Bob Barr and Jon Stewart Agree But Not One Republican Presidential Candidate June 14, 2007March 6, 2017 REMINDER: QUARTERLY TAXES DUE TOMORROW If you file estimated quarterly tax – either because you always do, or because you just made a killing in GLDD warrants and suddenly realize you’re supposed to – tomorrow’s the deadline for the second quarter payment. Here‘s the form, and instructions. As a general rule (cribbing now verbatim from the IRS) ‘You must pay estimated tax for 2007 if both of the following apply. (1) You expect to owe at least $1000 in tax for 2007 after subtracting your withholding and credits. (2) You expect your withholding and credits to be less than the smaller of (a) 90% of the tax to be shown on your 2007 tax return, or (b) 100% of the tax shown on your 2006 tax return.’ Hint: I wouldn’t tie myself in knots with this, if I were you. It’s an estimate. You made an unexpected $10,000 short-term gain on which the marginal tax, because you’re in the top bracket, is likely to be $3,500? And you don’t ordinarily get a tax refund? OK, so send in $1,200 now and September 15 and January 15. End of story. Realize a big loss later in the year? Skip those last two estimated payments. Make another $20,000 later in the year? Increase the last two payments There is obviously no penalty for estimating too high (you just lose the use of that extra money between now and when it would otherwise be due in future quarterly estimated filings and ultimately on April 15, 2008); and the penalty for estimating too low falls far short of waterboarding. The penalty calculation is explained here, but I strongly advise against clicking that link. Far better to have TaxCut or TurboTax find, when you do your taxes next year, that you owe a $79 penalty than to have your head explode trying to make sense of the calculation. People’s heads have literally exploded reading IRS Pub. 505. WHAT JON STEWART REALLY SAID Joe Devney: ‘In Tuesday’s column you paraphrased Jon Stewart regarding the Republican candidates and gays in the military. The actual quote is more pungent: ‘The only thing worse for these candidates than another terrorist attack would be a gay hero stopping it.’ ‘ A CONSERVATIVE REPUBLICAN’S VIEW Oh, sure, Jon Stewart. And Bill Clinton and Jimmy Carter – and General Shalikashvili – and the New York Times. But how about this, on the conservative op-ed page of yesterday’s Wall Street Journal? Don’t Ask, Who Cares By BOB BARR Wall Street Journal June 13, 2007; Page A18 Last week’s forum of 10 Republican presidential hopefuls offered the country some troubling insight into the thinking of leading GOP candidates. In particular, the five who responded to questions about the Clinton-era “don’t ask, don’t tell” policy governing military service by gays and lesbians showed a disturbing move away from conservative principles, in favor of what smells strongly of political expediency or timidity. As a conservative Republican member of Congress from 1995 to 2003, I was hardly a card-carrying member of the gay-rights lobby. I opposed then, and continue to oppose, same-sex marriage, or the designation of gays as a constitutionally protected minority class. Service in the armed forces is another matter. The bottom line here is that, with nearly a decade and a half of the hybrid “don’t ask, don’t tell” policy to guide us, I have become deeply impressed with the growing weight of credible military opinion which concludes that allowing gays to serve openly in the military does not pose insurmountable problems for the good order and discipline of the services. Asked about reconsideration of the don’t ask, don’t tell policy in favor of a more open and honest approach, the simplistic responses by several Republican presidential candidates left me — and I suspect many others — questioning whether those candidates really even understood the issue, or were simply pandering to the perceived “conservative base.” The fact is, equal treatment of gay and lesbian service members is about as conservative a position as one cares to articulate. Why? First, true conservative political philosophy respects the principles of individual freedom and personal privacy, particularly when it comes to what people do in private. The invasive investigations required to discharge a service member are an unconscionable intrusion into the private lives of American citizens. Worse, while supporters of don’t ask, don’t tell claim the policy only regulates behavior and not identity, the distinction is disingenuous. A service member could be discharged for being overheard remarking that, “I can stay later today since my partner will be taking the dog for a walk.” Second, and on a more practical level, the ban on gays openly serving in our armed forces is hurting a military that is stretched thin, putting further strain on an institution conservatives claim to love. The U.S. has fired over 11,000 people under the current policy, and in the process has lost over 1,000 service members with “mission-critical skills,” including 58 Arabic linguists. Researchers at the UCLA School of Law have found that lifting the ban could increase the number of active-duty personnel by over 40,000. Because the military can’t fill its slots, it has lowered its standards, extended tours of duty and increased rotations, further hurting morale and readiness. Conservatives are supposed to favor meritocracy — rewarding ability — especially in the armed forces. Instead, the military is firing badly needed, capable troops simply because they’re gay, and replacing them with a hodge podge that includes ex-cons, drug abusers and high-school dropouts. Third, the gay ban wastes money. According to a Blue Ribbon Commission made up of academics and prominent defense leaders including former Defense Secretary William Perry, the gay ban has cost taxpayers over $360 million, and even this figure did not include many of the actual costs of rounding up gays and lesbians, firing them and training their replacements. The training of an Arabic linguist alone costs some $120,000; that of medical or aviation specialists can cost up to a quarter million dollars. For all these reasons, many conservatives and other former supporters of the policy have concluded it’s time to change. In March, former Republican senator and Army veteran Alan Simpson announced he no longer supported policy of don’t ask, don’t tell, and believed it was crucial to lift the ban, which in his view has become “a serious detriment to the readiness of America’s forces.” A handful of other Republicans have signed onto the Military Readiness Enhancement Act, which would repeal the current ban on openly gay troops. In January, Gen. John Shalikashvili, former chairman of the Joint Chiefs of Staff, became the highest ranking military official to call for repeal, joining a growing chorus of (mostly retired) military brass to oppose the policy. Attitudes both within and outside the military have shifted greatly since 1993 when the current policy was formulated. Three-quarters of returning Iraq and Afghanistan vets said in a December 2006 Zogby poll that they are “personally comfortable” interacting with gay people. A majority of those who knew someone gay in their unit said the person’s presence had no negative impact on unit morale. Among the public at large, polls show consistently that roughly two- thirds of Americans favor letting gays serve, including majorities of Republicans, regular churchgoers and even people with negative attitudes toward gays. These reasons, and the credibility of many experts making the arguments, have convinced me that there is little reason left to believe gays openly serving would break the armed forces. Americans want strong, moral leadership, and they are quick to sniff out pandering and expediency. It sure would be nice if the presidential wannabes were as quick to realize this. Mr. Barr is a former Republican congressman from Georgia. One day, Mr. Barr will come around on the other issues, too: If we have hate crimes laws to protect all the other victims of hate crimes (and we do, including white victims and Catholic victims and Pakistani victims), Mr. Barr will one day conclude it is deeply offensive to exclude only one class of victim: those assaulted or murdered because of gender identity. (A bill fixing this has passed the House; remains to be acted on by the Senate.) If we want to encourage stable relationships, discourage promiscuity, facilitate ‘liberty and the pursuit of happiness – or simply give all our citizens equal rights under the law – Mr. Barr will one day conclude gay couples who apply for marriage licenses should be granted them just as straight couples are. But one step at a time. Mr. Barr is now prepared to allow gays and lesbians to fight and die for their country, and his voice on this issue is an important one. In a few years, he might conclude it is time to extend equal treatment to gays and lesbians in civilian life as well. If he does, his evolving view will be warmly welcomed.
