| …NEW YEAR'S EVE… Last Rites THE DAILY RECKONING
OUZILLY, FRANCE FRIDAY, 31 December 1999
In Today's Daily Reckoning:
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*** Rocket Chips glare… the bombs bursting in air *** New Year's Flight cancelled *** Still without power in Le Dorat ********************************************* *** Markets all over the world are ending the year at
record highs -- London, Mexico, many European Bourses --
they're at all-time highs. *** The Rocket Chips sputtered yesterday, though. The
Nasdaq was down 4. The Dow was down 31. *** The leading edge of the market seemed to lose a bit
of its sharpness. The internet average was down. So was
the semi-conductor average. Amazon was down 4, to $79.
But Qualcomm, that San Diego super-charger, rose another
74 bucks! *** The dollar ends the year very close to a 10-year
high against the Swiss franc -- and practically at
parity with the euro. *** There were 108 new highs on the NYSE yesterday,
compared with 165 new lows. *** But the number of stocks advancing exceeded the
number declining. This produced an upswing in Richard
Russell's proprietary indicator, the Primary Trend
Index. Could the next trend be the fall of the Rocket
Chips… and the rise of the stocks that have been in a
bear market since April of last year? *** Take the tech stocks out of the S&P and the index is
up 4% for the year. With the techs, it's up 75%. *** Air Zimbabwe cancelled its flight to London today.
Only one passenger had confirmed his reservation. The
rest were worried that the flight -- which lands after
the New Year -- may not get down safely.
*** Gold went down yesterday. Heck, I got a report that
they're eating the stuff in fancy restaurants. According
to the Boston Globe, they're serving "risotto with leaf
of 24-carat gold." Could this be a joke?
*** My son, Will, back from college, confirms that his
friends get checks for participating in internet ad
programs. They click on certain sites while writing
their term papers -- and get paid for it. What a scam! *** If you think the only way to make money is by
investing in the techs and nets consider this: Lynn
Carpenter reports that her "old economy" picks are doing
quite well: Her steel company is up 17% in two weeks.
And her transportation picks are up 89%, 20% and 60%
since February. Details in Fleet Street Letter --
www.fleetstreet.com *** I've been working at half speed during this
Christmas week. Yesterday, Elizabeth and I drove to Le
Dorat, a pretty little town nearby. It is a gem -- with
the oldest church in the region, dating from the 10th
century. *** But the town had neither water nor electricity since
the big storm went through on Monday night. So, it's as
dead as… well… a laptop without power. Still, that
didn't stop the restaurant from serving us a fine lunch.
The restaurant has a gas stove -- so they're still in
business, serving customers by candlelight. Life goes
on. *** The most-advertised disaster of all time -- Y2k --
gets its test tonight. If it strikes with the force Gary
North predicts, I hope you're able to eat as well as we
did. I ordered an "andouillette" -- a sausage made up of
pig parts that you wouldn't want to discuss in polite
company. It smelled like a pig pen, but was tasty. *** We're going to a party tonight in the middle of
nowhere. The Coopers are a family from Scotland, who
speak English with a heavy accent. They're hosting a New
Year's Fete for the anglophones of the region. It won't
be Paris -- but it will be a heck of a lot easier.
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* * * * * * * * * * * * * * * * * * * * * * * * * * * Last Rites And so, the year ends. I hope Mary Cooper has invited Pere Blot to the
festivities tonight. But I doubt it. The Coopers are not
papists. I do not know them well, but I imagine that
they are of a more modern persuasion. Maybe typical
Scottish Presbyterians. Maybe freethinkers. Too bad. The passing of the last year of the 1900s needs
some attending ritual… some magic incantations to send
it on its way. Something serious, grave, solemn. Pere
Blot would be perfect -- if he'd do it in the language
used at the turn of the last millennium -- Latin. People were more religious then. Lacking the internet
and Howard Stern, they looked to religious doctrine to
tell them how things worked. And they relied upon
tradition for guidance as to how to live. The guidance and faith that helped individuals through
the first the first 9 centuries of the second millennium
broke down in the 10th. The Pope spoke to this problem in
1924 -- as reported in the Herald Tribune of that year,
"The Pope instanced the new rich as the class most prone
to the evil of feminine dissipation… comparing the new
rich to the classes which emerged on the top of the
social ladder after the French Revolution." These people
"had no traditions behind them to defend them from the
pursuit of pleasure." Dissipated women make good company for a single man. But
I don't want my daughters to join them. Preventing them is not an easy proposition. Because the
whole of Western Society -- unlike, say, the Taliban of
Afghanistan -- seems to have become like the "new rich"
of 1924 or the top classes after the French Revolution.
