All Saint's Day

This episode of The Daily Reckoning originally aired on November 1, 1999… enjoy.


“Pumpkins. I’m going to plant pumpkins next year.” Pierre has been raising beef – big, beautiful Limousin beef – and sheep for many years.

But the European Union is forcing down the subsidies for beef. And sheep are disappearing from the region altogether…there are no longer any subsidies available for sheep farmers. French farmers cannot compete with those in New Zealand and Australia. And wool prices are so low it no longer pays to shear the sheep.

Cereals, on the other hand, are heavily subsidized. The difference, Pierre explained, came about because the cereal growers could leave their farms in slack seasons and go to demonstrate in Brussels. Large groups of farmers always strike fear in what passes for the hearts of politicians, so the cereal farmers typically get half to two-thirds of their income from the subsidies…not from selling food.

Farmers who raise livestock, on the other hand, cannot get away. They’re forced to stay on the farm day after day to take care of the animals. They pose less of a threat to the taxpayers’ purse. Even with the subsidies still in place, raising cattle is not a way to get rich. Pierre has suggested that we put our farms together. Apparently, you need bigger and bigger holdings to make money. And he needs to build a big new barn to make the operation more efficient. The return on investment? About 2%.


Maybe pumpkins are the answer. The big orange vegetables are new to France. So is Halloween. All Saints’ has been recognized and celebrated for many centuries. But Halloween is a new import from America, along with the whole shebang of decorations, customs and commercial opportunities that accompany it. Department store workers wore costumes in Paris last week — stimulating interest and sales, no doubt. Even out here in the middle of nowhere, Halloween is catching on.

My children held the first Halloween party in this region three years ago. The invitees had barely heard the word at the time. The kids took a candlelight tour of our attic, with staged shows of various spook-house exhibits. In one room, however, I decided to surprise them. I lay on a bed…in a room with wallpaper peeling off the walls and creaking floorboards…and put a sheet over me as though I were a corpse waiting for an undertaker.

As the kids came in, I began making a low growling noise…and then sat up. The kids were so alarmed and shrieked so loud I was afraid someone would call the police. Then they flew down the circular steps so fast that their little bodies were still spinning like tops as they swirled out the front door and into the yard.

That was three years ago. Now, Halloween decorations are in many stores.

Along with new things to buy and a new opportunity for secular celebration.

There is a world of difference between All Saints’ and Halloween. The spirits that one honors on All Saints’ were not, after all, all saints. They were real. They were spirits that might be honored…or feared. (Of course, if you don’t believe in the spirit world…you have no business celebrating All Saints’ anyway.)

But regardless of your views on the afterlife, All Saints’ requires at least some reflection…on the lives of our forebears, on the challenges they faced and perhaps the lessons that could be learned from them. At the very least, you might stand before the grave of someone you knew…offer flowers…and spend a moment recalling the person.

This is not a ritual that lends itself to the Internet age. (But who knows…maybe you’ll be able to order flowers via Internet…and maybe the screen will prompt you to think about certain aspects of the deceased. And maybe will be a big hit as an IPO, giving people a way to celebrate the ancient holiday without ever leaving their day-trading terminals.) [Who would have thought this comment would seem so outdated just one year later?Addison]

Halloween, on the other hand, is an example of what Philippe Muray calls “Festivus.” Muray has noticed the way in which the genuine, dark, primeval, wild and dangerous currents and undercurrents in society have been tamed…and transformed into harmless celebrations. This applies not merely to the shift from All Saints’ to Halloween, but also the political process, where genuinely revolutionary parties have been replaced by a token opposition and emasculated rebels.

Last week I noted how you cannot even say what you want about taxes anymore…without fear of criminal prosecution. Yet, is there any real opposition – of a sort that might be described as dangerous to the government? No, we celebrate the First Amendment now; we do not practice it.

Likewise, America celebrates liberty. It is like Halloween…an empty expression…a hollow festival… something to feel good about. No reflection required. No risk, either. But what would the ghosts of Jefferson and Adams think of us?

Who cares? As the GDP increases…stocks rise…and the spirits of Liberty remain in the grave…pumpkins are the business to be in.

Regards, Bill Bonner

November 1, 1999

P.S. Reader Kathryn George straightened me out. All Saints’ Day was first celebrated in 607 by Pope Boniface IV, when he converted the Pantheon Temple to Christian use. It was a day to remember the Christian martyrs persecuted by the Romans. Pope Gregory II proclaimed the following day, Nov. 2, All Souls’ Day, to remember all dead Christians. The French, always torn between Catholicism and rationalism, compromised…rolling them both together into a national holiday on the 1st.

Halloween, on the other hand, is a pagan Celtic ritual…imported to America from Ireland. Some Christians are appalled at the rise of Halloween over All Saints’, on this, the 2000th year since the birth of Christ. They believe Halloween honors Satan, and marks a return to paganism by modern society.

But the truth is, the rise of Festivus means that all the gods…even pagan gods…are dead or dying. Is there a day set aside to honor dead gods? Who gathers at their gravesites to remember them? How about Huitzilopochtli? It is said that as many as 50,000 maidens were sacrificed to him in what is today the capital city of Mexico. Surely, that deserves a moment of reflection.


FESTIVUS – Festivus is the name given by Philippe Murayto the latest phase in European (including American) civilization. The gods are all dead. So are the politicians. Who would die for his religion today? Who would die for his politics? Or for matters of principle? Serious ideas, holidays, ideologies, virtues, religions, cultures and convictions have all been hollowed out. They are no longer honored. They are merely celebrated.