Save 45% Even If You’re Not Speaking to Each Other June 13, 2007March 6, 2017 ALISON GOES GREEN I consider myself an environmentalist, which can be a challenge given our very comfortable lifestyle. My husband is a contrarian but also an engineer (so he loves to try new technology) and a Wall Street guy with an eye on the bottom line. Our interests finally converged around cutting electric use in our weekend house in Connecticut. So here’s the story. Our electric use peaks in the summer when we use air conditioning and electrically-heated hot water, but the bills were high year-round, averaging about $200 a month and topping out at over $400 in midsummer. We were tired of the bills. We started by swapping out the lightbulbs for CFLs; easy, the state subsidized the prices, and it did seem to help. We put power strips all over the place to foil the energy “vampires” (like TV’s) that use power even when they’re off. It made it easy to switch off the power when we went away, back on when we returned. Then we replaced the washing machine with a front-loader – I’d fought that for years, thinking I’d hate bending that much, but now I love it – can’t get over how dry things are when they come out of the washer, so MUCH less drying is required. (And it does lots of fun things like light up and make cute beep noises and, most usefully, count down the time til it’s done). Then my husband decided it was silly to heat water when we weren’t there, so we replaced the old electric water heater (used only in the summer months when the furnace is off) with an on-demand one that heats water only as we use it. And here’s what happened. Comparing the three month period since we made all the changes to the previous years: March-May 2003: $428.56 March-May 2004: $413.94 March-May 2005: $468.32 March-May 2006: $447.51 March-May 2007: $242.94 So, we’re already saving an average of 45% with some simple changes, and without compromising anything about our quality of life. Imagine, if everyone did this, how many power plants we wouldn’t have to build? FROM ROGER WHO GET THEM FROM ALAN, WHO GOT THEM . . . The Silent Treatment A man and his wife were having some problems at home and were giving each other the silent treatment. Suddenly, the man realized that the next day, he would need his wife to wake him at 5:00 AM for an early morning business flight. Not wanting to be the first to break the silence (and LOSE), he wrote on a piece of paper, ‘Please wake me at 5:00 AM.’ He left it where he knew she would find it. The next morning, the man woke up, only to discover it was 9:00 AM and he had missed his flight. Furious, he was about to go and see why his wife hadn’t wakened him, when he noticed a piece of paper by the bed. The paper said, ‘It is 5:00 AM. Wake up.’ Men are not equipped for these kinds of contests. Wife Vs. Husband A couple drove down a country road for several miles, not saying a word. An earlier discussion had led to an argument and neither of them wanted to concede their position. As they passed a barnyard of mules, goats, and pigs, the husband asked sarcastically, ‘Relatives of yours?’ ‘Yep,’ the wife replied, ‘in-laws.’ ROLL YOUR MOUSE OVER THE SCANDAL Kevin: ‘Check out see this brilliant visual in Slate.’ Having a hard time keeping track of all 10,000 GOP scandals? Between fired U.S. attorneys, deleted RNC e-mails, sexually harassed pages, outed CIA agents, and tortured Iraqi prisoners-not to mention the warrantless wiretapping, plum defense contracts, and golf junkets to Scotland-you could be forgiven for losing track of which congressman or Bush administration flunky did which shady thing. Renzi – now, was that the guy with the sleazy land deal? Or the woman Paul Wolfowitz promoted? We’re not saying that Democrats never do anything shady. (Cash-stuffed freezers come to mind.) But as the saying goes, with great power come great opportunities to screw up royally. And if your memory is as hazy as ours, you could probably use a handy refresher.
