Year: 2010

I’m no engineer and have no idea how many wells there are in the Gulf of Mexico . . . but how could we not have had a giant dome standing by, just a day or two distant from any well in the Gulf, aboard a ship jointly paid for by all the drillers – and maybe all the insurance companies insuring those drillers – waiting for the day we all hoped would never come?

• Should we not have such things in place in the future – and in the North Sea and the Persian Gulf and wherever else?

• What other dome-like things (metaphorically) should we have standing by for other kinds of disasters?

There must be a long check-list of such disaster-mitigators – tents, generators, gauze, antidotes, snap-together pre-fab bridges, whatever might mitigate a calamity at a nuclear plant, and on and on. Some of the items have yet to be acquired and adequately deployed, either because it would cost too much (an excuse that cannot be dismissed out of hand, but that does not hold up in the case of the dome) or because no one felt the responsibility to do it (a situation we could correct).

Certainly, if the cost of such a dome had been $50 million to fabricate, in 1975, say; and we had had to spend $25 million a year maintaining it and the barge it sat on (or should we have left it sitting on the ocean floor, immune to hurricanes, to be hoisted by some gigantic winch if the day ever came to use it?), it would have been a bargain.

How could this catastrophe have happened?

ROZ IS ROWING AGAIN

Even as ever more plastic is dumped into the ocean, she dips oar to brine to make her point. Australia, here she comes.

CASH IS FLOWING AGAIN

Let no one ever accuse me of sitting by my Bloomberg, pouncing on news the instant it’s released. Embarrassingly, I don’t have a Bloomberg. (I do have a Blumberg, four Blums, five Blooms, two other Bloombergs, and a Bloomstein.) My point is . . . I just now noticed a February 25 press release from Boise Paper.

Remember our Boise warrants? Most recently purchased at 2 cents and up 40-fold? As reported periodically, I’ve already sold a lot of them, especially once they went long-term. But I still have a nice bunch, and according to that press release, debt has been paid down significantly and free cash flow is substantial.

Is “paper” an industry of the future? Well, no, probably not. Might the stock hit $10 or $12 before the warrants expire June 18, 2011? Probably not, either. (For one thing, I’m not that lucky. For another, who knows what other catastrophes our economy or financial markets may encounter. For a third, I don’t want to jinx it.) But it’s not an altogether crazy notion, so I am holding on.

What are we doing to our fragile planet? Paving it, deforesting it, polluting its oceans, extinguishing its species – in part because our own species has exploded, from a global population of 2.5 billion when I was born to nearly 7 billion today. Too many people living too heavily on the land with too little regulation. The catastrophe in the Gulf is a catastrophe.

DNDN

Trond Hildahl: “You wrote: ‘Provenge – which is projected to cost $100,000 a year and said to add 4 months to a late-stage prostate cancer patient’s life – can now, at last be marketed.’ It was a 4.1 month improvement in median survival, not average. Half the patients taking Provenge lived longer than 25.8 months, and the numbers keep looking better the further out you go (obviously only to a point – in the long run we’re all dead). It’ll cost $93,000 one time, not annually. And those taking it, may then not need all the other expensive chemo-side-effect fighting drugs that tax our healthcare system.”

☞ I misunderstood the cost. Thanks for the correction.

M.D. (who is an MD): “I have been following your thread on DNDN puts, waiting for the moment to buy. (As I made a 720% gain on your NTMD puts, it is money that I never had, so ‘I can truly afford to lose!’). A $100,000 drug/placebo that will prolong the painful death of prostate cancer won’t take off. I am buying June and September $55 puts. How about you??”

☞ Well, if I had prostate cancer and there were a widely accepted view that my life would be extended (and maybe I’d be one of the lucky ones who did better than the 4-month median, and maybe in the meantime some other breakthrough would come along) . . . and if I could afford it (or the insurance company would pay for it) . . . you can bet it would take off with ME.

Still, it’s a complicated manufacturing procedure that involves a lot of logistics, and it will take some time for their capacity to grow . . . and maybe more promising therapies will appear on the horizon that could dampen investor enthusiasm, or maybe they will somehow encounter tougher price push-back from insurers than is now expected . . . I really don’t know enough to have any opinion on either the short-term price of the stock (which could certainly sell off with profit-taking) or the long-ish term (as defined by the furtherest-out LEAP, January 2012).

