The U.S. stock market continues to lollygag along…

Nothing much has changed so far this summer… bar another new panic over Greece. (More on this in Market Insight below…)

Today, on the eve of the bicentennial of the Battle of Waterloo, we do not celebrate war. Only a fool would celebrate something so horrible. But we pay our respects to the glorious imbecility of it.

War may be dreadful, little more than a racket in many ways, but it is also a magnificent undertaking. It engages the heart and the brain at once and exposes both the genius of our race and its incredible stupidity.

Napoleon Returns

But we are talking about real war. Not phony wars against enemies who pose no real threat.

Phony wars earn real profits for the war industry, but only an ersatz glory for the warriors. Real soldiers take no pride in them. Instead, to a real hero, they are a source of shame and embarrassment.

Wars are not conducted to “Free the Holy Land.” Or “Make the World Safe for Democracy.” Or “Rid the World of Tyrants.” Or “Fight Terrorism.” Those are only the cover stories used by the jingoists to get the public to surrender its treasure… and its sons.

Wars are fought to release the fighting spirit – that ghost of many millennia – in the scrap for survival.

Read more > The feds are waging a war on cash

And so it was that, 200 years ago tomorrow, one of the greatest military geniuses of all time, Napoleon Bonaparte, faced the armies of the Seventh Coalition – principally, the British, under the Duke of Wellington, and the Prussians, under Gebhard von Blücher.

Napoleon had been run out of France, but he had come back. The veterans of the Napoleonic Wars rallied to his cause, and he soon had an army of 73,000 seasoned soldiers. Moving fast, he put his forces in his favored “central position” between Wellington and Blücher.

On June 16, he attacked the Prussians at the Battle of Ligny and drove them back. Then he turned to Wellington, who had formed his army on a low ridge, south of the Belgian village of Waterloo.

Napoleon knew how to plan and execute a campaign. He was where he wanted to be, with two of his best commanders on either side of him, Marshal Grouchy on his right and Marshal Ney on his left.

But two things conspired against Napoleon. The Prussians had been beaten, but not destroyed. They quickly regrouped and then marched on Waterloo.

And it rained. Soft ground always favors the defender. The attacker wears himself out in the mud. Wellington only had to hold his position.

Napoleon had to break the British line before the Prussians arrived at his back…

“Wellington Is a Bad General”

And so, the stage was set, on June 18, for one of the most extravagant showdowns in military history.

Napoleon was having breakfast on the morning of the battle when one of his generals suggested a reorganization that might strengthen the French position. Bonaparte replied:

Just because you have all been beaten by Wellington, you think he’s a good general. I tell you Wellington is a bad general, the English are bad troops, and this affair is nothing more than eating breakfast.

Wellington shared Napoleon’s opinion of his troops. He thought they were bad, too. They were a collection of soldiers drawn from many different units. They had not seen action in almost 20 years. Many were poorly trained. Of his cavalry he wrote:

I didn’t like to see four British opposed to four French. And as the numbers increased and order, of course, became more necessary, I was the more unwilling to risk our men without having a superiority in numbers.

The battle began in the late morning. No one knows exactly when. Quickly, the “fog of war” descended on the battlefield, with no one sure what was going on.

Crucially, Napoleon missed the rapid approach of the Prussians. He had expected them to need two days to get back in fighting order after their defeat at Ligny.

An Englishman describes the scene once the battle was under way:

I stood near them for about a minute to contemplate the scene: It was grand beyond description.

Hougoumont [the escarpment where British and other allied forces faced off against the French] and its wood sent up a broad flame through the dark masses of smoke that overhung the field; beneath this cloud the French were indistinctly visible.

Here a waving mass of long red feathers could be seen; there, gleams as from a sheet of steel showed that the cuirassiers [armored French cavalry] were moving; 400 cannon were belching forth fire and death on every side; the roaring and shouting were indistinguishably commixed – together they gave me an idea of a laboring volcano.