Don’t Ask, Don’t Translate June 12, 2007March 6, 2017 You saw every hand go up when the Democratic presidential candidates were asked whether gays should be allowed to serve openly – and every Republican hand stay down a couple of nights later. As Jon Stewart summed it up on ‘The Daily Show,’ the Republicans will do anything to defeat our enemies – some even talk of using first-strike nuclear weapons. But there are limits. Using nukes is one thing; torture may be okay – but using gay soldiers (as our allies mostly all do)? No way. From Friday’s New York Times: June 8, 2007 Op-Ed Contributor Don’t Ask, Don’t Translate By STEPHEN BENJAMIN IMAGINE for a moment an American soldier deep in the Iraqi desert. His unit is about to head out when he receives a cable detailing an insurgent ambush right in his convoy’s path. With this information, he and his soldiers are now prepared for the danger that lies ahead. Reports like these are regularly sent from military translators’ desks, providing critical, often life-saving intelligence to troops fighting in Iraq and Afghanistan. But the military has a desperate shortage of linguists trained to translate such invaluable information and convey it to the war zone. The lack of qualified translators has been a pressing issue for some time – the Army had filled only half its authorized positions for Arabic translators in 2001. Cables went untranslated on Sept. 10 that might have prevented the terrorist attacks on Sept. 11. Today, the American Embassy in Baghdad has nearly 1,000 personnel, but only a handful of fluent Arabic speakers. I was an Arabic translator. After joining the Navy in 2003, I attended the Defense Language Institute, graduated in the top 10 percent of my class and then spent two years giving our troops the critical translation services they desperately needed. I was ready to serve in Iraq. But I never got to. In March, I was ousted from the Navy under the “don’t ask, don’t tell” policy, which mandates dismissal if a service member is found to be gay. My story begins almost a year ago when my roommate, who is also gay, was deployed to Falluja. We communicated the only way we could: using the military’s instant-messaging system on monitored government computers. These electronic conversations are lifelines, keeping soldiers sane while mortars land meters away. Then, last October the annual inspection of my base, Fort Gordon, Ga., included a perusal of the government computer chat system; inspectors identified 70 service members whose use violated policy. The range of violations was broad: people were flagged for everything from profanity to outright discussions of explicit sexual activity. Among those charged were my former roommate and me. Our messages had included references to our social lives – comments that were otherwise unremarkable, except that they indicated we were both gay. I could have written a statement denying that I was homosexual, but lying did not seem like the right thing to do. My roommate made the same decision, though he was allowed to remain in Iraq until the scheduled end of his tour. The result was the termination of our careers, and the loss to the military of two more Arabic translators. The 68 other, heterosexual service members remained on active duty, despite many having committed violations far more egregious than ours; the Pentagon apparently doesn’t consider hate speech, derogatory comments about women or sexual misconduct grounds for dismissal. My supervisors did not want to lose me. Most of my peers knew I was gay, and that didn’t bother them. I was always accepted as a member of the team. And my experience was not anomalous: polls of veterans from Iraq and Afghanistan show an overwhelming majority are comfortable with gays. Many were aware of at least one gay person in their unit and had no problem with it. “Don’t ask, don’t tell” does nothing but deprive the military of talent it needs and invade the privacy of gay service members just trying to do their jobs and live their lives. Political and military leaders who support the current law may believe that homosexual soldiers threaten unit cohesion and military readiness, but the real damage is caused by denying enlistment to patriotic Americans and wrenching qualified individuals out of effective military units. This does not serve the military or the nation well. Consider: more than 58 Arabic linguists have been kicked out since “don’t ask, don’t tell” was instituted. How much valuable intelligence could those men and women be providing today to troops in harm’s way? In addition to those translators, 11,000 other service members have been ousted since the “don’t ask, don’t tell” policy was passed by Congress in 1993. Many held critical jobs in intelligence, medicine and counterterrorism. An untold number of closeted gay military members don’t re-enlist because of the pressure the law puts on them. This is the real cost of the ban – and, with our military so overcommitted and undermanned, it’s too high to pay. In response to difficult recruiting prospects, the Army has already taken a number of steps, lengthening soldiers’ deployments to 15 months from 12, enlisting felons and extending the age limit to 42. Why then won’t Congress pass a bill like the Military Readiness Enhancement Act, which would repeal “don’t ask, don’t tell”? The bipartisan bill, by some analysts – estimates, could add more than 41,000 soldiers – all gay, of course. As the friends I once served with head off to 15-month deployments, I regret I am not there to lessen their burden and to serve my country. I’m trained to fight, I speak Arabic and I’m willing to serve. No recruiter needs to make a persuasive argument to sign me up. I’m ready, and I’m waiting. Stephen Benjamin is a former petty officer second class in the Navy. ☞ An increasing number of generals, admirals, and – yes – conservative Republicans are coming around to the late Barry Goldwater’s view: that ‘you don’t have to be straight to shoot straight,’ let alone translate Arabic. We are one president away from getting rid of this policy.
The Iniquity of Inequity June 11, 2007January 6, 2017 BOREALIS CORRECTIONS I fixed Friday’s column for a couple of mistakes: AXI was not ‘suspended’ from trading – it voluntarily had trading in its stock halted while they worked out the Roche Bay deal. The V doesn’t stand for Vancouver; it trades on Toronto’s TSX Venture exchange – half a million shares Friday up 42 cents at $1.97 Canadian. Finally, what I described as “large orders in hand if we can produce the ore” are large “off-take agreements,” which are still promising, but not firm commitments. ESCAPA Jim Skinnell: “Sorry, had to brag: 28.234! Very cool game though. They speed up as you go further along, so it gets more a more difficult.” A GRAND TIME TO BE RICH AND POWERFUL Matt Miller’s latest Fortune column: June 25, 2007 issue FORTUNE Magazine How To Run A Budget Like An Idiot by Matt Miller New census data show that the top 1% of U.S. earners now take home a greater share of national income than at any time since the height of the go-go 1920s. The top 300,000 earners together receive almost as much income as the bottom 150 million. Democrats inhale these facts and