In Today's Daily Reckoning:
*** Fruit flies...tree-toads...and yeast - all on the
family tree
*** The Dow went up...gold went down...
*** Do you want some excitement?
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**** Is this a wonderful time to be alive, or what?
Yesterday, the President of the U.S. and the British Prime
Minister joined in announcing the near-completion of human
genome project. Now we will be able to find our way
around...with the help of this 'wondrous map'... more
below.
*** Buy the rumor, sell the news. Celera Genomics stock
fell $13 as the news was announced. The company has a
market cap of $6.46 billion. It lost $1.70 per share last
year...or about $90 million. Many thanks to the charitable
investors who fund this sort of project...
*** Overall, the Dow rose 138 points as this Summer of Love
progressed from flirtation to deep kissing. And the Nasdaq
rose 66 points.
*** Advancing stocks outnumbered declining ones 1482 to
1341. But there were only 46 new highs, compared to 60 new
lows.
*** Stocks and bonds rose, the press informs us, because
investors believe Greenspan will not raise rates this
month. Also, estimates of the expected budget surplus have
doubled.
*** The bigger picture, however, is that we are still in a
bear market. Michael Belkin (via William Fleckenstien of
SiliconInvestor.com): "[A]s our work suggests, if the
bubble peaked in March on a speculative orgy ignited by the
misguided Federal Reserve Y2K monetary binge, then
investors should consult market history for the level at
which declines from bubble peaks usually conclude for a
measure of current downside risk. If speculative bubbles
are simply excessive deviation from long-term trend - then
post-bubble corrections are just reversion to the mean.
"Historical data shows a clear tendency for declines to
reach the 200 week average area in the first decline after
a speculative bubble peak. Tech and TMT are only about
halfway to that support zone. Based on trend
deviation/reversion theory, the Nasdaq and global TMT
stocks still have 30 percent to 60 percent immediate
downside risk. It's taking longer than usual to get there,
but history suggests that it is premature to catch falling
knives and a better buying opportunity lies ahead - at a
much lower level (Nasdaq 2,200)"
*** The price of gold fell another 70 cents. I had a drink
yesterday afternoon with an old friend, Martin Spring, a
financial analyst from South Africa, attending the Gold
Conference. The conversation never got to gold...but Martin
has been covering Asian markets for 30 years.
*** "If you want some excitement," he said, forgetting that
he was suffering from pneumonia, "look at Korea. When the
Koreans decide to do something...they go at with
astonishing energy and determination. And Korean stocks are
cheap. Samsung is one of the world's leading electronics
companies. And you can buy it at 9 times sales."
*** Jeff Bezos said the reports that Amazon was running out
of money were "ridiculous." The stock rose 1/16th of a
point.
*** And here's an interesting little note about what may
come after the 'summer of love': "In practical terms,"
wrote Charles Maxwell, whose affiliation I do not know,
"unless the coming winter approaches the highly-unusual,
+13% warmer-than-usual season we have just passed through,
US gas storage numbers are accumulating in a potentially
disastrous pattern of insufficient gas to take this country
through the full span of cold weather to April of 2001."
(See: Natural Gas Panic: Get Ready To Take Profits http://www.dailyreckoning.com/body_headline.cfm?id=207)
*** "Biotech Investors Advised to Beware Hype" warned the
headline on Reuters this morning. The Nasdaq biotech index
rose 3.5% yesterday. It is up 38% for the year.
Innocent investors take note: Biotech Bubbles are
notoriously fragile. They swell up quickly...and then, like
a summer romance...poof!
*** But what is good for humans - that is, the prospect of
genetic tinkering - is apparently not so good for plants.
While the human genome project is applauded, the genetic
modification of food is thought to be the devil's own work.
Biotech companies in the agricultural industry are
shunned...and cheap...reports James Passin.
*** The poor plants! Not only are they denied the benefits
of genetic engineering, they are also eaten without mercy.
Often live. Even people with the tenderness of heart to
spare animals, seem to have no concern whatever for the
suffering of plants.
*** A group of International Living
(http://www.internationalliving.com) subscribers arrived in
Paris yesterday - despite efforts of French air traffic
controllers. The controllers went on strike to protest
possible privatization initiatives. Most flights were
canceled. Airports were deserted.
*** This followed by a couple of weeks if French pilots'
refusing to speak English. Air France thought it would
require the pilots to speak English to controllers - as
they must in the rest of the world's airports. But the
experiment lasted on only 15 days.
