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The Most Expensive Material in the World
May 13, 2008
The most expensive stuff, pound for pound, is not the gasoline you put into your car. It’s not gold, or platinum, or diamonds, or even some exotic medicine. If you bought some, you wouldn’t even be able to hold it without destroying it. Of course, you probably wouldn’t be able to buy much of it. To manufacture a milligram of it, it would cost about $300 billion, and would take decades or even centuries. Even after you manufactured it, it would be difficult to store for more than a few hours at a time. The most expensive stuff in the world, by far, is antihydrogen - the only form of antimatter that humans can reliably create.
What is antimatter?
Antimatter is simply the opposite of normal matter. Every particle (except some with no charge) has an antiparticle. Antielectrons (called positrons) have the same mass and act similarly to electrons, but have a positive charge. Antiprotons have the same mass as protons but have a negative charge. If you can get a positron to start spinning around an antiproton, you have an antihydrogen atom. Antihydrogen acts, in many ways, exactly like hydrogen - it will have the same mass, the same spectroscopy, and should have the same gravitational interaction as regular hydrogen. If you looked at something made of antimatter in a vacuum, it would look just like its regular counterpart - anticopper would look just like copper; antigold would look just like gold.
Of course, as any reader of science fiction knows, the one big difference is that if an antimatter atom touches a normal atom, the result is the theoretically most powerful explosion possible as both atoms transform into pure energy at approximately 100% efficiency. Ounce for ounce, this is more than 100 times as powerful as a hydrogen bomb.
What could I possibly do with antimatter?
Aside from helping mankind understand the basic makeup of the universe, antimatter could provide us with an incredibly efficient engine. Antimatter fuel would take up an incredibly tiny amount of space compared to normal rocket fuel. Antiparticles are already used in medicine; antimatter might help precisely destroy cancerous tumors or help with imaging technologies. Antimatter weapons could be incredibly tiny, making the “suitcase nuke” a reality, or incredibly powerful, dwarfing even the largest nuclear explosion ever.
How can I make some?
If you want to get in on the antimatter gold rush that is sure to be coming soon, you’re going to need access to a lot of electricity, a particle accelerator, and a long stretch of time. The first step is creating some antiprotons. At CERN, this is done by speeding regular positrons up to near the speed of light, then smashing them into iridium blocks. This creates enough energy for new particles to be formed, and some of these particles will be antiprotons. You will need to save these for later, as they will form the nuclei for your antihydrogen atoms. Of course, you can’t touch them with regular matter, so you’ll need to use an array of magnets to catch them in a Penning trap or something similar.
Now you’ll need to have a source of positrons. This is actually quite easy to find; several different radioactive isotopes emit positrons as they decay. In fact, positrons are used in PET (positron-emission topography) machines in many hospitals for medical imaging. One way is to get positrons for this purpose now is to use xenon clusters. Start firing the antiprotons at the xenon atoms. When the antiprotons get close to the nuclei of the xenon atoms, electron-positron pairs will suddenly appear. About one antiproton in 10,00,000,000,000,000,000,000 (10e19) will grab one of these positrons and create one antihydrogen atom. You could also try storing antiprotons in a Penning trap and bombarding them with positrons, like these guys did. Using the latter method, you should be able to create up to 100 antihydrogen atoms per second! If you’re lazy, you can just take a look at U.S. patent number 6163587, “Process for the production of antihydrogen” and copy from them.
Before you start putting together your business plan, remember that at this point, having created a few hundred atoms, you will have used more electricity than a medium-sized city would use in a day. You also will have spent billions of dollars on creating a particle accelerator capable of producing the antiprotons. You also will have had to avoid any mistakes in supporting all of these incredibly complex procedures. Then, of course, you would have to store enough of it to sell without any of it touching any normal matter. Current estimates are that, under perfect conditions, you would get back around 0.00000001% of the energy used to produce antimatter when annihilating it for energy.