breathe out fire. Republicans say, “Hey, this is no time to be complacent. With a little effort we can push this closer to Louis XVI levels of inequality!” At least that’s what GOP presidential wannabes are sounding like as they genuflect before the altar of tax reduction, despite that creed’s growing fiscal, moral, and mathematical indefensibility. Mitt Romney wants more marginal and corporate rate cuts. Rudy Giuliani touts the endorsement of Steve “Flat Tax” Forbes. Even John McCain, the “straight talker” who opposed Bush’s original tax cuts, now insists on their extension. Before every red-blooded tax loather spits on this page in disgust, consider the context. Over the past six years we’ve borrowed nearly $2 trillion to cut taxes for the wealthiest during a time of war, meaning we’ve slipped the bill for our war and our tax cuts to our kids. How do the candidates-who also claim to be “fiscally conservative” (not to mention devotees of “family values”)-square all this? Their stock answer is that we can cut taxes further if only we “get tough on spending.” Sounds marvelous, but when Republicans controlled every corner of Washington, they balked at trimming a teensy few million from the next trillion in planned Medicaid expenses. Bottom line: The outer limits of Republican spending-cut zeal won’t get us anywhere close to balancing the books. And that’s before you toss in our $39 trillion in unfunded Social Security and Medicare liabilities. I once asked budget gurus at two conservative think tanks what federal spending and taxes should be as a percentage of GDP a decade from now (it’s 20% today). They casually replied 12% or 13%-meaning they think we’ll slice government by more than a third as 77 million baby-boomers hit their rocking chairs. This evidences either (a) deep disingenuousness or (b) deeper delusions. Neither speaks well for the state of conservative thinking. Truth is, the only way GOP math adds up is if Giuliani, Romney, and company adopt the incentives for voluntary transitions” (read suicides) for 65-year-olds featured in Chris Buckley’s new comic novel, Boomsday. The most disappointing feature of the GOP case on taxes is a sin of omission. Tax-cut cheerleaders, like the Wall Street Journal editorial page, focus exclusively on the income tax. And it’s true, the top 5% of earners do pay about 58% of federal income taxes. But the income tax is only 47% of federal revenue today-something Republicans never want to discuss. When you throw other federal taxes into the mix (especially the regressive payroll tax disproportionately borne by average earners), you find that “all in,” the top-earning 5% make about 30% of the income and pay about 40% of overall federal taxes. In other words, we have a modestly progressive system. Of course, if you had an Ayn Rand infatuation in high school that you never outgrew, you may think those top 300,000 supermen are dragging the 150 million proles around like a ball and chain, and the proles should shut up and be grateful. So let me appeal to your scientific side instead, with what I call the Plutocrat Insulation Index (or PII). Take the percentage of tax cuts going to the top 1% of earners and divide that by the percentage of men and women serving in Iraq who are from the families of that same top 1%. Miller’s Social Decadence Theorem posits that as the PII approaches infinity (which it does today), we’re deep in Marie Antoinette territory. With a push from those shiny new GOP tax plans, we’ll be telling them to eat cake in no time. Matt Miller is a Senior Fellow at the Center for American Progress and host of public radio’s “Left, Right & Center.” BILL GATES FINALLY GETS A HARVARD DEGREE As you know, he dropped out. Here is the Commencement address he delivered Thursday. It ties in with the article above – it’s about the world’s inequities. Which somehow escaped Gates’ gaze while an undergraduate.
Borealis Gets a Dividend June 8, 2007March 6, 2017 You will recall that Borealis is divided into 5 million shares and that it owns 5 million shares in each of its subsidiaries, such as Roche Bay Mining, which is divided into about 7.5 million shares. If there is a 30 mph head wind and Julie had three times as many marbles as Peter when they started out at 180 mph, how many shares of Roche Bay does Borealis effectively Own? That’s right! Five million! About two-thirds of the total. So the latest is that a little Canadian mining outfit called Advanced Explorations (whose own stock – symbol AXI on the Vancouver stock exchange [oh, stop laughing] – had been suspended from trading until this deal was complete) announced that it has raised $10 million or so to fund its initial work commercializing the Roche Bay iron ore holdings – for which large offtake agreements are already in hand, if we can produce the ore. AXI, which had closed months ago at 31 cents (Canadian) when the trading stopped reopened yesterday on this news and closed at $1.50 (Canadian) on volume of a little more than 1 million shares. As part of the deal, AXI acquires a big chunk of Roche Bay . . . but also gives Roche Bay 8 million warrants to buy AXI stock at 35 cents . . . and Roche Bay yesterday announced that it would be giving a dividend of half on one of those warrants (called ‘share purchase rights’) for each share of Roche Bay held. Bueller? Bueller? Well, since Borealis owns 5 million Roche Bay shares, and Roche Bay is paying out half an AXI warrant for each one, how many chucks could a wood chuck chuck if a wood chuck could chuck wood? Answer: Borealis gets 2.5 million warrants, with a current intrinsic value of $1.15 each (namely, the $1.50 you could sell the stock for yesterday, minus the 35-cent exercise price of the warrants). So, if one assumes the AXI stock will stay at $1.50 – a big assumption, although of course it could also go higher – then these 2.5 million warrants are worth $2,875,000 (Canadian). Could that be enough to help fund WheelTug and some of the other promising technology? Borealis remains a wild speculation; but with this deal closing, the hoped-for iron ore bonanza comes a step closer . . . and a bit of seed cash for WheelTug (and for some of the other hoped-for technological breakthroughs) may become available this October, when the restriction on selling the warrants is lifted. A lot of you are – rightly – skeptical of Borealis. But the company is certainly far ahead of where it was eight years ago, when we started this nutty thread. The plane moved. Delta has signed on to try to retrofit thousands of jets. Crews are drilling core samples up in the subArctic. You never know. Three years from now, our iron ore ships may have come in, and 737s could be pushing back from the gate on their own power. Visions of sugar plum fairies dance in my head. Have a great weekend.
Fun and Games June 7, 2007March 6, 2017 STREET VIEW Alan: ‘Go to Google Maps, type in any address and then click on ‘street view’ in the upper left corner of the map. You can see everything (and everyone) at ‘street level’ – amazing. ‘Walk’ along the street in any direction (you may see people you know!). It works in NYC, at least. WELL, THERE GOES THE REST OF YOUR WEEK I got to 13.5 seconds twice. Escapa! (Thanks, Peter.) Enjoy!
