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Contributed by Bill Bonner
Publisher of: The Fleet Street Letter



Today:  Screenplays of the Wrasslin' Genre

In Today's Daily Reckoning:
*** Dow above 50 day moving average... but down 7% for 
the year
*** Leading economic indicators holding steady...
*** Argentine Bond update... and Dr. Koop embroiled in 

*** Be warned... Bill is returning to France by slow 
ferry today. The following has been scripted by Addison, 
who's holding down the fort in Paris.

*** The Dow climbed 80 points to 10,687, coming to rest 
firmly higher than its 50-day moving average of 10,599. 

*** Still the index is down 7% for the year... remains 
below its 200-day moving average of 10,769... and has yet 
to reach Richard Russell's 50% retracement level - the 
magical half-way point between January's high and 
subsequent March low.

*** Russell: "One fact stands out. It's now very hard to 
make money in the stock market. One reason is the sudden 
costly collapse of so many stocks. I check hundreds of 
stocks every day. And each day there are surprises. Today 
I see (surprise) DELL suddenly below 40 - gad, the stock 
was as high as 54 last month. And here's Fannie Mae below 
50, why the stock was 65 last April. Here's GM at 57 
today - but only four months ago, in May, GM was 93. 

"These are all characteristics of grinding, toppy action. 
But the amazing phenomenon is that the public, the stock-
buying public, remains so bullish on equities."

*** Par example... 1587 stocks advanced; 1269 declined on 
the NYSE... 88 stocks claimed new high ground and only 38 
staked out a new low. Despite difficulties with investor 
profits, it wasn't a bad 'summer of love' Wednesday on 
the Dow.

*** However, the picture wasn't so creamy for big techs. 
The Nasdaq 100 - bastion of routers, switches and 
hardware - closed 30 points lower to 3049... down over 
551 points since its July 14th high of 4041. Dell Computer 
and CSCO fell 2 and 2 1/4 respectively.

*** The broader Nasdaq index dropped 27 points to 

*** Year to date, the Nasdaq is down just over 10 
percent. A quick look at this year's chart reveals, 
despite "the amazing phenomenon" noted above... the 
Nasdaq, pregnant with downward momentum, is poised to 
challenge May's lows. Bill King: "Now, even Wall St. 
brokers with big corporate chits among tech firms are 
calling for a retest [of the May lows]. Investors must 
now contemplate the possibility that the summer rally is 
over, and after one more tepid rally attempt in August, 
the fall classic - stock liquidation - will commence."

*** A non-rally on the S&P 500 held that broader market 
index in check... it remained steady at 1,438.

*** Also holding steady - the Index of Leading Economic 
Indicators. "If the forecast is accurate," says Reuter's 
"the numbers would mean a break from rapid economic 
growth for the rest of 2000." If the forecast is 

*** "C. Everett Koop sold off $915,000 of his stock a 
week and a half after [auditors filed a] warning with the 
SEC," reports Fleet Street Letter's Ned Harper. A lawsuit 
filed by shareholders alleges officers of the corporation 
cashed in on the IPO, but failed to alert owners of the 
stock. " In fact, between February 15th and 18th, other 
officers and directors sold shares for a profit of over 
$7 million. Five other board members, including Nancy 
Snyderman (the ABC News health reporter) sold off shares 
- after the warning, of course - for a total haul of over 
$11 million." (see: The Great Dr Koop Swindle)

*** While Internet stocks have proven themselves worthy 
of little more than these kind of shenanigans - and 
certainly worth a lot less to investors - the Internet 
itself is here to stay. But can we agree that it has made 
our lives better? More below...

*** Meanwhile, Bill King has also been following the 
growing electrical power shortage, which appears to be, 
in part, caused by massive demand created by Internet 
users and chip makers. King: "After days of record power 
demand in the West... due to scorching heat, five states 
and the feds have commenced an investigation into price 
gouging by electrical companies. Perhaps the electrical 
companies should cite BLS data that shows electrical cost 
declines..." Silicon Valley is so alarmed; they've begun 
to install their own power plants. (See: Is the US 
Running Out of Electricity?)

