Sell Your Puts May 31, 2006January 15, 2017 CHICKEN OR EGG On August 9, 1999, you read in this space the definitive answer: the egg. Are we really going to keep asking the same questions over and over? Can’t we settle some of these age-old questions? Q. If a tree falls in the forest, does it make a sound if no one’s there to hear it? A. Of course it does. Q. Which came first, the chicken or the egg? A. The egg. Because at whatever stage you decide to define a chicken as being a chicken — mutated and evolved from whatever near-chicken precursor laid the egg that hatched it — there was an egg with a forthcoming chicken inside before there was a chicken to lay it. The egg was laid by the precursor to the chicken, which had perhaps spent too much time around a poorly-shielded nuclear power plant. The egg cracks, and to the surprise of the near-chicken, out pops . . . a chicken! Anything else on your mind? (For questions like “Why is the sky blue,” where it’s not in dispute, just hard to remember, try http://www.ask.com/ and type, “Why is the sky blue?” For questions having to with your refrigerator’s ice-maker, or any other GE appliance, call 800-626-2000 twenty-four hours a day, press 4, and you get great human service.) Now, nearly seven years later, it is confirmed. I want to crow about this, but I think it must be more appropriate to cluck. PICK AN ISSUE! You can pick nits in this quick video. For example, I’m not sure some idiot at the VA might not have taken home the agency’s database with 26 million Social Security numbers under Democratic leadership just as was done under Republican leadership. But in the main, isn’t this video stunningly on point? The Republicans spend so much time vilifying the federal government, they’re not very good at running it. SELL YOUR PUTS Okay, with Nitromed down from a little over $22 last summer to $3.80 last night, I’ve sold most of my puts. Not because I’d buy the stock here – $140 million for what? – but because most of the profit from this trade has been realized, and for me, at least, it’s time to move on. I’ve kept my short position (why pay the tax by covering it?) and some September 7.5 puts. But for the most part, game over. If only they all worked out so well.
The IQ of Bean Dip (These Two Items Are Actually Related) May 30, 2006March 4, 2017 DAVE BARRY’S TIPS FOR THE HURRICANE SEASON From Sunday’s Miami Herald: The 2006 hurricane season is here, and if you’re a resident of Florida, you know what that means: It means you have the IQ of bean dip. If you had any working brain cells, by now you’d have moved to some less risky place, such as Iraq. . . . ARIANNA’S TAKE ON THE MOVIE YOU MUST SEE From the Huffington Post: May 22 — Over the weekend, I flew from Washington to Cannes. In Washington, the talk was all about 2006. In Cannes, the talk is all about 2008. That’s because even with Tom Hanks, Bruce Willis, Penelope Cruz, Jamie Foxx, and Halle Berry here for the film festival, the hottest star in town is Al Gore. In Cannes for the European premiere of his powerful global warming documentary, An Inconvenient Truth, Gore has been surrounded by adoring crowds and deluged with interview requests. He told me that he gave 23 back-to-back-to-back interviews on Sunday, Hollywood junket-style (all on only one hour’s sleep), and had another 23 scheduled for Monday. “This is my second visit to Cannes,” he said. “The first was when I was fifteen years old and came here for the summer to study the existentialists — Sartre, Camus… We were not allowed to speak anything but French!” Which may explain his pitch-perfect French accent. It’s clear that the film, and the engaging “New Gore” on display both in the film and his public appearances promoting it, have connected with people in a big way. The film is an environmental punch in the gut. Gore 2.0 is a revelation, and a critical smash. When asked at his press conference how he should be addressed, he replied “Your Adequacy.” “Hanks himself could not have delivered the line more smoothly,” gushed The Guardian. The Washington Post’s Sebastian Mallaby labeled him “a hero.” Time’s Anne Marie Cox called him “a rock star.” New York magazine touted his “amazing comeback.” And even Fox News’ Roger Friedman described him as “funny and relaxed.” Talk about killer reviews. Of course, as potent as the film is (Friedman says the minds of skeptics “will be changed in a nanosecond” and Franklin Foer says “it will certainly change elite opinion”), the other reason is the “Will he or Won’t he?” speculation about 2008. He’s saying no — but you can hear the “Run, Al, Run” chant growing louder. “Democrats are looking everywhere to find their presidential candidate,” Graydon Carter told me. “But the solution may be right under their noses.” . . . Even major skeptics like myself (and I’ve never been shy about attacking Gore, as you can see here, here, here, and here) can’t help but be affected. It’s why he suddenly finds himself surrounded by people all but begging him to run. . . . ☞ I am enthusiastically neutral among all our fine potential Democratic candidates. So leave the politics aside and consider the planet. We’re operating it, more and more people are beginning to say, as if it were a business in liquidation. It’s as if we had the IQ of bean dip. Go see this movie – today if you live in New York or L.A., or next week as it opens wider (Friday: Boston, Chicago, Dallas, San Diego, San Francisco, Seattle, Toronto, Washington) . . . and then in the weeks to come as it opens ever wider still (Peoria: June 30).