Cauliflower and Your Prostate June 6, 2007March 6, 2017 THINK THERE’S TOO MUCH MONEY IN POLITICS? I do! Click here to help fix it. THE EXAFLOOD From the Sacramento Bee, by Bruce Mehlman and Larry Irving (thanks, Peter): The impending exaflood of data is cause for excitement. It took two centuries to fill the shelves of the Library of Congress with more than 57 million manuscripts, 29 million books and periodicals, 12 million photographs, and more. Now, the world generates an equivalent amount of digital information nearly 100 times each day. The explosion of digital information and proliferation of applications promises great things for our economy and our nation, as long as we are prepared. DNDN So I got a lot of blowback from yesterday’s post, as you might expect. It hit three themes (plus one email saying the drug isn’t needed anyway – just take aspirin and eat curried cauliflower): 1. Two of the doctors recommending against approval of Provenge have big conflicts of interest. 2. The question was changed, yes, but to CORRECT it for what FDA standards say it should be. 3. The second trial people lived shorter than the first trial placebo people, but the second trial people were sicker. Apples to apples, Provenge beat placebo both times. I guess there are two issues here: a) In an ideal world, should the FDA approve it? b) In the real world of current law, WILL the FDA approve it? A much narrower question, and maybe heartless, but certainly relevent to the stock price. Here’s a sampling of the emails, only one of which, in red, was positive . . . followed by my friend’s response. Kerry: ‘Provenge works and the FDA only denied it do to politics and the Conflict of Interest Doctors, Scher and Hussain.’ Richard Lake: ”Substantial Evidence’ IS the FDA standard and if you don’t know that you have no business writing about it and if you did know that you are no better than a paid basher on the DNDN message boards. I personally believe you are ‘short’ ethics.’ Richard Berman: ‘You stated that the FDA changed the efficacy question in the Advisory Committee panel on Provenge. That is correct, however, they changed the question to fit the statutory and regulatory language and to be consistent with the language used for virtually all other cancer drugs. The original language, ‘establish efficacy’ appears no where in the statute or regulations. It is a very high standard, and to scientists is even higher. Remember, these are people to whom gravity is still a theory. The changed language ‘provide substantial evidence of efficacy’ is the statutory and regulatory language and is the language used in other cancer advisory committees. The question was corrected, not changed.’ Richard: ‘I agree with your conclusion regarding DNDN but not with your reasons (or, I guess, your friend’s reasons). For example, he mocks the company for not knowing how its drug works. In fact we don’t know how many drugs work. Phrases like ‘the exact mechanism of action is unclear’ appear with frightening frequency in drug applications. The head of Genetech describes oncology research as a series of ‘semi-rational leaps of faith.’ I try to remember that the FDA is not a drug testing organization but a statistics analyzing one. Provenge’s box score is not too good. FDA Standard: Two trials meet predefined targets with 95% level of significance each, resulting in a composite level of 99.5%. Provenge results: Two trials, neither of which met predefined target. So, after special pleading: Two trials, one of which met post hoc defined target with 95% level of significance but the other still didn’t so, after special pleading: One trial and a meta-trial which combined the two trials into a single data set (sort of like copying from the person sitting next to you) meet the post hoc defined targets with 95% level of significance each resulting in a composite level of who knows?’ Thomas H. Jones: ‘Please go read Dendreon’s 10K per 2007 for the REAL facts about Provenge (access at dendreon.com 10K from SEC filings on website). And please suggest that ALL your readers do the same so they have the facts for themselves. ALL the trial results your ‘friend’ referenced are there for the viewing and they are all POSITIVE . . . The average Overall Survival was 4 1/2 months, with some patients living for years. Eduardo Garcia, who spoke at the FDA advisory council meeting, is a 6+ year survivor.’ Trond Hildahl: ‘You are probably going to get a lot of hate mail – there are some fanatical Dendreon fans. Not all of us are foaming at the mouth, please believe me – but I do want to respond to a couple of your ‘shorting’ points. The FDA’s own requirements state the proper wording should be ‘substantial efficacy.’ Yet the question was worded ‘establish efficacy.’ . . . Maha Hussein, who you mention, actually fell asleep during the patient testimony session! This is not knowable from reading the transcript. Also, Hussein and Dr. Scher, 2 of the 4 NO votes, both have enormous conflicts of interest. Information that has come out since show that both never should have been allowed to serve on the advisory committee. These Drs. BOTH set a new low also by writing letters to the Cancer Letter and then ‘leaking’ them to the press. I could go on and argue a number of your other points, ESPECIALLY regarding the second trial and the number of deaths in the Provenge arm versus the placebo – I think you are flat out wrong in your conclusions . . . but I am not a statistician and this is already too long. Keep in mind the FDA recently advised that they will accept interim trial data from 9902B which will be available in mid 2008. Don’t stay short too long!’ Kevin M. Ward: ‘Maha Hussain – deep conflicts of interest, both from funding for her investigative work AND personal investments. Also, an expert in CHEMO, but NOT in immunotherapies. Should not have been on the panel. . . . Good luck with your short position. As of right now, it’s moved 23 cents against you. The day all this gets resolved and Provenge gets its approval, any short will be toast.’ Matt Kim, MD: ‘The second trial was indeed supportive of the first, the skewed data on first read was shown to be caused by the Provenge group having sicker patients than the control untreated group, on later analysis which the FDA accepted as proper and requires the same analysis for the ongoing trial the second study again like the first showed clear evidence of longer survival . . . I obviously don’t know your Harvard friend, but he is talking out his rear and that is verifiable if you have the integrity to check. I realize this statement is harsh but you put absolute lies in print on your website. Please don’t let your name be associated with lies.’ ☞ Get the gist? Well, here’s the thing. It’s possible these folks are right in buying the DNDN line, and that my friend is wrong. But he wasn’t born a DNDN short. He goes long drug stocks from time to time, also, and could have gone long this one. Before he goes long or short, he does a lot more analysis than most investors . . . and he has a great deal of experience understanding FDA procedures. Confronted with the emails above, he offers the following: (1) There were two doctors who were on the panel and who voted no (among the 4) who subsequently published letters to the FDA in a trade journal known as the Cancer Letter. One was Maha Hussain, the chair person of the Oncology Drugs Advisory Committee. The second is Howard Scher, head of prostate cancer at Memorial Sloan Kettering. That speaks for itself. The third doctor who published a letter opposing the approval was a statistician who was asked by the Biologics division to be on the Provenge panel, but was unable to attend the meeting. All three of the letters explain in detail why the data for show no evidence of efficacy, citing lots of data. (2) The question “Establish Efficacy” was worded by the FDA. It is published on the website. The original testimony from the division director, Celia Witten, is that this is the question the FDA wanted. What actually happened is that three doctors voted “no,” so then the chairman asked if the question could be changed. Dr. Witten said that, well, this was the question they wanted answered, though the committee could also answer a different question. They then went back and asked the fourth doctor, who voted “no.” Then Dr. Witten said that the law uses the words “substantial evidence of efficacy,” so she and the chairman changed the question to “substantial evidence of efficacy.” All of this can be found in the last 20-30 pages of the transcript. The FDA has a technical definition of “substantial evidence of efficacy.” There is a difference in what this means from a regulatory standpoint and what a guy on the street (or an orthopedist–look at the background of the people on the panel, found at the beginning of the transcript) might think it means. (3) The entry criteria for the two trials were the same. Thus, the outcomes should be the same. It also turns out that the patients who received Provenge in the first trial were much healthier than those who received the control, and this difference could easily explain the apparent difference in survival in the first trial. (4) In order for a trial to make a claim, it must demonstrate statistical significance on the primary endpoint. Dor Pharma [a different company with a different drug recently rejected] did not do this. IDM [ditto] did not do this. Dendreon did not do this. IF you do not do this, then, as noted for Dor (and all other companies), any additional data that might be generated from the trial is useful only for generating hypotheses and planning additional trials. It is “post-hoc” analysis. Richard Feynman in The Meaning of It All has an excellent discussion in the second lecture about why post-hoc data analyses are never valid in statistics. The FDA is following Feynman (the Nobel prize winner) in this regard. In reviewing IDM, the FDA concluded that since it did not meet its primary endpoint, it did not show “substantial evidence of efficacy.” Ditto for Dor. Ditto for Dendreon. Ditto for Pharmacyclics (PCYC), which received a rejection letter from the cancer division of the drug division of the FDA earlier this year for a product to treat brain mets. Ditto for Neoprobe (NEOL), which got a rejection letter for brain cancer for the same reason. The FDA has not approved Provenge, will not approve Provenge, and should not approve Provenge. If Provenge would like an approval, it should demonstrate statistically valid evidence of efficacy, like all other approved drugs. ☞ He believes DNDN has nothing, sadly, and will gradually fade away. I, obviously, have no clue. I just know he could be wrong – but generally is right. Certainly, very little ‘smart money’ expected the advisory committee to recommend approval, or the stock would not have been at $4 for so long just before it did (and jumped to $24). And, at least so far, that smart money has been right: the FDA – headed by a prostate cancer expert – has not approved the drug. Meanwhile, from PeterK: ‘Provenge’s ineffectiveness against prostate cancer is no loss except to DNDN and its investors. Aspirin and turmeric are already proven effective in the prevention and treatment of prostate cancer. Aspirin and other NSAIDS help prevent cancers, heart disease and possibly Alzheimers by reducing inflammation, which researchers believe causes or promotes the spread of these and other diseases. Click here. (‘Among daily NSAID users, there was a 12% reduced risk of prostate cancer in those aged 50 to 59, a 60% lower risk in those 60 to 69, and an 83% drop in risk for those 70 and over.’) And here. (‘Rutgers researchers have found that the curry spice turmeric holds real potential for the treatment and prevention of prostate cancer, particularly when combined with certain vegetables.’) Said vegetables include cauliflower, which when fried is delicious with turmeric. Be careful though; turmeric stains things yellow!’
Iran and Your Prostate June 5, 2007March 6, 2017 TO WHOM IT MAY CONCERN Happy BIRTHDAY, Sweetness! THINK THERE’S TOO MUCH MONEY IN POLITICS? I do! Click here to help fix it. CHENEY’S PLAN TO BOMB IRAN – CONFIRMED? Click here. (The idea is, even Bush isn’t nuts enough to do this – so Cheney will get the Israelis to provoke an Iranian attack on American forces and then Bush will start bombing.) GAY ARAB LINGUISTS IN THE MILITARY Stephen Gilbert imagines this dialog: ‘Mr. President, the linguist says there is a terror attack planned for tomorrow.’ ‘I don’t care what he says – he’s gay.’ Because, having now fired 58 (fifty-eight!) gay Arab linguists, that’s essentially what the Republicans who back this nutty policy are saying. Here‘s the latest such story. (And here‘s John McCain affirming his view that gays in the military are an intolerable risk.) President Clinton has long since issued a letter lamenting how Don’t Ask/Don’t Tell went awry. All 21 of our 2004 and 2008 Democratic presidential primary contestants support lifting the ban. And last month, President Carter issued a letter of his own. Even some Republicans have come around. ‘I believe it is critical that we review – and overturn – the ban on gay service members in the military,’ says Wyoming Senator Alan Simpson. ‘I voted for ‘don’t ask, don’t tell.’ But much has changed since 1993. We need every able-bodied, smart patriot to help us win this war.’ DNDN – PROSTATE CANCER – THE NEWS ABC News last night had a piece on Provenge, a drug meant to treat prostate cancer, from a company called Dendreon (DNDN). DNDN was long around $4 a share before it jumped to $24 in a couple of days a few weeks ago . . . then dropped back to $6 in a day. Last night it closed at $8.20. I don’t know whether or how the other networks may have covered it, but ABC was reporting on a demonstration in Washington by prostate cancer patients who wanted the FDA to approve the drug for sale. After all, the FDA advisory panel had voted 13-4 in its favor – it had extended life 4½ months on average in a small clinical trial (and as much as two to three years in a few cases) – yet the FDA had turned it down and the FDA brass would not comment. By the end of the news report any decent human being was screaming at the FDA, through his or her TV set, “People are dying! How can you call for another year’s clincal trials before approving this miracle drug?!” Here are some things ABC did not report (full disclosure: because of these things, I am short the stock): 1. The head of the FDA is probably as eager as anybody to combat prostate cancer – he’s had it. And he has spent much of his life fighting it . . . as head of the National Cancer Institute . . . as Executive Vice President and Chief Academic Officer of the University of Texas M.D. Anderson Cancer Center in Houston, leading a faculty of more than 1,000 cancer researchers and clinicians . . . as founding director of the Prostate Cancer Research Program . . . and on and on. 2. When the advisory panel vote was taken, the question was, “do the data [of the clinical trials] ESTABLISH EFFICACY.” The first 4 panelists unanimously answered: “No.” Seeing the handwriting on the wall, the chair of the panel changed the question. The remaining 13 panelists were asked whether the data showed “SUBSTANTIAL EVIDENCE of efficacy.” They answered yes, and the stock shot from $4 to $24. 