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Daynotes
Journal
Week of 11 May 2009
Latest
Update: Friday, 15 May 2009 10:04 -0400 |
09:38
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I sometimes get email from people questioning the need for more
scientists, or even keeping enough new scientists in the pipeline to
replace the ones we have as they retire. They suggest, by implication
or directly, that we already have more than enough scientists, that all
the great discoveries have already been made, and that all these folks
do is play around in their labs anyway. Sometimes, it goes further,
with suggestions that what scientists do is undesirable, synthesizing
toxic chemicals for children's toys, and so on.
These folks
usually have a distorted idea of what scientists actually do. They
think of us as loners living in our own little worlds. Every once in a
great while, one of us shouts "Eureka" and wins a Nobel Prize or
something. Nothing could be further from the truth.
In reality,
what scientists do is pretty simple. We start by thinking about
something, coming up with questions that no one may have asked before,
and developing a glimmer of an idea. With some additional thought and
perhaps a simple experiment or two, that idea turns into a hypothesis,
which is merely a proposed answer to a question. We then invent
experiments to test our hypothesis from as many directions as possible.
In the course of running those experiments, we obtain data. Eventually,
these data are published in a formal paper, so that other scientists
can take advantage of our work, just as we take advantage of the work
of other scientists. By publishing that paper, we also give other
scientists an opportunity to confirm our results and build upon them.
If
I need to know the solubility of a particular compound in a particular
solvent, for example, I can (usually) just look it up in a reference
book or paper. But that information didn't just magically appear out of
thin air. Some scientist somewhere somewhen actually did the work to
determine the solubility data. But there are billions of
compound/solvent combinations, so it may happen that solubility data is
unavailable for the combination I'm interested in. If I really need
that information, the only way to get it is to do it myself.
So,
working very carefully, I determine the solubility of the compound I'm
interested in. I use the best balance and volumetric glassware and
thermometer available to me and the purest chemicals. I test the
solubility at different temperatures, making repeated runs to make sure
any experimental error is detected. As long as I'm at it, I probably
test related compounds and similar solvents. I may spend a day, a week,
or a month working on this. When I'm finished, I write up the results
as a formal paper and submit it for publication.
So, you may
think that's not a big deal. Other than me, who would care about that
particular information? The answer is, maybe nobody. But, a year from
now (or a hundred years from now) some other scientist may need to know
the solubility of that compound. If he can locate my paper, he has the
information he needs (which is why, incidentally, scientists are so
upset when a paper is revealed to be fraudulent; they depend on
pubished information being correct. Honest mistakes happen, but
intentionally publishing bogus information is the worst thing a
scientist can do). If he can't find my paper, I might as well have
never done the work. He's going to have to spend a day, a week, or a
month of his time to reinvent the wheel.
So, there are actually
unlimited opportunities to advance human knowledge. Most of those
snippets of additional knowledge will turn out to be unimportant in
most respects, but some (and it's never predictable which ones) will
turn out to be very important. And the only way to make these
advances is to actually do the work.
Few
scientists ever make great discoveries or win Nobel
Prizes, but that isn't the point. For every Nobel Prize winner, there
are thousands upon thousands of working scientists, all of whom are
contributing pieces to the great puzzles. When a breakthrough does
occur, it's not just by the efforts of the winner; it's from the
efforts of thousands of other scientists, living and dead, who all
contributed pieces to the solution.
And that's why it's so
important that we have as many as possible of our best and brightest
working to answer the questions that interest them. Because it's not
just science that benefits from this accumulation of knowledge. It's
society in general. Look around you right now. With the exception of
wood and other natural products, everything you see is there because a
scientist asked that simple question, "I wonder if ...?"
08:16
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I'm puzzled by what's going on with the so-called restructuring of GM.
The federal government is apparently trying to force the bondholders,
whose debt is secured, to accept a tiny fraction of what they are owed,
and to accept that in stock that is essentially worthless with Chapter
11 bankruptcy imminent and Chapter 7 liquidation obviously soon to
follow. Right now, there are about 611 million shares of GM stock
outstanding, valued at something under $1.50/share. That puts the total
value of GM at something less than $1 billion. The plan is for GM to
issue 62 billion new shares and then simultaneously do a 100:1 reverse
stock split, giving current shareholders a total of something under 1%
of the new stock. The government is currently pushing for the following
division:
1% - current stockholders
10% - current bondholders (in exchange for $27 billion in secured debt)
39% - UAW pension fund (in exchange for $10 billion in unsecured debt)
50% - US government (in exchange for what will eventually total $27 billion in unsecured debt)
So,
the bondholders, who are senior and the only holders of secured debt,
are expected to settle for 10%, exchanging that debt at the equivalent
of $2.7 billion per percent of equity. The UAW, with $10 billion in
unsecured debt, are to be awarded 39% of the new stock, exchanging that
debt at the equivalent of about $0.25 billion per percent of equity.
