Thursday, 4 August 2011

09:31 – I read an interesting article the other day on CNN or FoxNews about small business owners pawning their Rolexes to meet payroll, and a second article about lending being extremely tight even for those with top-notch credit ratings. Interest rates are very low, which means nothing if no bank will lend you money.

Fortunately, I don’t want to borrow money. In fact, the last thing I want is to borrow money. That may seem odd for someone who’s just starting a small business, but in my experience the two biggest causes of small business failures are borrowing money and hiring employees. When Barbara and I talked about this new business, I told her that I intended to fund it out-of-pocket and that I would not hire our first employee until Barbara and I were run ragged and also had some assurance that the hectic pace was not merely a seasonal bump in sales. And, even then, I’d almost certainly contract work out or, as a last resort, hire a temp/part-time employee.

The problem with borrowing money or hiring employees is that you give up control by doing so. As long as we avoid either, we don’t have to worry about making a loan payment or meeting payroll, which is the way I want it. Now, if only the US government would be equally careful with our money.

Inventory of the chemistry kits is getting perilously low, so Barbara is taking the day off from work tomorrow to help me build more. We have enough components to build another dozen or so kits, and all but one of the components needed to build 50 or so more beyond that first dozen. The problem is, that one component is back-ordered for about the next three weeks. So we’re going to build all of the kits, but missing that one component. That way, we can just drop in that one component when it finally arrives and have kits ready to ship.

I’m also preparing purchase orders that I can drop on a moment’s notice if kit sales pick up quickly as the new school year approaches. Making up all the chemical solutions for any arbitrary number of kits is a couple days’ work, whether I make up enough for 50 kits or 500. The really time-consuming steps are filling and labeling the containers, assembling and packaging the chemical blocks, making up the small-parts bags, and assembling the kits themselves. For 50 kits, that’s maybe three days’ work for Barbara and me working together.

The media, including most of the financial media, is putting as favorable a spin as possible on today’s Spanish bond auction, although of course the yields remain disastrously high. That WSJ article does mention one significant factor that’s being generally ignored in news reports: a large and increasing percentage of Spanish bond sales are being made to Spaniards. The latest figures the WSJ quotes are for the end of last year. I suspect the percentage of Spanish bonds being bought by non-Spaniards is much lower now. And what few of the reports mention is that Spain has to sell another €38 billion in bonds–more than ten times as much as they sold today–between now and the end of the year. Good luck selling €38 billion worth of bonds into the Spanish economy, which is already nearly saturated.

Wednesday, 3 August 2011

08:36 – The Euro crisis is now in the end game, with everything worse than it was just before the crisis summit at the end of last month. Italian and Spanish bond yields have hit record highs, remaining above 6% all week. The Spanish government is on the way out, with early elections called for November, which is much too late to matter. Spain will have defaulted before the new government is even elected. Italy is on the verge of requesting a gigantic bailout, which the ESFS has neither the authority nor the means to grant. And tomorrow Spain will auction more of its worthless bonds, with the yields expected to be even more disastrous than those of the last couple of weeks. Meanwhile, tiny Cyprus is the latest EU country to join the Bailout Brigade, mainly because it was foolish enough to hold a lot of Greek bonds. Well, that, and the fact that it accidentally blew up its only electric power plant by improperly storing tons of explosives right next to it. Talk about shooting themselves in the foot.

Someone asked me why I keep harping on bond yields. It’s simple. The US currently pays about $200 billion per year in interest on its debt. Italy, whose population is about a fifth that of the US and whose debt is approaching $3 trillion (120%+ of GDP), has huge amounts of debt coming due in the near future. If Italy had to roll over all of that debt at current bond yields, it would be paying about the same dollar amount per year on its debt as the US is paying on its debt. In other words, at $200 billion per year, US interest payments amount to about $660 per year for every man, woman, and child. At the same level, Italian interest payments would amount to about $3,300 per year for every Italian man, woman, and child. Now, of course, not all of that debt is due to roll over soon, but enough of it is that the increased interest payments that would be required at current bond yields are sufficient to bankrupt Italy.