3. I’m told by an expert who follows these things closely, the FDA can’t suddenly change the standards by which it approves drugs. If they had stuck with the question that was supposed to be asked, the vote, far from 13-4 in favor, might well have been 17-0 against. So my friend bet the FDA would not accept the recommendation of its advisory panel – and he was right. The FDA said more trials would be needed (that would take two or three years at a cost likely well in excess of $100 million), and the stock dropped to $6. 4. Here is the transcript of the FDA meeting. You are a better man than I if you can make sense of it, but my Harvard-trained doctor pal (who would also very much like to see a cure for prostate cancer – who wouldn’t?) says: Note the testimony that the product does not produce CD8 ‘cytotoxic’ T cells. So how then does the drug work? According to the company in the transcript, ‘we don’t know.’ MAGIC perhaps? His point: the drug is supposed to use the body’s own immune system to attack the cancer – but for that you need T-cells . . . yet they admit it produces none. Note that the overall survival of the Provenge-treated patients in the second trial was numerically less than the survival of the placebo-treated patients in the first trial. Got that? People using the drug survived less long than those using a placebo. Dr. Maha Hussain pointed this out – she was chair in 2005 of the FDA’s committee on deciding the correct endpoints for trials of prostate cancer therapies. She also happens to be chairwoman of the committee called ODAC that advises the drug division of the FDA on cancer products. It’s heartbreaking that the drug hasn’t been proven to prolong life . . . may even shorten it based on the results comparing longevity of the second trial with placebo results of the first. But for now, at least, my friend writes, “The FDA is consistent in applying its standards. If the FDA were to approve Dendreon’s Provenge, then almost EVERY DRUG WOULD HAVE TO BE APPROVED” – because drugs aren’t taken to clinical trials without some encouraging evidence they might work – “and the US market would be flooded with useless placebos. Not only is this against the law (the Kefauver act of 1962 states that drugs must be shown to be safe AND effective), it is very bad policy.” (Because, presumably, since our health care system is already badly strapped even just paying for the drugs that have been proven to work, what if it had to cut back on those in order to pay for, also, loads of drugs that very possibly don’t?) But even if you think Congress should change the law and not require proof it works before a drug can be approved (and if I were denied a cure I thought might help, I would think the same thing), look at it purely from a stock market perspective. Far from the nearly $700 million at which the stock market currently values the company, my friend thinks it’s worth nothing. All it has, he believes, is a drug that does not work. (NTMD, at least, had a drug that did work. It was just that there was no point paying six times what it would cost to buy its two generic components separately.) The options on DNDN tell all. People are paying $2.50 for the right to sell this $8.20 stock at $5 over the next year and a half. Only to the extent it falls below $2.50 will they begin to see a profit. Do not short the stock – how would you like to be sitting there short at $8 and see it run to $24 in a day if my friend is wrong (or right, but something sends it soaring for a while anyway)? And probably do not buy the puts – so many people agree with my friend that they are very expensive, as in the example above. But if you happen to own the stock, consider the parts of the story ABC didn’t tell, disheartening though they are to anyone hoping to prolong life even for a few months. (Which is to say, all of us.)
The Boy with Spiders Living in His Ear And Other Important Clarifications June 4, 2007March 6, 2017 THINK THERE’S TOO MUCH MONEY IN POLITICS? I do! Click here to help fix it. INFLAMMABLE Nick: ‘Ah, yes, flammable and inflammable; also habitable and inhabitable. Something that can be set alight can be inflamed, hence it’s inflammable. Something that can be lived in can be inhabited, so it’s inhabitable. The INs are some sort of verbal activator (I’m sure the linguists have a term for this). The negatives are, properly, uninflammable and uninhabitable.’ ☞ That’s telligible. Thanks. Tom Cuddy: ‘Another favorite of mine: slim chance and fat chance mean the same thing.’ BATED Joel: ‘Artie means ‘bated’ (as in abated, stopped or held) breath, not ‘baited breath.’ This one gets under my skin, as does ‘I could care less’ when what they really mean is ‘I couldn’t care less,’ meaning ‘I care so little that it would be impossible to care less than I now care.’ And ‘Music hath charms to soothe the savage beast’ when the quote is ‘Music hath charms to soothe the savage breast,’ or at least that’s pretty close. Breast, as in heart, not beast, as in nasty ol’ critter. Congreve wrote it, I believe.’ ☞ I went back and changed baited to bated, and found this for Congreve. You were pretty close. Mike Hanlon: ‘It’s ‘bated breath.’ Here‘s a very witty site that explains the whole thing. (For trivia buffs, straightdope.com is a gold mine!)’ ☞ Yes! E.g.: ‘The truth about the boy with ‘two spiders living in his ear.” STUP-AM-I Bruce Stephenson: ‘The other common words ending in ‘efy‘ are putrefy and stupefy . . . though Merriam-Webster lists 16 in total.’ ☞ Well, I am stupefied . . . but it’s not really 16. At least one, ‘beefy,’ is not a verb. And another, ‘defy,’ though a verb, does not mean make d the way liquefy means make liquid or rarefy means make rare. And madefy (make wet) and pinguefy (become or make fatty, oily, or pinguid) – and the rest – seem, as words in actual usage, to have putrefied. GLDDW For those who sold some or all their warrants Friday, the worst they could have done was $4.40 (the low for the day, $4.90 was the high). For those holding on, as discussed at length Friday, it may soon be necessary to put up $5 in cash to convert the warrants to stock. If it is, I plan to do some of that, too. At that point, you’re going from the compartment of your brain, or at least your portfolio, reserved for ‘exhilarating speculations with money you can truly afford to lose’ – which at 38 cents and 70 cents these warrants were – to the compartment (larger, I hope) reserved for ‘solid long-term investments from which you might hope to do better than a bank account . . . always recognizing that even seemingly solid investments can run into unanticipated difficulties.’ (Are you asleep yet?) (And when will we start adding color to our prose? See how that red phrase was meant to connote excitement and danger? Olé! And the gray was meant to convey snooze? Too distracting? Reserve only for purple prose?)