Bodies of infantry and cavalry were pouring down on us, and it was time to leave contemplation, so I moved towards our columns, which were standing up in square.

To win the battle, the French had to dislodge Wellington from his ridge at Hougoumont. Again and again, they attacked. And again and again, they failed. The Englishmen – along with a large number of Irishmen, Scots, and Germans – held their ground.

The Royal Scots Greys, the Gordon Highlanders, the Irish Royal Inniskilling Fusiliers – all fought better than Bonaparte or Wellington had expected.

But the “bravest of the brave” was on the French side – Marshal Ney, whose statuewe encountered on Sunday.

A Hero’s Hero

When we saw the statue, we wondered: What sort of people are these who execute a man for treason and then honor his memory with a statue of him in their capital city?

Ney was a hero’s hero – a man whose military career was such a long shot… that so defied the odds… it was hard to believe he ever existed. He was everything our modern military lard-butts are not. He was the fighting spirit in the flesh.

The French launched as many as 12 separate attacks against Wellington’s lines. Ney, leading the charges personally, had five horses shot from under him.

A British infantryman remembers what it was like to see him coming:

About 4 p.m., the enemy’s artillery in front of us ceased firing all of a sudden, and we saw large masses of cavalry advance: Not a man present who survived could have forgotten in after life the awful grandeur of that charge.

You discovered at a distance what appeared to be an overwhelming, long moving line, which, ever advancing, glittered like a stormy wave of the sea when it catches the sunlight.

On they came until they got near enough, whilst the very earth seemed to vibrate beneath the thundering tramp of the mounted host. One might suppose that nothing could have resisted the shock of this terrible moving mass.

They were the famous cuirassiers, almost all old soldiers, who had distinguished themselves on most of the battlefields of Europe.

In an almost incredibly short period they were within twenty yards of us, shouting “Vive l’Empereur!”

The word of command, “Prepare to receive cavalry,” had been given, every man in the front ranks knelt, and a wall bristling with steel, held together by steady hands, presented itself to the infuriated cuirassiers.

Marshal Ney’s cavalry overran the British cannons. But without infantry and artillery support, he could not break the cavalry-proof defensive squares Wellington’s infantrymen formed.

And then Blücher arrived… and Napoleon was beaten. His “central position became a trap.” The Prussians hammered the French against the British anvil.

At the end of the battle, Ney led one of the last infantry charges, shouting to his men, “Come see how a marshal of France dies!”

Four days after the battle, Major W.E. Frye described what he saw:

22 June – This morning I went to visit the field of battle, which is a little beyond the village of Waterloo, on the plateau of Mont-Saint-Jean; but on arrival there the sight was too horrible to behold. I felt sick in the stomach and was obliged to return.

The multitude of carcasses, the heaps of wounded men with mangled limbs unable to move, and perishing from not having their wounds dressed or from hunger, as the Allies were, of course, obliged to take their surgeons and wagons with them, formed a spectacle I shall never forget.

The wounded, both of the Allies and the French, remain in an equally deplorable state.

More tomorrow… on what happened to brave Marshall Ney.



Paris, France


Market Insight

Greece Puts Europe “On Sale”




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It’s all about Greece…

On Monday, the German press reported that European governments would push for capital controls in Greece if there was no deal reached this week on debt repayments.

This would stop Greeks from yanking money out of their banks and taking it out of the country.

Tomorrow, Greek negotiators will meet with Eurogroup finance ministers to agree to a proposal for how Greece will pay back its creditors.

As it stands, Athens must come up with €1.5 billion ($1.7 billion) by the end of the month… and another €3.5 billion ($4 billion) byJuly 20.

As tensions mount, European stocks have been taking it on the chin.

As you can see below, the EuroStoxx 50 Index – Europe’s Dow – is down 10% since April.

061715 DRE SX5Eytd

The S&P 500 hasn’t seen a correction of this magnitude in almost four years.

On the bright side, this has taken the forward price-to-earnings (P/E) ratio of the EuroStoxx 50 down to 15 versus 17.6 for the S&P 500.