Laboriousness Day

Summer’s labor is over, dear readers! Now it’s vacation-time!

Amy & I are heading up to Toronto for a few days to visit friends and family, do some fine dining, and see the sights! We promise to take plenty of pix.

Unfortunately, I can’t convince her that we should follow Michael Cook’s footsteps and make a side-trip through the city’s drainage infrastructure.

Have a great holiday!

From the Editor: Idiot’s Alchemy

(Sorry I haven’t written much lately, dear readers. I’ve been awfully busy at work, and pretty burned-out by the time I’m home. But I’ll wrap up most of it today, and then Amy & I are off on a mini-vacation. More later! Meanwhile, here’s this issue’s From the Editor column.)

Idiots’ Alchemy

Making money out of nothing at all

In keeping with last issue’s Hollywood-themed editorial, I’ve decided to write a sequel! This month, we move from blockbusters to bombs. In Hudson Hawk, my favorite terrible movie, the archvillains plot to demolish the world banking system by flooding it with alchemically produced gold. At least, I think that’s the plot. It’s tough to follow, what with the implausible action sequences, candy-bar code-named CIA operatives (with David Caruso as Kit Kat!), a nun-as-love-interest, and musical numbers featuring Danny Aiello and Bruce Willis.

The action revolves around Darwin and Minerva Mayflower — campily played by Richard E. Grant and Sandra Bernhard — and their reconstruction of a lead-to-gold machine designed by Leonardo Da Vinci. Says Minerva, “After a couple of years of steady production, we’ll flood the market with so much gold that gold itself — the foundation of all finance — will lose its meaning.”

Of course, Nixon ended the gold standard 20 years before Hudson Hawk came out, rendering the Mayflowers’ plot moot. And yet it’s also eerily prescient. After all, gold qua gold doesn’t mean so much anymore, not as a “foundation of all finance.” Now it’s just another commodity in which to invest.

What we’re left with is money itself. Funnily enough, while we’re free of gold, we haven’t gotten over alchemy. Instead of la machina oro, we have “quant funds,” those hedge funds that employ statistical models so sophisticated that they can “find winning trade strategies,” as the Wall Street Journal puts it. From equations to money, like magic!

Turns out one of these winning trade strategies was investing in financial instruments that were based heavily on subprime mortgages (that is, the practice of giving large loans to people who have poor credit). Some of these sophisticated investing models managed to underestimate the risk of — repeat after me — giving large loans to people who have poor credit.

Finding themselves pummeled by margin calls and investor redemption requests (that is, investors trying to get their money out of these fabulous funds before it all disappeared), some funds required massive bailouts from their parent institutions. Outspoken financial personality Jim Cramer made the YouTube rounds by ranting about how the government needs to step in with an interest reduction, ostensibly to save the homes of subprime mortgage holders, but also to save the jobs of hedge fund managers.

Evaluating risk — the true foundation of finance — lost its meaning. For a while.

So how does this tie into pharma? Well, first there’s the direct impact of this credit shakeup on private equity firms. Many of these groups employ leveraging techniques to (partially) fund acquisitions of public companies. We’ve seen several contract manufacturers acquired by PE firms this year, but with money less easy to borrow, will further acquisitions be back-burnered?

But the other pharma tie-in is potentially more damaging, and that’s the bizarre talk about a new round of mega-mergers in the drug industry. First we heard rumors of Novartis’ interest in buying Bayer, and then an analyst floated the idea that Pfizer should acquire Wyeth.

Regarding the former, you can learn more with Derek Lowe’s In the Pipeline excerpt on page 40. As far as the latter? Well, I think the argument for a Pfizer/Wyeth hookup is far more flawed than that which guided Pfizer’s Warner-Lambert and Pharmacia buys earlier this decade. In those instances, Pfizer could point to its co-marketing agreements for major drugs and show how 100% control of those products would lead to greater sales. You may recall that I disagreed with those moves, not that I take any joy in how that turned out.

Now? Pfizer’s key motivation (says our analyst) is the acquisition of Wyeth’s biologics program, which she compares to AstraZeneca’s MedImmune acquisition. Which cost more than a dozen times MedImmune’s earnings. In cash.

But I’m starting to think that the point of these rumors — and there’ll be more this year — isn’t to push for those particular mergers. Rather, it’s to incite any sort of big merger activity, because the banks that took a bath this summer need to boost their financing and underwriting businesses this fall.

Let’s hope the new CFOs are smart enough to keep the industry’s recent merger history in mind. Otherwise, we could be looking more upheaval. Or, as Darwin Mayflower put it in Hudson Hawk, “History, tradition, culture: these are not concepts! These are trophies I keep in my den as paperweights! The chaos we cause the world with this machine will be our final masterpiece! Go, team, go!”

Go (not very far) ape!

Here’s a story about an escaped orangutan at the Atlanta Zoo. There are several odd aspects to this one. Which one do you think is the strangest:

a) That thee orangutan just wandered around about a 100 feet from his cage for half an hour, before being tranked and taken back to his pen,

b) that zoo officials think may have used “some sort of equipment” to get past the moats,

c) that they declared a “code brown” situation?

Yuck.

Will Rogaine put Cal Ripken on its packaging?

When a theme crops up for the third time on this blog, it’s time for me to create a new category for it. In that spirit, I now offer up “Adventures in Wheaties,” which is a perfect compliment to my “Adventures in Gin” category. I’ll use this category to chronicle my love/hate relationship with America’s favorite breakfast cereal.

