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Showing posts from May, 2016

Random Quote from Kant

Critique of Pure Reason.

"In the applications of the pure conceptions of the understanding to possible experience, the use of their synthesis is either mathematical or dynamical; for it is directed partly merely to the intuition, and partly to the existence of a phenomenon in general. But the conditions a priori of the intuitions are, in respect to a possible experience, absolutely necessarily; those of the existence of the objects of a possible empirical intuition are only in themselves contingent. Hence the principles of mathematical use are ... absolutely necessary; that is, they strike apodictically; whilst those of dynamic use will also carry with them the character of a necessity a priori, but only under the condition of the empirical thinking in an experience...."

I'm not sure I grasp this fully. The premise behind it is the old distinction between contingent and necessary truths. It is a contingent truth that Smith owns a Hewlett-Packard laptop. It is a necessar…

Valeant Pharmaceuticals: Co-Purchasing and Injunctive Relief

Yesterday I discussed the history of Valeant Pharmaceuticals, and mentioned its unsuccessful effort to acquire Allergan.

Valeant never did acquire Allergan, but its effort made some fascinating law.

Some of the key questions arose from the fact that Valeant was acting in concert with a hedge fund manager, Pershing Square. So closely in concert, indeed, as to raise the question whether what was going on amounted to insider trading as SEC rules understand it? Pershing Square acquired a 9.7% stake in Allergan during the period of this collaboration, and it is was willing to vote those shares in favor of ousting the company directors that were resisting the takeover attempt.

Allergan responded with a lawsuit, asking that Pershing Square be enjoined from voting its shares giving the "likelihood" that this would be deemed to be insider trading.

Was there such a “likelihood” and would that have supported a preliminary injunction?

The U.S. District Court for the Central Distric…

Valeant Pharmaceuticals: Some Corporate History

Yesterday, I wrote a few words about where Valeant stands now. I'd like to follow up today by taking a look back.

Valeant was a California company that merged with Canada's Biovail in 2010. The two companies were of about equal size, and some would say the resulting company had as much of Biovail's DNA in it as Valeant's, although of course calls itself by Dad's name.

And at that time, Biovail was known as a product development company, (with some pushing-the-envelope bookkeeping tricks, but let's be charitable and forget about that.) Unfortunately some of its key products, including the neurological medicine Wellbutrin, were suffering from tough competition. Pearson, in 2010, set the company on quite another course. He was more interested in acquiring other companies than developing products.

Let's skip ahead. Valeant spent much of 2014 trying to buy Allergan, which failed because Allergan found another suitor, and was acquired by Actavis for $66 billion …

Valeant Pharm: A Heavily Indebted Company

Valeant Pharmaceuticals has taken some hits of late. At the end of March 14, a share of VRX at the NYSE would bring you $69.04. At the end of the following day, it was worth less than half of that, just $33.51. It has lost further ground since. What happened? Management had announced disappointing earnings figures, and  cautioned that its debt holders could categorize it as in default if it missed an April 30th filing deadline.

A week later, the bond rater Moody's downgraded Valeant, on the grounds that its cash stockpile was inadequate to its overall indebtedness.

Meanwhile, as the departure of J. Michael Pearson, the long-time CEO, approached, shareholders naturally got nervous. They were nervous, that is, because always creates a case of the nerves in someone, often in many people. They weren't nervous as a recognition of Pearson's great leadership. Indeed, he had run up a heck of a lot of debt on acquisitions, some of which at least were of dubious value to the compan…

Reviewing the Obama administration

It has 8 months left to run, but here are some retrospective thoughts on almost-the-whole of it.

1. Gitmo's infamous detention camp remains open. This wouldn't necessarily stick in one's craw except that Obama issued an executive order as early as January 22, 2009, with the confetti from the inaugural parties still incompletely cleared away, that said it would be closed within one year.

2. Another one that goes back a ways. Obama early on pressed for a cash-for-clunkers bill, which he signed on June 26th of that first year, supposedly to revive the auto industry. It was a cheap gimmick that had no good effect at all.

3.  The whole rebellion in Libya thing was horrendously mismanaged.   Absurdly, the administration seems to have thought it was exercising what it called "smart power" in this connection., Nothing smart about it.  Ended with the need to use a random video as a cover for whatever the heck actually happened in Benghazi.

4. Waffling on things like the K…

Who was Rudolph Virchow?

A name from my childhood, when for a period I was fascinated by the history of microbiology.

Virchow was born in 1821 and lived until 1902. He was involved in anthropology, politics, etc. but is best known for his contributions to medical research.

Virchow is considered the father of modern pathology. He applied cell theory, already then much discussed, to explain the effects of infection on organs and tissues of the human body.

The basic insight was that the causes of disease are to be found not at the tissue level, but at the cellular level. This led him to especially groundbreaking work in the area of cancer, where he was the first to hypothesize that cancerous cells were originally normal healthy cells, not invaders.

He also made great strides regarding thromboembolism, setting out the hypothesis that pulmonary thrombi are carried from the veins of the leg by the flow of blood, then doing the experiments that proved this point.

Unfortunately, where there is light there is shadow…

Bitcoin and Georgist economics

Stirred by the latest controversy over who might have gotten it all started, stirred too by some of the tweets in my feed in recent days, I've been wondering what Henry George might think about bitcoins. I'm not a Georgist, but I have long regarded his point of view with fascination, and  I discussed his theory of credit in particular in one passage of my book on the economic crisis of 2007-08.

The theory of interest can give us some basis for extrapolating to what HG might think and say about cryptocurrencies were he around today to learn of them.

In his classic work, PROGRESS AND POVERTY (1879), George proposed a thought experiment thus, "[I]f wealth consisted but of the inert matter of the universe, and production of working up this inert matter into different shapes [then] interest would be but the robbery of industry, and could not long exist."

So: did he in fact see interest as theft? No, because the premise of that thought experiment is invalid. Some wealth i…

New bitcoin controversy, Part II

So: now that Wired and Gizmodo have outed Australian Craig Wright, and Wright has owned up to it...is he really Nakamoto? Has the question of the origins of bitcoin been put to rest?

Dan Kaminsky, a computer security researcher, has said that he and other researchers who've looked into this "have got him dead to rights." That is: that Wright is pulling a con.

Jerry Brito, the executive director of a nonprofit research organization that studies currency issues, agrees. Wright has "provided no cryptographic evidence verifiable by the public, and many of his answers sound plain fishy."

Even Wired seems to have changed sides.

The cryptographic evidence adduced one way or the other is difficult for a non-expert to follow. Here is a simple point, though. Wright's company, Cloudcroft, a data analytics concern, has claimed to own two supercomputers, one of which was manufactured by SGI, the company formerly known as Silicon Graphics. But ... SGI denies it ever sol…