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Why the life of the tech-stock bear market is going to be nasty, brutish, and almost interminable.
"The tech bear market should have been over by now. . . . Instead, the picture just seems to get more grim . . . "
"Not so in tech, though. In fact, tech could use a dose of Darwin right now. We have the strongest tech companies being pulled down by the meek and almost no consolidation of ne'er-do-wells in the works, despite massive overcapacity in virtually every aspect of technology from desktop to mainframe and all the soft- and hardware in between."
"Making things worse, of course, is that the clients of technology, chiefly other technology companies, phone companies, and finance companies, are similarly beleaguered with massive overcapacity. The banks and brokers, unless they merge, simply can't even afford to spend money to upgrade their systems. Yet when a Datek merges with Ameritrade, less, not more, tech spending will occur. The phone companies have so much extra capacity in the ground that it would be cheaper to buy bankrupt properties than to build new ones, except there's no money to buy the bankrupt ones and the telephone companies can barely hold on to their clients without giving away the store."
"All of these could struggle on for years before they feel the need to fold up shop or merge. The amount of money already invested in these -- plus the amount of debt on the balance sheet -- almost requires that they be kept alive for years just to avoid the embarrassment of the default for those who made the deals to keep them afloat. If you don't think that's how the game works, have you noticed that Donald Trump still owns casinos?"
"f I am right, and the shakeout takes years, that's not a period investors are willing to wade through, so the selling pressure on the big-capitalization tech stocks will continue unabated. And that's why I think that 2002 is simply year three of a tech bear market, one that won't end until Darwin takes hold, which, as the lesson of the ever-resilient smokestack stocks shows, unfortunately, might not happen until several years go by."
2:28:27 PM Google It! 
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