The Spanish situation is a bit different. Spain has a much lower debt load than Italy, but Spain also has structural unemployment that’s optimistically stated to be 21%. In reality, of course, it’s much higher, particularly among young Spaniards. So Spain suffers a double whammy. All those unemployed people aren’t earning salaries and paying taxes, and all of them require social spending, which further hammers the poor Spanish treasury. And Spain, like Italy, can no longer borrow on the open markets because no one wants its bonds.

09:17 – This article, which focuses on one young formerly middle-class Greek family, makes clear how bad things have already gotten in Greece. The husband is a mechanical engineer who considers himself lucky to have occasional work picking fruit for €29.45 a day. His wife, a chemical engineer, finds occasional work selling toilets and flowers. They can’t afford to pay the rental for an apartment, so they’ve moved into his parents’ apartment, displacing his parents to the vacant shop next door. Even getting enough to eat is a problem. And they consider themselves lucky, because they’re in better shape than most. Greece is already well on its way to joining the third world, and it’s only going to get worse.

10:14 – As my regular readers know, I consider same-sex marriage to be a basic human right. The religious nutters would have us believe that allowing same-sex marriage would inevitably destroy society. Well, here are two married lesbians, Hege Dalen and Toril Hansen, who are rightly being acclaimed heroines in Norway. While the police dithered, these women took immediate action at severe risk to their own lives to rescue 40 of the kids on the island. They were having dinner on the mainland when they heard shooting and screams from the youth camp on the island. Most people would have called the police and considered their duty done. Not these women. They hopped in their boat, roared out to the island, and took a boatload of kids to safety. Despite the fact that their boat now had bullet holes in it, they returned to the island four more times, under fire, to haul off additional loads of kids.

If these women had been members of the US military, their actions would almost certainly have earned them the Medal of Honor, and would have made the front pages across the planet. As it is, this morning was the first I’d heard of it. Gay advocates are claiming, with apparent justification, that these women’s heroism has been downplayed because they’re gay. Well, to those who condemn gays and same-sex marriage, all I can say is fuck you and the horse you rode in on.

Tuesday, 2 August 2011

08:19 – Wow. The vote in the House on the debt limit proves that the politicians of both parties are mostly morons. The deal pretty much gives the Democrats everything they wanted and the Republicans nothing they wanted. And yet the Democrats split evenly on the vote, and the Republicans voted overwhelmingly in favor. This bill should have failed on a party-line vote, with all Democrats voting in favor and all Republicans opposed. Morons, and with the exception of half the Democrats and a minority of Republicans, they’ve voted in favor of simply more of the same. Of course, the Democrats who voted Nay did so for all the wrong reasons, so they’re morons as well.

I suppose there is one small bright spot. As George Will commented this morning, the electorate is rapidly shifting toward a libertarian perspective, not because they’ve suddenly taken up reading political philosophy but because they realize that the Democrats and the Republicans are all insane. Let’s hope this trend continues and accelerates. If so, the 2012 elections should be interesting.

11:13 – With kids like this, there’s hope for Australia. What’s interesting is that Charlie Fine, who is 11 years old, both reasons better and writes better than his adult opponent, Fred Nile.

12:23 – The US debt deal has driven the Euro crisis off the front page, but European problems continue and accelerate. Today’s 10-year bond yields for Spanish and Italian debt are about 6.46% and 6.25%, respectively, a level that is not sustainable, and those yields are quickly headed for the disastrous 7% level, which would make bailouts almost certainly necessary. Of course, there’s no money for bailing out Spain or Italy, let alone Spain and Italy, and no prospect for finding any. And now Belgium is being mentioned in the same breath as Spain and Italy, and France itself can be expected to come under severe bond yield pressures shortly. This is going downhill fast, and there’s simply no way to put the brakes on. We’re heading for a Euro crash sooner rather than later.

Monday, 1 August 2011

08:31 – News reports say there is a budget deal, pending approval by both houses of Congress. Unfortunately, it seems that those in Congress who supposedly favored fiscal responsibility have folded, settling for a deal that includes a huge boost in the debt limit in return for no real spending cuts. The lunatic left, led by Obama, Reid, and Pelosi, have gotten nearly everything they wanted, most particularly putting off a real accounting until after the 2012 elections. Those of us who favor fiscal responsibility have gotten almost nothing. Make no mistake: this so-called deal is no deal at all for those of us opposed to big government and irresponsible spending.

