Friday, September 5, 2014

Employment Stats

Employment is still quite sluggish especially at the top line. The 6.1% number is not what we should look at, it is the participation rate which is still very low relative to before this Recession.
This past month as shown below we saw another dip, which is not a good sign for August.
The above is a key chart which shows a reduction in unemployed but against a steady and poor participation rate.

It is not anticipated that the Economy will rebound until the next Administration.



Wednesday, September 3, 2014

Common Sense: Not Thomas Paine

In the NY Times there is some erstwhile entrepreneur who is in my opinion bemoaning the process of raising money,

She bemoans the following:

The problem is, refusing to do any work until a term sheet is signed sounds great but is hard to do. When you first meet, you are excited and the investor promises that the process will take only a few weeks. You can afford to invest a few weeks. Even as time drags on, everything appears to be proceeding, and you are certain the deal will close. As time drags on, costs pile up and cash reserves dwindle. You realize that, with so much time invested, you cannot afford to start the process again. I will never get stuck in this situation again. I will never let an investor seduce me into believing that a term sheet is around the corner while I put time and money into meetings and answering thousands of questions. I will ensure that a term sheet is agreed upon up front and then start the due diligence process. If the V.C.s find something they do not like during due diligence, they can always back out of the deal, but at least I will have established that there is a deal to be done. Even though I know their firm is big and my company is small, I will do this because I know that time and energy are my biggest assets.

Now I was involved in my first VC backed start up in 1969. Most likely one of the very early ones. The lesson is that you always have to be ready with the due diligence packages. It is standard, it is expected, and you better get your act together as part of any business, you will be doing it again and again. 

I had it down to an art. You know what is expected and what is asked for is what any business should have ready at hand. Dealing with investors takes time, so expect it.

This write up in the Times is a display of the generational changes we have seen. These folks seem to expect everyone to see how great they are and when one asks for some form of proof, they seem affronted. They believe they are perfect and should be taken at face value, whatever that may be.

Raising money is like any other sales effort, but not the "buyer" is dealing with money, theirs and their investors. The entrepreneur must understand that and demonstrate that they will take care of that responsibility.

The term "seduce" is foolish in my opinion, for to me it demonstrates a level of arrogance and entitlement that one sees in young inexperienced start up players whose understanding of business is limited.

As for a term sheet, it can be drawn but it still has outs, namely the due diligence outs for whatever reason the investor so chooses.

So folks like this had better get used to having due diligence packages ready at hand, on line, sent with the push of a button! In fact one can even send it via this new service called the "Internet". cool thing this new technology!

Sunday, August 31, 2014

Red Wine and CVD

Eureka reports on an interesting finding by a Czech researcher. Wine protects only those who also exercise from CVD.

They state:

Evidence suggesting that mild to moderate consumption of wine protects against cardiovascular disease has been accumulating since the early 1990s. In particular, retrospective studies have found that wine increases levels of HDL, the "good" cholesterol. But until now there has been no long-term, prospective, randomised study comparing the effects of red and white wine on HDL cholesterol and other markers of atherosclerosis. The IVV study is the first long-term, prospective randomised trial comparing the effect of red and white wine on markers of atherosclerosis. The study included 146 people with mild to moderate risk of cardiovascular disease according to the HeartScore . Participants were randomised to one year of moderate consumption of red wine (Pinot Noir) or white wine (Chardonnay-Pinot) from the same year and wine region of the Czech Republic....
He added: "The only positive and continuous result was in the subgroup of patients who took more exercise, which means regular exercise at least twice a week, plus the wine consumption. In this group HDL cholesterol increased and LDL and total cholesterol decreased in the red and white wine groups. There may be some synergy between the low dose of ethyl alcohol in wine and exercise which is protective against CVD."

Now this is interesting since having lived in Prague for a while I found the Czechs drink beer and the Slovaks drink wine, usually white. Also there is often a genetic tendency for very low HDL and at the same time low cholesterol, with very low risk of CVD.

Just what this all means I do not know but since it is the middle of Labor Day weekend I thought it would be worth a comment!

Saturday, August 30, 2014

Even the Brits Hate the CATV Companies

The Guardian has a post regarding Comcast and its attempts to block any competition.