If there were 7-year LEAP puts, which of course there are not, and if they were reasonably priced, they might make an interesting bet, because my guru may be proven right a few years from now. But for now, I will just hope he’s wrong and that Provenge works.

THE GAY REPUBLICAN PRESIDENTIAL CANDIDATE

You’ve got to admire the gumption.

GAY DOG TURNED AWAY FROM AUSTRALIAN RESTAURANT

No – really.

IRON ORE

“Please go to rochebay.gi,” writes the Borealis press shop. “The front page of the Web site shows the results of the Government work last summer.”

Well, you win some and you lose some. As expected (by the market – not by my guru), the FDA approved Dendreon’s application. Provenge – which is projected to cost $100,000 a year and said to add 4 months to a late-stage prostate cancer patient’s life – can now, at last be marketed.

Dendreon stock, which had climbed from $2.50 to $40 in anticipation of this, ended the day at $51, up around 11. All my precious little contrarian puts – and yours, if you took this bet – went effectively to zero.

Guru writes: “Politics trumped science and has now saddled the healthcare system with an annual $10 billion bill for a placebo. It’s the first time in my career that the FDA caved to popular demand.”

I hope he’s wrong. (He does, too.) If the drug really works, and really extends life, then the only question is how much of it we can afford.

But guru believes further studies will eventually show Provenge to have no effect.

Meanwhile, I’m not going to fling myself from a parapet – not least because the DCTH he recommended a few months ago has now nearly tripled.

But I am going to take the rest of the day off. I just wanted to be sure to tell you the coin-flip turned up heads, and commiserate with any of you joined me in betting against it.

I KNEW I SHOULD NEVER HAVE BOUGHT THAT iPOD

Brian Deterling: ‘Your footnote yesterday reminded me of this which has been making the rounds. It shows how much money you would have today if, instead of buying an Apple product when it first came out, you used the cash to buy Apple stock instead.’

ICELAND PHOTOS

Thanks, Alan, for pointing me to these. Wow.

KATLA

And, reports the Christian Science Monitor, ‘Every time in recorded history that Eyjafjallajökull has erupted, the much larger Katla volcano has also erupted.” Whoa.

Internally, I ‘number’ these columns. This is Column 3500. Talk about meaningless milestones. But it is an excuse to mention Peter, Paul Mary’s iconic Album 1700 (free association being worth what you pay for it), which even now, 43 years later, goes straight to the soul. (Don’t worry: not a single puffing dragon anywhere near this album.)

STAND UP FOR YOUR HEALTH

Doug Lindal: ‘Is this where you got your ideas on the stand up work desk? A good story on a good company.’

☞ No, but you’re right – great story! These adjustable desks are not cheap; but if they lengthen your life (or help with back pain), they’re a bargain. Not that I’ve gotten off my duff to buy one.

CALM DOWN FOR YOUR HEALTH

Zac: ‘You write: ‘To forgive – or at least to rise above it all and ‘let it go’ – is not just divine, it’s good for your health. MSNBC: ‘A new study found that heart disease patients who suppressed their anger had nearly triple the risk of having a heart attack or dying over the next 5 to 10 years. . .’ Actually, that means you have two options: either rise above it (which isn’t always possible when you’re as petty as I am) or erupt in anger and scream and yell at people regularly. I opt for the latter, but the point is that it is suppressed anger that hurts your heart. . . you gotta let it out all out.’

☞ Ah. Good point. But maybe deflect, rather than suppress, it?

BOREF

I know.

I know!

And yet:

ICE Corporation to Develop Controller for WheelTug® Aircraft Electric Drive System

GIBRALTAR–(Marketwire – April 27, 2010) – ICE Corporation, a leading designer and supplier of electronic controls for aviation, will design, develop and build the controllers for the aircraft on-ground electric drive system being developed by WheelTug plc, the companies announced today.

WheelTug® is a unique concept in aircraft ground operations. This patented hybrid-electric drive system incorporates high performance electric motors installed in the nosewheels of the aircraft, providing full mobility on the ground without the use of the aircraft engines or tugs for pushback and taxi operations. WheelTug enables aircraft to be driven without using their engines from the terminal gate to the runway, and from runway exit to the gate, upon landing. The resulting improvements in efficiency, flexibility, fuel savings, reduced engine FOD damage and CO2 emissions yield projected savings of more than $500,000 per aircraft per year.

