In scanning the coverage of the telecom recovery, we read about the excesses of the past and how we "know better" now. Everyone is singing the same tune: "Things are so different now." . . . "We'll never return to the 'old days.'" . . . It'll never be the same." And the sad part is, most people believe it.

The facts are we all want to go back to the good old days. We are all acting like we did in the good old days. The reactions are like the good old days - just on a smaller, less obvious scale.

Overinvestment is still ripe - do you really believe all these wireless strategies are going to pan out? The market is still crazy - how else do you explain a near 100% run-up on a DSL stock based on a vapid announcement that the vendor tested its gear in Cisco's lab, or 60,000 postings about a stock on Yahoo's stock message boards in one day?

Everybody is jumping back in the water, clothes off, with glee.

If you don't buy into the craze, you get slammed for not taking part: investment bankers for not chasing the deals; stock brokers for not investing in stocks that jumped 30% in a week; venture capitalists for not going in on the deals everyone else is chasing; consultants for not buying into the "clear trends." If you take part, most people freely admit the telecom recovery is not fully factually based; it's emotionally based. Says one investment banker friend of mine, "It's all bogus, but what are you going to do? Investors want results." So the first thing that is wrong is that the "system" has lost any semblance of checks and balances.

A second problem is the lack of attention to fundamentals, which once more are being ignored by many in the industry. Overcapacity is still an issue. The major "stable" players in the market have sizable revenue at risk because of VoIP expansion, cable displacement services, cellular conversions and so on. This is not going to magically correct itself.

A third problem is the danger lurking in reactionary strategies - when things go bad, the reaction can be knee-jerk and severe, as we've seen in the past few years when the industry was abruptly halted because of lack of spending. The fragility of so many players, and the impending effect of bankruptcy-driven pricing, is still hanging out there untested, and a quick reaction by a series of bad profit announcements could send us back down again.