A Long Day

I thought of the famous painting by Norman Rockwell. A deeply furrowed and weathered farmer from out on the plains sits on the runner of his pickup truck, while his son awaits the train. The son is going off to college and is full of the bright expectations of youth. The father is more concerned with how he will get the next crop in without his son’s help. The picture appeared to be from the late `30s.

There, in section D of the American cemetery, on the bluff overlooking the English Channel, was the simple cross that marked the grave of Nils Wennberg, private first class, from South Dakota. Is that what happened to the boy, I wondered.

The 6th and 7th of June, 1944, were black days for the Nindel family of Indiana. The crosses at Omaha Beach record that two Nindel boys, Preston and Robert, died within 24 hours of each other on those two days – two of the nearly 10,000 American casualties.

Also of interest was the grave of Jimmie Montcrieth – whose heroism on the 6th of June was so remarkable that he was awarded a Medal of Honor – posthumously. Montcrieth ran from position to position, exposing himself to enemy fire, rallying his troops and managing somehow to advance against the German bunkers. He was killed – but the bunkers were taken.

“All I remember,” said Stanley, a stout oysterman and carpenter, and D-Day veteran, whom I worked with back in the `60s, “was jumping in the water and running up to the beach. I had never been shot at before. I didn’t care for it. Guys were getting shot all around me. And I has so much sh…[gear] hanging off me, I could barely move. But I made it to the beach and crouched behind the dunes and started shooting back. I didn’t know what I was shooting at. But I hoped to hell I hit some son of a bitch in a German uniform.”

“Stanley,” I once asked during the terminal phase of the Vietnam War…when the draft lottery numbers were being handed out, “couldn’t you have gotten out of it? Didn’t you have polio or something?” Stanley had had polio as a child and walked with a limp.

“Hell no. I didn’t tell them about the polio. Besides I didn’t want to be sitting around here with my thumbs up my [bleep] while everybody else was getting their [themselves] shot up. Of course, it was different back then….”

I walked along the beach where Stanley must have come ashore. I tried to imagine what it was like. The German’s reinforced concrete bunkers are still there. They still look massive, impregnable and unassailable. How could anyone have gotten to safety across the open beach and up the sandy bluff? And yet, they did. By the end of the day on June 6, there were 150,000 troops on the continent. As Hitler remarked, “The God of War has gone over to the other side.”

The God of War had indeed changed allegiance. Rommel, in charge of the German defense west of the Seine, committed suicide. His successor, Kluge, followed in his footsteps – shooting himself a few months later.

Less obedient to the God of War was von Choltitz, in charge of the German garrison in Paris. Hitler ordered him to destroy the city. But von Choltitz may have been in Paris too long. He disobeyed orders. He surrendered Paris, intact.

The American cemetery at Omaha Beach is the setting of the first and last scenes of “Saving Private Ryan.” As in the film, there were a number of WWII vets wandering among the crosses and stars of David. Like the father in the Rockwell painting, they wore baseball caps – often with indicators of their military affiliations – and bore the creases of age and hardship. Accompanied by younger relatives, they walked slowly, reverentially.

Most were very friendly and open – relaxed, as Americans tend to be. One older guy seemed to be stunned, though. It was as though he was trying so hard to recall something, that he had forgotten where he was and what he was doing.

I wondered what they were thinking…and what memories they brought with them. And how things could have changed so much…so that even though these events happened during their lifetimes – it is as if they happened a thousand years ago.

I thought, too, about how all the great changes and challenges of our century were over before I was born. The baby boomers have faced nothing like the Depression, or Electrication, or Automobilization, or National Socialism, or WWII. We have had an easy time of it. Let’s hope it stays that way.

Your very humble correspondent,

Bill Bonner
London, England
June 6, 2001

*** Long bonds, gold, and the gap between inflation indexed bonds and regular 10-year treasury notes all are down – apparently confirming Mr. Greenspan’s observation that inflation is no problem.

*** No inflation, no worries. Or so investors seemed to be saying yesterday, as they rushed in to buy stocks. The Dow powered ahead 114 points and the NASDAQ jumped 78 points, or 3.6%.

*** Among the winners on the day were stocks that have been big losers all year. Names like Lucent, Cypress Semiconductor and Xilinx topped the leader-and in board. Xilinx, the specialty semiconductor chipmaker, cheered investors by reporting that its rapidly deteriorating profitability is deteriorating less rapidly. The stock rose 10%.

*** Meanwhile, back in Reality Land, the NAPM’s services index fell once again in May and April as factory orders plunged 3%.

*** What kind of miracle economy is this? “The productivity of U.S. workers logged its sharpest fall in eight years,” declares a Reuters report, “while signs of wage pressure emerged with the largest gain in labor costs in more than a decade.”

