Contributed by Bill
Publisher of: The
Fleet Street Letter
DELRAY BEACH, FLORIDA
THURSDAY, 5 APRIL 2001
A Wicked World
*** Wicked world continues...Nasdaq down...Lucent
close to bankruptcy. So is PSINet.
*** People bought cars last month...consumers still
spending...so what's the problem? Nightmare on Wall
*** European telecoms - buying a defunct technology
for $$ billions...gold up...Argentina in a
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*** Oh what a wicked world! The Nasdaq dropped
another 34 points yesterday, amid rumors that
Lucent was headed for bankruptcy.
*** The Nasdaq has lost nearly 10% of its value in
the last 3 days. It seems almost unbelievable. The
index, now at 1,638, was 5,048 only a year ago.
*** Lucent fell to $5.50, well below its 1996
Initial Offer Price of $6.38. But the company says
it's not going bust. And Abbey Cohen says things
are going to get better in the market.
*** Also, auto sales for March were stronger than
anyone expected - running at an annual rate of 17.1
million. American consumers continue to spend - and
to buy foreign products. Toyota, for example, had
its best month ever.
*** Dallas Fed chief, Robert McTeer, urged
consumers to "go out and buy an SUV." Looks like
they took the bait.
*** So what's the problem?
*** Consumer debt now equals 71% of GDP and 85% of
personal incomes - a record on both points. And
Moody's says that households' liquid assets fell
13.2% in the first quarter of this year, compared
to the same period last year.
*** "While consumers are continuing to empty their
wallets at a record pace," writes Chad Hudson on
the Prudent Bear website, "the day will come when
they realize they need to start saving again."
*** "Nightmare on Wall Street - Tightfisted
Consumers" says the headline of Gretchen
Morgenson's column in the N.Y.TIMES. "Our general
feeling is that the next shoe to drop in the
economy is a slowdown in consumer spending," said
Jason Trennert, an economist with the ISI Group.
*** While the Nasdaq fell, the Dow rose 30 points.
GE was down a little.
*** The dollar index fell too - leaving the euro
back above 90 cents. Could the long-awaited bull
market in the euro finally be getting underway?
*** Gold rose too, pushing the HUI (an index of
gold mining companies) up 4%.
*** European telecoms invested billions in what was
to be the next generation of wireless services. But
"the [third generation] technology adopted by
European operators," writes Marshall Auerback, "may
ultimately prove to be irrelevant as it is
surpassed by more cost effective alternatives."
Both American and Japanese companies have already
demonstrated better systems - faster and cheaper -
working on a different standard. The billions
invested may end up being scrapped like old 8 track
tape players. That is the trouble with new
technology - there is always newer technology.
*** Cisco is down 83%. One of its major customers -
PSINet - is near bankruptcy. And many others, to
whom it extended vendor financing, are going broke.
Want to buy a Cisco router? You can get it for 20%
of the list price at auction. "The market for
networking equipment is in complete freefall," said
an industry expert.
*** Argentina has been in a slump for 33 months. A
report in yesterday's news said that the number of
desperately poor people in Buenos Aires, those
living on less than $1.60 per day, has risen to
almost a million.
*** Australia cut its interest rates to 5% -
following the Fed lead.
*** Poor Maria. The anxious 15-year-old has a
talent agent and is going for a casting call today.
She takes modern dance and ballet lessons - and
wants to start a career in the theatre. But she
still has to pass her 'brevet' - a difficult test
they give all students in the 9th grade. If you
don't pass it, you don't get to go to the next
grade. She faces the first installment tomorrow.
*** "Would you talk to her?" Elizabeth asked me.
"Maybe she'll listen to you more than she does to
me. She's got to take her schoolwork more
*** And so I spoke to Maria, giving her fatherly
advice. What good did it do? Not much, dear reader,
*** And what else? I can't think of a thing.
Oh...Jules, 13, is on a school trip to Toronto. The
poor Canadians were expecting a French kid. Jules,
meanwhile, was looking forward to speaking English.
Well, I just talked to Jules. He's staying with the
Lin family, where they speak Chinese at home!
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"Words must be a little wild, for they are the
assaults of thought on the unthinking."
John Maynard Keynes
All is but toys: renown, and grace, is dead;
The wine of life is drawn, and the mere lees
Is left this vault to brag of.
To-morrow, and to-morrow, and to-morrow,
Creeps in this petty pace from day to day,
To the last syllable of recorded time;
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life's but a walking shadow; a poor player,
That struts and frets his hour upon the stage,
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Here at the Daily Reckoning the minutes pass by as
elsewhere. We rant and rave about the price of
gold, the future of Amazon.com, and the futility of
Fed policy. Occasionally, we permit ourselves a
visit to philosophy or politics...or to the theatre
of contemporary life that goes on all around us.
But does any of it really matter? Who knows.