*** Also, regarding an opportunity to make 183% on 
Argentine bonds mentioned here last week, Steve Sjuggerud 
writes from Ecuador: "I'm in Ecuador, I haven't had a 
chance to answer e-mails yet. I apologize to those of you 
who've tried to contact me." In the meantime, he 
suggested if you're interested in buying the recommended 
bond "the CUSIP number to give your broker is P0450KAB9C. 
Otherwise, call Howard Goldstein at International Assets 
800-432-0000 or 407-629-1400."

*** As I write beneath the mid-morning shadows of the 
medieval cathedral Saint Merry which sits across the 
square from our office, I'm struck by what a 
spectacularly beautiful day it is in Paris today...

Bill returns tomorrow...

Au revoir,


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INTERNET (First aired October 28th, 1999)

"I reckon I'll be at the beck and call of people with 
money all my life," said Oxford, Mississippi's most 
famous drunk, "but thank God I won't be at the beck and 
call of every son of a bitch with 2 cents to buy a 
postage stamp." 

William Faulkner worked for the post office in the days 
when communications still were put on paper, stuffed into 
envelopes and carried to your door. And the days when 
postmen could still be fired for failing to deliver the 

That is, in the days before e-mail. The comment above was 
his remark after he was fired for failing in his duty. 
But it was not necessarily rain, nor sleet, nor dark of 
night that kept him from his appointed rounds. 

Today, I get more than 100 electronic messages every day. 
One Hundred is a key number, because if more than 100 
pile up in my online mailbox, Compuserve sends them 
back...undeliverable. E-mail is a lot faster and more 
convenient. It is better. E-mail is so widely used that I 
rarely get a real letter anymore. And when I is 
usually a disappointment...a form letter...or sometimes 
just a written confirmation of something that I had 
already received electronically. 

There are those who say that the Internet will 
revolutionize life on earth and anyone who fails to 
invest in Internet companies is a fool. There are others, 
fewer in number, lesser in social standing and poorer, 
who say that it is just a lot of hoopla about nothing. 
It's just a fad, like CB radio, they say. Except by a few 
cranky dinner companions, I had not seen this latter view 
expressed until I read "Silicon Snake Oil," by Clifford 

Stoll is a user...but a non- believer. 

I will not hedge or wiggle...but will state my own 
prediction without so much as a soupcon of equivocation: 
Both views will turn out to be correct. 

From an investment point of view, the Internet is now a 
bubble waiting to pop. My faith in this view was 
confirmed yesterday in a very curious phone call. Someone 
called to ask me to take out a big contract to place 
advertising on his website. Would the ads work? Would 
they be cost-effective? The discussion never reached this 
point. Like almost every other entrepreneur in 
Christendom, this fellow was preparing to take his 
website public. He was getting in line for an IPO. And 
what he needed was traffic...eyeballs...faces...and ad 
contracts. And if I would enter an ad contract, it didn't 
matter if the ads worked or not...because he'd give me 
stock options. Investors would see the ad sales contract 
and believe that it was a business deal rather than a 
stock speculation. And we'd all make a killing. I 

Investors have much better odds in Las Vegas than in 
Internet shares. And they get free drinks. And a show. 
Even Barbara Streisand performs. If you have lost all 
your money...and are feeling suicidal...what better way 
to finish off an evening? 

The Internet is an innovation that has captured the fancy 
of millions of people. But that doesn't mean that it will 
have a direct, profound or beneficial effect. Maybe it 
really is similar to the invention of the printing press. 
Or maybe it is more like the invention of television. 
Probably it is a little of both. 

The printing press did not change people's lives quickly 
nor in a predictable way. Presses were first used for 
printing Bibles. The Bibles put the word of God into the 
hands of clergy and laymen who came up with their own 
interpretations of what it meant. It was not long before 
Europe was fighting religious wars...which lasted for 
three centuries. 

Much later, moveable type, cheap paper and industrial 
processes made it possible to sell newspapers to the 
masses - at a profit. For the first time, people came to 
share a common language...a common view of events and 
trends...and a common narrative that defined them as a 
nation. The printing press thus enabled the creation of 
the nation state. 