Memorial Day May 26, 2006March 4, 2017 MEMORY DAY SPECIAL David Andrews: ‘Is there still some sort of discount on ordering the Posit Science software? I can’t remember, so I must need it!’ ☞ Full disclosure to newcomers: I don’t remember much either, but I seem to recall I own a tiny sliver of Posit Science. That said, the program comes with a 90-day money-back guarantee, and you’ll get 20% off if you enter this code when you check out: at0608. Just one more perk of your subscription to this site. To take the Brain Speed Test, click here. (Mine goes from zero to 60 in 4.2 seconds. Pretty impressive – except that’s IQ points, not miles per hour.) MEMORIAL DAY LETTER TO THE EDITOR THE WAY TO HONOR OUR WAR DEAD Ross Cooper Scottsdale, Arizona Memorial Day is intended to be a day when all Americans honor the brave men and women who have made the ultimate sacrifice to defend the liberties and freedoms we all cherish. Against this backdrop there is an ongoing debate about the NSA secret domestic wiretapping program, which has been framed by supporters of the program as a necessary trade-off between security on the one hand and privacy and individual liberties on the other. By most accounts the men who were part of the first wave to land on Omaha Beach on D-Day suffered 80% to 90% casualties. The courage shown by these men in the face of almost certain death is sobering and admirable. We are often reminded that freedom is not free. Even if every year the terrorists perpetrated a 9/11 type attack against America, the odds each year of any given American being killed by a terrorist attack on American soil would be about .00001%. I wonder what the brave men who died on Omaha Beach would think of trading some of the precious liberties for which they gave their young lives for a chance (and by no means a guarantee) of reducing those already extremely low odds. The preservation of liberty and freedom requires from all Americans a certain measure of courage and commitment to principle in the face of fear. This Memorial Day Americans should say no to the politics of fear and honor our war dead by taking a strong stand in defense of the principles for which they gave their lives. WHERE TO DEPLOY OUR SOLDIERS NEXT? Are we going to be an empire or a republic? The concluding paragraph in a long, thoughtful article – ‘A Republic Divided’ – by David Bromwich in the Spring volume of Daedalus: After the fall of Communism, there was an opening that passed. The United States never fully entered the world of nations. The burden of a constitutional opposition today must include education in the significance of this fact. For the sound part of the balance-of-power doctrine always lay in the idea that no one nation can control the world. We may still be the world’s best hope; it should be a comfort that we are no longer its last hope. But we cannot endure half empire and half republic. We will become all one thing or all the other: an empire that expands by the permanent threat of war, and invents power after power to enlarge the authority and reach of the state; or the oldest of modern republics, vigilant against the reappearance of tyranny and firm in repelling any leader who sets himself above the law. HAVE YOU LISTENED TO THIS SPEECH LATELY? James Spader on ‘Boston Legal’ . . . if you have broadband, click the play button under his photo. Have a great weekend.
Seriously: See It May 25, 2006January 15, 2017 AN INCONVENIENT TRUTH If they made a movie about your home, you’d go see it. Well – they have: An Inconvenient Truth. Investors particularly should go see it. The implications for the long term are vast. WHO KILLED THE ELECTRIC CAR? That movie opens June 28. Watch the trailer here. THE LITTLE BOOK THAT BEATS THE MARKET John McCoy: ‘OAKLX is the Oakmark Select Fund, not the Oakview Select Fund.’ Robert Levy: ‘Your reader writes that OAKLX has a philosophy very similar to Greenblatt’s. It really doesn’t. They don’t rebuy different stocks every year. They concentrate in larger companies. And, over the past four years they really haven’t had a standout record. There is a fund that does operate similarly to ‘The Magic Formula.’ It’s actually mentioned in Greenblatt’s book but not by name. It’s Hennessy Cornerstone Growth, which picks a certain number of stocks each year (50 I think) based on a formula. He then buys new ones every year or keeps the same ones that meet his criteria. It’s volatile but has a good long term record.’ Jeff Covey: ‘I can second Dan Flikkema’s initial experience with the magic formula. After my first two rounds of putting $1,000 into each of five magically-selected stocks, I’m down 8.6%. I realize wild swings in both directions are to be expected, but watching $862.02 fly away feels almost dirty after a couple of years of investing in Vanguard funds.’ A GRAND TIME Matt Ball: ‘I don’t know why you keep saying it is a great time to be rich in America. Under Clinton/Gore, the markets hit new records basically every month. Now, most markets are below where they were when Bush took office, the dollar has collapsed, and our country has trillions of dollars more debt. I’d bet that the vast majority of the rich did much better under Clinton/Gore.’ ☞ Well, if you were getting $10 million a year in dividends back then, you probably still are – but now you’re paying $2.4 million less in taxes of them. But I see your point. Now, seriously: go see Al Gore’s movie. Especially if you are not an Al Gore fan. You may be surprised; you will almost surely not be bored; and in any event, you owe it to your kids.
