The More They Stay The Same


Professional, intelligent and sexy. I’ll make a great impression on your behalf All with the elegance and grace of a true lady. Available for intimate evenings and corporate affairs. Shopping or a round of golf. I also ride and fly. Whatever your pleasure, I’ll be at your side.”

The ad, which appears on a website devoted to “escorts” in the L.A. area, also shows a photo of Veronica. I have not met her, nor even seen the photo, but Scott Shuger, writing in “Slate,” reports that she is attractive.

Veronica and others like her are finding ways to use the world’s newest technological wonder — the Internet — in the service of the world’s oldest profession.

And thanks to the Internet — business is improving. Veronica is available for $500 per hour or $2,500 for an evening. Her clients include the usual assortment of tycoons and traveling salesmen…as well as something new — rich, socially awkward computer geeks.

I didn’t mind when the geeks got rich. I didn’t mind when Bezos got his photo on magazine covers and named the “Man of the Year.” But the thought of these guys with Veronica stirs some atavistic resentment which I will not even attempt to explore. It is as if the Huns have settled into the village for the winter — stealing our crops and sleeping with our women…while we shiver in the mountains.

Readers of this column know that our challenge is to find the “trend whose premise is false.” Pure intellectual curiosity is not the only motivation. We also know that you can make a lot of money as an investor — if you can see what others can’t.

Mr. Deport and I, both born in 1948, sat around drinking tea on the weekend and reflecting how much life had changed during our lifetimes. The small talk appropriate to such occasions includes the view that the pace of change is picking up. At present, most of the world seems to think that things are changing rapidly — thanks to communications technologies, generally, and the Internet specifically.

But as I noted in yesterday’s reflection, the most dramatic changes in this century occurred before we were born.

I return to this subject today because I think it is important to understand that the Internet revolution may not be as big an event as people think.

In the book I was reading on the plane over to Baltimore, I discovered that Hitler stayed in touch with General Paulus, whose armies were later trapped in Stalingrad, by means of teleconference. Messages would be relayed — typed out — in “real time,” with Hitler and his aides at one end and the officers at the front on the other. This was in 1941. And how different is that from the telegraph messages routinely passed across hundreds of miles in the last century — or the Internet chat room conversations of today?

There have been many improvements in communications since 1941…but they’ve been incremental. And, of course, content quality is another issue.

Are the TV shows of today better than “I Love Lucy”? Are today’s movies better than, say, “Gone with the Wind,” which was made in 1938. Is air travel really better? In some ways, it is worse — as flying has become more ubiquitous, the standards of service have actually declined. Are the tunes you hear on the radio better than Jimmy Rogers or Enrico Caruso? Is your car more comfortable?

At this point, you may be thinking — what a hopeless retrograde! But I am not disputing the idea of progress. I am just pointing out that progress occurs by fits and starts. And not all of it is for the better. WWII was no improvement over WWI, for example. Nor is the progress of murder rates in Baltimore anything to be proud of.

The biggest leap forward happened in the first half of the century. That is when the Western world went from a largely-agricultural, late 19th century culture to a fully modern one.

This happened not only in politics and technology — but in the arts, too. It was at the Paris show of 1913 that Marcel Duchamps shocked the world with his display of a urinal as a work of art. From the Paris show to the Brooklyn Museum of Art’s showing of the Saatchi collection, what has changed? Only the price tags have risen…and what used to be cheap and shockingly new is now appallingly expensive and passe.

The “modern” movement in literature — in which writers probed the ulterior surfaces of bourgeois life to try to elicit a howl of pain and outrage — was already mature by 1950. James Joyce published “Finnegans Wake” in 1939. Two years later, Joyce was dead. And T.S. Eliot had already pulled back away from nihilism to embrace royalism, classicism and Catholicism. Now, modernism in literature has run its course from novelty to grotesque parody.

And what about sartorial fashions? By 1940 the bustles and gowns of the fin de siecle period had been completely replaced by outfits that look little different from what civilized people wear today. I am not talking about shorts and t-shirts or the skater get- ups that my daughter Sophia threatens to put on from time to time. Serious people still wear suits and dresses and other clothes that look a lot like the clothes my parents wore in the ’30s and ’40s.

