Tuesday, March 22, 2011

Challenges or Opportunities?

I notice many societal challenges the common thinking is automatically to assume they are insurmountable, and to dread how they will lead to a lower standard of living. For example affordable housing/lack of available housing.

A guestimate from me is Britain needs 2 million more housing units across the country over the next decade to meet current housing shortage and the housing needs of the 2.5 million net population growth expected. At least 1 million of these houses in Greater London. If half of these were my favorite, 15-20 story condo buildings with 150 units in each building, so 500,000 units in London, that would require 3,300 of these buildings to be built in Greater London. I believe in building these condo towers right clustered on major public transportation links.

An additional 500,000 housing units could be built in new suburbs expanding into the green belt. Since Greater London already has around 4 million housing units, this isn't that bad of an expansion.

Anyway the point is the number of jobs this would create in constructing these 1 million housing units in London. From architects, to engineers, to building supply firms, to transport companies, to construction trades, to infrastructure related expansion work. Its sad but in economics that growth is what gets the money flowing. With all those guys employed in good jobs, they in turn would go out and spend the money. For a nation with millions of unemployed and a housing shortage it seems a no-brainer.

Tuesday, March 8, 2011

Stem Cells and Regenerative Medicine coming paradigm

-Stem Cells and Regenerative Medicine-  This is the garden of eden of unpicked orchards.  In the long run, you take an elderly person and extract adult stem cell from an organ in their body.  You then isolate healthy cells that have not mutated through damage through time.  And you reset the telomeres on these isolated stem cells.  At this stage you can also insert the genetics that you want into these stem cells.  This will combine nicely with genetic engineering.

In Bioreactors you replicate hundreds of millions of these young, healthy stem cells.  When that is completed you filter out the bad replications you made, and keep the healthy ones.  Then you inject or use some other method to insert these cells into the elderly person's organ.  As the elderly person's cells die as usual, and this depends on the cell type, the young, healthy stem cells will replicate themselves and rejuvinate the person's organ.  You do this across all cell types in the body, and it is rejuvinated from a cell replication perspective.  This isn't a cure all for aging by itself, but we are talking a huge advance.

There is fears that resetting the telomeres could increase cancers.  But I feel this is wrong, young people have these healthy cells with long telomeres left, yet are far less likely to get cancer.  I believe most cancer is a failure of the immune system.  This is why you see AIDS patients getting cancers.   

An 80 year old with whole body replacement of the adult stem cells, would actually have healthier stem cells than a 30 year old.  Literally have younger cells.  Of course after hte original batch of elderly people were treated, the plan would be to do it on a more regular basis.  People wouldn't wait until 80 to get going on these procedures, they may start at around 50, and reset the clock.

Paradigms in history of health advances

There isn't that much the industry can do at this point.  They went all out with huge research spending over the last decade.. and didn't get much.

Longer patents and higher cost per drug are not really reasonable.  The issue isn't funding for research.  They could double research spending and I doubt they would find anything more.  Its not like they are aware of a promising area but not funding it because of lack of funding.

But while it is the end of the pharma-chem paradigm, its not the end of progress for health technologies.  Stem cells are nearing commercialization for the first treatments.  Several nanomedicines are in trials.  And genetic engineering has been successfully done in research programs.  Progress is being made on the vectors for the new genes to enter the dna strands.

There have already been a number of health paradigms since the enlightenment, each reaching near its full potential.  To name some of them..

-Vaccines- eliminating the big 7 scourges of mankind.  Now new vaccines are for obscure targets where the benefit of widespread vaccination is highly questionable.

-Public Sanitation/Public Sewers- You can imagine how bad the disease was when they threw their sewage in the streets.  Today I don't know of anywhere in the developed world where raw sewage flows.  One of the great breakthroughs was when Doctors began washing their hands before giving birth.  A shocking change in the death rate of infants.

-Antibiotics- This really was the big breakthrough of the pharma-chem paradigm.  Penicillin is still amazing how many ailments £5 pounds worth can cure. 

-Cheap Protein/Public Nutrition -Europeans are tall, healthy and intelligent in good part because of the amount of protein and fortified nutrients they get growing up.  Probably 100% of the UK population has enough money to get the minimum protein required for healthy growth of the organism.  On the other hand this is slipping in recent decades with the regulators being asleep at the wheel.  Sugar, excessive salt, many fats should be taxed and or regulated out. 

So what paradigms are coming down the road?  I will cover that in the next threads.

Monday, March 7, 2011

Drug Firms Face Billions in Losses in '11 as Patents End

By Duff Wilson
 At the end of November, Pfizer stands to lose a $10-billion-a-year revenue stream when the patent on its blockbuster cholesterol drug Lipitor expires and cheaper generics begin to cut into the company’s huge sales.

