Restructuring" Is Prerequisite of Industry Recovery -- Ownership & Control of Assets Will Become Central Issue As the Center Goes Chapter 11, Economic Activity and Broadband Progress Moves to Locally Owned Networks at the Edges We Explore Architectural, Economic, Technology and Policy Issues of FTTH June 30, 2002 -- This combined August September Special Issue of the COOK Report on Internet takes an exhaustive look at what is coming to be known as asset based telecommunications. The COOK Report On Internet |
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Europe set to lose 25% of its Internet capacity? |
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| Topic: Economics |
6:16 pm EDT, Jun 25, 2002 |
The epic bankruptcy saga of KPNQwest became still more entangled on Monday as banks joined the clamor for an investigation of the service provider's accounts. KPNQwest's network, which carries a quarter of Europe's Internet traffic, remains live for now, but could close at any moment as a court order on Friday left the trustees with no money to pay staff. ... The bandwidth that the Ebone European backbone network leases from service providers is likely to be turned off within the next few days. If you need to get any data from Europe, you should act now. Routing tables will adjust, but congestion is lkely to be a problem. Europe set to lose 25% of its Internet capacity? |
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Telecom Outlook: First the Bad News, Then the Bad News |
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| Topic: Economics |
10:47 am EDT, Jun 18, 2002 |
The turmoil continues in telecommunications, making the long-awaited turnaround increasingly difficult to call. Indeed, in light of a wave of bad news last week and through the weekend, some analysts say the industry's problems could actually become worse before they become better. Joe Nacchio leaves Qwest; XO files for bankruptcy; Lucent's sales decline 15% in a single quarter; Sprint's debt is nearly junk. Analyst: "I foresee a near total collapse as the endgame." Another: "The magnitude of the problem is enormous." 24 of 29 top US telecom companies that have not yet filed for bankruptcy are at risk of doing so in coming months. A banker's view: "Let the ailing networks rot." Telecom Outlook: First the Bad News, Then the Bad News |
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| Topic: Economics |
10:40 am EDT, Jun 11, 2002 |
Until very recently, one of the most striking things about our economy was how common it was for young people to make a lot of money quickly. For nearly 20 years, except for a year or two in the early 90's, a college student has been able to gaze out of his dorm-room window and see a well-traveled path to millions. His ability to imagine himself getting very rich very quickly was an ingredient in the modern money culture. ... That's what 27-year-olds did, strike it rich. This youthward shift in moneymaking has had all sorts of strange social effects. ... It would hardly be surprising if the pursuit of passion led ambitious young people to rethink the whole idea of success. The comment about "a couple years in the early 90's" is a huge understatement which seriouly marrs the observation here. However, some of the conclusions are reasonable regardless. Young at the Wrong Time |
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Only Some Will Survive the Telecom Shakeout |
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| Topic: Economics |
2:52 am EDT, May 2, 2002 |
How do you tell the difference between the companies that are going to survive the shakeout among telecommunications service providers and those that will go belly-up? Every CEO running a phone company has studied the problem. When some number of customers stops buying, a company's remaining customers often come looking for discounts. It's exactly this double whammy of falling demand and falling prices that has hit telecommunications providers. ... Verizon will survive; Qwest is a definite maybe; WorldCom is on the ropes. ... Falling prices: $3,000 for an OC-3. A little over $12,000 for an OC-48. And dropping fast. I read an article earlier this week that mentioned a price of $2,000 for an OC-3. Cheap, cheap, cheap! It wasn't too long ago that all you could get for ~ $2k was a T-1. Only Some Will Survive the Telecom Shakeout |
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MCI offers unlimited calls |
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| Topic: Economics |
11:39 pm EDT, Apr 16, 2002 |
MCI unveiled a plan Monday that for the first time gives residential customers unlimited local, local toll and long-distance calls for $50 a month. The goal is to gain local market share. MCI is heavily in debt and under SEC investigation. Analysts say the plan is proof of big changes in the way phone companies bill. "We are moving to a flat rate, or subscription-based, all-you-can-eat world." How's this for a trick? Since billable minutes are falling off fast for all the carriers, MCI pondered, "Right now, the market wants to see growth in the number of minutes used. How can we get customers to make more LD calls?" and came up with the reply, "Let's go flat rate!" So they charge each customer a little more than the average one pays already, and figure they break even financially, but they get to say "minutes are up 15% this quarter!" in the next report. One risk (which they must have foreseen) is that only the chattiest of their customers will take them up on the offer, and revenues will still go down even as minutes stabilize or climb up. So long term, it still doesn't pay the bills, but it could make for some nice weasel-words in the next quarterly report ... According to a Knight-Ridder wire story, MCI's plan is a reply to a similar deal just announced by AT&T. MCI's marketing director: "It was important for us to come out as the first nationwide local phone company. We also wanted to step out of the price-driven commodity market of long-distance." Analysts say that if customers respond, then voice service will quickly evolve into an (unprofitable) all-flat-rate business. The above is from JLM. I'll add that research has shown that consumers will pay more in aggregate for flat rate services then for metered services. I won't argue the likely reasons for such a decision, other than to say that this sort of pricing scheme makes the most sense in an environment where most long distance consumers are individuals and not businesses. I'm not sure what the current break down actually is. However, one wonders why they can't simply offer flat rate residential long distance and metered commercial long distance. The market is used to having different prices for local phone services already. MCI offers unlimited calls |
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Telecoms Stocks Fall as Hopes Dashed |
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| Topic: Economics |
12:37 pm EDT, Apr 10, 2002 |
The hard hit telecom sector took another battering on Tuesday as Verizon ... warned there would be no growth in revenues ... [From Bloomberg, Reuters: What's more, Verizon said it doesn't expect improvement in revenue growth in the near term. It wasn't more specific.] ... Analysts warned investors to brace themselves for more bad news. "First quarter results are expected to remain depressed across all companies in the telecom sector." SoundView lowered earnings estimates for BellSouth, citing Argentina and Venezuela; stock loses 7% to hit 4 year low. ... Verizon will take a $2.5B charge and does not expect growth; stock down 3%. WorldCom promises to cut capex but still loses over 10%. SBC loses 4.5%, Sprint 3%, Quest 3%, Vodafone 3.5%, Nokia and Alcatel down. BT will cut 18,000 jobs and promises to find a way to pay off $14B in debt. Nortel maxes out its credit line for another $1.9B after banks decline to increase its limit; stock is down 51% this year. Analyst: "Nortel has sufficient resources to survive the downturn; the odds of a Nortel bankruptcy are less than 10%." ... The telecoms sector continued to get slammed as investors worry that the slowdown may have more to do with industry fundamentals than with the economy. ... "People were thinking that the slowdown in the revenues and the lines were recession-related. (But) upon closer [inspection], they're starting to focus in on the likely secular declines in the revenue growth coming out of the basic local services companies. It really shouldn't come as a big surprise. The basic telecommunications service companies are facing some very challenging fundamentals." Telecoms Stocks Fall as Hopes Dashed |
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