Scary Movie 5 May 24, 2006March 4, 2017 THE MOVIE An Inconvenient Truth has opened ‘in select cities.’ Run, don’t walk. A PINCH OF BANANA Thomas McDonagh: ‘Per banana.com, ‘the banana plant is not a tree. It is actually the world’s largest herb.” ☞ According to that site, you can sooth mosquito bite itches by rubbing them with the inside of a banana peel . . . not to mention the benefits if you are suffering from P.M.S., the effects of nicotine withdrawal, depression, stress, constipation, warts, hangovers, heartburn, high blood pressure or intellectual lassitude. FOLLOW THE TRENDS Google will now let you see who’s interested in what, when, where. Click here to see the relative importance – to Finns – of ‘god’ and ‘food.’ Now click here to see the graph when you add ‘sex.’ Note that worldwide, people seem to be a lot more curious about death than taxes. Not sure how one might put this new Google capability to useful use – but how useful is online Boggle? THE LETTER M.I.T. Howard: ‘Without wanting to show any sympathy for the President of Iran – who truly appears to be a dangerous leader – a question: why isn’t a transcript of the letter easily available? (I had seen a translation from a French newspaper, but cannot find it on the web.) All we hear from the administration is that it does not address the nuclear issue. The transcript I read actually asks many good questions. The basic theme was how can you call yourself a Christian, Mr. President, while pursuing such destructive policies? For example, how could you make the choice to spend 100s of billions of dollars on the war in Iraq while poverty and oil dependency grip your country. The letter seemed rational and respectful (e.g., referring to Christ and Moses as honored people). The letter was tolerant, professing a common set of values shared by monotheistic religions. The only really objectionable part I found was the requisite bashing of Israel and the Jewish people. [But let’s pause a minute to note that that is really objectionable and should not, of course, be requisite. – A.T.] So while I wouldn’t want our diplomats to fall for this seeming reasonableness as a negotiating feint and delaying tactic, it seems our press has an obligation to present this information. Maybe the Iranian president is not a complete lunatic. Maybe we cannot dispense with him out of hand as an evil person – as we prepare the next military attack. Maybe, once again, diplomacy backed by resolute will to use force is the answer. Nah, too much nuance, may as well bomb Iran into the Stone Age.’ MAGIC FORMULA INVESTING Dan Flikkema: ‘I’m 4 months into the ‘Magic Formula’ investing. It’s a pretty wild ride. One of my companies (Mannetech MTEX) is inexplicably down 21% in one day. The same day they reported increased earnings of 29% over the prior year. Go figure. Overall I’m still up 7% on the first 10 picks. I’ll buy 5 more stocks next week and I’m committed to this program for at least 5 years no matter what. But Greenblat is correct to say you really have to believe the system works or these strange one-day drops would be too discouraging. Incidentally, Oakview Select (OAKLX) is a fund that has a very similar philosophy to Greenblat’s. It would be a better choice than individual stocks for people with less than $75,000 or so to invest.’ ☞ Gad zooks, man! You’re not supposed to know anything about the companies you invest in, or follow their earnings . . . this is magic. (And yes, I still owe everyone a longer discussion.) THAT FED CHAIR MUSIC VIDEO Steve Rodriguez: ‘Never mind the shtick. The guy singing (was it lip synching?) is awesome. He nailed all of those high notes that even Sting strained to reach.’ DID I MENTION . . . An Inconvenient Truth? This being the only planet we’ve got, you will find it riveting. (If they made a movie about your home, would you not go see it? Well: they have.)
Bogle Blog Bog Log Loge Ogle Gob Glob Gel Leg May 23, 2006March 4, 2017 OGLE BOGLE’s BLOG Scott Sill: ‘Jack has launched a blog! You’ve always been a big supporter of his, so you’ll probably love it.’ ☞ Jack Bogle is an investor’s hero. BOGGLE Play it on the web. Oh . . . my . . . God. This is amazing. You just start (no registration, no fuss, just enter a first name) and find yourself playing against dozens of people, smarter than all of whom you automatically assume yourself to be (if you are me). And then you get . . . creamed! These folks have apparently had at least two cups of coffee and do not take this exercise casually. Oh, my. There goes Tuesday. TEST YOUR SENSES And just when I was already feeling really stupid . . .