*** Productivity of workers outside the farm sector fell at an annual rate of 1.2 percent during the first three months of the year. Unit labor costs, meanwhile, shot up at a 6.3% annual rate.

*** This month’s issue of Red Herring offers “66 Experts Predict When The Economy Will Recover.” The experts are sure it won’t take long – overwhelmingly expecting recovery within 9 months. But wait…what’s this…they’ve got Mary Meeker, the dot.com shill, and, oh my God, Ira Magaziner, Hillary Clinton’s health care sidekick, included as ‘experts.’

*** And for now, no amount of bad news seems to dim investor optimism. After all, the stock market is “looking ahead,” or so we are told. Is it looking ahead like a 4- year-old looks ahead to his birthday party? Or rather, like the driver in a careening racecar looks ahead to a brick wall?

*** “The bulls’ numbers are growing, bolstered by a feeling that the economy may be bottoming out after a marked slowdown,” the Journal story stated. “All told, investors in April put $21 billion into stock mutual funds, after net withdrawals of $20.6 billion in March, according to Lipper Inc. Inflows continue in May.”

*** The latest investor sentiment indicators confirm the ebullient mood. ISI’s survey of institutional investors finds that they are more bullish than they have been at any time in the last five years.

*** The Chicago Board Options Exchange produces a nifty index known as the “VIX” that tracks option pricing to gauge the mood of investors. And the VIX currently signals the highest level of bullishness since last August. The current VIX reading is close to the extreme levels reached immediately before previous market peaks like that of July 1998 and March of last year.

*** In May, Wall Street brought out more than $49 billion in new stocks [offerings]…the most since October 2000.

*** Charles Biderman, editor of Liquidity Trim Tabs sees the record issuance of new stocks and bonds as a negative for the stock market – the thinking being that the more investors buy these new issues, the less they buy the stocks that are already trading. And if folks don’t buy existing stocks because they are busy buying new ones, the stock market will have a tough time gaining ground.

Eric Fry

And more notes.

*** Clickety clack, clickety clack. The Eurostar doesn’t really make much in the way of noise. In fact, it’s quiet on the 7:15 to London. Not like 18 months ago – when business were passing each other investment tips and loudly yucking it up over how much money they were making.

*** I picked up a copy of The Times… The English papers, I’m happy to report, don’t pretend to the same high-minded seriousness as their American counterparts. Instead, in the first few pages we find stories of murder, mayhem, jealous lovers and tearful tales of tiny tots drowned in backyard pools. My favorite is a report of two men who worked as counselors for sex offenders at a prison. They became so discomfited that they sued the Prison Service and were awarded more than half a million dollars in damages for the “psychological horrors” they suffered.

*** In a Paris newspaper, Liberation, I am promised a shocking revelation from Lionel Jospin’s past. I imagine pedophilia…necromania…Republican tendencies…instead I discover that the Prime Minister was once a member of the Trotskyite wing of the loony left. Weren’t nearly all of France’s soft socialists – when they were younger, of course – connected to more radical factions?

*** And here, dear reader, I feel the need to make a full disclosure – lest it come out later whilst I am in the middle of a presidential campaign or running hard for the post of master-at-arms at some looney, futile right wing romance. I, too, once attended a meeting of the Trotskyite Revolutionary Workers League…or was it the Revolutionary Trotskyite Proletarian Alliance?

*** I remember it well. I was student at the time; I thought it would be a good place to meet girls… The clandestine meeting – held in what appeared to be a school auditorium – was chock-a-block with gabby intellectuals and very few genuine ‘workers.’ The building had no smoke alarm system, of that I was sure, so thick was the pall of smoke from Gauloise cigarettes. Beyond that, there were endless tiresome speeches…and then everyone rose, raised his right fist and joined in singing the “International” – the theme song of the group. I decided then and there that I wanted nothing more to do with a group that sang that badly and had so few good looking women…

*** This may be a good summer to visit Europe – while the dollar is still strong. (I realize that I gave this same advice last summer. The euro has not risen, but it has not fallen either…so the bargains remain.)

*** “If you’re looking for a castle somewhere,” Forbes quotes Sotheby’s head of International Realty, “and don’t want to spend a lot of money,” look to the Loire Valley. You can “still find a little chateau – yes, a chateau – for about $500,000,” gushes Forbes. On the second point, Forbes is right. You can buy a chateau for $500,000. But like so much information, it is dangerously misleading. Once you have paid for your chateau, your expenses are just beginning.

*** In fact, if you want to see for yourself, both the joys and pitfalls of owning a chateau in France, you may want to join one of the groups that is coming to stay in my money pit this summer. International Living is bringing a group on June 24th.

The Daily Reckoning