The discussions center around cutting about $2.5 trillion in deficit spending over ten years, or roughly $250 billion per year. The problem is, we currently deficit-spend about that much every couple of months. In other words, each month, every month, we spend $125 billion to $150 billion that we don’t have. Looking at it that way, it should be obvious to anyone that $2.5 trillion over ten years is a drop in the bucket. Even if all those so-called cuts are actually implemented, which there is nearly zero likelihood they will be, we might see the increase in our deficit over the next ten years change from, say, $25 trillion to $22.5 trillion. So, ten years from now, we might have, in 2011 dollars, only a $37.5 trillion debt rather than a $40 trillion debt.

Of course, that’s not really going to happen. There’s not enough money on the planet to fund US deficits and debt at those levels. The inevitable result is that we’re going to come up against hard financial realities. As Thatcher warned, we’re going to run out of other people’s money. There are three ways out of such a problem. We can grow out of it. We can inflate out of it. Or we can default. We’re not going to grow out of it, which leaves inflation or default as the only real alternatives. Either of those is a disastrous solution, but most rational economists would probably agree that default is the lesser of the two evils.

Work on the biology book continues.

13:36 – Geez. Now I understand why Barbara uses her MP3 player in her car. Radio stations have become unlistenable. Back in the days when I spent a normal amount of time driving, I used to listen to WFDD, which is our local university public radio station. They played lots of classical, baroque and other music that wasn’t played on commercial stations. Now they’re all talk, talk, talk. And radical left talk at that. WKRR, formerly known as Rock 92, and which I now call CRAP 92, used to advertise 58 minutes of music per hour. Boy, has all that changed.

A friend is out of town on a long weekend, and asked me to pick up his mail and paper. It’s about a five minute drive to his house. So I turned on CRAP 92 as I backed out of the garage. There was a constant stream of commercials, including one for female facial hair removal, that lasted until about 30 seconds before I got to his house, when they started playing a rock track from the 70’s. I picked up his mail and paper and put them in the house. I couldn’t have spent more than five or six minutes in there. When I returned to my truck, CRAP 92 was again running commercials, which it continued to do for the five minutes or so it took me to drive home. Geez. And the real bitch is that when they’re not running commercials that doesn’t mean they’re running music. They have two morons named Chris, who sound like their combined IQs would have trouble breaking 100. They yuck it up for minutes on end, wasting time that could have been used for playing music. I conclude that anyone who listens to CRAP 92 regularly must also be a moron.

I don’t understand why commercial radio stations still have any spectrum. Both the AM and FM bands are some pretty useful bands, and they’d be a lot more useful put to purposes other than wall-to-wall commercials and morons blathering on. The government should reclaim this bandwidth, along with the bandwidth allocated to OTA television, and put it to better use. If it were me, I’d simply make it illegal to run any kind of commercial or otherwise paid-for material on the public airwaves. That’d kill commercial radio and TV stations quickly, and we could then use that wasted spectrum otherwise.

Sunday, 31 July 2011

12:30 – Well, the budget melodrama continues, with both sides proposing imaginary budget cuts, coupled with very real increases in spending. Reid’s proposal is particularly cynical. He counts as “cuts” money that would never have been spent anyway, such as continuing funding for the wars in the Middle East, which we already know are going to be spun down. He also counts reductions in proposed increases as “cuts”, so in fact his $2.4 trillion (or whatever it is) in “cuts” actually reflect increased spending. The Democrats’ real priority, of course, is to sweep this mess under the table until the 2012 election. Once they’re reelected, or so they fondly hope, they’ll again have screwed the voters, leaving us with no recourse until the next election.

There’s an old new saying I just made up: Fool me once, I’m trusting. Fool me twice, I’m gullible. Fool me three times, I’m an idiot. Unfortunately, American voters have shown themselves to be so far sub-idiotic that there’s no word to describe it. Politicians lie and voters believe them. Even most of the Tea Party politicians, who are widely described as zealots, are lying. A few are holding out against increasing the debt limit at all. I hope they get their way, but I doubt they will.