Of course, the production costs become a moot point if we can find it lying around in space. Some people think this is possible; the AMS spectrometer is currently orbiting the Earth, searching for interstellar antimatter. We’re in the Wright Brothers phase of antimatter exploitation and exploration now. Antimatter may be a blessing, taking us to a world of abundant, non-polluting energy, or to destruction, if the wrong people get their hands on sufficient supplies of antimatter. It’s too early to tell. One thing is for sure, though… it’s really expensive to make it.
In Most of the US, It Is Legal to Drink Alcohol Under the Age of 21
May 9, 2008
It is a common, but erroneous, belief that the United States has the highest legal drinking age in the world (aside from countries which ban it outright, such as Saudi Arabia). In general, this is true, due to the National Minimum Age Drinking Act of 1984. However, this federal mandate only forces states to set the minimum age for purchasing and public possession of alcohol to 21, under pressure of reducing federal highway funding for that state. It is still up to the individual state to set the specific laws regarding this, and most states have a whole list of exceptions to the law. It turns out that only seven states - Alabama, Idaho, Indiana, Kansas, North Carolina, Pennsylvania, and West Virginia - totally prohibit underage alcohol consumption.
Twenty states have absolutely no law against alcohol consumption by minors, and thus use laws against alcohol consumption or other violations to press charges against underaged consumers of alcohol. However, all of the other states (aside from the seven mentioned above) have specific exemptions. These exemptions include drinking alcohol with family members, drinking for religious purposes (such as wine during Catholic Mass), and consumption under orders from a physician (for example, a doctor may order a youth to ingest alcohol as a treatment for methanol poisoning without fear of the state government). In some states, the question of whether possession on private property is prohibited has either not yet been legally tested or found to not count as “public possession.” For instance, it is legal in California for minors to possess alcohol in a private location. In almost all states, you are allowed to possess alcohol if it is necessary in the course of your job, such as bar tending or distributing beer.
Several other places have specific exemptions to the minimum drinking age. Already, military bases within 50 miles of a locale where the drinking age differs are allowed to modify the drinking age of personnel on that base. In practice, this applies only to military bases near Mexico and Canada, since the established drinking age in all 50 states is 21. An example of a military base where the minimum drinking age has been lowered to 18 is Fort Bliss, Texas. Many states allow minors to drink as long as they are either in their own home, their guardian’s home, or in the presence of their legal guardian. In several states, if your spouse is over the age of 21 but you are not, you are allowed to drink alcohol in their presence, as they are acting as your legal guardian.
To see exactly what the prohibitions against alcohol are in your state, and what they have been at different times, you can use this extremely useful tool. It’s basically a search engine for finding out a simplified version of the laws for a particular state at a particular time in history.
“Our Customers are the Enemy”: Five Lesser-Known Cartels
May 8, 2008
“Our competitors are our friends. Our customers are the enemy.” -James Randall, former president of ADM
Everybody’s heard of the Organization of Petroleum Exporting Countries (OPEC), which is an international cartel dedicated to maximizing profits on oil for its members, and the news is filled with tales of “drug cartels” around the world. Price-fixing via collusion of supposedly competitive industries is often suspected in high-cost, abstract industries such as insurance. But did you know that there have been cartels artificially inflating the price of goods as diverse as light bulbs, vitamins, and groceries?
1. The Phoebus Cartel
If you think that it is difficult to convince people to convert from incandescent light bulbs to CFLs, try getting people to convert when virtually every manufacturer of light bulbs is colluding with each other to raise prices of all bulbs and reduce their average life expectancy (causing more bulbs to be bought). Named after the Latin form of the Greek sun-god, the cartel included every major manufacturer of light bulbs in the world, including General Electric, Philips, and Osram. For almost twenty years, from 1924 until the beginning of World War II, the cartel kept prices fixed for light bulbs in the rest of the world, including Europe, at around four times the cost of light bulbs in the United States. The cartel has also been accused of retarding research into more cost- and energy-efficient light bulbs for all of those years. Eventually, effects of both the war and the entry of lower-cost Scandinavian manufacturers into the market led to the demise of the Phoebus Cartel.