So what could possibly have driven me to write about Wheaties yet again? After all, I’ve already discussed my A-Rod boycott and my aversion to buying a WNBA-branded box of the stuff. Now I’m convinced that the boys at General Mills are just messing with me.

After all, how do you follow up this box:

Skinny runner Hunter Kemper

with this one?

Fat baseball player Tony Gwynn

With all due respect to Tony Gwynn, a class act and a legendary ballplayer, I don’t think Wheaties is doing itself any favors when it displays one of the guys whom people cite when they make their “baseball players aren’t athletes like football and basketball players” argument. I understand the Hall of Fame reasoning in putting him on the box, and it’s not like they’re putting Sidney Ponson on, too, but it’s still not exactly hyping a fit lifestyle.

In the writeup about him on the back of the box, we find that Gwynn

was truly a thinking man’s ballplayer, a perfect blend of art and science. Known best for his artistry with a bat, he also pioneered the extensive use of videotape analysis studying his own game relentlessly, never resting on his success. His work ethic was legendary as he spent countless hours refining his stroke in the batting cage and at the hitting tee.

The writeup goes on to mention that a Wheaties breakfast “can help jumpstart metabolism.” Note that this doesn’t say, “will help jumpstart metabolism,” considering it’s juxtaposed with another picture that doesn’t even employ the slimming effects of a pinstripe uniform.

If I was Hunter Kemper, I’d give up and start eating Krispy Kremes.

But Michael Vick can’t catch a break

Great article in the NYTimes today about Pakistan’s supreme court ruling on Nawaz Sharif’s right to return to the country and campaign for high office. Now I’m not praising the article because it shows how the weakening of Musharraf’s support has led to an independent-minded judiciary. Nor am I praising it because of its deft depiction of the intricacies of power relations among Musharraf, Sharif and Benazir Bhutto.

No, I’m praising it because it included one very specific detail:

On Thursday, Mr. Chaudhry, leading a bench of seven judges, declared to a packed courtroom that the Sharifs had an “inalienable right to enter and remain in country, as citizens of Pakistan.”

Mr. Sharif’s supporters hugged each other and poured out of the white marble building onto the main avenue, where they slaughtered four goats in celebration. As blood spilled on the asphalt, Mr. Sharif’s backers shouted: “Farewell, farewell, Musharraf, farewell.”

Still Ill

Michael Blowhard offers up a lovely meditation on age and the relationship of body and mind (okay, soul). This musing is occasioned by MB’s participation in beach volleyball during a long weekend. At 53 and surviving cancer, he explores a number of metaphors for the relationship “we” have with our bodies, and how those relationships evolve as we age. It sorta culminates in this:

The best comparison I’ve been able to come up with is to owning a car. When your car is brand new, you roar around in it, relishing the speed, the nimbleness, and the responsiveness. It isn’t just that your car is an extension of you. You’re a team, merging into one fabulous, even better organism.

By the time your car is 10 years old, though, you have a different relationship with it. Your car has developed intractable quirks and failings. Things often go wrong for no apparent reason whatsoever. And when a reason is apparent, there’s often nothing that can be done about it anyway. In order to keep this car running, you have to take its weaknesses into account. You need to be prepared for surprises, as well as for the fact that few of them will be good ones. You and your car aren’t roaring around together any longer, celebrating the power that together you represent. You’re now your car’s caretaker. You’re clearly in charge, you’re definitely responsible, and fate will do what fate’s gonna do anyway.

I started doing a variety of yoga last October, and found it to be enormously beneficial. I had a small surgical procedure that forced me to stop for a few weeks last May, and then I let inertia / laziness take over, leading to three months without a real workout. I started again last week, and am kicking myself for falling out practice just at the time of year when my job grows most stressful (the added flexibility helps when you need to kick yourself).

Now that I’m going into a heavy-duty mode to finish an unexpectedly large September issue, put on our annual conference and make its 40-page attendee guide, assemble the big October issue, and promote our year-end gigantic directory (400+ pages), I’m making a point of getting a workout in every other day. But that’s neither here nor there, unless you have to work or live with me.

Anyway, his post has some interesting ruminations on age. It’s a subject I’ve been pondering as I deal with the inevitability of the fact that I just don’t fit in with the 20- and early 30-somethings here in my office. Oh, and that there are college basketball players who were born the year I entered college. Here’s another excerpt:

One thing that some younger people often don’t understand about aging is that age isn’t merely the failure to be young. Age is its own thing. Younger people sometimes look at older people and see people who just aren’t trying hard enough. The aches, the protectiveness, the irritability . . . If only the graybeards would try harder, none of that would be a problem.

Young people often seem to explain age to themselves as a failure of will, in other words. What they miss is that it isn’t only the body that changes as you age. Your values, your abilities, and your desires change too. Excitement becomes less important, for example — something often to actively avoid, because it’s just too damn rattling. Besides, been there done that. Calm and peace become more important. Youthful willpower — aka push — evaporates, to be replaced by a determination to enjoy life as it is. Dissatisfaction and the lust to achieve is replaced by gratitude for what is. It’s not just that the ability to will things into being vanishes, it’s that the desire to do so also goes. Energy and inspiration can no longer be ordered up and bossed into performing. Instead, maybe they come, maybe they go . . . They do what they do on their own schedule. Life’s good either way.

I’m gonna go be crochetty now. Goddamn kids . . .