*** Just as we were admiring the corpse of the big Technology Boom…recalling all the amusing moments we’ve had with the Cisco Kids and the River of No Return…

…Yes, and I admit, a tear was rolling down my cheek as I bid farewell to all the over-hyped wonders of the New Era….

…and then, all of a sudden, the Nasdaq sat up in its coffin and roared!

*** The Big Tech index rose 177 points – or about 5.5%. All the familiar forms came back to life. Cisco rebounded $5.81. Oracle jumped $1.38. “A lot of people,” said Bill Meehan in the Financial Times, “were waiting to get back into Cisco and Intel.”

*** Apparently they were. The techs were “pretty attractive,” said another analyst. So, investors bought the dip and there was rejoicing on Wall Street and throughout its many mass media outlets. Even Amazon went up nearly $4.

*** One source of the resuscitation was the French telecom company, Alcatel, which reported an increase in profits of 109%. This put some juice back in the whole telecom industry. And with it, the rest of the tech sector seemed to revive too. As the Financial Times headline awkwardly phrased it, “Technology Is Back In Wall Street Good Books.” [Good books? Exactly what is that supposed to mean? Maybe one of our British readers could translate.]

*** But the Nasdaq still ended the month of October down 8%. From its peak in March to its October low, the Nasdaq lost more than 40% of its value.

*** But yesterday, there was no looking back. Once the cadaverous Nasdaq seemed to have made a miraculous recovery, the euphoria was hard to contain. The Old Economy rose along with the new. The Dow ended the session up 134 points. There were 2047 stocks advancing on the NYSE; 893 declined. 99 hit new highs; 51 hit new lows.

*** Dow stalwart GM motored 4% higher…Home Depot hammered up 5%.

*** And IBM rose 5%. But Big Blue is in a class by itself. The immediate reason for its share price boost was that the company announced it would – surprise, surprise – buy back more of its shares!

*** Share buybacks have been IBM’s major financial strategy for many years. “Since 1995,” wrote Jim Grant recently, “Big Blue has spent $36 billion on share repurchases, $1 billion more than its accumulated net income over the same period.”

*** Well, what’s wrong with that? Investors are supposed to buy what they know…using their own personal erfahrung to gain an edge on other investors. Who knows IBM better than its own board of directors and managers?

*** Uh…just one problem. The idea is to buy low. Serious investors accumulate assets at bargain prices…trying to avoid driving up the price. IBM does the opposite.

*** “Early in 1995,” explained Jim Grant, “IBM was paying 2.3 times book value for its own shares… In the first three months of 2000, in what may or may not prove to be the last days of this long-running fandango, it paid 10 times book…” This despite the fact that the company now carries 80% more long-term debt than it did in 1995.

*** The price of oil rose in Asian trading this morning – to just below $33/bl. Oil inventories in the U.S. still seem to be going down. There’s a cold wind blowing here in Ouzilly… does it portend a colder winter? If so, the price of oil could return toward $40 a bl.

*** Consumer confidence took its biggest plunge since 1998. The Autumn of Anxiety syndrome is reaching into the homes of Mr. And Mrs. Middle America.

*** But, for no particular reason, new home sales rose 9.2% in September.

*** Bond market quality spreads are at their highest levels since 1991. A recession is coming, says Bill King.

*** Investors, business people, and consumers are nervous. Equities, Earnings, Energy, the Economy…all the E’s are troublesome. Something is different…

*** “What did they know, and when did they know it?” asks William Fleckenstein. “With about the same frequency as the publication of the latest Stephen King novel, Merrill Lynch released another of its super-duper lists last week – the 10-best recommended stocks of all time (or until they change their mind). One stock on the list was Solectron.

“This morning Solectron announced that it is going to acquire an Asian competitor for $2.5 billion and, wonder of wonders, the company needs to raise some money through equity and zero-coupon bonds entitled LYONs – a vehicle pioneered by Merrill Lynch. My question is, did the stock make the list because Merrill knew financing is coming? Nah, they wouldn’t do that, would they?”

*** A congressional advisory group has recommended new federal subsidies to bridge the “digital divide.” Think how much better Shakespeare’s tragedies would have been if he had not been on the wrong side of the digital divide. Or Einstein’s equations!

*** Here in the middle of the French countryside, people seem edgy. Pierre was so concerned about the ‘tension’ caused by having Francois still working around the farm that he came to see me to ask me to get rid of him.

*** Even the animals are edgy. Yesterday morning, two of Pierre’s prize bulls were standing out in the middle of the road. The animals are so handsomely contoured – they make me hungry just looking at them.

*** After three practice sessions, the little choral group at St. Marcel’s is to perform live today – at the 11 o’clock mass for All Saints day. We never did quite learn our parts – but my hope is that the false notes will average themselves out…and the music will echo off the stone walls with confidence, if not accuracy.

*** So, you are spared. I don’t have time to elaborate on when investors will meet their Waterloo, as promised. It will have to wait until tomorrow. Below you’ll find an essay from the Daily Reckoning vault… adroitly selected by Addison, who’s tapping his way through yet another French holiday in Paris.

Isabelle, here in the Paris office, tells me that just 2 or 3 years ago the French didn’t even celebrate Halloween. You sure wouldn’t know it if you had taken le metro home last night. There were goblins, creepy drooling men, and witches galore. Some people even wore costumes. The French have truly begun to get into the spirit of Festivus.

Addison Ouzilly, France November 1, 2000