They state:

The US cable industry called on the Federal Communications Commission on Friday to block two cities’ plans to expand high-speed internet services to their residents. USTelecom, which represents cable giants Comcast, Time Warner and others, wants the FCC to block expansion of two popular municipally owned high speed internet networks, one in Chattanooga, Tennessee, and the other in Wilson, North Carolina. “The success of public broadband is a mixed record, with numerous examples of failures,” USTelecom said in a blog post. “With state taxpayers on the financial hook when a municipal broadband network goes under, it is entirely reasonable for state legislatures to be cautious in limiting or even prohibiting that activity.” Chattanooga has the largest high-speed internet service in the US, offering customers access to speeds of 1 gigabit per second – about 50 times faster than the US average. The service, provided by municipally owned EPB, has sparked a tech boom in the city and attracted international attention. EPB is now petitioning the FCC to expand its territory. Comcast and others have previously sued unsuccessfully to stop EPB’s fibre optic roll out.

One of my more referenced papers from 2002 on Municipal Broadband detailed what was to happen. No surprises. But what is shocking is that the current Administration appears in my opinion to be in collusion with these characters to further hinder any competition. Pity. But again no surprises.

Friday, August 29, 2014

PSA: Beyond Logic

In a recent Medscape article on the PSA debate the author states:

Cost is another issue. It is estimated that to prevent a single cancer death through screening and treatment costs more than $5 million. Could those dollars be better used to have a greater impact on society? Because although we may prevent a man from dying from prostate cancer, in many cases that doesn't mean that he is going to live a whole lot longer than he would have lived anyway. We have a net dilemma in trying to resolve these controversies. They are not going to be resolved tomorrow. Ultimately, we can hope that 2 things occur. One, going forward, it would be great if the gene tests that are in development turn out to be able to tell us which men need to be diagnosed and treated and which men can be spared. Two, we need to ensure that a similar fiasco does not occur. By that, I mean another screening test for early cancer that is not specific for that cancer being developed, without the right studies being done before it is used. We must avoid approving tests when we don't know for certain that they will be associated with more benefit than harm.

Let me now address each of these assertions:

1. Cost: This calculations makes a set of assumptions which in my opinion as discussed before herein are incorrect. We know the mortality rate of PCa and the costs associated with it. We also know that PSA velocity and % Free are excellent when combined with PSA. What we do not know is when we see a Gleason 6+ cancer whether it is aggressive or indolent. That is a genetic problem. Thus lacking such knowledge it is impossible to make a financial assertion of this type.

2. Genetic Tests: BRCA is a reasonable test for Breast cancer. The problem is that many PCa are not BRCA like, they may be methylation like and thus one needs to sample the actual cancer cells, not just one but many, and many individually to seek a stem cell as well. Not a simple problem.

3. Many tests lack great sp0ecificity. Welcome to testing. We cannot only use tests that  are perfect, medicine is never really like that. We never can give an answer to a patient who says "Doc, how long do I have?". No one patient is the same to all others.

Thus when we see statements like this we should take them with a grain of salt. We use the tools at hand and learn, many of the tools are poor, but they do work, somewhat. Perfection we leave to zealots.

Thursday, August 28, 2014

CATV and Monopolies

I read a piece in Ars Technical alleging that Comcast is taking measures to delimit competition.

The article states:

CenturyLink has accused Comcast of trying to prevent competition in cities and towns by making it difficult for the company to obtain reasonable franchise agreements from local authorities. CenturyLink made the claim yesterday in a filing that asks the Federal Communications Commission to block Comcast’s proposed acquisition of Time Warner Cable (TWC) or impose conditions that prevent Comcast from using its market power to harm competitors. Comcast has a different view on the matter, saying that CenturyLink shouldn’t be able to enter Comcast cities unless CenturyLink promises to build out its network to all residents. Without such conditions, poor people might not be offered service, Comcast argues.

Now that was the same game we saw when we tried to build Hanover, NH.  The incumbent had been Adelphia then bought by Comcast. Then things started, the town demanded almost 100% coverage and more. We wrote a paper discussing this at the time.

It was this added cost that made any entry prohibitive. As we saw it the town just did not comprehend the economics. All we had asked for was a equal and level playing field, the town apparently at the CATV's insistence demanded complete coverage. Frankly no CATV system does that, there are always dead zones due to reasonable economics.

As we have noted before, the merger, politically correct with the current administration, is unacceptable from any reasonable antitrust position in my opinion.