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Week of 11 May 2009


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Monday, 11 May 2009
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09:38 - 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 ...?"


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Tuesday, 12 May 2009
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08:16 - 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.


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Wednesday, 13 May 2009
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08:44 - 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.


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Thursday, 14 May 2009
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Friday, 15 May 2009
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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.


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Saturday, 16 May 2009
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Sunday, 17 May 2009
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Copyright 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009 by Robert Bruce Thompson. All Rights Reserved.