2. The 1990s Vitamin Cartel
Although some people think that cartels are just a memory of a gilded age past, they are alive and well even today. There was a lull in most cartel activity for fifty years after World War II, but they are popping up more and more in the last few decades. One of the largest and most sophisticated cartels operated in the mid-1990s to fix the price of various vitamins and amino acids, such as lysine, citric acid, and vitamin A. Consisting of several massive, blue-chip companies, including Roche, BASF, and ADM, this cartel made hundreds of millions of dollars in excess profit in a few short years. The cartel came to end after an FBI raid in 1995, with several ADM executives going to prison, one for 36 months (the first time this maximum sentence was ever handed down).
3. The Uranium Club
Between 1972 and 1976, a group of non-US governments and various uranium suppliers, both in the United States and elsewhere, caused the price of uranium to rocket upwards. This group - “The Uranium Club” - created a cartel with price floors and production quotas to ensure that certain countries would provide a certain amount of uranium to buyers. Major members included companies from Australia, Canada, South Africa, and France, and these governments, monitoring the export of uranium for “security reasons,” provided a way for the cartel to check if any individual companies were cheating the system by underselling or selling more uranium than allowed. Prices of uranium more than sextupled within four years. This apparently had little direct effect on the US uranium, as foreign uranium was mostly barred from trading on the market at the time, but it is alleged that it caused an indirect rise.
4. The Horse Racing Cartel
The Asian Racing Federation is a collection of various racing horse racing organizations, many of them government monopolies, that have conspired to ensure that only their affiliates can legally gamble on racing outcomes. Representatives have stated the goal of their “Good Neighbour Policy” is to restrict illegal, off-shore gambling, and thus provide more tax revenue to their respective governments. However, since they minimize the number of competitors, they have artificially kept profits higher for their preferred bookmakers, and thus act exactly like a cartel.
5. The Supposed British “Supermarket Cartel”
Last month, the United Kingdom’s Office of Fair Trading (OFT) started an investigation into the four largest supermarket chains in the UK, on suspicion of conspiring to fix prices. Theoretically, this makes no sense. Virtually all cartels tend to be in commodity businesses with little room for branding (for example, graphite, industrial dyes, freight shipping and bulk chemicals). This makes it easier for companies to detect cartel “cheaters,” since they are selling basically the same product. In addition, most companies involved in cartels have little direct interaction with the end consumer but rather with other businesses. Finally, cartels prefer to operate in markets with a relatively small number of buyers. Supermarkets seem like the epitome of companies that would not be involved in cartel formation and operation. However, the OFT has been asking very specific questions. If they find out that the supermarkets have been colluding in a cartel, it will bring up several difficult questions on how prevalent cartels are in this day and age.
Investing for an Alien Invasion
May 6, 2008
A key part of active investing is figuring out what will happen to particular investments under specific circumstances. This is why so many questions are sent in to finance columnists, asking what they should do if they think another war or recession is on the way. However, I have found absolutely NO advice on how to structure my investment portfolio if an alien invasion is imminent. I have put together these tips so that you can have the right stocks to profit when - not if - the extraterrestrials start attacking your city.
Sectors to Avoid: Retailers, Transportation, Finance
Large retailers will be hit by the “perfect storm” of reduced consumer demand, a dysfunctional supply chain, and the death of most of their customers by marauding alien bands. Consequently, a “Strong Sell” is in order for Wal-Mart (WMT - quote) and Target (TGT - quote).
It seems that finance firms would be in a unique position to find deals amongst the rubble of collapsed Western civilization. Unfortunately, most major banks and finance firms are headquartered in those selfsame cities that would be destroyed early in an attack, leading me to place a “Strong Sell” on almost all finance firms. Two exceptions are National City (NCC - quote) and KeyCorp (KEY - quote), due to their headquarters in Cleveland, a city which is likely to be overlooked by extraterrestrials.
Worldwide air superiority for the little green men (hereafter referred to as “LGMs”) is almost a given; “stealth” capabilities aside, it is much more difficult to hide in the air than on the ground. Ships are also easily spotted from the air, or even space, and virtually all unauthorized shipping platforms will be destroyed by LGM hostilities. Most importantly for our purposes, the global supply chain will be shattered. UPS (UPS - quote) and Fedex (FDX - quote) will have major difficulties shipping during these hostilities, but may find it hard to raise prices in order to compensate due to reduced orders from the now-obliterated cities. These factors will erode their profit margins and they definitely warrant a “Sell” on both stocks.