Karl Rove Indicted Last Week? May 22, 2006March 4, 2017 SPANISH INQUISITION? Michael Axelrod: ‘Nonsense! James Reston, Jr. should try being a critic in a real dictatorship. Try Saudi Arabia for a start.’ YOU HAVE TO LAUGH He climbed Mt. Everest, and . . . this takes ten seconds if you have broadband. AMERICAN IDOL VOTE COUNT EXPOSED M.I.T. Howard: ‘The whole country has just been subject to voting fraud (well maybe only the half who care). Yes, last week’s American Idol vote tallies were meaningless. Remember the percentages for the three finalists: 33.68%, 33.26%, 33.06% Was America really this closely divided? Unlikely. The close percentages are a tribute to the quality of the phone system. The phone lines for all 3 candidates were saturated! The lines were open for a fixed period of time and the pipeline of people voting was enough to saturate the system. The phone system did a marvelous job of accepting almost identical vote tallies for each candidate. Now that’s good engineering.’ OHIO VOTE COUNT EXPOSED Or at least seriously called into question – here. WHAT AMERICA THINKS ABOUT THAT More than half those polled who consider ABC, CBS, NBC, MSNBC or CNN their favored source of TV news feel the 2004 election was stolen, according to this – while just one-half of one percent of Fox News fans agree. Come back, Walter Cronkite – and Walter Cleaver and the Beave, for that matter – we need to be one country again! WHAT MIKE WALLACE THINKS I missed this in December when he gave an interview – at the age of 87 – to the Boston Globe: Q. President George W. Bush has declined to be interviewed by you. What would you ask him if you had the chance? A. What in the world prepared you to be the commander in chief of the largest superpower in the world? In your background, Mr. President, you apparently were incurious. You didn’t want to travel. You knew very little about the military. . . . The governor of Texas doesn’t have the kind of power that some governors have. . . . Why do you think they nominated you? . . . Do you think that has anything to do with the fact that the country is so [expletive] up? KARL ROVE INDICTED LAST WEEK? Couldn’t ‘a been – it wasn’t in the paper or on the news. And yet, from the truthout.org blog . . . By Marc Ash, Sun May 21st, 2006 at 11:58:26 AM EDT :: Fitzgerald Investigation I’d like to break this posting into two categories: What we know, and what we believe. They will be clearly marked. We know that we have now three independent sources confirming that attorneys for Karl Rove were handed an indictment either late in the night of May 12 or early in the morning of May 13. We know that each source was in a position to know what they were talking about. We know that the office of Special Counsel Patrick Fitzgerald will not confirm, will not deny, will not comment on its investigation or on our report. We know that both Rove’s attorney Robert Luskin and Rove’s spokesman Mark Corallo have categorically denied all key facts we have set forth. We know we have information that directly contradicts Luskin and Corallo’s denials. We know that there were two network news crews outside of the building in Washington, DC that houses the offices of Patton Boggs, the law firm that represents Karl Rove. We know that the 4th floor of that building (where the Patton Boggs offices are located) was locked down all day Friday and into Saturday night. We know that we have not received a request for a retraction from anyone. And we know that White House spokesman Tony Snow now refuses to discuss Karl Rove – at all. Further, we know – and we want our readers to know – that we are dependent on confidential sources. We know that a report based solely on information obtained from confidential sources bears some inherent risks. We know that this is – by far – the biggest story we have ever covered, and that we are learning some things as we go along. Finally, we know that we have the support of those who have always supported us, and that must now earn the support of those who have joined us as of late. We now move on to what we believe. (If you are looking for any guarantees, please turn back now.) We believe that we hit a nerve with our report. When I get calls on my cell phone from Karl Rove’s attorney and spokesman, I have to wonder what’s up. “I” believe – but cannot confirm – that Mark Corallo, Karl Rove’s spokesman gave Howard Kurtz of the Washington Post my phone number. I believe Howard Kurtz contacted me with the intention of writing a piece critical of our organization. I know that Anne Marie Squeo of the Wall Street Journal attacked us and independent journalism as a whole in her piece titled, “Rove’s Camp Takes Center of Web Storm / Bloggers Underscore How Net’s Reporting, Dynamics Provide Grist for the Rumor Mill.” We believe that rolling out that much conservative journalistic muscle to rebut this story is telling. And we believe that Rove’s camp is making a concerted effort to discredit our story and our organization. Further – and again this is “What We Believe” – Rove may be turning state’s evidence. We suspect that the scope of Fitzgerald’s investigation may have broadened – clearly to Cheney – and according to one “off the record source” to individuals and events not directly related to the outing of CIA operative Valerie Plame. We believe that the indictment which does exist against Karl Rove is sealed. Finally, we believe that there is currently a great deal of activity in the Plame investigation. We know that this story is of vital interest to the community, and that providing as much information as we can is very important to our readers. We want you to know that this is challenging territory and that we are proceeding with as much speed as the terrain will allow. Marc Ash, Executive Director – t r u t h o u t