Under the agreement, ICE will design, certify, and build the controller that drives the electric motors and control the system for the first model being developed, which is for the Boeing 737NG aircraft. ICE Corporation has designed and manufactured products ranging from ice protection systems, electro-thermal anti-icing and de-icing, to avionic systems and systems monitoring equipment to a new line of robust sensorless motor controllers for both military and civilian aircraft. ICE’s products are known for durability and reliability within the extreme environments known to the aircraft industry.

The controller is the WheelTug system’s most complex component. It forms the nerve center of the WheelTug system, interfacing and interacting with both personnel and aircraft systems. While WheelTug has had prototype controllers operating in the lab for several years, this agreement will provide for a complete and certificatable system that is optimized for aerospace requirements.

Randy O’Boyle, ICE President and CEO, said, “The ICE Corporation has a 30+ year history of entrepreneurship in aviation. Our innovations in power electronics and high power control for aviation make us the perfect partner for this tremendous new aviation product. We’re excited to join the WheelTug team in leveraging this new technology to reduce aviation fuel costs and improve operating efficiencies while economically making the planet a safer place. Years from now, people in the industry will be saying, ‘Why didn’t we think of that?'”

Isaiah Cox, WheelTug President and CEO, said, “ICE is the perfect partner; as an organization they are a pleasure to work with, and their engineering skills are unparalleled. We have no doubt that WheelTug customers will benefit from such a reliable, robust, and lightweight controller.”

WheelTug is moving rapidly, with its partners including ICE, in development of the system. Final specifications for the initial 737NG model are expected to be available to potential airline customers within the coming months.

Systems for other aircraft types will then be developed as rapidly as possible. In addition to ICE, WheelTug is working with Luxell Technology and Co-Operative Industries as partners for the cockpit interface and wire harness, respectively.

In terms of aircraft availability and services, WheelTug is now working with several different airlines, and expects to formalize one or more of those relationships shortly. As of April 29, Delta Air Lines, an early partner, will no longer be a development partner, so 737NG installation and maintenance rights previously reserved for Delta’s TOC will be available to other MRO organizations. . . .

☞ To recap: WheelTug is owned by Chorus Motors which is owned by Borealis which is owned by mentally unbalanced individual shareholders like me (and – go ahead, so long as you have taken this flier only with money you can truly afford to lose, raise your hand – you).

Collectively, the market values the whole enterprise at $14.25 million ($2.85 a share), which will be exactly $14.25 million too high if, as usual, the goal posts just keep being pushed eternally into the future.

(The throw-away line at the end of this press release – that Delta has lost interest – certainly can’t be a plus!)

Or, conceivably, that $14.25 million will prove a small fraction of its true value if the ICE man’s prediction comes true (and/or if any of Borealis’s other potential bonanzas ever materialize). I have to say, I still have high hopes.

So, as in Casablanca, we wait.

And wait.

And wait.

PS – In the spirit of full disclosure and self-flagellation, I have to grant we might have skipped 11 years of this wait. Instead of jumping in late in the last Century at $3.50 a share, we could have just jumped in today. Imagine what that $3.50 would be worth today had we allowed it to compound in blue chips – GM, Citibank, Enron, Cisco, Microsoft – and only now switched a little of it into BOREF (he says, impishly*).

*On November 16, 1999, when BOREF first hit this screen, Citibank closed at $30, adjusted for dividends and splits (it is $4-ish today), Microsoft was $35 ($31 today), Cisco was $42 ($27 today), and I can’t readily find where GM and Enron were – but higher.

THAT $50 BILL

Don Stromquist: “The bill [you wrote about yesterday] has been trying to get your attention for weeks and in desperation hopped into your sock. Listen closely and you’ll hear its tiny cry: ‘Don’t put Reagan on me!’ ”

DEEP BREATHS . . . AND LET IT GO

To forgive – or at least to rise above it all and “let it go” – is not just divine, it’s good for your health. MSNBC: “A new study found that heart disease patients who suppressed their anger had nearly triple the risk of having a heart attack or dying over the next 5 to 10 years. . .”

