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Contributed by Bill Bonner
Publisher of: The Fleet Street Letter



Today:  God, Man, and French Chefs

*** Has Barton Biggs seen the Big Bottom...?

*** Mr. Bear takes a holiday...

*** Credit cycle? What credit cycle? BOA enters the "debt" 
business. Nine out of 10 analysts are wrong. A chef goes 
mad...and more!

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*** "Maybe we've seen the worst," said one analyst 
yesterday as the Dow rose 12 points and the Nasdaq shot up 
97, to close above 3,000. 

*** Long-time bear, Barton Biggs thinks he's seen a Big 
Bottom. Biggs says he expects the Nasdaq to rise 25% in the 
weeks ahead.

*** Investors are expecting the Supreme Court to put an end 
to the election purgatory today...and believe that the 
long-awaited end-of-the-year rally is finally underway.

*** Maybe it is. If I were Mr. Bear...I would probably be 
ready for a break. And it wouldn't surprise me if the rally 
were strong enough to make us wonder about our major 
hypothesis: that the bull market is over...and the real Big 
Bottom won't be seen until people stop looking for 
it...that is, when stock prices work their way down so low 
that people give up thinking about them.

*** Intel rose more than $3 yesterday...along with Cisco, 
another `must own' Big Tech, which went up about $2.50.

*** But not all techs rose. Sun Microsystems fell 12%. JNI 
fell 45%. 

*** The Bank of America is a trendsetter. The bank warned 
that bad debt losses may reach $1.2 billion in the last 
quarter of the year. But eager to turn lemons into 
lemonade, the bankers announced that they were setting up a 
new "debt business." "This is a reflection of the turn in 
the credit cycle," remarked a fixed-income analyst.

*** Credit cycle? There wasn't even supposed to be a credit 
cycle anymore. Not after the `New Economy' was invented. 
And Bruce Steinberg, chief economist at Merrill Lynch, says 
he thinks the New Economy is still alive and well. After a 
brief interlude of worry and doubt, opines Steinberg, 
businesses will still borrow in order to make huge new 
investments in new technology. 

*** Stephen Roach, meanwhile, holds a similar post at rival 
firm Morgan Stanley Dean Witter. He believes the steep 
incline of the downturn in economic growth is telling. In 
less than 12 months, GDP growth will drop from over 6% to 
less than 2%, he predicts. "This is a recession-style 
compression in the growth rate," he says.

*** Don't worry, replies Steinberg, "That was an incredibly 
important statement by Greenspan," he says, referring to 
Greenspan's speech last week. "It means that the Fed will 
not sit around and let the economy sink into recession."

*** Greenspan will "be reactive, not proactive," reasons 
Roach. "Whatever the Fed does early next year will be too 
little, too late..."

*** The trouble with economists and analysts is that they 
are notoriously wrong. The Wall Street Journal looked at 
the forecasts for the year 2,000 from 11 top Wall Street 
analysts. Nine of them said the S&P would go up over the 
year...above 1600. (It is, of course, down for the 1369.) Only one guessed right about the direction 
of the S&P.

*** That in mind, you may now consider the news that a 
group of top analysts came out yesterday and said the S&P 
is now at its most attractive level in 2 years.

*** The dollar rose a little yesterday. It is back to about 
87 cents per euro. The dollar may have topped out...but it, 
like the Dow, is dawdling rather than diving down directly.

*** Oil rose a little, a dollar and six cents.

*** "Will consult for food," reads the headline on Red 
Herring. The Internet consulting firms have fallen along 
with their clients. The average consulting company stock is 
down 71.6% since October 1.

*** The Dec. 4 issue of Barrons included an ad for the 
American Century Vista fund - a fund with heavy investments 
in tech stocks. The ad quoted a 12-month rate of return of 
108.12%. But the number is asterisked. A footnote tells you 
that the return was calculated through Sept. 30. What a 
difference a few weeks make! By the time the ad appeared, 
the actual return had declined by nearly 86 percentage 
points. Similarly, ad an for T.Rowe Price's Science & 
Technology fund ran in the Nov. 27 issue of Business Week, 
citing a return of 38.42%. Yet, again, updating the return 
to the date of the ad would have given the fund a loss of 

*** I took both girls, Sophia and Maria (pronounced Mariah) 
to dinner last night. I'm leaving for the U.S. today...I'll 
be gone almost until Christmas eve. So we found a good 
restaurant on the Avenue Kleber. Little did we know that 
the chef was about to have a nervous breakdown...more 

*** Also, I know that there are a lot of new readers 
(thousands of them) to the Daily perhaps it 
is time for an introduction...again, more below.

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The conversation in the rather up-market "Les Bouchons de 
Francois Clerc" came to an immediate halt. Everyone had 
heard the booming voice in the kitchen. Someone was `losing 

I will do my best to translate, without offending your 
refined sensibilities, dear reader:

"C'est une catastrophe! This place is a bordello filled 
with the excrement of fat porcine animals of low 
intelligence who prostitute themselves."