Radioactive Bananas at the Center of the Earth May 19, 2006March 4, 2017 HUD SECRETARY JACKSON So now the Housing Secretary retracts the story he told (recounted yesterday) about canceling a contract at the last minute when the contractor criticized President Bush. The story he told his audience was untrue. Gosh – reassuring to know he wasn’t telling the truth. ARTICHOKES Michael Axelrod: ‘The earth is really different from an artichoke, and it’s not just size. The earth has a hot core [about ten thousand degrees Fahrenheit, another of you – Dana Dlott – tells me] because of accretion (material falling into a gravitational source) and because of radioactive decay. So the earth’s core generates its own heat unlike an artichoke which is simply a hot object that is cooling. Heated things cool by 1. convection (transfer of heat by a fluid), 2. conduction and 3. irradiation. Your toast cools mainly by convection where the hot toast heats up the air. When you burn yourself from a hot pot, the heat has reached your hand by conduction. Finally irradiation is radiant heat like a floor heater that gets red hot. The earth does not contact anything unless you believe it rests on a big turtle, and flies through the vacuum of space, so the earth only cools only by irradiation. I think an artichoke cools mainly by convection.’ USA TODAY (WELL, USA LAST MONTH) The earth is really different from an artichoke, and the 21st Century is really different from the 15th. Back then, they didn’t even believe in evolution. The ‘American Inquisition’ James Reston Jr. 18 April 2006 © USA Today The paranoia that gripped Spanish society in the 15th century echoes even today. The result? A country struck by fear resorts to torture and spies on its citizens. And like King Ferdinand, President Bush couches his righteousness on Iraq in faith and in democracy. Through the mist of time, the Spanish Inquisition has come down to us as one of the most barbarous periods in all of history. Its viciousness peaked in the late 15th century, during the reign of the messianic “Catholic kings,” Ferdinand and Isabella. Paranoia gripped Spanish society as the Inquisition coincided with a Christian war against the Muslims of southern Spain. Clandestine trials, secret prisons, rampant eavesdropping, torture, desecration of Islam’s holy books, and gruesome public executions created an atmosphere of pervasive terror. Suspects were assumed to be guilty, with no recourse to a defense, to a jury, or to a legitimate court. In the chaos now roiling the Western world, does any of this sound familiar? It is time to ask whether the United States, with some of these same touchstones, is entering a period of its own peculiar Inquisition. Of course, there are no burning places for heretics in America now. No Tomas de Torquemada presides over this period of internal anxiety and investigation. But the word, inquisition, is not exclusive to Spain in the Middle Ages. It is a useful term for historians to characterize phases of history that are distinguished by religious intolerance, by Christian holy war and Islamic jihad, by racial profiling and xenophobia, by show trials, and by snooping of secret police. *Paranoia abounds* This country, too, is seized with collective paranoia. President Bush knows, as Ferdinand, Isabella and Torquemada knew, that constant warnings about secret terrorists are a powerful deterrent to dissent and a useful tool for consolidating political power. Bush, like his Spanish precursors, presses for a unity of faith and a credo of purification. His faith mixes the secular and the spiritual. Its hallmarks are Jeffersonian democracy for all the world, unquestioning patriotism and revitalized Christianity. Unbelievers in this holy trinity are to be ferreted out. Not to subscribe to the methods in the war on terrorism is not so much dissent as heresy. The American Inquisition began on Sept. 16, 2001, five days after the monstrous attack, when Bush proclaimed his “crusade.” That was the defining moment for this era of U.S. history. In the years since, Bush has demonstrated all the passion and single-mindedness of King Ferdinand. The American secret police force is not called the Holy Brotherhood as it was in 1492, for today’s brotherhood is more electronic than human. On Capitol Hill, Cabinet members, past and present, call search warrants obsolete. Beware. We are all “mined” for our “data.” How different is this really from the spying that went on in the Spanish Inquisition? Suspect words or acts do not change that much with time. In Inquisitional Spain, neighbors were supposed to report a suspicious neighbor to the Holy Office. Now, symbolic words or actions are detected electronically. In the past few months, Americans have been treated to the extraordinary spectacle of a U.S. president arguing for torture in the lofty staterooms of the U.S. government. Memos float around his Department of Defense, stressing that U.S. interrogators should cease their persecution if their victims come close to “organ failure.” The world wants to know what is going on in the star chambers of secret U.S. prisons around the world. The U.S. administration scoffs. The Geneva Conventions are called quaint, and the court in The Hague, Netherlands, cannot touch us. Standards for war crimes and crimes against humanity are for non-Americans. *Forms of torture* For the historian, symbolic acts such as torture often define an era, and the American brand of torture has a particularly medieval quality. “Waterboarding,” as it is called (as if it were a sport like surfboarding or skateboarding), uses cellophane instead of gauze with water to subject the suspect to near drowning and suffocation. So today this is called an “enhanced” technique of interrogation. But the pitcher and gauze were just as effective in the 15th century. The intent is really no different from that of Torquemada’s interrogators: to make the subject talk even though that talk might be drivel. It is not surprising that a leader, who believes that his Christian God chose him to be president at this moment in history and that his Almighty speaks directly to him, should preside over this American Inquisition. Bush’s messianic bent came to light vividly in June 2003, when he announced that his God had inspired him to go fight those terrorists and to end the tyranny in Iraq. What, one wonders, is his God telling him now about the chaos? This supposed pipeline to heaven is, of course, not new for kings and potentates. On his deathbed in 1516, King Ferdinand told his minions that he could not die yet: God had told him that he would move on from the conquest of Granada to lead a great crusade that would recapture Jerusalem. The messianic impulse is commonplace in history. Now, we are just a few years into the Iraq era. The situation is getting worse, and there is no end in sight. When this nightmare ends, years of self-examination are sure to follow as happened after the Vietnam disaster. The Iraq syndrome will be lengthy. In the meantime, American Inquisition takes root. It is more hard-edged and mean-spirited than the Vietnam crackdown … for one reason. Though Bush’s explanations for his wayward adventure may constantly change, though the enterprise may show itself to be a military and moral catastrophe of historic proportions, this American leader and his circle of illuminati are utterly convinced of their righteousness. Toward their detractors they misappropriate, like inquisitors before them, the verse of John 15:6: “If any abide not in me, he should be cast forth as a branch and shall wither, and they shall gather him up and cast him into the fire, and he shall burn.” James Reston Jr. is the author of Dogs of God: Columbus, the Inquisition, and the Defeat of the Moors. [And my college classmate. – A.T.] YOUR LATEST TAX CUT, YOU LUCKY DOG D. Stone: ‘What an outrage that a government running a huge deficit and paying for a foreign war decides to borrow another $15 billion to extend tax cuts for people making over $1 million per year. Insanity.’ ☞ It is a grand time to be rich and powerful in America. BANANAS: AND IT ALL COMES FULL CIRCLE Doug Simpkinson: ‘Do you remember I once told you that bananas are pretty radioactive (yet still safe)? It turns out that the center of the Earth, which is so much hotter than an artichoke heart, would have long ago cooled to a solid lump if it weren’t for a decent quantity of radioactive potassium, the same stuff that makes bananas so radioactive. Without the radiation generated heat, no magnetic field would be generated in the core of the Earth, and our atmosphere would have been stripped away billions of years ago by the solar wind. We wouldn’t be here if it weren’t for the absolute power of bananas. Here is an article on the potassium in the Earth’s core: ‘The Earth is thought to have formed from the collision of many rocky asteroids, perhaps hundreds of kilometers in diameter, in the early solar system. As the proto-Earth gradually bulked up, continuing asteroid collisions and gravitational collapse kept the planet molten. Heavier elements – in particular iron – would have sunk to the core in 10 to 100 million years’ time, carrying with it other elements that bind to iron. Gradually, however, the Earth would have cooled off and become a dead rocky globe with a cold iron ball at the core if not for the continued release of heat by the decay of radioactive elements like potassium-40, uranium-238 and thorium-232, which have half-lives of 1.25 billion, 4 billion and 14 billion years, respectively. About one in every thousand potassium atoms is radioactive. The heat generated in the core turns the iron into a convecting dynamo that maintains a magnetic field strong enough to shield the planet from the solar wind. This heat leaks out into the mantle, causing convection in the rock that moves crustal plates and fuels volcanoes.
The Absolute Power of Bananas at the Center of the Earth May 18, 2006March 4, 2017 How hot is the earth’s core? This is very interesting. I boiled an artichoke today for 25 minutes – artichokes are in season and they are great to eat just the way God made them (after He boiled them and taught you how to avoid the chokes), all you need is a little salt on the plate to touch the base of each leaf onto before you scrape off its meat between your teeth – and after I took it out of the pot I left it on a plate for 20 minutes while I went and did something very important. (If I have not made it clear to you over the years, I am very important.) Back from whatever that was (it may have involved reading the newspaper), I began, as one does with an artichoke, to eat it from the outside in. The outer leaves were cold, and I didn’t mind: there are few experiences better than the plot line of an artichoke, however predictable – culminating in the after-taste of the whole experience, which is just one more reason to celebrate life. But I’m getting ahead of myself, even though you know exactly where this is heading. Leaf by leaf, even as time itself was passing, yet, verily, did the leaves get warmer. In other words, the rate of decline in their temperature – even being exposed to the outer air just before it was their turn to get scraped – was less than the increase in temperature they retained from having been closer to the core. And that’s saying something, because you know it takes a while to go around the entire artichoke and scrape a layer of leaves. And yet warmer they did get, until – remember, the outer leaves were cold – as I neared the finale they were burning my fingertips. Do you see what I’m saying here? Adjusting for the relative sizes of the Earth and an artichoke, and for the starting temperature of molten – nay, gaseous! – rock and stuff . . . and working back from estimates that the earth’s core is five billion years old . . . I calculate that the center of the earth is exactly . . . well, really, really hot. After 5 billion years. Not that we didn’t know this already, but it’s always reassuring to have confirmation. BANANAS – WHY SO CHEAP? Don Goldberg: ‘Well, they do grow on trees.’ Nick Watson: ‘Enjoy them while we can . . .‘ The world’s most popular fruit and the fourth most important food crop of any sort is in deep trouble. Its genetic base, the wild bananas and traditional varieties cultivated in India, has collapsed. . . . ABSOLUTE POWER From the DNC: ‘Alphonso Jackson, the Republican Secretary of Housing and Urban Development, told a story recently during a talk he gave in Dallas. Here’s what he said, according to the Dallas Business Journal:’ Jackson closed with a cautionary tale, relaying a conversation he had with a prospective advertising contractor. “He had made every effort to get a contract with HUD for 10 years,” Jackson said of the prospective contractor. “He made a heck of a proposal and was on the [General Services Administration] list, so we selected him. He came to see me and thank me for selecting him. Then he said something … he said, ‘I have a problem with your president.’ “I said, ‘What do you mean?’ He said, ‘I don’t like President Bush.’ I thought to myself, ‘Brother, you have a disconnect — the president is elected, I was selected. You wouldn’t be getting the contract unless I was sitting here. If you have a problem with the president, don’t tell the secretary.’ “He didn’t get the contract,” Jackson continued. “Why should I reward someone who doesn’t like the president, so they can use funds to try to campaign against the president? Logic says they don’t get the contract. That’s the way I believe.” ☞ Had enough?
