The Lost Puppy

I will return to the subject of money tomorrow…but let me finish my story. It illustrates a little of small town life and the way people organize themselves around hidden protocols.

Most of life is governed, not by laws written by legislatures, but by these invisible rules of order. They are written down nowhere, but respected almost universally.

I told you about my conversation with Dominique and her husband, Yves.

Yves gets up to mischief from time to time. Such as the time he went looking for the lost puppy.

He loaded his son, Jean, in the car and began driving around. The little town was almost deserted. It is a small town anyway…where people leave their cars running in the middle of the street and go in to get a loaf of bread…

Besides, he was concentrating on looking for the dog…so he did not notice that they had changed the street signs on one of the tiny little side streets. Nor did he notice that the police had stationed themselves across the street.

So the police stopped him, since he was going in the wrong direction.

“Did you notice that this is a one way street?” they asked him.

“No…when did you change it?”

“Just last week…Can we see your papers, sir?”

“I’m sorry,” said Yves, “but I just hopped in the car because Jean’s puppy ran away. We were just out looking for him.”

“You know you are required to have your papers with you at all times when you are in a motor vehicle,” the police replied officiously…

“I know, I know…but my son was upset…I just didn’t think about it.”

“What is your name…?”

Yves was beginning to get annoyed.

“Of all the pettifogging nonsense,” he began to say.

Surely, the local constabulary had something better to do than harass an innocent man…driving around town at 5 mph looking for a missing puppy.

This took place, I should point out, a couple of years ago. At the time, a man names Jacques Delire, or something like that, was the most wanted man in France – – a consequence of his habit of kidnapping children and murdering them.

So Yves replied:

“I’m Jacques Delire…and I just kidnapped this boy in the back seat!”

The police, of course, knew that this wasn’t true. They may not have known Yves personally, but they probably had some idea of who he was. And they certainly knew he wasn’t Jacques Delire.

But they didn’t like being trifled with. So they arrested him and took him to the local jail.

“This is ridiculous,” said Yves, informing them of the obvious.

They were convinced that they should charge him with something — but they couldn’t decide just what. So they consulted their superiors.

But when the chief of the local gendarmes came into the guardhouse, a look of recognition quickly passed over his face. Yves, too, recognized the policeman. For this was one of the men who had been using Yves’ driveway as a lovers’ lane.

“What are they doing?” little Jean had asked his father when they spotted the car in the driveway. They were clearly doing something, because the car was rocking gently. Jean didn’t know what it was. And Yves had told him not to go and look.

“They’re probably fixing the radio,” he had replied.

But Yves had a better idea what Mr. Bougeon, the police chief, had been up to. And he also knew with whom he had been up to it — a young woman also on the police payroll, whose name was not Madame Bougeon.

And now the police chief recognized the face before him as that of the farmer who had seen them.

Suddenly, the look on Mr. Bougeon’s visage changed — from one of annoyance to solicitude. The change was so abrupt and so complete it startled his subordinates.

“I hear you have lost your puppy,” he said to Yves. “Can we help you find it?” Moments later, Yves was a free man…and the two policemen who had brought him into the stationhouse were driving around town, looking for a lost puppy.

Your correspondent,

Bill Bonner

Bonn, Germany March 21, 2000

*** Hmm…has the Nasdaq topped out? That’s the question I posed a week or so ago. It’s still the big question. Yesterday’s market action makes it look like more of a possibility. Of course, people have lost a lot of money betting against the Nasdaq. But it’s just a matter of time.

*** The Nasdaq went down 187 points yesterday. While the Dow rose 85. I’ve been expecting this kind of convergence. It makes sense. The Nasdaq has gotten ahead of itself — relative to just about everything, including the Dow. It has to get back where it belongs.

*** The other convergence you have to expect is between the Dow and the great majority of stocks. The Advance/Decline ratio either has to improve…or the Dow has to go down. Yesterday the Dow went up 85 points. But more stocks fell than rose — 1,379 to 1,567. No convergence there…but stay tuned. The Dow seems to be going down — despite the big pop last week.

*** Last week the Dow rose more than 6% while the Nasdaq fell 5%.

*** Grants tells us that the money supply is still moving up at a rapid clip. Over the last three months it rose at a 13% annual rate. Over the last six months, the rate of increase is 9.7%.

*** So, while Greenspan talks about tightening, money growth is actually rather loose. Today is a big day for the Fed. It is expected to increase interest rates by a quarter of a point. The fall in the Nasdaq yesterday should help convince Greenspan and crew that they’re making headway — their small rate increases are gradually turning the markets around. But don’t rule out a bigger increase.

*** Bonds are rising. Gold went up slightly yesterday, too.

*** A “Barron’s” article further illustrates the precarious position of the dot-com companies. When you lose a lot of money — you run the risk of running out of cash. Which is exactly what is happening. The “Barron’s” article tells us that one out of every four of the publicly traded Internet companies will burn up its capital before the end of the year. Three-quarters of the 371 companies are producing negative cash flow.

*** Leslie Whiteley hit the jackpot yesterday. Mr. Whiteley started smoking three years after the federal government began requiring Philip Morris to put a health warning on cigarette packs. Still, the jury found the company negligent and malicious — which clears the way for a big punitive damages award. A year ago, another California jury gave another smoker $50 million.

*** “Computer literacy,” says Al Gore, “is a fundamental civil right.” There is a photo of Gore pandering to Southern voters in “The Economist,” doing a little jig on stage. The man has no dignity or sense.

*** Nor does his Republican opponent. According to “The Economist,” Bush was upset with Al Hunt, The “WSJ’s” resident liberal columnist. Spotting him at a restaurant, Bush cussed him out in front of his family. Bush is no gentleman. Between the two of them, they lack every virtue known to man.

*** I’m staying at a hotel that seems to be in the middle of a field somewhere between Bonn and Koln. The place is long on convenience, but short on charm. But I’m here to work…so what do I care?

*** Germans feel betrayed. They feel like schmucks. They pay high taxes and high living costs…and carefully obey all the rules…while every one else plays an angle of some sort. Here in former West Germany, they’re paying to support the Eastern part of the nation — and they think their Ossie cousins are goofing off. Plus they pay to support the European Union — and they are quite sure the French and Italians, among others, are cheating. And recently they’ve discovered that their own politicians have been playing games, too.

*** But the German stock market soared last year — up about 30%. So the average German investor is taking a “I’m going to get mine” view…the heck with the rest of the world.