And the federal government, with $27 billion in unsecured debt, is to
be awarded 50% of the new stock, exchanging that debt at the equivalent
of about $0.54 billion per percent of equity.
No wonder the
bondholders are upset. They, with the best claim, are being pushed to
settle for the least equity. The UAW, with no claim at all, is being
offered a large percentage of the equity, and that for only half of
what GM was to pay the UAW trust for retiree health care. The
bondholders have counter-offered, asking for 58% of the stock. In my
opinion, that's too little. They should have countered by asking for
99.999% of the stock.
In reality, of course, the federal
government might as well be a secured creditor, especially since GM is
depending on the feds for more money to keep them alive for a few more
months. So, since we're using a stock split to re-organize things, we
have to leave the current shareholders with some equity. But 1% is too
much, so rather than issuing 62 billion new shares and then doing a
100:1 reverse split, let's issue 62 trillion new shares and then do a
100,000:1 reverse split. That leaves the current stockholders with
0.001% of the new shares. The UAW doesn't get any stock. The remaining
stock is split as follows:
50.001% - current bondholders
49.998% - federal government
And
that half ownership assumes that the government continues to throw
money down the GM rathole, which they should obviously stop doing. They
need to simply walk away from the billions that they've already wasted.
Leave the bondholders with 99.999% of the company and let Chapter 7
liquidation run its course. In reality, the bondholders are going to
end up with 99.999% of almost nothing. Everyone who's invested in GM is
going to take a major bath, including the taxpayers. It's time to admit
that and get it over with.
08:44
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Okay, so to continue what I was talking about Monday, how can I
contribute to the scientific literature? I have a pretty comprehensive
home lab, but I don't own any of the expensive instruments used to do
most modern research. I can't produce NMR spectra, for example. My best
thermometer is accurate to only 0.1 °C and my pH meter to only 0.1 pH.
So how can I hope to produce anything useful?
The answer is to
focus on old technologies that are still important and widely used.
While I was working on the forensics book, I did a lot of work with
presumptive color tests. Most of these tests originated in the 19th
century, when they were the best technology available for detecting
blood, drugs, toxic alkaloids, and so on. Nowadays, they've been
entirely superseded by instrumental analysis, or so you might think. In
fact, presumptive color tests remain critically important because
they're fast, cheap, and effective. For every suspected illicit drug
sample that is tested on a $100,000 spectrometer, probably 1,000
suspected drug samples are tested with simple color tests.
And,
although these tests are still very widely used, most of them are used
unchanged in the purely empirical forms they were originally
developed 100 or 150 years ago. That much is obvious from looking
at the literature. Named reagents often have no fixed proportions. Even
the originator of the reagent in question often published papers that
specified different proportions at different times. Marquis Reagent,
for example, is formaldehyde in concentrated sulfuric acid. But what
concentration of formaldehyde? The original literature from the 19th
century is all over the map, as are more recent documents. Does the
concentration of formaldehyde make a difference in sensitivity or
selectivity? Who knows? No one has done the work to find out. Or, if
they have, they haven't published. Or if they've published, I sure
can't find the paper. And Marquis Reagent is used all over the world to
do presumptive drug tests. It's probably been used literally dozens of
times somewhere in the world just while I was writing this paragraph.
Then
there's Scott Reagent, which is the primary presumptive color test
reagent for cocaine. Broadly speaking, it's an aqueous solution of
cobalt thiocyanate. But what concentration? And does the reagent
require the addition of glycerol or not? You can find any number of
combinations in the literature, from papers written 100 years ago to
papers written in 2009. But if anyone has done any controlled tests and
written up the results, I sure can't find them. And no one talks about
pH with Scott Reagent. One adds concentrated hydrochloric acid as the
final step to confirm the presence of cocaine, but what about the
initial screening? Does pH have any effect on sensitivity or
selectivity? Who knows. No one has done the work or, if they have, they
haven't published.
As an amateur, I'd have the luxury of
publishing something that's almost unheard of nowadays. Negative
results. "I tried this and nothing happened." Such papers used to be a
lot more common, even in the formal scientific literature, but nowadays
no one wants to hear about the experiments that didn't work. And yet,
those negative results are as valuable as positive results in the sense
that they allow others to avoid wasting time by repeating the
experiment.