Similarly, railroad lines are easy prey for roving attack saucers. However, as the invading force or puppet government will have use for railroads for rounding up dissidents, sales will not dip quite as much as other transportation modes. In addition, government contracts tend to be a reliable source of revenue. I would rate both Norfolk Southern (NSC - quote) and CSX Corp. (CSX - quote) as “Holds.”
Sectors to Overweight: Defense, Generics, Chemicals
Any attempts for humanity to fight back against the LGMs will, by necessity, be asymmetrical. We may not be able to send an F-22 up directly against their Glerg-4 KillCraft, but we would be able to send many drones up and hope one gets lucky. We probably could not send a division of troops against their death rays, but we may be able to smuggle in explosives to the mothership. All of this leads to the conclusions that only a certain kind of weapons maker will profit during this invasion. A defense company that makes a variety of cheap, easily replaceable armaments, while adapting to the shifting battleground, will win more government contracts. Of course, the company that merits a “Strong Buy” is the Russian firm Izhevsk Mechanical Works (RTS: IGMA - quote), creators of the AK-47.
Humanity will need to learn how the alien technology works, and for that we are going to need some reverse engineers. The best companies that do this today are the ones that reverse engineer high-technology products already. Generic drug companies such as Teva Pharmaceuticals (TEVA - quote) will do quite well figuring out exactly which compounds are being given out to brainwash the masses of areas under LGM control, and thus earn a “Buy.” More importantly, mankind will have to study what we think of as “electronic” technology (although they may not use electricity at their stage of development), such as computers, flying saucers, and death rays. I issue a “Strong By” on Microsoft (MSFT - quote) which has proven that they are well versed in stealing other people’s ideas.
It is reasonable to assume that the aliens will need specialized chemicals that were available on their home planet but not here. Major chemical manufacturers will clamor to produce the exotic, chlorine-based molecules our alien overlords will crave. If you are not bothered by “sin stocks” and profiting from the destruction of your own species, I would place a “Strong Buy” on both Dow Chemical (DOW - quote) and Du Pont de Nemours (DD - quote). Let the socially responsible funds miss out on the profits to be made from tobacco, gambling and aiding and abetting the subjugation of our species to extraterrestrials.
Conclusion
It makes perfect sense to start positioning your portfolio immediately for any upcoming alien invasion. In addition, immediately post-attack would be a great time to add money to your portfolio, as most people will not be prepared and sell their holdings willy-nilly to purchase food and something, anything to burn for heat. As Baron Rothschild once said, “Buy when there’s blood on the streets.” When that blood is green, so much the better.
Bill Laboon holds no positions in any of the securities mentioned in this article. He would like to thank the authors of “An Introduction to Planetary Defense: A Study of Modern Warfare Applied to Extra-Terrestrial Invasion” for their insights.
Nauru: The Decline and Fall of the Phosphate Empire
May 5, 2008
Its people had the highest income, per capita, of any nation in the world. Families who had never before left their hometown would charter planes for shopping expeditions to Hawaii and Singapore. Citizens bought sports cars with their royalty checks. Less than thirty years later, eighty percent of their nation is a barren, strip-mined wasteland. Per-capita GDP is less than Namibia’s, Nicaragua’s or Sudan’s. Phosphates made Nauru rich, but also contained the seeds of its destruction.
Discovery… of the Island, and of Phosphates
Nauru (pronounced NAH-oo-roo) was discovered (by the Europeans at least) in 1798 by John Fearn, who named it Pleasant Island. For almost a century, its people mingled with European whalers, traders, and the occasional deserter. In 1878, as more firearms were introduced into Nauruan culture, tensions between the twelve clans of Nauru reached a boiling point. A fierce civil war erupted, and lasted for ten years, until the Germans annexed the island and helped unify the tribes.