Just to be clear, if the debt limit is not increased, the US is in no danger of defaulting on its legitimate obligations. What would happen is that we’d have massive across-the-board spending cuts, including huge reductions in the military budget, massive layoffs of federal workers, large reductions in social spending, elimination of all foreign aid and transfer payments by the IMF and similar international organizations, withdrawal from the UN, NATO, and other entanglements, massive reductions in Medicaid spending, and the elimination of entire federal departments and agencies. That’s something I’m all in favor of.

Word on the biology book continues, and we’re starting to assemble a new batch of chemistry kits.

Saturday, 30 July 2011

09:28 – The big news this morning is that I’m almost certain not to bear a premature baby, and it’s all because I use Crest Pro Health mouthwash. Granted, the study was a small trial, but still the results are stunning. Among a group of expectant mothers with gum disease who swished their mouths twice a day with water, about 20% delivered prematurely. Among a similar group who swished their mouths twice a day with Crest Pro Health mouthwash, only about 5% delivered prematurely.

The article cautions that using mouthwash is not beneficial for pregnant women who have not been diagnosed with gum disease, at least in terms of reducing premature births, but that’s merely unsupported opinion in the absence of a trial. Using the mouthwash could of course benefit women with undiagnosed gum disease. For that matter, it seems likely but is not certain from this study that the benefit is from the effect of the mouthwash on gum disease, but other factors could be in play. Perhaps fetuses like the taste of the stuff and decide to stick around longer for their twice-daily hit. Or perhaps cetylpyridinium chloride is absorbed by the mother and reduces premature births. The most obvious explanation is usually correct, but many important scientific discoveries have been made by people who looked past the obvious.

Laundry this morning, and the number of old dish towels I have to wash has been declining. We keep a stack of about 50 of them in the hall bathroom, where Colin usually pees when he has an accident. Fortunately, the floor is ceramic tile, so I just sop it up with one of the old towels and then mop the floor with Lysol solution. The towel goes in a field-expedient diaper pail, a flip-top wastebasket that used to be in my lab. Until a few weeks ago, Colin sometimes went through the entire stack of towels in less than a week. Lately he’s down to a dozen or so a week. He usually pees outside now, except when he gets excited, notably when Barbara gets home from work. But he is getting house-trained, albeit gradually. Colin is about five and half months old now. When Malcolm was that age, he had at least as many accidents as Colin is having, so I’m not too concerned.

Friday, 29 July 2011

08:45 – It’s interesting, in the same way that watching a train wreck is interesting, to watch the maneuvering of FIGS (France, Italy, Greece, and Spain) versus FANG (Finland, Austria, Netherlands, and Germany). The former, along with Portugal and Belgium, are pressing for fiscal union so that they can pillage the wealth of FANG to support their own spendthrift governments and moribund economies. FANG legislators and voters are perfectly aware of this, and very unlikely to allow it to happen. Smart money is on the Eurozone and then inevitably the EU itself fragmenting into one group of rich, productive northern nations and a second tier of poor, unproductive southern nations. Look for that to happen sooner rather than later, possibly even before the end of this year.

On a related note, I see that the ratings agencies have downgraded regional Spanish debt, a likely preliminary to them downgrading Spanish sovereign debt itself. Spanish and Italian bonds are already selling at historically high yields, and their most recent auctions have failed to sell out. They’re both at the point now where one or two more straws will break their backs. And the EU bailout fund has insufficient resources to stabilize either of them, let alone both. Nor are Germany and the other wealthier EU nations willing to throw more money down that rat hole. I suspect that the FANG nations have already decided to let nature take its course with the weaker nations. Everything the FANG nations are doing now is aimed at damage control for their own economies and their own citizens.

Work on the biology book continues.

12:21 – Apple has finally carried through on its threat to disable ebook reader apps that allow purchasing ebooks from within the app, bypassing Apple’s store. Talk about the height of arrogance. Apple demands 30% of revenue for doing nothing, and further insists that publishers and distributors price their works on the Apple store no higher than elsewhere. In effect, Apple demands 100% of the profit (or more) on all sales.