They've given up on tradition altogether. Tradition
arises naturally, spontaneously. It is the product of
trial and error over many generations. Bad customs, or
the people who practiced them, suffered a competitive
disadvantage. They were bred out. Like virtue -- customs
show us "what used to pay." But heck, this is a new era… and what used to pay
doesn't matter anymore. Buying inexpensive, high
yielding stocks used to pay. Buying stocks with
earnings, profits, book value… and companies with a
dominant position, a defensible brand, a margin of
safety -- all of it used to pay. In fact, these
traditional ways of investing made Warren Buffett the
most successful investor of all time. But poor Warren lost nearly a quarter of his fortune
this year. He just didn't get it. He was tied to the old
traditions of investing like a monk to a belfry rope. The pursuit of pleasure will be in full flower tonight.
The funeral for the 1900s will be more like an Irish
wake than an Episcopalian service. Far different from
the church bells that marked the end of the year in 999,
there will be orgies all over the place -- with lots of
naughty women whooping it up. With their help, the
celebrations are sure to be both gay and sordid at the
same time. They're taking precautions on the Eiffel Tower. They're
afraid that some people may use the moment of the year's
end to terminate their own lives -- leaping into the
arms of God as the rest of the Paris jumps into the New
Year… like women throwing themselves on their husbands
funeral pyres (a tradition you don't find honored much
anymore). What a fitting way to celebrate the end of the
most murderous century in history! Something almost
poetic about it. I recognize that it is a sin to kill -- even to kill
yourself -- but I confess a certain sympathy for the
morticians. Were it not for the vigilance of the Paris
police, business might pick up dramatically on the first
day of the new year. Besides, not every death is mourned. Sometimes people
are so obnoxious that a New Year's leap would be a
blessing for everyone who knows them. And sometimes,
senility seems to have taken away the soul long before
the corpse is finally planted in the ground. By any just reckoning, the soul of the 20th century will
soon be roasting in the hottest fires of hell, if it is
not doing so already. Abandoning tradition, the century
embraced death with wild abandon. "If the 19th century was a century of individualism,"
wrote Benito Mussolini in 1932, "it may be expected that
this will a century of collectivism and hence a century
of the state." Mussolini was a prophet. Or at least he was able to read
the writing on the wall. It was already there by the
early 30s. "The Jews are our problem," was already
showing up on the walls of Berlin. That was a problem that collective action could solve!
Along with a lot of other bugaboos invented by the
chattering classes of the time. Individual thinking gave
way to collectivist, mob thinking. The private civil
society, dominated by religion and tradition, gave way
to the political society of Nazism, Socialism,
Communism, New Dealism, and other imbecilisms. And today, except for a residual of academics and rebels
without a clue, these isms have been discredited. In
that sense, the 20th century is already dead… and its
soul already stoking the fiery furnace. But the collectivist thinking is still a feature of
human life -- as it will be for as long as there are
humans. And, today, it is focussed on neither religion
nor politics. It is focussed on money, and cut loose
from the moorings of traditional stock market thinking.
All the rules, protocols, broker's wisdom, and wives
tales have been thrown out the window. Tonight we attend the death watch. But while millions
celebrate the passing of the 1900s, the cold, arthritic
hand still clutches its collectivist delusions.
"Capitalism and new technology will make us all rich"
the old century wheezes. If only Pere Blot could whisper in its ear. "Momento
mori… exeunt omnes…" or some other hocus pocus to
break the spell. This is the final foolishness of the century. When it
goes… it is all over. Happy New Year. Bill Bonner
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