| …THE GHOST OF CHRISTMAS FUTURE… THE DAILY RECKONING OUZILLY, FRANCE FRIDAY, 24 December 1999… Christmas Eve * * * * * * * * * * * * * * * * * * * * * * * * * * * *
In Today's Daily Reckoning: *** Lunacy reaches its apogee -- maybe *** Santa comes to Wall Street *** God, Mammon and Humbug on the NYSE floor
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*** Should I give up my lunatic hypothesis? Some DR
readers wrote to tell me that not only was the market
analysis foolish… the astronomy was wrong too. *** Quibble, quibble… nit pick… Hey, this is the greatest
period of wealth creation in history. Loosen up. *** The moon was at its peak Wednesday night… and
investors were moonstruck on Thursday. The Dow was
bid up to a new record. So were nearly all other indices.
Those on my side of the Atlantic too. *** Nasdaq broke through 4,000 -- and closed slightly
lower. It's up 80% for the year. The Dow is up 24%.
And the S&P -- which also hit a new high, is up 19%. *** Okay, if stocks continue to soar next week --
I'll admit that my non--prediction (that the peak in the
high tech lunacy would coincide with the fullest moon
in 133 years) was just an amusement. If the market
goes down though… I'll claim guru status. *** Here's a change -- most stocks actually went up
yesterday. Yes, Advances actually led Declines.
This marks a departure from the trend of the last 20 months…
in which, according to the Financial Times analysis…
60% of stocks have fallen. *** Ominously, bonds continued to fall. And so did the
Internet average… the IIX. *** The gap between most stocks… and the leading
indexes is the largest it has ever been. History tells
us that the gap is eventually closed when the indexes collapse.
That is what happened in '29 and '73. *** But the gap could also be closed by a new, huge,
broad-based bull market. That is what most investors expect --
a "melt-up" in January as the Y2k fears pass, and the
Y2k cash, so generously provided by Big-hearted,
St. Alan Greenspan, gets taken out of mattresses and
safe deposit boxes and put into stocks.
*** Santa has visited the trading floor in 7 out of the last 10 years.
This year, his sack of Christmas bonuses was so heavy he
staggered under the weight. "Greed is in full control,"
said an analyst at Cantor Fitzgerald. *** Santa wasn't the only fantasy character visiting the NYSE
yesterday. Bishop Desmond Tutu was there too. Tutu was
the perfect Scroogian touch… walking into the temple of
Mammon on the eve of the 2,000th birthday of the man he
claims to serve. Tutu is Humbug on wheels. He wears his
anglican collar turned away from worldly matters, but his eyes
rarely stray from politics. Where is his real faith, one wonders. *** I see that one Texas company, Garden.com, is selling Xmas
trees on-line. Readers will recall that I suggested this as a
business idea. If you'd taken it public… you'd be a billionaire by now.
But, heck, I was too busy too. *** McDonald's in Paris is closing for New Years. They're afraid
of violence. So are many of the restaurants on the Champs
Elysee -- where 1.5 million people are expected. I'm
beginning to have second thoughts about going into the city
for the big bash. It's hard enough to get in and out of town
on a regular day. *** A Mayo Clinic study tells us that suicide around Christmas
is no more likely than at any other time of the year. This is
good to know, but a surprise. The level of excitement, noise
and commotion at our house has gotten so high -- you can
see why people might want to do themselves in… just to get
some peace and quiet. *** Jules will be 12 tomorrow. He was born on Christmas day.
He spent yesterday at a shopping mall, wrapping presents and
carrying packages in order to raise money for his boy scout troop.
Jules' wrapping skills need improvement. His packages looked as
though they had been delivered by the post office.
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The Ghost of Christmas Future It was 4AM. I had no doubt about that. The clock said as much.
And who am I to argue with clocks? If ever we cannot trust them,
the country is done for. But what were those voices? At such at an hour. The first to speak was a soft, feminine voice, talking to someone
on the landing outside by door, "It's not the way it used to be." "What do you mean," replied the man, in a voice that was
neither young nor old, with a slight impatience. "Of course, I don't know why I bother," she went on,
"I don't think it matters to you anyway." "What doesn't matter to me," he replied, with growing
restlessness… "Me!" "Oh, come on… what are you talking about?" "I mean, you are not interested in me anymore. All you
think about is getting rich. You and that damned computer!
Here it is, even at a Christmas Party, and all you ever talk
about is stocks! Broadcom. Qualcom. Dot.com. Does every
word you speak have to end in 'com?'" "You're being silly…" "No I'm not. It's you who are being silly. And you know why
you spend all your time watching stocks? I'll tell you -- fear!
You're afraid of life. You're afraid of me. You condense all
your hopes and aspirations… all your dreams and fears… i
nto one simple master-passion -- making money in stocks." "All you care about is making money," she went on.
"You're afraid to care about anything else! Not about me.
Not about Christmas… not about anything. Even now,
why you're eager to get home so you can turn on your
computer and see how rich you have gotten this evening." "You are exaggerating," he protested, "besides, I am
making money. But that doesn't mean I feel any different
about you." This conversation trailed off, as the holiday revelers
moved off to their final destination of the evening --
an apartment near mine. I went back to sleep. Having failed to profit from the
greatest period of wealth creation of all time, I could
feel little sympathy for those who have. And yet… I did feel sorry for them. **** While this was taking place, Ebenezer received his
third and final visitor of the night. "I am the ghost of Christmas Yet to Come," said the spirit. And away they went, the two of them. Ebenezer was
scared. Perhaps he feared the future. The spirit conducted them beyond a full, bright moon…
to where the moon shone no more. It was as if a tide
of night had washed the stars out of the sky. It was black.
And cold. And then, all of a sudden, a city arose all around them.