For example, let’s say I publish an ebook on for $3.00 list price. For each ebook they sell, Amazon pays me 70% of that $3.00 and keeps the other $0.90 to cover its own costs. If Amazon updated its reader app to meet Apple’s requirements for in-app purchasing, Amazon would still pay me the $2.10 royalty, but would have to pay the remaining $0.90 to Apple as Apple’s 30% cut, leaving Amazon with $0.00.

So, as of last night, Amazon updated its iOS app to remove the in-app purchasing option. Someone using an iOS device now has two options. First, they can purchase a book from Apple’s store (which was the whole idea all along; Apple was embarrassed because almost no one was purchasing ebooks through their crappy store). Second, the iOS user can fire up a browser, navigate to, and purchase the ebook manually. Way to go, Apple. Nothing like screwing your users in a money-grab that has no justification.

A lot of bloggers seem to think this change will let Apple grab a lot of ebook market share, on the theory that iOS users will take the easy way out and just buy from the Apple store. I don’t think so. It’s easy enough for an iPad user to buy the book directly from the Amazon or B&N site, and I think Apple’s going to see some pushback over this nasty little scheme. Furthermore, I have purchased hundreds of books for my Kindle over the six months since I bought it, and I have purchased none of them using the Kindle itself. In every case, I’ve ordered the book from the Amazon web site on my office or den PC and later downloaded it, via Wi-Fi or USB, to my Kindle. Every Kindle owner I know does it the same way, and I don’t know any smartphone users who buy directly from their smartphones. They all buy from a browser running on their PCs and then sync the book to their smartphones and other reading devices.

So, Apple may get a few more ebook purchases from iPad users, but probably not many more. IIRC, Apple to date has sold via the Apple store an average of about one ebook for each Apple unit capable of displaying ebooks. Their nasty little scheme may bump that to maybe two or three ebooks per device, but I doubt that it will threaten B&N’s market share for ebooks, let alone Amazon’s.

14:03 – Ruh-roh. I just shipped the last of the chemistry kits I had already made up and boxed. I have the sub-assemblies necessary to make up another batch quickly, but I’m not sure that batch will last me until the backordered component arrives.

Meanwhile, I do have all but one of the components necessary to make up another 60 or so kits. That means we can put together the main sub-assemblies (chemical block and small parts bag) and assemble and box up 60 more kits, missing only that one component. Once it arrives, it won’t take long to add that one component to each box and then tape them up and have them ready to ship.

Speaking of taping them up, it turns out to be good that I bought much more packing tape than I thought I’d need. U-line had the stuff on sale for $1.69 per roll, which was half the normal price, but only if I ordered a case of 36 220-yard rolls. So I did, thinking it’d be a lifetime supply. As it turns out, I’m using the stuff much faster than I though I would. The large priority-mail flat-rate boxes are one-foot cubes, so I figured I’d need maybe three or four feet to seal the top and bottom middle seams, plus maybe another four feet to seal the edge seams. Call it eight feet per box. At 660 feet per roll of packing tape, I figured I’d get something like 80 or 85 boxes per roll. Then reality intruded. I’m taping the crap out of these boxes, because the last thing I want is to have one come apart in transit. Incredibly, I ran out of tape on the first roll after sealing only 20 boxes, which amounts to 33 feet (10 meters) of tape per box. Still, that means my 36 rolls of tape are enough for 720 boxes, so I should be good for quite a while longer.

Thursday, 28 July 2011

08:40 – Heads-down work all day yesterday on the biology book. Or as heads-down as it gets with a 5-month-old puppy pestering me constantly.

The front matter and introductory chapters are complete, as are the Group I sessions on Mastering Microscope Skills. Group II, on The Chemistry of Life, is nearly complete. Over-complete, in fact. It currently runs about 55 manuscript pages, and will have to be trimmed back. Group III, on Life Processes, is well in progress, as is Group XIV on Ecology, and I have many other individual lab sessions also in progress that will be assigned to other groups. Things are starting to come together.