I have not reached a conclusion about this…I’m still working on it. But I’m deeply suspicious of the belief in revolutionary progress that is currently in fashion.

Of course, Veronica could care less. She is in it for the money. And the money is good. Another high class hooker in the “Slate” article was identified as “Anne Marie.” She charges $5,800 a day — with a two-day minimum. No mention of whether she gets stock options. But she’s doing a brisk trade because of what Shuger identifies as the “eBay effect.” Things that you might have wanted, but didn’t know where to find, are only a few clicks away. “Thanks to the Web,” he writes, “exchanging dead presidents for live girls couldn’t be easier.”

As in other professions…the Internet has made a difference…but the trade is essentially the same.

Bill Bonner

Baltimore, MD February 2, 2000

*** Everyone is on pins and needles waiting to see what Alan Greenspan will do today. Well, we’re on the point of one very Big Needle — the Nasdaq. I call the Nasdaq super stocks the “Rocket Chips”…because the chart shows them going almost straight up during the last half of last year.

*** It’s only a matter of time before they go down — and maybe straight down. Because they’re selling at lunatic prices…that cannot hope to be justified by earnings growth. They would have to grow profits at the highest levels ever recorded for any public company — and maintain that level forever! Ain’t gonna happen.

*** And sooner or later, investors arrive at what George Soros calls “a moment of truth” — when they realize that their expectations cannot be met. For a while, investors keep playing the game…acting as though everything is okay. The greater fools buy the dips. Smart investors sell the rallies. And then, something happens and the whole thing comes crashing down.

*** Meanwhile, the market as a whole has been going down since June 1998. Most stocks have lost ground since then, a fact that is disguised by the Nasdaq bubble…and the rise of the major indexes.

*** Yesterday, for example, the Dow rose 100 points. And the Nasdaq rose 111. But only 37 stocks hit new highs, while 136 hit new lows. Investors have been selling the losers — usually “Old Economy” stocks. And they’ve been buying the winners — typically, the “New Economy” stocks and those in the leading indexes.

*** So, the indexes go up…while most stocks go down. This has been going on for more than a year and a half. But it can’t go on forever. Investors saw the same pattern in the run up to the stock crash of ’29 and before the bear market of ’73-’74. Most stocks fell for months before the Dow went down.

*** I expect this year to be marked by CONVERGENCE — between the Dow and the rest of the market, between the New Economy and the old one, and between Wall Street and Main Street. But no one can predict the future. So we just watch carefully…and amuse ourselves by trying to figure out what is going on.

*** The markets probably think Greenspan will raise rates a quarter of a point. He has been Mr. Moderation in the past…and probably will be now. Most likely, today’s Fed announcement will have no impact.

*** The debris from the Japanese crash of ’89 is still being swept up. Japan’s 17 largest banks have written off $450 billion in bad loans already and are still doing so. Consumer spending in Japan actually went down in December. It was more than 4% less than December a year ago. The Japanese could do no wrong in the mid- `80s. Now it seems they can do no right.

*** GM is in the news today. The company is selling tracking stock in its Hughes unit and will use the money to buy back GM shares. GM shares are cheap. When you take out the value locked in Hughes and other subsidiary operations, they are practically selling the auto business for nothing. GM shares rose $4.68 since yesterday on the news.

*** Austria is bringing the Freedom Party into the government — in defiance of Euroland. This has been an entertaining drama. The Freedom Party has been tagged as a haven for neo-Nazis. Pretty serious charge. But where’s the evidence? The press presents none. I have read the accounts carefully. The party leader sounds more like Ross Perot than Joseph Goebbels. He did say that Russians are “experts in blackmail and mugging.” And Poles are “car thieves.” Big deal.

*** The other charge leveled against Joerg Haider, Freedom Party leader, is that he comes from a “Nazi family.” I don’t know what to make of that. Wasn’t that one of National Socialism’s most visible sins — judging people by their lineage?

*** I called Paris yesterday and found out that the kids had gotten an unexpected holiday from school. The subway and bus system operators were all on strike, so they closed many schools.

*** Henry, 9 years old, has asked me to pick up as much Pokemon stuff as I can while I am in the United States. The Paris stores are sold out. He’s preparing a magazine for Pokemon aficionados — complete with cartoons and trading advice. Hmmm…

The Daily Reckoning