Treasure of the Sierra Madre May 17, 2006March 4, 2017 YOU MISSED SATURDAY NIGHT LIVE? Click here. NTMD TURNS LOWER Down to $4.33, for a $157 million market cap – triple the market cap of Borealis. B-ORE-ALIS (Get It?) You will recall that each $11.50 share of Borealis (BOREF) represents your ownership of, among other things, one $9 share of its subsidiary Roche Bay Mining (RCHBF). So you in effect get the rest of the company – including the Chorus Motors subsidiary that owns the Wheeltug subsidiary that made the watermelon that moved the plane – for $2.50. With 5 million shares outstanding, that’s $12.5 million for the whole thing. You can tell me Borealis is worthless or you can tell me it’s worth a fortune, but you can’t tell me it’s not the wackiest company you ever invested in. It recently issued its chairman an oddly informative ‘Resolution of Appreciation and Thanks’ signed by his son, the president. To wit: 12 May 2006 RESOLUTION OF APPRECIATION AND THANKS Adopted by the Board of Directors of BOREALIS EXPLORATION LIMITED WHEREAS, The Board of Directors of Borealis Exploration Limited would like to formally extend our profound appreciation to Dr. Rodney T. Cox for his vision, his perseverance, and his single-minded commitment to the future of Borealis and its core mineral holding, and to our loyal shareholders for their commitment and assistance at every step of the way. Borealis Exploration Limited was founded for the specific purpose of creating value from the Roche Bay Magnetite Deposits. The Eastern Roche Bay deposits were initially discovered in 1965, by the Geological Survey of Canada while they were doing their first helicopter-supported large scale regional surveys over the vast Canadian North. In 1965 very little was known about the iron ore prospects of Canada’s North, but the surface showings of banded magnetite on Eastern Melville Peninsula were simply spectacular. Borealis Exploration in 1965 immediately took large Exploration Permits covering the Eastern Deposits under the direction of Judge James L. Buckley. In 1967 Borealis Exploration Geologists led by Normal H. Ursel discovered the Western Roche Bay Deposits. Some of the deposits, when surveyed in the 1970’s by aeromagnetics, revealed the highest surface magnetic values ever recorded. Borealis was chartered by Canada’s parliament in 1968 and went public in 1969. Dr. Rodney T. Cox, who has always been an old-school Graham-and-Dodd asset based investor became Chairman and President of Borealis some nine years later. He was convinced that the Roche Bay deposits were worth billions of dollars. And in the following half decade, Borealis actually started the mega project of placing the Roche Bay Deposits in production. Borealis invested a considerable amount of time, money, and resources into understanding the geology of the property, extensive mapping, doing extensive drilling, on the Adler A and Adler B Deposits, along with one hole in the C deposits, detailed assaying, processing, marketing work, socio-economic and environmental studies and a pre-feasibility study — all with the goal of driving the mega project to production for the benefit of the Inuit Communities and Borealis’ shareholders. Borealis was a whirlwind of activity. Borealis’ shares, which had traded for pennies in the 1970s, rose dramatically in value as work continued. The Roche Bay runway was a typical example of Dr Cox’s innovative and imaginative problem solving. In order to do a proper drilling program without relying on very expensive helicopters, from Hall Beach, Borealis needed to build a runway for fixed-wing aircraft capable of carrying heavy equipment, supplies, as well as exploration and drilling crews. The beaches on Roche Bay Peninsula are made of raised limestone shale. They are more or less flat, but they were unsuitable for a runway. The shale needed to be broken up, compressed, and graded. Borealis asked for Government of Canada approval to build a runway suitable to land a C-130 Hercules-class plane. Such a runway is about 70 meters wide and, and at least 1500 meters long. Typically, runways take years to plan, grade and build, and a considerable amount of specialized equipment which, which meant a huge budget of engineers and consultants. Borealis was doing this mega project on its own ticket, and did not want to wait for the sea lift to bring in the proper equipment, even if it could have afforded to build the runway ‘correctly’, or to hire the proper experts to build the strip. When the airport plans were submitted for government approval, the proposal to build a runway probably added a little mirth to an otherwise dull and dreary bureaucratic day in Yellowknife. The Government of Canada clearly felt they had nothing to lose by raising no objection to the plan. The plan was unrealistic. Borealis did not have the proper equipment and the highly trained experts. What Borealis had was a single D-4 caterpillar tractor, a Bob Cat backhoe, and a makeshift grader which was nothing more than a pickup truck dragging an I-beam. Borealis had a couple of dozen of stubborn and very skilled Inuit, a newly imported engineer from Eastern Europe and a few southern workmen led by the stubbornest man of all. The workmen made the use of that rudimentary equipment into a high art. They worked night and day, and the runway was completed “on schedule and under budget.” Dr. Cox exemplifies Edison’s observation that genius is 99% perspiration and 1% inspiration. The Government saw the airstrip on satellite photos and arrived when all of 200 meters were done. They arrived in force and in a rotten mood. They accosted Dr. Cox wanting to know what in the world did he think he was doing building an air strip without full approvals and without the right equipment. Dr. Cox reminded them that they had raised no objection at the time, and someone had told him to “go and build your airstrip”. It had been a joke at the time, but the airstrip was completed, and is still usable today, and can still take Hercules aircraft. Because Borealis was under budget and had the capability, the team finished up the season by also building a second smaller airstrip for smaller aircraft like Twin Otters and Britten-Norman Islanders. In spite of friction over airstrips and the like, the Canadian government strongly supported the project by renewing the leases and a good working relationship continues to this day. The Inuit communities, both individuals and more recently in the form of the