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Powers and thoughts within us, that we
Know not, till they rise
Through the stream of conscious action from where the
Self in secret lies.
Another Charles Maxwell
1856
In 1831, Michael Faraday made a discovery. When a piece of
copper is held near a varying magnetic field an electric
current is produced - a process called electromagnetic
induction. This, and Orsted's discovery of the opposite
phenomenon, that an electric current produces a magnetic
field, formed the basis for what Professor Gordon believes
was one of the 'first order' revolutions of the 19th
century: electrical power.
But then, as now, no one could predict the future. When
Faraday was asked what practical use his discovery might
have, he responded: "What use is a baby?"
Life goes on. No one is quite sure where it is going...but
it is in motion. This is true at both micro and macro
levels.
My daughter, Sophia, is not sure her life is going forward.
We had a birthday party for her last weekend. She is
leaving for the US this week, where she will turn 18 in a
few days. She'll spend the summer in New York, taking care
of nieces and nephews. We'll stay in touch with her by e-
mail. But when I passed her room in the evening, I
discovered something you can never get from an e-mail.
The digital, Internet Age...proclaimed as a communications
revolution is an imposter. It is not a revolution at all -
as I pointed out yesterday. What's more, it may stifle
communication.
As I passed Sophia's room, I heard quiet sobs.
Pater Familias knocked softly, entered and looked at his
daughter.
"Were you crying?"
"No."
Had this been an e-mail exchange, we could have moved on to
other subjects. But I could see from her face that she was
upset.
We had a nice talk. Sophia is both frustrated and
frightened. Life only begins for teenagers after they leave
home. Sophia is ready to begin her life - but still trapped
with her family (in a foreign country no less!). Plus, she
is afraid of what the future might hold.
"Don't worry," said the Father Knows Best imitator with
little imagination, "everything will be all right. Life
goes on. We just don't know where it goes. Or how it goes."
Yesterday, life went on. All the world's newspapers
announced the news today:
The "most wondrous map ever produced by humankind" was how
Mr. Clinton described it. It would be "the instruction book
for human life," said James Watson, the American scientist
who won a Nobel Prize for helping to discover the double-
helix structure of DNA in the human genome.
Both Watson and every other commentator compared the genome
project as a revolutionary advance, on a par with the
invention of the printing press.
Thus has the 'summer of love' begun. With the deepest
secrets of life itself mapped out for all the world to see.
And its deepest mysteries still yearning to be discovered.
All the world will be able to see the genome. John Sulston,
director of the UK's Sanger Centre, which sequenced a third
of the genome, said he had been obliged to make some
"pretty stern statements" to prevent the genome being
privatized. Unlike the printing press, apparently, the
genome is considered so important that it cannot be owned.
It must be shared. Kept in the public domain like a latrine
in a public park or the air traffic control system at
Charles de Gaulle airport in Paris.
Quick to find a politically correct significance from the
project, Craig Venter the head of Celera Genomics,
announced that "what we have shown is the concept of race
has no scientific basis." Of course, as the Herald Tribune
reports, "scientists have found no known function for 97%
of the genome." Meanwhile, it was also revealed that "we
share ...98% of our genetic material with chimpanzees and
51% with yeast." We are all the United Colors of Benetton,
after all.
President Clinton, a religious man, attributed God with
creating the gene sequences of life. Others were not so
sure. One, quoted in a Financial Times article, thought the
genome project should put creationism to rest forever -
since man seems to have been created in the image of, say,
the tree toad or fruit fly, with whom we share most of the
basic codes of life.
One of the very interesting things about science - and life
itself - is that it takes us in directions we had not
intended to go. No one was able to foretell that the
printing press would lead to the reformation and
generations of religious wars and to the settlement of the
New World. Who could have predicted that the invention of
the internal combustion engine would have led to the
Blitzkrieg and the Battle of Britain? No one now knows what
the genome project will yield. We don't know how it will be
used - or to whose benefit. Both Clinton and Blair
proclaimed that it could not be used to lower insurance
premiums for those with good genes. But surely other uses
will emerge.
Scientists themselves often credit forces beyond their
rational minds with the discoveries they make. James Clerk
Maxwell, who elegantly expressed the known relationships
between electricity and magnetism in the 1860s said,
awkwardly, on his deathbed: "What is done by what is called
myself is, I feel, done by something greater than myself in
me."
The humane genome project is just a baby. A love child from
the summer of 2000. It's self in secret still lies. Who
knows what it will be when it grows up?
Bill Bonner
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Last modified: April 02, 2001
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