God, Man, And French Chefs

“Excrement!”

The conversation in the rather up-market “Les Bouchons de Francois Clerc” came to an immediate halt. Everyone had heard the booming voice in the kitchen. Someone was `losing it’…

I will do my best to translate, without offending your refined sensibilities, dear reader:

“C’est une catastrophe! This place is a bordello filled with the excrement of fat porcine animals of low intelligence who prostitute themselves.”

It was a remarkable stream of cussing which went on for several minutes. I had heard nothing like it, even when Pierre skinned his knuckles while trying to fix the tractor.

Maria laughed. Other diners looked at each other awkwardly…or down at their food nervously. Had the man lost his mind? What had he done to the food? We could imagine tomorrow’s headline in the leftist newspaper, Liberation:

“Diners Poisoned as Chef Goes Mad!”

I could even imagine the article’s slant: sympathy for the poor chef who had probably been asked to work more than his usual 35 hours and was justifiably indignant over the working conditions, or perhaps over the condition of the carrots he was given to work with…along with a certain unstated contempt for the dead bourgeois customers – who had driven the poor man mad.

This is my first experience with a chef gone berserk. But they must go crazy all the time. French diners are very demanding. And very critical. They take food seriously.

At least a couple DR readers have wondered why I make my home in France. To some, living in France in the time of Chirac has no more appeal than serious dental work in the time of Colbert. But in reply to the question, I respond that life, like theatre, is lived as either tragedy or comedy. An American in France sees the comedy in things. We are like Chevy Chase in his movie, “European Vacation,” too ignorant to worry about what the chef puts in the soup… and too romantic to care.

And there is another reason – which helps explain, or perhaps illustrate, many of the ideas you find in the Daily Reckoning…which I will explain.

The French take many things seriously. Maria and Sophia recounted their experiences at school, Maria doing wickedly accurate impersonations of some of the characters at the Instituted de la Tour…and Sophia reporting, in depth, on the strange goings-on at the Ecole Actif Bilingue.

Poor Diane! Maria reported that her friend broke down in tears as her teacher evaluated her work in front of the entire class. Apparently, each of the students is asked to stand as the teacher tells her how she is doing. The pressure is intense. Teachers in France do not worry about a child’s self-esteem. Students are criticized sharply, almost mercilessly. It is hard to feel sympathetic towards a 14-year-old boy. But Maria’s account of how teachers picked on the only two boys in her class brought me close.

I have also heard parents criticize their children in a manner that would seem harsh in America. But parents are expected to spend a lot of time pushing their children to do well in school. So much depends on getting good grades in France…the whole country seems to be run by people who did well in secondary school, took competitive exams and got into the elite `grand ecoles’ such as E.N.A., the school of administration that prepares most of France’s high-ranking business and political leaders.

“The enarques [as graduates from E.N.A. are called] are untouchable,” says a friend of mine, asking not to be quoted. “There are always scandals in France – and people going to jail. But the enarques never go to jail. Because the judges are enarques too.”

[I am secretly hoping that maybe Henry will make it into E.N.A…and will make me untouchable too.]

Sophia’s school is completely different from Maria’s. It is a school for foreigners, and perhaps redundantly, for misfits. Sophia is there because her French is not good enough for the regular schools. Unlike the younger children, she has had to learn French the hard way – by studying it.

There are four major groups in Sophia’s school. There are the French – who are usually hard cases – the “Arabs,” the “Koreans,” and the Anglo-Saxons. Thus do school children divide the races of mankind.

“Instruction is supposed to be in English,” Sophia told us. “But nobody speaks English except us, the Anglo-Saxons. The rest speak various things that sound a little like they might be English…but I usually can’t understand a word.”

Curiously…

“But the Koreans,” as Sophia’s schoolmates refer to all the East Asians in their school, “who barely speak English, seem to be the only ones who get good grades.”

This little insight by Sophia triggered a recollection in her sister:

“Dad,” she asked, “How come you and Mom argue about such silly things? I mean, I heard Martine’s parents arguing about money…or maybe it was over what kind of car they were going to buy.”

“But you and mom,” she continued, “last weekend…I mean who ever heard of parents arguing over who was that… Darwin?”

Ah yes, Darwin. Well, that.

“Maria, we weren’t arguing,” I protested, trying to close ranks with Elizabeth, “we were just discussing it.”

And Koreans?