Also, it was the printing press that allowed explorers to 
share the information and excitement of their discoveries 
in the post-Columbus era. Other expeditions were mounted 
to the New World - which might have otherwise been 
ignored - resulting in the settlement of two new well as the importation of vast 
quantities of gold into Europe. 

The price of gold plummeted. 

The Internet definitely speeds up communications. E-mail 
is always urgent. But it is not necessarily important. 
And that which is done urgently is not necessarily worth 
doing. Or done well. 

An interesting new study shows the effects of online 
investing. A pair of California-Davis economists watched 
a group of 1,607 investors. They found they outperformed 
the market by 2.4% per year, which is quite good, before 
they went online. Then when they went online to do their 
investing, they under-performed by 3.5% annually. A 
little bit of reflection might be a good idea. 

TV was a big improvement. It proved so popular that the 
habits of the entire world have been altered. People now 
watch several hours of TV, on average, per day all over 
the globe. 

Formerly, they spent that time in a number of ways. Who 
knows what they were doing. But they now prefer to watch 
television. The world has changed. But so what? You'd be 
hard pressed to show how it had changed for the better. 
At its debut, it was claimed that TV would revolutionize 
education...and that it would raise the level of popular 
culture. Analysts in `49 imagined viewers glued to their 
sets as the Royal Shakespeare Company presented 
"Coriolanus." They thought the TV would replace teachers, 
too...and make learning fun. 

Actually, in 1922 Thomas Edison predicted that movies 
would make teachers obsolete. And now Al Gore predicts 
that connecting kids to the information highway will 
enable them to delve into the mysteries of the Library of 

Of course, in the classroom, TVs became a minor 
distraction. At home they became a major one. Kids 
learned about new toys...and became current with popular 
gags and prejudices. But there were no literacy 
improvements attributed to TV or movies. And the number 
of teachers increased. 

And the effect of TV and movies on popular culture may 
have been best described in the movie "Barton Fink," in 
which a character who is meant to represent William 
Faulkner during his Hollywood years is shown kneeling on 
a hankerchief in a seersucker suit, throwing up in a 
toilet. He rises, cleans himself up a bit and offers 
Barton a drink: 

"No thanks," says Barton, "I never drink before noon." 

"I do require a bit of the social lubricant from time to 
time," says the Faulkner character...taking a drink. 
Barton recognizes him as [Faulkner] and asks what he is 
working on in Hollywood. 

"I'm writing a screenplay of the wrasslin' genre," 
replies the great writer. 

Bill Bonner 
About The Daily Reckoning:
The Daily Reckoning... "more sense in one e-mail than a month of CNBC."  That's what readers are saying about The Daily Reckoning.

Bill Bonner, recognized internationally as a brilliant writer, entrepreneur
and publisher of The Fleet Street Letter, offers you his daily market
commentary absolutely FREE. For the first time, outsiders are getting a peek into his powerful and profitable investment insights. Bill's practical contrarian advice empowers even average investors to protect their hard-earned wealth and achieve amazing gains.

Bonner writes his email letter from Paris, France, each morning --
describing the wacky, wonderful world of investment, politics and everything remotely related. Irreverent. Sharp. Honest. Thoroughly, unabashedly contrarian. It's also among the fastest growing e-letter on the Internet.  It's a brand new service... but it has a distinguished history..

For nearly 62 year, The Fleet Street Letter, the oldest investment
advisory letter in the English language has consistently delivered
invaluable economic and political foresights to savvy investors. Current readers regularly enjoy impressive investment gains even as the market falters. Here's more from his online readers...

"My small portfolio has followed true to my wife's description of my
investment philosophy, "buy high and sell low." However, that has changed since I started religiously reading DR... I credit this reversal of fortune directly to The Daily Reckoning"

" Your Daily Reckoning is the best in business commentary... mixing
serious warnings and the state of the market with gentle humor"

"It is actually better than some of the newsletters that I pay to

"Your statements and philosophy have kept me from storming into the market and in fact [I'm] making some money in put options" (Frank)

Open your mind with the most stimulating e-mail newsletter that you'll ever read, The Daily Reckoning. To receive this free daily email newsletter click here now.

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Last modified: April 01, 2001

Published By Tulips and Bears LLC