LEARN YIDDISH

Why? Why not. This is RoseEtta Cohen. Oy va voy!

DNDN ON THE CBS EVENING NEWS

At first my heart sank when I saw last night’s highlighted segment on Provenge, which (before this clip begins) Katie Couric said the FDA was expected to approve later this week. Oh, no!

True, if the drug really does extend life four months, I’m all for its approval, my avarice notwithstanding. (And true, I have only bet money on these DNDN puts that I can truly afford to lose.)

But my guru doesn’t buy it, and thinks the FDA won’t either.

When I thought it through, I realized Katie was right – the FDA is widely expected to approve Provenge, witness the steady rise in the stock from $5 to $41. That’s the whole point. Katie wasn’t reporting what the FDA would do (how would she know?), just what it was widely expected to do. Nothing new in that.

So, as before, if the expected happens, we lose 100% of our bet. If it doesn’t, we make maybe 500%.

The drama builds.

GOLDMAN WILL LOSE OR SETTLE

That case is made by Barry Ritzholtz, here. It is a quick, crisp read – and one more reason to thank you for electing Barack Obama.*

*Ritzholtz tells us that the guy bringing the case against Goldman Sachs, Robert Khuzami, “is a bad ass, no-nonsense, thorough, award winning Prosecutor: This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement.”

Contrast that with his Bush-era predecessor, Linda Thomsen, whose team missed all the Madoff warnings and who – on another matter – was personally teed up for investigation by the SEC’s own inspector general.

There is a pattern here. Believing in government, Democrats tend to appoint top-notch people to do the job – whether it’s professionalizing FEMA, as Clinton did, only to see it sink back into Republican complacency (to run FEMA, Bush tapped the Judges and Stewards Commissioner for the International Arabian Horse Association) . . . or appointing a Nobel-prize winning physicist to head the Department of Energy (Bush’s first appointee had, as a senator, voted to abolish the Department of Energy) . . . or, in this case, installing “the real deal” to head S.E.C. enforcement.

MONEY LAUNDERING

Not sure how a $50 bill got into my sock – it seems implausible I would have put it there myself, or that it would have somehow sudsed its way out of a pants pocket and into that sock – but there it was, clean and dry, and a testament to the near indestructibility of our currency. Still, I’m not sorry to have had some of my cash in Canadian dollars, via FXC.

REPEALING DON’T ASK DON’T TELL

It hasn’t happened as fast as many of us would like, but according to the politics editor of the Atlantic, Marc Ambinder, there are reasons for that. And it will get done:

. . . Obama has said that he wants gays integrated into the military in the right way – in a way that builds on a foundation of legitimacy that only the Pentagon brass can create. And the time frame for repealing the ban was determined on the basis of what Sec. Gates and Adm. Mullen need in order to build that legitimacy.

That’s not an answer that soldiers dismissed under Don’t Ask, Don’t Tell like to hear, and they’ve got every right to be angry. But it’s a strategy that will repeal DADT in a way such that no subsequent president could reverse the ban by executive order.* It will be permanent. The Pentagon is expected to present the findings of its internal study in December, and the Senate will vote on a repeal either in the rump session of Congress late in 2010 or early in 2011. That’s the track. It’s getting done. . . .

*Compare that with, say, the “global gag rule” regarding reproductive health. The first day of Clinton’s presidency he lifts it; the first day of Bush’s, he re-imposes it; the first day of Obama’s, he lifts it again; and guess what will almost surely happen to it the next time a Republican wins. Obama wants repeal of DA/DT to stick, long after he’s gone. — A.T.

HACKED

A robotic program appears to have hacked into this site late last week, for reasons, and in ways, that remind me how little I know about cybertech. Webmaster Jason has excised the offending code, changed passwords, and, with any luck, we’re good again. Sincere apologies to any who have been inconvenienced by this.

CAUTION

Gluskin Sheff‘s Dave Rosenberg notes that . . .

Investor sentiment is wildly bullish. The just-released Investors Intelligence survey is now up to 53.3% for the bulls (versus 51.1% last week) while the bear camp has dwindled further, to 17.4% (versus 18.9% a week ago). Bullish sentiment rose for the third consecutive week and bearish sentiment has not been this low since January 12. As Bob Farrell’s Rule number 9 stipulates, when all the forecasts and experts agree, something else is bound to happen.

