Saturday, May 29, 2010


I love the coincidences here: there are a number of stories today about new/innovative stuff. Let’s start out with this New York Times article about telehealth, a field of health care that I think is very promising…by the way, these are the tasks that we need faster broadband coverage for, in order to make these virtual appointments that much more convenient.

Here’s the second (also an NYT story) on crowdsourcing medicine—essentially medical social networking:
PatientsLikeMe has an innovative for-profit business model, too. It sells health data, gathered from member profiles but with certain identifying information removed, to drug makers and others for scientific and marketing research.

Members can seek out patients of the same age, sex, and disease progression, whose profiles are displayed on the site, to see which drugs or doses worked for them. Drug makers can pinpoint subgroups — say, severely depressed middle-aged men — who reported the greatest improvement on a particular medication.
I think the logical evolution of medical social networking is combining them with electronic medical records, which will (among other things) be incredibly useful for researchers (assuming consent, of course).

The third, on 3-D printing:
… what if you wanted to "print out" a dinner plate, the leg of an armchair or an eyeglass frame? It may sound far-fetched and futuristic, but plastic extrusion machines that can do this — popularly known as 3-D printers — are poised to enter the home electronics market.

When you read, do you search or do you chase?

The bank failure trend does not look good.

Disturbing facts on Nigeria:
…more oil is spilled from the [Niger] delta's network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico, the site of a major ecological catastrophe caused by oil that has poured from a leak triggered by the explosion that wrecked BP's Deepwater Horizon rig last month.

With 606 oilfields, the Niger delta supplies 40% of all the crude the United States imports and is the world capital of oil pollution. Life expectancy in its rural communities, half of which have no access to clean water, has fallen to little more than 40 years over the past two generations. Locals blame the oil that pollutes their land and can scarcely believe the contrast with the steps taken by BP and the US government to try to stop the Gulf oil leak and to protect the Louisiana shoreline from pollution.

Will Spain become more like Finland or Argentina? Relatedly, will Europe have its Wile E. Coyote moment?

Co-sign, co-sign, co-sign:
The fable told by the private-equity industry, Kosman explains, is that many companies are poorly managed and sources of cost-savings could be wrung out by new management brought in by new owners. Alternatively, the story holds that their share price undervalues the parts of an enterprise that could be more profitably deployed if reconfigured or broken up. But in reality, very few private-equity owners are willing to play the role of both disruptive innovators and patient capitalists. They are interested in quick windfalls. What makes the entire business model viable is that companies, or their parts, can be bought and sold several times with borrowed money, using the subsidy of a tax break on the interest each time.

If this tale sounds vaguely familiar, it's the story of the leveraged-buyout (LBO) craze of the 1980s. When the LBO business crashed and burned, Kosman explains, LBO operators rebranded their industry as "private equity," which sounded so much more dignified. Many of the players, such as KKR, are the same. True venture capitalists, Kosman writes, "invest in growing companies, and they maintain an active oversight role as these companies grow and change." Private-equity firms, by contrast, make their big bucks on buying, loading up the company with debt, and selling -- sometimes to each other so that tax breaks can be used each time. In addition, they pay themselves exorbitant "special dividends" and "management fees," looting the cash flow that the operating company needs for its ordinary operations, not to mention investment in innovation.

The stories are grimly familiar. Thomas H. Lee Partners, one of the biggest private-equity firms, buys Warner Music, the world's fourth-biggest music company, and loads up the company with debt to finance the buyout and to pay itself $1.2 billion in dividends. One-third of the work force is fired. KKR, Merrill Lynch, and Bain Capital team up to buy Hospital Corporation of America, a long-troubled company with 170 hospitals. Staffing is thinned, standards erode, complaints increase. CD&R, The Carlyle Group, and Merrill Lynch buy Hertz, the nation's largest auto-rental company, putting up $2.3 billion in cash out of a $15 billion deal. The private-equity owners quickly recoup more than half of their down payment by loading up the company with even more debt. Funds for rental operations are cut by 39 percent, and Hertz's market share falls. Bain Capital, the company that made Mitt Romney rich, invests just $18.5 million in KB Toys, extracts $85 million in dividends, then takes the company into bankruptcy, stiffing employees, investors, and creditors.

Interesting immigration facts I hadn’t heard before:
… they have been trying to convince lawmakers that H-1Bs depress wages and take jobs away from American workers. To prove their point, they highlight examples of unscrupulous body shops that underpay their workers, and they cite questionable research published by other anti-immigrants. But a new peer-reviewed study, published in Management Science, a top academic journal, challenges these claims. This research finds that foreign-born I.T. professionals on temporary work visas actually earn more than their American counterparts; and that limits on H-1B visas cause the salaries of foreign workers—rather than of Americans—to increase. This, along with research completed by my colleagues at UC-Berkeley, Duke, and Harvard, confirms what most people in Silicon Valley already know: that foreign-born I.T. workers complement American professionals and make the pie bigger rather than take jobs away.

Bond fears?: “It's an odd gift from the Europeans to U.S. bond investors: a debt crisis that has made owning debt more appealing.” (Not sure his article supports that assertion.)

Subprime goes to college (from Steve Eisman, who you may remember from The Big Short--via Paul Kedrosky):
Do people like sprawl?

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