Government of Nunavut, have also consistently supported the Roche Bay project. By the mid 1980s Roche Bay failed to attract and hold the attention of a major player. No major players followed, and work stopped on Roche Bay. Later Dr Cox was to discover that Exploration und Bergbau, the iron exploration and delivery arm of much of the German steel industry, had been telling potential Roche Bay purchasers that the Borealis ore was no good, based entirely on a misunderstanding — the first page of a technical report on the ore which dated to 1971. The first page of that report had identified the deposits as hematite deposits not magnetite deposits. The initial work the Germans did was to test magnetite using Humphrey Spirals. The Borealis deposits are magnetite and they cannot be processed as hematite using Humphrey Spirals. While subsequent pages of the report did report tests for magnetite, using simple magnetic separation, nobody ever read that far in reaching their conclusion. A simple technical mistake may have led to decades of business frustration when potential suitor after potential suitor declined to move ahead with Borealis, in the latter stages of due diligence. Other iron prospects were developed when Borealis deposits were not. By the mid 1980s iron markets had collapsed and in the words of one of the industry leaders, “iron” had become a four letter word. As a company, Borealis started moving on to other things, but Dr. Cox’s commitment to the Melville Peninsula properties was not shaken. He refused to believe anything other than that the rest of the world was wrong and he was right. It is a lonely position to take, but as even he often reminded the Board there is often a very thin line between idiocy and genius, and between failure and success. Besides, nobody had ever started a mega-project in Canada, failed, and still owned the project. Borealis held this dubious honour. So for years, against the advice of every expert in the field, Dr. Cox refused to abandon the iron ore. Lease payments were always given the highest priority, and in both good times and bad, they were made on time. The Graham-and-Dodd value investor refused to walk away from an asset of the magnitude approaching the value of the Swedish Iron ore Deposits which were first mined in 1130, just because nobody else seemed to think it was worth anything. On the contrary, he became ever more convinced of the value of the assets, including not only iron ore, but the precious metals which appeared in sizable quantities in a single segment of an extracted drill core and showed up in one-step processed tailings. As years passed, Borealis moved on to the development of new technologies. Yet Dr. Cox, aided by our shareholders, always kept those iron leases for the company, secure in his conviction that 5-20 billion tonnes of ore, along with whatever gold and other precious metals found within the deposits, weren’t going anywhere. And Borealis continued, on a smaller scale, its work on exploration, beneficiation, and feasibility. In the late 1990s, Borealis restructured its assets, again investing considerable time, money and expertise to ensure that the Roche Bay property — when it was developed — would be poised to return maximum value to Borealis shareholders. The Roche Bay Deposits were transferred in 1997 to Roche Bay plc. Dr Cox and Borealis never forgot Roche Bay, and when it was suggested that Benjamin Cox take over the operational management of Roche Bay, Dr. Cox was an enthusiastic supporter. As the recent announcement of a major agreement between Roche Bay plc and one of the world’s largest metal producers has shown, that decision has proven to be auspicious. Now that Roche Bay is springing to life and there is a development pathway and timeline in place to put Roche Bay into production, it looks highly likely that Dr. Cox’s unflagging vision will be fulfilled. And we would like to credit that vision. To our knowledge, there are no junior mining companies in the world which have been in business for 41 years, let alone any mining company of any size which has held an undeveloped property for 41 years. On the contrary, among the major mines in production today, the average property was owned by no less than 6 previous owners. In other words, for every successful mine today, there were six executive teams who decided to cut their losses and walk away before someone else finally made their property into a money-spinner. Indeed, an interesting article in Skillings Mining Review noted that among the 10 most profitable mineral finds in North America, at least half had been abandoned at least once and some more than once. To add to this, it must be made clear that Borealis has, to an astonishing extent, been blessed by some of the most loyal and superb shareholders ever found. Dr. Cox has been supported by thousands of shareholders over the years who have trusted him and his vision. The list of shareholders is too long to include here, but several key shareholders must be singled out for their extraordinary contributions, specifically: Homer H. Harris, who provided the initial funding and our first group of outside shareholders over a period of almost 50 years. Daniel E. Gershenson, who worked on the project as long as he was able and provided us with his worldwide academic network. Forest M. Robinson, who is the most persistent supporter of our work. Out of our approximate 4000 shareholders in all our companies, Forest is responsible for probably 1000 of them. Joseph Monteith, who is a relatively newcomer having been involved with Borealis for the last 15 years or so. Joe is a huge supporter of all of our technical work and our mining projects: NOW, THEREFORE, WE, the Board of Directors of Borealis Exploration Limited, have adopted this Resolution of Appreciation and Thanks on 12 May 2006, and do formally extend our profound appreciation and thanks to our loyal shareholders, and to Dr. Rodney T. Cox for his vision, his perseverance, and his single-minded commitment to the future of Borealis and its core mineral holding; and THAT the Roche Bay property is set to reward the shareholders of the very first company to claim the mineral rights is among the most astonishing stories of what Dr. Cox himself would call down home pig-headedness that the mining industry has ever seen. For that, we as a Board salute Dr. Rodney T. Cox, and our shareholders. The Board of Directors Borealis Exploration Limited By: Isaiah W. Cox, President