DCTH

But that doesn’t mean I’d sell my DCTH, which broke $14 yesterday before closing at $12.93 – better than a double in just a few months, whether you paid $4.61 or $5.37. Thanks for this go to our guru, who’s proved right yet again (remember Nitromed puts? remember INCY?), and who sees a bright future for Delcath. If he turns out to be right about DNDN, and our puts quintuple, he will go from ‘guru’ to ‘god.’ (With a small g, of course.)

Meanwhile, another super-smart friend who listened in on Delcath’s investment call yesterday shorthanded me his impression: ‘Management said that, at $20k/unit, addressable mkt for oculocutaneous melanoma was $750mil. Very impressed by huge statistical significance of data, and also by management. Really seemed smart, capable, and honest. Canaccord took price target today from $8 to $17.50. Great ideas and great product. Still a long road to go, but $30-50 in a few years is very plausible.’

THE PRESIDENT ADDRESSES WALL STREET REFORM

Read or, better still, watch. (‘So instead of competing to offer confusing products, companies will compete by offering better products.’ And I love the part where he quotes from Time Magazine.) This is worth your time.

Health reform, education reform, environmental reform, energy reform, stem cell reform, credit card reform, nuclear warhead reduction – and now financial reform. Thank you again for electing this guy.

THE TREADMILL DESK

Dan Critchett: “How’s this for one-upsmanship?”

☞ I love it! Not exactly clear to me how well I’d type while walking (and aren’t you supposed to swing your arms when you walk?), but not a problem: At $1,999, I’m not likely to find out.

GOOD NEWS

Things are getting better. We’re gradually getting our confidence back; GM has paid off its loan 5 years early (thank you, Toyota); the health care reform freight train is finally rolling; financial reform will pass next; energy grants are being issued to encourage weatherization (once people see how much their neighbors are saving, they’ll want to save, too); New York City’s teacher “rubber rooms” are finally closing (just one indication of the new energy in education reform); we’ve cut the maintenance of 700 nuclear warheads from our budget; the Dow is up 70% from its low (and many stocks are up three- and five- and ten-fold) – and lots more.

But I wouldn’t be surprised to see some stock market declines ahead. It’s great for the long-term that the S.E.C. and Congress are finally restoring some oversight and regulation and safeguards to the financial sector – but I wouldn’t be surprised to see a short-term downdraft in stock prices. It’s great for the long-term that we’ll soon be restoring the Clinton/Gore tax rates for the top 2% – but the stock market usually declines ahead of tax hikes. It’s great that the Dow is up 70% from its low – but you can never rule out a down-draft after such a run, especially when so many really tough problems remain (not to mention the occasional earthquake, volcano, and hurricane).

TRANSPARENCY

I’m a couple of weeks late bringing this to your attention, but I think it’s another reason to thank you for voting for Obama:

THE WHITE HOUSE
Office of the Press Secretary

FOR IMMEDIATE RELEASE
April 7, 2010

Obama Administration Marks Major Open Government Milestone
All Cabinet agencies release open government plans and highlight
flagship initiatives on transparency, participation, collaboration

WASHINGTON, D.C. – Today, President Obama hailed the release of open government plans by all Cabinet agencies – the latest milestone in his Administration’s unprecedented efforts to erase the long-standing barriers between the American people and the government. These plans are the agencies’ strategic roadmap for making transparency, citizen participation, and collaboration part of the way they work.

“For too long, Washington has closed itself off from the oversight of the American public, resulting in information that’s difficult to find, taxpayer dollars that disappear without a trace, and lobbyists that wield undue influence,” said President Obama. “That’s why my Administration is taking concrete steps to build a government that’s more transparent, open and accountable. And now that these plans are published online, we hope the American people will play their part and collaborate with us to provide oversight and improve upon this information. Together, we won’t just build a more efficient and effective government, but a stronger democracy as well.”

The plans released Wednesday make agency operations and data more transparent, while creating new ways for citizens to have an active voice in their government. In addition, each agency has identified at least one “flagship initiative” – a signature open government innovation in the agency. Examples include:

• Department of Health and Human Services’ Community Health Data Initiative: This initiative will publish online a large-scale Community Health Data Set – a wealth of easily accessible, downloadable information data on community health care costs, quality, access, and public health. HHS will work with outside experts and citizens to take advantage of the new data to raise awareness of community health performance and spark improvements.

