The "C" Spot-

As I left them on Sunday, my mother and her friend were walking around the garden. The two women were dressed in near-matching outfits…black walking shoes, black pants and white sweaters. Both have white hair…and both walk with a forward stoop, like Keat’s apple trees in autumn, bent from years of mellow fruitfulness. They reminisced about the people they knew a half-century ago…and the many things that have happened since. They have been friends for more than half a century.

“I don’t mind if they charge high prices for gasoline,” said my mother’s friend, Margaret, to me at lunch. “The higher the price, the better. People drive too much. And besides, I’m worried about global warming.”

Margaret is worried about a lot of things. “I don’t think they should allow these big outfits like Walmart to build these big outlets near small towns,” she opined. “It practically destroyed our downtown area,” she continued, switching from global issues to local ones.

Later: “The problem with the schools is that they don’t pay teachers enough, so they don’t get the best talent.”

Margaret is a sweet woman. But she reminds me of Ralph Nader. She has opinions on everything she knows nothing about. She is the Washington Post editorial page in wrinkled flesh.

Gail Collins, writing in the New York Times, reports that “Mr. Nader is furious about campaign finance, along with – and this is a very incomplete list – the World Trade Organization, the death penalty, genetically engineered food, child poverty, the military budget, the Taft- Hartley Act, tuition at public universities, the evening news’ obsession with the weather, the ban on industrial hemp and the fact that Mr. Gore did not show up for the Farm Aid concert.”

Why is the old humbug opposed to the weather coverage? I have a hypothesis: because the weather is the one thing on the list that he and other collective thinkers cannot “do something” about…except, perhaps, in the very long run…if you accept the global warming argument.

Nader resents anything that won’t yield to politics. In another era, maybe he would have sent his soldiers to do battle with the waves, like Xerxes. But in today’s world, he and his minions spend their efforts trying to turn personal decisions into policy issues.

An independent thinker, for example, can decide for himself when the price of gas is too high. If he gets tired of buying gasoline, he could move to the city and do as I do – walk to work. He could switch his home heating system to wood – as I once did. He could even build a solar home – as I also once did. Or, he could just buy oil…and be miserly with the thermostat – as I now do.

Or, he could reach down into his “C” spot – that malignant little part of the brain where his collective thinking takes place, and come up with a solution, not for him alone, but for the entire human race.

“A New Energy Economy is Dawning,” writes Lester R. Brown, another very public nuisance, in the International Herald Tribune. Brown has a solution for America – raise gasoline taxes. That is, he wants to force you to pay more for gasoline than the market price.

On the same page, J. Robinson West, a former assistant secretary of the interior, says that “In Future [a phrase that has a suspiciously British ring to it] Energy Goals and Foreign Policy Must Be Linked.” He wants to force all kinds of policy changes, not only on Americans – but on foreign nations too.

And Flora Lewis, also editorializing in the IHT, wants to ‘do something’ on a planetary scale. “Oil Prices Should be Stabilized by International Agreement.” Ms. Lewis complains that “there has been no serious effort to organize oil supplies to meet common interests.” Organizing oil supplies is exactly what the oil market does. But the oil market is persuaded in a million different directions by millions of different, independent producers, distributors, speculators and consumers – each of them making his own personal decision based upon his own personal situation.

But personal choices have no place in the “C” spot. The busybodies want to replace the cooperation of the oil market with the force of politics. Against all the evidence of decades of observable experience, Ms. Lewis seems to think the price of oil can be set and maintained by bureaucrats, to the advantage of all.

An article in the Figaro tells of a new hypothesis about primitive man. A French academic researcher believes that the first homo sapiens arrived in Europe – and found it inhabited by Neanderthals…who had been around for 500,000 years. Within 30,000 years, Neanderthals were extinct.

What doomed the poor old Neanderthals? No one knows. But one theory is that they were less able to communicate… and perhaps less capable of collective thought and action. Cave paintings in France, say the researchers, were done by the newcomers – Homo Sapiens – indicating an ability to use common symbols to communicate ideas and sentiments…and give the whole tribe a sense of group identity and purpose. With single-mindedness they turned themselves to the task of making Neanderthal man extinct.

Solidarity has its uses. But they are limited. In conditions of extreme trial, for example, the disciplined cohesion of the group can make the difference between life and death. That is the lesson of the book, “Alive!”, which told the story of the soccer team that crashed in the Andes…and “Endurance,” recounting the remarkable survival of Earnest Shackleton’s misbegotten expedition to reach the South Pole.

In one respect my mother and Margaret couldn’t be more unlike one another. While Margaret, like Ralph Nader, has never married…my mother married while in the Army…had 4 children and now has 18 grandchildren and one great grandchild. While Margaret reads the editorial pages regularly and is concerned with all the collective issues of the day – my mother has absolutely no interest in politics and focuses all her attention on her family. Margaret thinks about public issues; my mother thinks only about personal ones.

The two sides of the brain, it is believed, do slightly different kinds of things. The left-brain, I am told, is where the digital, rational thinking takes place. The right-brain is more poetic.

I predict that further research will one-day reveal more subsections of the brain. Conducting an autopsy on Ralph Nader, for example, an alert coroner may discover an enlarged, or in Nader’s case – perhaps inflamed – area near the medulla oblongata: the “C” spot. If he is on the ball, he will recognize it as the peculiar organ where collective thinking is done and name it after his ex- wife.