Hanging Teenagers June 1, 2007March 6, 2017 BOGO LIGHTS Ralph Humbertson: ‘Six BoGo lights are off to Africa and six to me for hurricane gifts to family and friends. I think I’ll make this my special little charity. What is the quote? ‘If everyone lit just one little candle, what a bright world this would be.” ☞ It’s not just a quote, it’s Perry Como! MALARIA NETS Jim Gibson: ‘If you like the BoGo promo, you might really like the Nothing But Nets program established by Rick Reilly at Sports Illustrated with the United Nations Foundations. Donate $10 to provide a bed net that protects an African family from malaria – and not a penny of it will be diverted for administrative costs.’ COMING-OUT INSURANCE Pregnant? Worried the baby might be gay? John Kasley: ‘From a Canadian gay website. Click here.’ ☞ In North America, we can laugh about a two-minute video clip like that. But not this one: HANGING TEENAGERS This four-minute clip speaks for itself. GLDD But wait – watch those videos first. Indeed, this long item will be of no interest at all if you don’t own GLDD warrants. See you Monday. You do own some? You’ve watched the videos? Okay, here goes: A friend sent along a copy of a 17-page research report from the Opportunity Research Group. They valued GLDD in various ways, all of which justified a price significantly higher than the current $9 or so a share. Also, Jim Cramer gave it a plug last night. (I know; he also liked Nitromed.) So here is where it gets a little tricky. We have now had 10 consecutive days when the stock closed ‘at or above $8.50.’ The company can, at its option, force conversion of the warrants if the stock trades that high for 20 days in any 30-day trading period. (Take two Advil and click here, jumping down to paragraph 6.1, for the details.) In other words, as soon as two weeks from now, they could let us know we have as little as a month to either (a) sell the warrants for whatever we can get (which was about $4 last night, roughly five to ten times what we paid for them over the last year); or (b) instruct our brokers to exercise them, which means paying $5 each to buy the shares; or (c) sell some and exercise some; or (d) do nothing, in which case the warrants become worthless and, when you realize what you have done, you will not be able to find a building tall enough off the roof of which to fling yourself. As you can tell, I’m partial to the first three options. If you hold the warrants in a retirement account (so the profit is tax-sheltered), or have held them more than a year and a day (so the profit is lightly taxed as a long-term gain) this could be a good time to take your profit. No need to rush to do it instantly this morning ‘at any price’ – but sometime in the next week or two. If you have some warrants that will go long-term within the next few weeks, and you’re in a fairly high tax bracket, I’d wait for them to go long-term. They could go down while you wait, but they could go up – and the one sure thing is that the tax rate on your gain will be lower once the gain is long-term, which tilts the odds toward waiting. If your profit will be short-term (and thus subject to ordinary income tax), and if you’re in a reasonably high tax bracket (so this matters), and if you can afford to exercise the warrants, I’d exercise at least some if not all. Nothing is sure in life, even in the dredging business, but you would have, in effect, paid somewhere between $5.38 and $5.70 for your currently-$9 shares (the cost of the original warrant plus this $5 you had to pay to exercise it) . . . and in a year or two they might be $12 or $15. (And, yes, they might be $5 or zero, so don’t go overboard. But GLDD is a large, old-line company with some basic trends going its way.) NOTE: When you do exercise the warrants, the clock starts all over again on the one-year holding period. Consider the pros and cons of exercising. Basically: is it worth exercising and holding the stock for a year to avoid paying short-term capital gains tax? Assume for a minute you are in the 40% tax bracket (between state and local taxes). Assume, further that the stock doesn’t budge. It was $9 the day you exercised the warrants; and now, a year and a day later, it’s $9 again. In that case, you have the same gain you would have had selling the warrants instead of exercising them. (You paid 50 cents for each warrant and sold for $4 = $3.50 profit. Or you exercised the warrant and so had a basis of $5.50 in the stock which you sold for $9 = $3.50 profit.) Except the second way, you were lightly taxed on that profit. In your 40% bracket, the tax on a $3.50 profit would have been $1.40. In the 17.5% bracket let’s say (between federal and state capital gains tax), just 60 cents or so. Was it worth doing all this to save 80 cents a warrant? Well, in the case of the stock not budging from $9, the answer is probably yes. You tied up $7.60 for a year that otherwise could have stayed in your pocket (the $5 you had to ante up to exercise the warrant, plus the $2.60-after-tax you could have realized just selling the warrants and not bothering with this). But you ‘earned’ 80 cents after tax on this $7.60 – better than a 10% after-tax return. The risk, of course, is that the stock might fall. But then again – and I think a bit more likely – it might rise. A lot of it depends on how much risk you can afford and how overweighted your holdings would be toward dredging if you suddenly put up $5 in cash – real money! – for each warrant that you acquired, on a lark, with pocket change. Next week: Putrefied Inflammable Bated Breath and the Exaflood