Congress and Obama continue the debt dance, with both sides pretending that there are actual budget cuts on the table, when in fact the argument is all about whether the budget and deficit will be increased by a huge amount or by an even huger amount. What they really need to be doing is zero-based budgeting, or at the very least budgeting based on a milestone year. I’d suggest 1990 or even 2000. Start with that and then discuss how much should be cut from the spending levels that year. Alternatively, they might consider setting a spending limit as a percentage of GDP. Currently, spending is about 25%, with revenues at only 15% of GDP. In the first year, they should cut taxes to put revenues at 10% of GDP, with spending at, say, 5% of GDP. In later years, they could reduce those numbers to more reasonable levels, until the federal debt is eliminated and federal revenues and spending are at, say, 0.5% of GDP. And even that would be much too much.

Wednesday, 27 July 2011

08:27 – My 30-day estimate may have been optimistic. Only three business days after the crisis summit, yields on Spanish and Italian bonds had already returned to pre-summit levels, and both countries are having difficulties selling their bonds even at those disastrously high yields. Meanwhile, German banks are dumping Greek, Portuguese, Irish, and Italian bonds as fast as they can sell them. So much for stopping the contagion.

UPS showed up yesterday with six large boxes from one of my wholesalers. I now have about 98% of what I need to assemble 60 more chemistry kits. Unfortunately, one small item is backordered until late August, and I can’t find a second wholesale source for it. If necessary, I’ll see if I can find it at retail and get a quantity price break. But that’s a last resort. I’m hoping that what I have in inventory will last another couple weeks, but I’ll probably end up having to backorder kits, at least for a couple of weeks. Oh, well. At least we can build a bunch of kits lacking that one item and simply drop it in once that item arrives.

Tuesday, 26 July 2011

08:16 – Reading about the Norwegian mass murderer, there’s something I don’t understand. He thinks muslims are invading and taking over Europe, forcibly spreading their hateful beliefs to a previously civilized part of the planet. Okay, I get that. He’s right. If Europe has any sense, it’ll expel muslims with extreme prejudice, as should the US and other civilized countries. Muslims are nothing more than Nazis in drag, and the proper response to a muslim is the same as the proper response to a Nazi.

What I don’t understand is why he set off his truck bomb next to government offices, in an area presumably largely populated by ethnic Norwegians, and then shot up a youth camp presumably largely populated by ethnic Norwegian young people. Why not park the truck next to a mosque during services and then shoot up the survivors? Or, since he apparently had enough ammonium nitrate to make five or six more truck bombs, why didn’t he park truck bombs outside five or six more mosques during services? What was the point to slaughtering a bunch of ethnic Norwegians, most of whom were presumably non-believers, and most of whom presumably weren’t much happier about the spread of islam than he is?

11:34 – I’m always leery when calls of racism are made against ordinary people or institutions, but if this article is correct this is a pretty blatant case. This young woman earned the highest GPA in her graduating class, and yet was denied her position as sole valedictorian. Furthermore, her mother’s appeal to the school authorities was denied on questionable grounds, and delayed until the question became moot. The young woman in question is black and a single mother, and the school district in question is in the Deep South. If the facts stated in this article are correct and complete, it’s reasonable to ask if this young woman was denied her rights simply because the authorities didn’t believe she was the right kind of person to represent her school.

Now, it’s possible that there were extenuating circumstances. For example, the article mentions that she took a heavy load of AP classes, but does not mention which ones. Let’s face it, an A in AP History or AP Literature or AP Foreign Language shouldn’t have the same weight as an A in AP Biology, Chemistry, Physics, or Calculus. Many school districts award 5 points on a 4-point GPA for an A in any AP course, but if an A in one of those non-rigorous AP courses is worth 5 points, then an A in a rigorous AP subject should be worth at least 6. So, although the article doesn’t give details, it’s possible that the students in second and third place had only slightly lower GPAs and had taken a boatload of rigorous AP courses. In that case, they probably deserved the valedictorian and salutatorian positions. Or they would have, had the school district made those changes to the way GPAs were assigned. As it stands, the only justification I can see for their position is that the other students may have had a wider range of extracurricular activities, which in any event should not be given any weight for academic honors. And, of course, as a single mother, the student in question probably had more limited opportunities to engage in such activities.