Yes – we had mentioned Koreans, too. I had actually. East Asians seem to work harder; and intelligence tests suggest that they are smarter than Anglo-Saxons. Or the French. In Darwinian terms, they seem to have a competitive advantage. How come the whole world is not full of Koreans? Because, I had pointed out to Elizabeth, Darwin’s theory is flawed. It was a silly point…but a silly argument needs silly points.

Who could take an argument over Darwinism seriously? Even worse, who could take Darwinism seriously? Still, it is fun to argue about it…

Uh oh…I’m going to miss my plane if I don’t leave now.

More to come…and Darwinism…and living in France…

And, of course, more…

Rushed,

Bill Bonner Paris, France December 12, 2000

*** “Maybe we’ve seen the worst,” said one analyst yesterday as the Dow rose 12 points and the Nasdaq shot up 97, to close above 3,000.

*** Long-time bear, Barton Biggs thinks he’s seen a Big Bottom. Biggs says he expects the Nasdaq to rise 25% in the weeks ahead.

*** Investors are expecting the Supreme Court to put an end to the election purgatory today…and believe that the long-awaited end-of-the-year rally is finally underway.

*** Maybe it is. If I were Mr. Bear…I would probably be ready for a break. And it wouldn’t surprise me if the rally were strong enough to make us wonder about our major hypothesis: that the bull market is over…and the real Big Bottom won’t be seen until people stop looking for it…that is, when stock prices work their way down so low that people give up thinking about them.

*** Intel rose more than $3 yesterday…along with Cisco, another `must own’ Big Tech, which went up about $2.50.

*** But not all techs rose. Sun Microsystems fell 12%. JNI fell 45%.

*** The Bank of America is a trendsetter. The bank warned that bad debt losses may reach $1.2 billion in the last quarter of the year. But eager to turn lemons into lemonade, the bankers announced that they were setting up a new “debt business.” “This is a reflection of the turn in the credit cycle,” remarked a fixed-income analyst.

*** Credit cycle? There wasn’t even supposed to be a credit cycle anymore. Not after the `New Economy’ was invented. And Bruce Steinberg, chief economist at Merrill Lynch, says he thinks the New Economy is still alive and well. After a brief interlude of worry and doubt, opines Steinberg, businesses will still borrow in order to make huge new investments in new technology.

*** Stephen Roach, meanwhile, holds a similar post at rival firm Morgan Stanley Dean Witter. He believes the steep incline of the downturn in economic growth is telling. In less than 12 months, GDP growth will drop from over 6% to less than 2%, he predicts. “This is a recession-style compression in the growth rate,” he says.

*** Don’t worry, replies Steinberg, “That was an incredibly important statement by Greenspan,” he says, referring to Greenspan’s speech last week. “It means that the Fed will not sit around and let the economy sink into recession.”

*** Greenspan will “be reactive, not proactive,” reasons Roach. “Whatever the Fed does early next year will be too little, too late…”

*** The trouble with economists and analysts is that they are notoriously wrong. The Wall Street Journal looked at the forecasts for the year 2,000 from 11 top Wall Street analysts. Nine of them said the S&P would go up over the year…above 1600. (It is, of course, down for the year…at 1369.) Only one guessed right about the direction of the S&P.

*** That in mind, you may now consider the news that a group of top analysts came out yesterday and said the S&P is now at its most attractive level in 2 years.

*** The dollar rose a little yesterday. It is back to about 87 cents per euro. The dollar may have topped out…but it, like the Dow, is dawdling rather than diving down directly.

*** Oil rose a little, a dollar and six cents.

*** “Will consult for food,” reads the headline on Red Herring. The Internet consulting firms have fallen along with their clients. The average consulting company stock is down 71.6% since October 1.

*** The Dec. 4 issue of Barrons included an ad for the American Century Vista fund – a fund with heavy investments in tech stocks. The ad quoted a 12-month rate of return of 108.12%. But the number is asterisked. A footnote tells you that the return was calculated through Sept. 30. What a difference a few weeks make! By the time the ad appeared, the actual return had declined by nearly 86 percentage points. Similarly, ad an for T.Rowe Price’s Science & Technology fund ran in the Nov. 27 issue of Business Week, citing a return of 38.42%. Yet, again, updating the return to the date of the ad would have given the fund a loss of 12.9%.

*** I took both girls, Sophia and Maria (pronounced Mariah) to dinner last night. I’m leaving for the U.S. today…I’ll be gone almost until Christmas eve. So we found a good restaurant on the Avenue Kleber. Little did we know that the chef was about to have a nervous breakdown…more below.

*** Also, I know that there are a lot of new readers (thousands of them) to the Daily Reckoning…so perhaps it is time for an introduction…again, more below.