[PEN-L:30660] Re: telecom market madness

["Carl Remick" <carlremick@xxxxxxxxxxx>]

> From: Michael Perelman <michael@xxxxxxxxxxxxxxxxx>
>
> This article is fascinating.  Market enthusiasts proclaim that
> markets are magnificant processors of information.  This article
> desribes how markets are driven by frenzy more than by
> information.
>
>
> TELECOMMUNICATIONS
>
> Wildly Optimistic Data Drove
> Telecoms to Build Fiber Glut
>
> By YOCHI J. DREAZEN
> Staff Reporter of THE WALL STREET JOURNAL

Yes, this was one of the most interesting articles to appear in the WSJ in a 
long time -- showcasing telecom's overexpansion as a catastrophic failure of 
the marketplace's ability to provide useful feedback.  The day this piece 
appeared, however, another WSJ article seemed to present a relatively 
optimistic outlook for telecom; it cited the overbuilding of US railroads in 
the late 19th century and noted that, though bankruptcies resulted, the 
industry was rationalized and the overcapacity absorbed pretty 
expeditiously.  To me, though, it seems the overcapacity of fiber-optic 
networks far exceeds the excess capacity that afflicted the 19th century 
railroads.

Carl

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