The loss poses a daunting challenge for Pfizer, one shared by nearly every major pharmaceutical company. This year alone, because of patent expirations, the drug industry will lose control over more than 10 megamedicines whose combined annual sales have neared $50 billion.

This is a sobering reversal for an industry that just a few years ago was the world’s most profitable business sector but is now under pressure to reinvent itself and shed its dependence on blockbuster drugs. And it casts a spotlight on the problems drug companies now face: a drought of big drug breakthroughs and research discoveries; pressure from insurers and the government to hold down prices; regulatory vigilance and government investigations; and thousands of layoffs in research and development.

My comments:  The pharm-chem paradigm is running out of steam. The low hanging fruit has been picked, an the big, easy money made. Now its a declining number of new drugs. Same thing happened in an earlier era with vaccines.

But its not the en of the road for health technologies. Rejuvinative medicine; stem cells and related.. looks just huge in its potential, even bigger than the pharma-chem paradigm. There is also genetic engineering which is in its infancy. And there is nano-medicine which is also in its infancy.

Unfortunately I camee to realize the great names in Pharmacueticals will never make the jump to a new paradigm. They will stay making drugs, even as that business becomes about generics. New companies that don't even exist now will become ten billion dollar a year companies in the new fields.

Sunday, March 6, 2011

Problems with NIMBYism

When a NIMBY blocks a development it causes a lot of negative impacts:

-Families are denied housing. Sometimes this means families never even forming in the first place
-All the workmen who would be working buildig the houses, are never hired
-Allt he workmen to build the infrastructure like electricity, water, roads.. never hired.
-Rising prices for existing housing, causing a transfer of wealth from young to old

Less work being done and less wealth for the society, means lower tax revenues and therefore lesser services. For example that workman making good money operating machinery is a net tax payer. On the other hand in NIMBY utopia he is unemployed and collecting benefits. This difference in tax revenues can be used to fund things like libraries or recreation centers.. or Gaelic translators.

To make a long story short, NIMBYism is one of the main, if not the main cause of our economic stagnation.

Friday, March 4, 2011

In America 99% of the mortgage market is state backed now

50% of marriages end in divorce, huge percent of people end up disabled, job loss is real and growing every year.  So sort of suicidal to lend to the average person over any long time horizon.  Unless it is like 50% down.

In the 20th century you could be reasonably sure if someone lost their job they could easily replace it with a similiar paying job.  In the 21st century its a different game.

That is why my contention is that lending is increasingly going to be to states and corporations.  The consumer credit market is going to fade away.  It will still be there just a lot smaller percent of the whole.  Its like credit card debt, the big banks are trying to get out of it.  Because they aren't making money on it.  Soon it will be something more reserved for their premium clients.

Without consumer credit what is going to drive the economy? .. state spending.  Look even in Britain in just the last 2 years the number getting housing assistance rose by 500,000. 

Wednesday, March 2, 2011

Engineering versus bean counting

Here is the different mentality.  German geniuses are working on automated systems to avoid accidents.  Soem already out are anti-lock brakes and electronic stability control. But coming is lane detection software, automatic braking for rear ends, object sensors that detect cars in the next lane and do not allow the car to run into them.  Also automatic parking is coming, that could avoid a lot of minor collisions which cost a lot of money to fix.

In anglo-saxon nations we put our geniuses to work on actuarial tables, calculating different premiums for say a 5'7, lesbian, Irish woman who is 38 years old.  Versus a 37 year old black man, 5'8, manchester city fan.

And yes our actuaries make at least as much money as those German engineers.  But the engineers are working towards a permanent solution to the problem.  While the actuaries are useless middlemen, collecting money but not changing the situation.  No matter how many actuaries you have there is still the same number of accidents, and the same number of claims.

Tuesday, March 1, 2011

Manufacturing growing at fastest pace in 7 years(USA)


The rebound in manufacturing is gaining momentum, the report showed. The new orders index rose to a seven-year high. A measure of order backlogs rose to its highest level in a year. And inventories are shrinking, both at manufacturers and their customers. All are signs that factory output is likely to keep growing.
"The recovery in the sector is both robust and on track," said Ian Shepherdson, an economist at High Frequency Economics.
Solid growth overseas, particularly in developing countries such as China, Brazil and India, has also helped by boosting exports. A measure of export orders rose to its highest level in more than 22 years.

My comments:  US recovery is starting to look real and like it is gaining momentum.  They should be nearing the economic high mark of mid-2008 soon, and breakng into new territory.

They've got a lot of major industrial corporations seeing heavy orders coming in from the developing world.  Deere, GM, Ford, Boeing, CAT, GE.  And internal companies who were putting off upgrades and replacements are now coming in with big time orders.  (which creates a virtuous cycle). 

Tech is very stong right now too.. Intel, Microsoft, Oracle, HP, IBM, Dell, Apple.

QE 2.0 is working too, big end demand comes in, US dollar devalues to a more approriate level, and so far no inflation.