So, say I decide in my little home lab to do some
original research on these old presumptive color test reagents. Worst
case, I end up with negative results. I learn that formaldehyde
concentration has no effect on the sensitivity or selectivity of
Marquis Reagent with the range of x% to y%, and that pH has no effect
on Scott Reagent test results within the range of pH x to pH y, or
perhaps even that sensitivity decreases dramatically below pH x or
above pH y. Those results, although negative, are still useful.
Best
case, I discover something significant. Say, that the sensitivity and
selectivity of Scott Reagent are both dramatically improved if the test
is run using a buffer solution that maintains the pH at pH x.y to x.z.
In that case, I probably file a patent and negotiate with commercial
test providers to license my discovery. Unlikely, but it could happen.
00:00
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10:04
- I didn't forget to post yesterday. I just didn't get around to it.
I've
been thinking about where we'll be after four years of Obama and his
radical left policies, aided and abetted by a compliant legislature and
judiciary. It doesn't look pretty. Obama's massive social engineering
programs will have to be funded by both direct and indirect taxation on
both income and wealth. The direct tax increases will come with
increased tax rates on income and limits on exemptions and deductions,
along with increased inheritance taxes by whatever mechanism. For
political reasons, those increases will fall, or at least appear to
fall, primarily on the upper middle and upper classes.
But Obama
could confiscate 100% of the income and wealth of "rich" people, and it
still wouldn't begin to pay for his programs. So I think we're going to
see significant currency inflation, not just to fund the existing
deficit, but to fund all of these monstrously expensive new programs.
Inflation is simply a hidden tax on wealth, of course, and a
particularly vicious one. The government benefits two ways.
First,
when they increase the amount of currency in circulation, they reduce
the value of any dollars (and dollar-based financial instruments) you
hold proportionately. If they boost the currency in circulation by 20%,
for example, the $10,000 you have in the bank now has only
$(10,000/1.2) = $8,333.33 worth of buying power. The government has in
essence taxed you $1,666.67, or one sixth the value of your dollar
assets, which the government gets the benefit of spending.
Second,
monetary inflation is invariably followed by price inflation as those
additional dollars circulate. Prices go up. Chances are, so does your
salary, but not enough to make up for the price inflation. But then you
get stuck with a double whammy, because you pay taxes on the imaginary
increase in value. Say inflation is running 20% annually. On January 1,
you buy a house for $100,000. Exactly one year later, you sell that
house for $120,000. In reality, of course, you've made no profit. The
$120,000 you get from the sale of the house is worth exactly the same
in purchasing power as the $100,000 you paid for it a year earlier. But
the government doesn't see it that way. As far as they're concerned,
you've made a $20,000 profit, and they want their "share" of your
"profit". So you end up with less than you started with, and the
government pockets the difference.
In an inflationary
environment, debtors profit by borrowing expensive current
dollars and paying back cheap inflated dollars. You don't want to be a
lender, lending expensive current dollars and being repaid in inflated
dollars. If you're holding dollars, either in a bank account or in
dollar-based financial instruments, you are a lender. Getting out of
soft dollars and into hard money is the best option. In inflationary
conditions, smart investors avoid losses by putting their assets into
things that have intrinsic value, such as precious metals (and even
not-so-precious metals). The downside of that is that if you buy and
actually hold valuable commodities, you give up the natural rate of
interest, which is about 3%. If you buy $10,000 worth of gold or silver
(or copper or nickel), and assuming 20% annual inflation, at the end of
one year your metal is probably worth about $12,000. If inflation that
year turns out to be 100%, your $10,000 worth of metal is now probably
worth $20,000 or thereabouts.
Of course, the reason that metals
and other hard-money investments retain their real value is that they
have both rareness and utility. The government cannot, for example,
arbitrarily inflate the copper supply. And copper is actually useful.
It can be made into wire, pipe, and other useful products. The real
danger, barring an unexpected discovery of huge new copper reserves, is
that high inflation so damages the overall economy that demand for
copper falls because no one can afford to buy new copper wiring or
pipes.
So, what to do? I certainly can't argue with anyone who
decides to buy silver, gold, or platinum. Or copper or nickel, for that
matter. As to us, I think I'll talk to Barbara about keeping a current
dollar account for liquidity with about six months' expenses, and
moving any surplus into something that's more likely to hold its value.
Of course, the goal of the Obama administration seems to be to turn all
of us into peons, dependent on government largess, so the future isn't
very predictable. It wouldn't surprise me to see Obama's crowd
implement explicitly confiscatory measures as things continue to go
downhill. So, I guess an assault rifle and plenty of ammunition
qualifies as a prudent hard-money investment.
00:00
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00:00
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Copyright
© 1998,
1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009 by
Robert
Bruce
Thompson. All
Rights Reserved.