Its narrow streets, and very high buildings, reminded
Ebenezer of somewhere. Yes, it was lower Manhattan.
The financial district. It was Wall Street. On the street, groups of men and women were speaking.
But they had worried, haggard faces. "What troubles them so, Spirit?" asked Ebenezer of
his guide. "You must see for yourself," replied the Phantom,
and they drew near a group on the corner of Broad
and Wall. "Amazon…?" asked one, "are you kidding? The
bankers got less than 2 cents on the dollar. Shareholders
got nothing. Not even a scrap of paper to put on their
bathroom walls." "At least the bankers got something," answered
another.
"They were lucky." "Yeah, but who cares?" "A guy I know cares. He owned the bank stocks." "You'd think they would have held up better." "Well, you would have thought a lot of things." "Well, you would have thought you could've gotten
more than a turkey for a Christmas bonus. I remember
last year, I got a more than $2 million. This year -- a turkey." "Some guys didn't even get that." "Where are you living now? I heard you moved?" "Yeah, we moved in with my wife's mother. We had
to give up our apartment." "What, that place overlooking the park on the West
Side? What'd you do with your last year's bonus…
didn't you pay for the place?" "No… I took out a mortgage and put my bonus into
Qualcom. It did so well, I remortgaged at 125% and
leveraged up." "Jeez… you must be hurting." "Nah… it's the bank that's really hurting." "I'll tell you who's really hurting, one of my customers
in Baltimore. The guy just wouldn't take no for an answer.
He bought the dips. Ha. Ha. Each time the nets went
down, the guy bought more. The guy died and the banker
went to his place -- took everything. Even the sheets
off the bed." Ebenezer couldn't believe his ears. "What has happened?" he asked the spirit. The phantom of Christmas Future made no response.
Instead, he stood erect, pointed his finger… and in an
instant the two were standing once again at the little
window in East Baltimore. "Our time is short," said the spirit. The two gazed in the window. The scene was not the
boisterous happy one they had seen earlier. Instead,
Bob and his family sat still, quiet -- as if a dark shadow
had passed over them and the fire in their hearth had
gone out forever. There, in the corner was a crutch, partially hidden by a
Christmas tree. The tree, though dressed for the season,
failed to tilt the scales toward the gaiety it implied. Ebenezer noticed something missing. "Why, where's little Tim," he asked, dreading the answer. "Tim is no more," said the phantom. "I have seen enough," said Ebenezer. "No more shadows.
I understand the lesson you are trying to teach. I am not
so dull than I cannot grasp your point. I acknowledge it.
Some losses are real… and more important than money.
I will send Bob and his family a sympathy card." "Come…" said the spirit. "Your lessons are not complete." A second later Ebenezer recoiled in terror. They were in a
bedroom, stripped of its curtains, sheets, even the pictures
were off the walls, leaving light patches of wallpaper where
once hung Ebenezer's collection of great artists works of the
mid 20th century. The Pollacks, the Miros, the Warhols --
he hated every one of them… but they were great investments.
What had become of them? And the figure on the bed, the corpse, it was covered only
by a large, plastic garbage bag, so carelessly laid on that
even a gentle breeze would have left the body naked,
exposed to the world as though a ghastly piece of art in
a modern exhibition. Ebenezer shuddered. "Why?" Oh cold, cold, rigid, dreadful Death, set up thine altar here,
and dress it with such terrors as thou hast at they command… Strike, shadow, strike… so that we may see his good
deeds flow from the wound. No voice pronounced these words. But Ebenezer heard
them anyway. And then, a moment later, they were in some other place.
It was a cemetery. "We don't need to come here," said Ebenezer. I know
whose tombstone you will show me. But before we look,
answer me this. Are these shadows of the thing that
Will be, or are they shadows of things that May be only." The spirit was immovable. His finger beckoned to the
tombstone. Ebenezer moved forward. He looked. And there it was.
His own name, chiseled in stone. He fell to his knees, and reached for the spirit's hand.
But spirits are elusive as profits in a bear market.
Finding no hand to comfort him, he formed his own in prayer. In agony, his voice trembled: "I will honour Christmas in my heart, and try to keep
it all the year. I will live in the Past, the Present, and
the Future. The Spirits of all Three shall strive within me.
I will not shut out the lessons that they teach. Oh,
tell me I may sponge away the writing on this stone." He blinked, and the spirit was gone. So was the graveyard.
He was back in his bed. The room was his own. The bed was his own.
Best of all, the Time before him was him own.
And his to make amends in! He was so excited, he fluttered out of bed as though
a robin from its nest. He rushed to turn on his computer. "SELL!" His fingers rushed over the letters so fast,
the computer could barely keep up. "I don't know whether they're going up or down,"
he laughed to himself, "but I don't care anymore.
I'm free of all this nonsense forever." Opening his window, he saw a young boy on the
street corner. "Hey, boy," he shouted. "Who are you calling boy?" came the resentful reply. "Oh never mind," said Ebenezer. Times have changed.
And he made up his mind to change with them. "Oh, my, the markets are closed today," said
Ebenezer to himself. "It's Christmas. How wonderful.
Everything is wonderful now. Bubble, schmubble.
I'm going to go see my old friend Bob. "And get that kid of his properly checked out at Johns Hopkins.
I think Itec may have a new drug that can help him." "Hmmm… I should probably buy some stock in Itec.
Great company. And it looks like the internet mania
is moving to biotech. I could make a fortune on this one…" *** Where this led, I do not know. I do not even know if
the story is true. I just know that it ought to be true,
even if it is not. And I know how it ends too. With these immortal l
ines from dear Tiny Tim -- Merry Christmas. And God bless Us, Every One! Your friend and faithful servant, Bill Bonner
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