It was a remarkable stream of cussing which went on for 
several minutes. I had heard nothing like it, even when 
Pierre skinned his knuckles while trying to fix the 

Maria laughed. Other diners looked at each other 
awkwardly...or down at their food nervously. Had the man 
lost his mind? What had he done to the food? We could 
imagine tomorrow's headline in the leftist newspaper, 

"Diners Poisoned as Chef Goes Mad!"

I could even imagine the article's slant: sympathy for the 
poor chef who had probably been asked to work more than his 
usual 35 hours and was justifiably indignant over the 
working conditions, or perhaps over the condition of the 
carrots he was given to work with...along with a certain 
unstated contempt for the dead bourgeois customers - who 
had driven the poor man mad.

This is my first experience with a chef gone berserk. But 
they must go crazy all the time. French diners are very 
demanding. And very critical. They take food seriously.

At least a couple DR readers have wondered why I make my 
home in France. To some, living in France in the time of 
Chirac has no more appeal than serious dental work in the 
time of Colbert. But in reply to the question, I respond 
that life, like theatre, is lived as either tragedy or 
comedy. An American in France sees the comedy in things. We 
are like Chevy Chase in his movie, "European Vacation," too 
ignorant to worry about what the chef puts in the soup... 
and too romantic to care. 

And there is another reason - which helps explain, or 
perhaps illustrate, many of the ideas you find in the Daily 
Reckoning...which I will explain.

The French take many things seriously. Maria and Sophia 
recounted their experiences at school, Maria doing wickedly 
accurate impersonations of some of the characters at the 
Instituted de la Tour...and Sophia reporting, in depth, on 
the strange goings-on at the Ecole Actif Bilingue.

Poor Diane! Maria reported that her friend broke down in 
tears as her teacher evaluated her work in front of the 
entire class. Apparently, each of the students is asked to 
stand as the teacher tells her how she is doing. The 
pressure is intense. Teachers in France do not worry about 
a child's self-esteem. Students are criticized sharply, 
almost mercilessly. It is hard to feel sympathetic towards 
a 14-year-old boy. But Maria's account of how teachers 
picked on the only two boys in her class brought me close. 

I have also heard parents criticize their children in a 
manner that would seem harsh in America. But parents are 
expected to spend a lot of time pushing their children to 
do well in school. So much depends on getting good grades 
in France...the whole country seems to be run by people who 
did well in secondary school, took competitive exams and 
got into the elite `grand ecoles' such as E.N.A., the 
school of administration that prepares most of France's 
high-ranking business and political leaders.

"The enarques [as graduates from E.N.A. are called] are 
untouchable," says a friend of mine, asking not to be 
quoted. "There are always scandals in France - and people 
going to jail. But the enarques never go to jail. Because 
the judges are enarques too."

[I am secretly hoping that maybe Henry will make it into 
E.N.A...and will make me untouchable too.]

Sophia's school is completely different from Maria's. It is 
a school for foreigners, and perhaps redundantly, for 
misfits. Sophia is there because her French is not good 
enough for the regular schools. Unlike the younger 
children, she has had to learn French the hard way - by 
studying it.

There are four major groups in Sophia's school. There are 
the French - who are usually hard cases - the "Arabs," the 
"Koreans," and the Anglo-Saxons. Thus do school children 
divide the races of mankind.

"Instruction is supposed to be in English," Sophia told us. 
"But nobody speaks English except us, the Anglo-Saxons. The 
rest speak various things that sound a little like they 
might be English...but I usually can't understand a word."


"But the Koreans," as Sophia's schoolmates refer to all the 
East Asians in their school, "who barely speak English, 
seem to be the only ones who get good grades."

This little insight by Sophia triggered a recollection in 
her sister:

"Dad," she asked, "How come you and Mom argue about such 
silly things? I mean, I heard Martine's parents arguing 
about money...or maybe it was over what kind of car they 
were going to buy."

"But you and mom," she continued, "last weekend...I mean 
who ever heard of parents arguing over who was that... 

Ah yes, Darwin. Well, that. 

"Maria, we weren't arguing," I protested, trying to close 
ranks with Elizabeth, "we were just discussing it."

But Koreans!

Yes - we had mentioned Koreans. I had actually. East Asians 
seem to work harder; and intelligence tests suggest that 
they are smarter than Anglo-Saxons. Or the French. In 
Darwinian terms, they seem to have a competitive advantage. 
How come the whole world is not full of Koreans? Because, I 
had pointed out to Elizabeth, Darwin's theory is flawed. It 
was a silly point...but a silly argument needs silly 

Who could take an argument over Darwinism seriously? Even 
worse, who could take Darwinism seriously? Still, it is fun 
to argue about it...

Uh oh...I'm going to miss my plane if I don't leave now.

More to come...and Darwinism...and living in France...

And, of course, more...


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"

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Last modified: April 01, 2001

Published By Tulips and Bears LLC