Your cooperative, correspondent…feeling sorry for bunnies and Neanderthals…

Bill Bonner

Paris, France September 28, 2000

P.S. Readers may recall the rabbit I flattened on the road. Instead of getting out of my way, the animal darted this way and that. Feinting and dodging might have thrown a wolf off the mark. But my Renault van was indifferent. It just kept coming on and eventually, for a brief but fatal moment, the silly bunny and my left front wheel were in exactly the same place at exactly the same time.

In short, the evolutionary strategy for avoiding the jaws of a wolf proved counter-effective against an automobile.

We have seen that collective action helps groups of humans survive and prevail over the elements…and other groups. In fact, it may have been the evolutionary advantage that doomed Neanderthal man to extinction. But could this instinct to solidarity now be a liability? Is collective thinking an advantage or a disadvantage in a modern, cooperative society?

*** The discussion of Bureau of Labor Statistics’ numbers may not be “heating up” exactly. But it is at least responding to global warming. The icy silence is melting.

*** John Berry, writing in the Washington Post, revealed yesterday that the BLS may have understated inflation a tad. BLS said that it had perhaps jacked up its hedonic adjustments by a factor of two. New numbers are expected this morning at 9:30 EST.

*** The thought of having to revisit the inflation figures seemed to chill Wall Street. “We’re still in a mode where people feel uneasy,” reported one analyst to Reuters.

*** Will the Autumn of Anxiety soon give way to fear and panic? No one knows. But I don’t expect it. Presidential elections usually boost stock prices – as people are encouraged to think collectively and expect to get something for nothing. And, if there are any problems – politicians all promise to “do something” about them.

*** Oil barely moved yesterday. The Saudis alternately pledged to pump more to stabilize world prices and threatened to pump less if the Europeans followed Clinton’s lead and began drawing down emergency reserves.

*** “…the 55 million Americans who heat their homes with gas will pay 25 to 40 percent more than they did last winter,” an article in the NY Times tells me, “and with the Energy Department forecasting that demand for natural gas in the United States will rise 40 percent in the next two decades, prices may go higher still.”

*** The euro held its ground and even rose slightly against the dollar. I have been looking for the bottom in the euro market…with the alert senses of a man waiting up for a teenaged daughter. Several times, I thought I heard the footsteps on the stairs. But have been disappointed each time. Is this it? What’s that? Sounds like a key in the door. We’ll see.

*** Today’s the big day in Denmark. Will the Danes vote to join the euro – or avoid it? What effect will it have on the market? Again, we’ll see.

*** The Dow fell very slightly yesterday – minus 2.96 points. Nasdaq took a bigger fall – 32 points down.

*** The advance/decline ratio turned around, but not dramatically. There were 1496 advancing issues on the NYSE yesterday and only 1331 declining ones.

*** But the new high/new low ratio was still negative, with 82 of the former and 109 of the latter.

*** A couple of the Big Techs made big moves to the downside. Priceline.com fell 42% to $10.75. Yahoo lost 10% of its value, falling $12 to $90. Yahoo was at $250 earlier this year.

*** CMGI – the Internet incubus, I mean incubator, lost $3 yesterday. It is down 80% from its high of $163 in January.

*** Now that these stocks have come down so dramatically, are they finally reaching reasonable price levels? Yahoo is at least a good company. It earns good money – with income of $203 million, compared to sales of $855 million. But the price! It is selling for 265 times earnings.

*** Who would buy a business for 265 times earnings? Who would be willing to wait 265 years – at the current rate – to recover his investment?

*** Well, you may be thinking, the company is growing fast. And yes, it has been growing fast. But, as Shakespeare put it, ’tis many a slip twixt the cup and the lip.’ Prices need to be discounted for risk.

*** Al Gore could be a Yahoo buyer. He thinks collectively and long term. “In 50 years there will be no North Pole in the summer time,” said the candidate for America’s highest office. Al is no weatherman, but he knows which way the wind is blowing. He cannot predict the weather in Washington for the next week – let alone for the North Pole 50 years from now. But he is tapping into a part of the brain where collective fantasies are stored and nourished. More below.

*** Yahoo may be worth its current price – by the time the polar ice cap melts. In the meantime, GM has earnings 3000% higher than Yahoo, but it valued 30% lower. Curiously, Harley Davidson has a market cap of $14 billion – nearly half that of GM. Harley is a popular sensation. It is cool to own Harley stock. A modest investment suggestion: buy GM, short HDI.

*** The Nasdaq is now down 9.3% for the year. The Dow is down 7.5%. Where is the wealth effect now?

*** Gold rose $4.30. The dollar index was down a little. Amazon lost $2.

*** Investors Business Daily reports that 65% of earnings pre-announcements are negative, suggesting lower than expected earnings across the board.

*** “In 1972, only very few stocks advanced,” wrote Marc Faber recently. “More and more had disappointing earnings…and collapsed, but this led investors to pay premium prices for just a few companies that were perceived to have the ability to grow even during bad times.”

*** “The strong stocks, which had driven the indices up to their Jan. 1973 peak (the ‘nifty fifty’),” he goes on, describing what he calls ‘Phase II of a Bear Market,’ “held up well until October, and some even made new all- time highs… But after that, it was down all the way, because oil prices and interest rates rose and the global economy sent into recession.”

*** Today is Brigitte Bardot’s birthday. It is also the anniversary of the Polish Partition of 1939, in which Germany and the Soviet Union took Poland without asking.

*** “On ira tous au Paradis,” (we’ll all go to paradise)…we hear this line (and only this line) from a popular French song every day. It is the chant of a ‘clochard,’ – a drunken bum who hangs out in front of our office. Yesterday, he was sprawled on the sidewalk and lay so motionless that people thought he had finally gone to paradise. A small crowd of locals and tourists gathered…and seemed disappointed when he came back to life.