But at least tales told by idiots can be
And guess what? While we fume and fumble over the
latest P/E ratios, other battles - every bit as
preposterous - go on in other fields.
My evidence for this is an article in this month's
Harper's Magazine. "Tense Present" describes the
rip-roaring clashes that have been going on behind
the scenes among the people who put together
dictionaries. It is hard to imagine, but these
people, too, have their farcical arguments, their
fanatics, and their martyrs.
Do you say "irregardless?" Do you split your
infinitives? Do you use words casually,
promiscuously, almost recklessly - as I do -
without worrying about what is 'correct'?
"Who sets down all those rules that we all know
about from childhood - the idea that we must never
end a sentence with a preposition or begin one with
a conjunction?" asks Bill Bryson in "Mother Tongue:
English and How it Got that Way."
Well, lexicographers, that's who. And they fall
into two main camps: the Descriptivists and the
The French, by the way, are - by habit, disposition
and law - prescriptivists. The Academy Francaise -
a group of scholars appointed by the government -
decides what the meaning of 'infect' or 'imbecile'
is and figures out where the impersonal pronouns
and reflexive participial expressions fit into the
How do they know? Well, that is the point. They
know because they decide the issue. Otherwise,
people might put their prepositions wherever they
But the Anglo-Saxon world is different. Just as the
common law arose spontaneously - from the actual
decisions, customs and usage of the people - so did
"That is nonsense up with which I will not put,"
said Winston Churchill, after his grammar was
corrected by a prescriptivist interloquater.
Churchill thought he had the right to stick his
propositions at the beginning of a sentence or at
the end - and if people didn't like where they were
placed, they could shove them up...
"A dictionary should have no traffic with
artificial notions of correctness or superiority.
It should be descriptive and not prescriptive,"
wrote editor Philip Gove in Webster's Third
By the 1970s, Descriptivism had completely taken
over dictionaries - and the U.S. school system.
Teachers often didn't know the rules of Standard
White English themselves. And besides, the
prescriptive rules were seen as "inherently
capitalist, elitist, sexist, racist, xenophobic,
homophobic: unfair," writes David Foster Wallace,
a SWE speaker.
Debates between the Descriptivists and the
Precriptivists can get pretty hot. Because there is
a lot at stake. Language, and how it is used, has
an effect on the way people think - and what they
do. A 'homeless' person gets our sympathy - or at
least he did as long as the linguistic subterfuge
went unnoticed. But a bum?
Descriptivists maintain that they are only
describing the language as it actually is. They
believe they are scientists - who are explaining
how the language works, much like physicists tell
you how the physical world works.
"A dictionary can be an 'authority' only in the
sense in which a book of chemistry or of physics or
of botany can be an 'authority' - by the accuracy
and the completeness of its record of the observed
facts of the field examined in accord with the
latest principles and techniques of the particular
To those of us who begin our sentences with
conjunctions whenever we can find one and split
infinitives with a meat cleaver, this sounds
But here is Wallace's response:
"This is so stupid it practically drools. An
'authoritative' physics text presents the results
of physicists' observations and physicists'
theories about those observations. If a physics
textbook operated on Descriptivist principles, the
fact that some Americans believe that electricity
flows better downhill (based upon the observed fact
that power lines tend to run high above the homes
they serve) would require the Electricity Flows
Better Downhill Theory to be included as a 'valid'
theory in the textbook."
According to the Descriptivists, one usage is as
good as another. So, if you say "anxious" when you
mean "eager," as many people do, then "anxious"
The Prescriptivists point out that language has a
function, like electricity. And using it properly
is important - otherwise, someone is going to get
A recent news headline, for example, informed me
that a "Woman Finds Long-Lost Daughter After 18
Years in Check-out Line."
Eighteen years is a long time to spend in a check-
out line. But at least it paid off.
Your editor, choosing his words carefully,
The Daily Reckoning:|
author Bill Bonner
Bill Bonner is,
in spite of himself, a natural born contrarian. Early each morning, Bill
writes The Daily
Reckoninghis take on the financial markets and whats going
on in the worldand sends it off by e-mail before most Americans
alarm clocks have buzzed. Many readers say it's the first thing they want
to read when they get upnot only because it's informative and thought
provoking, but also it's inspiring, in its own quirky and provocative way.
Of course, there's
much more to Bill than his daily market commentary. He's also the founder
and president of Agora Publishing, one of the world's most successful
consumer newsletter publishing companies. Bill's passion for international
travel and big ideas are reflected in the company he's successfully built.
In 1979, he began publishing International Living and Hulbert's
Financial Digest . Since then, the company has grown to include
dozens of newsletters focusing on health, travel, and finance. Bill has
vigorously expanded from Agora's home base in Baltimore, Maryland since
the early 90sopening offices in Florida, London, Paris, Ireland, and
subsidiaries include Pickering
& Chatto, a prestigious academic press in London and Les
Belles Lettres in Paris, best known as a publisher of classical
literature in bilingual editions.