• Department of Energy’s Open Energy Information Initiative: DOE has launched Open Energy Information (OpenEI.org), a new open-source web platform that opens DOE resources and data to the public. The free, editable, and evolving wiki-platform will help to deploy clean energy technologies across the country and the world. OpenEI.org also will provide technical resources, including U.S. lab tools, which can be used by developing countries as they move toward clean energy deployment.

• Department of Veterans Affairs Innovation Initiative: The VA Innovation Initiative (VAi2) will invite VA employees, private sector entrepreneurs, and academic leaders to contribute the best ideas for innovations to increase Veteran access to VA services, reduce or control costs of delivering those services, enhance the performance of VA operations, and improve the quality of service Veterans and their families receive. The VA Innovation Initiative will identify, prioritize, fund, test, and deploy the most promising solutions to the VA’s most important challenges.

• Department of Housing and Urban Development’s Homelessness Prevention Resources Initiative: Many agencies and organizations struggle with the task of capturing information about the homeless. Even more difficult is the task of predicting when and where homelessness will strike. HUD believes that homelessness can be averted by combining information from multiple agencies and using the data to identify communities that may be at a tipping point towards increased homelessness. HUD will work to develop a set of tools and processes to help predict at-risk communities, allowing the Department to take proactive steps to combat it.

The White House website tracks the progress of those agencies required to meet the open government milestones. Independent agencies are not mandated to participate, though many, like the Peace Corps and the Corporation for National and Community Service, have taken on the challenge to open their practices to greater transparency and public participation.

In addition to the Open Government Plans, the Administration is releasing new policy guidance involving the use of social media and the Paperwork Reduction Act, improving transparency in the rulemaking process, and setting the process by which the government will collect and publish, for the first time ever, subaward data for all federal grants and contracts. This last piece is in line with the Federal Funding Accountability and Transparency Act, which then-Senator Obama coauthored in 2006 with Senator Tom Coburn of Oklahoma.

Background on the White House Open Government Initiative

The Administration’s open-government efforts began on the President’s first full day in office, when he signed a presidential memorandum that established transparency, participation, and collaboration as the hallmarks of a more efficient, accountable government. That same memorandum directed the Federal Chief Technology Officer (CTO) to issue recommendations for creating a more transparent, participatory, and collaborative government.

To that end, the White House Open Government Initiative and the CTO partnered with the American people to solicit expertise from outside of Washington. The three-phase public consultation involved thousands of Americans commenting on and shaping policy approaches that were incorporated in the December 2009 Open Government Directive. The Administration released an Open Government Progress Report to coincide with the Directive, outlining the steps that the federal government has implemented to break down those barriers to public participation and agency transparency.

☞ Things are getting better.

APRIL 22

It’s Earth Day. Try not to muck it up.

STAND-UP GUYS

John Seiffer: “I use a desk that can raise and lower so I can sit or stand at it. It’s ugly but gets the job done. I usually sit about half the time, but will probably do it less thanks to yesterday’s post.”

☞ Live long and prosper. (Here’s a nice piece by an author who writes standing up and sitting down.)

HOSPITAL VISITATION RIGHTS

Imagine your child or spouse or parent were suffering in the hospital, calling out for you hour after hour, and the hospital would not allow you to visit.

It doesn’t happen – but something virtually identical does.

My friend Joanna Grover-Watson last year wrote this account of the Miami teaching hospital that denied visitation between a dying woman and her life partner. President Obama last week ordered an end to this insane, inhumane practice, nationwide. Thank you for voting for him.

THE GREATEST PINBALL MACHINE EVER

The “Ripley’s Believe It or Not!” So how is it that when I was 30 and poor-ish, I had room for something like this (“The Black Knight”), and now that I’m 90 and boorish I don’t? This is the problem with grown-up furniture. It crowds out all the good stuff. Which is why God invented Gameworks. (Not to mention their $2.99 fried onion rings. Drowned in what must be nearly $2.99 in free ketchup, they are the best value in town.)

I just felt you needed to know.