Nauru may have endured as so many other Pacific islands have, by not being worth too much to anybody and having colonial rulers adopt a laissez-faire attitude towards them. Unfortunately, they had a different destiny. In 1900, a British prospector discovered that almost the entire island of Nauru consisted of high quality phosphate rock, created mostly from years of bird droppings. Although many people have never heard of them, phosphates are essential to a modern standard of living. They are a key ingredient in fertilizers, even today, and several wars have been fought solely over phosphate supplies, especially in the 19th century.
Within a decade, phosphate mining commenced, and continued as nations battled for control of the all-important phosphate rock (more information about the current phosphate shortage). Between discovery of the phosphate in 1900 and the independence of Nauru in 1968, five nations had control of Nauru at one time or another: Germany, Australia, the UK, New Zealand, and Japan. Nauru was invaded during both World Wars (in WWI by the Australians, in WWII by the Japanese) to ensure that the phosphate would flow. During all of this time, although their island was a cornerstone in the global economy, ordinary Nauruans did not benefit much from the phosphate mining in their country. The various companies extracting the phosphate rock tended to keep the profits for themselves.
The Golden Age
In 1968, the Australian government, then-trustee of Nauru, declared that the island was “uninhabitable” and offered to resettle the Nauruans. The people of Nauru decided instead to declare independence from Australia, and shortly afterwards, bought the rights to phosphate mining away from all foreign owners. They were going to go it alone, and they were going to do it on the back of phosphate rock. They started bringing in companies to mine the phosphate for them, and set up the Nauru Phosphate Royalties Trust to invest and manage the money from the mining (an early example of a sovereign wealth fund). The NPRT was founded to ensure that there would continue to be money to run Nauru even after phosphate reserves were depleted, and to provide royalties from the phosphate mining to the people of Nauru.
The money was shot out from the NPRT onto the citizens of Nauru like a fire hose. Within a few years, Nauru had the highest per-capita GDP in the world. Forget about oil wealth; in the 1970s, in Nauru, all the talk was of phosphate wealth. Nauru acquired a collection of foreign real estate, invested in musical productions, and showered its citizens in free money. There was no real need to work; government checks bought everything a person could desire. The streets were lined with new German, Italian, and American sports cars. People moved away from the traditional diet of their ancestors and gorged on chocolates, red meat, and other processed, high-fat and high-sugar foods.
Phosphate mining continued unabated, and people thought the party would go on forever. Below the surface, though, were several forces forcing an end to the festivities.
The Decline and Fall
As phosphate reserves started to decline in the 1990s, Nauruans began asking questions about how much money was being managed by the Nauru Phosphate Royalties Trust. Although the managers had always been secretive, it was assumed that there would still be plenty of money to maintain a decent standard of living, if not living up to the heyday of phosphate mining a few years earlier. However, it was soon found out that through mismanagement, corruption, and some old-fashioned busted investment, the NPRT had lost a great deal of money. More than a billion dollars - almost the entirety of the NPRT’s assets. Nauru was broke, and their one reliable export was almost extinguished.
Unemployment now reaches about 90%… and 95% of the jobs that do exist are government jobs. Private enterprise is almost obliterated. A facility to house refugees denied admission to Australia provided 20% of the GDP of Nauru last year, and is shutting down this year.
The life expectancy of the islanders has plummeted to 58 for males (65 for females), as bad dietary habits have taken a toll. With 90% of its population obese, renal failure and heart problems are epidemic. Anywhere from 40% to 50% of the population has type 2 diabetes.
Over eighty percent of the country is a desolate moonscape, as all of the phosphate-containing topsoil was stripped down to the bare rock. Droughts have become an epidemic - the bare rock in the interior of the island reflects the heat, driving away virtually all clouds. The only remaining human habitations are in a small strip around the edge of the island.
Finally, in 2007, the country’s phosphate reserves ran out. There have been some plans floated to start mining “secondary phosphate” - phosphate that is stored underneath the worthless limestone of the interior. Extracting it entails crushing and removing the limestone, then strip mining more phosphate from below the ground. Let us hope that the Nauruans have learned some lessons in sustainability from their first brush with mineral wealth.
