Month: March 2018

“Cyberattacks Put Russian Fingers on the Switch at Power Plants, U.S. Says” (nytimes):

The Trump administration accused Russia on Thursday of engineering a series of cyberattacks that targeted American and European nuclear power plants and water and electric systems, and could have sabotaged or shut power plants off at will.

Here’s my dumb question #22 for today: Why were any of these systems accessible via the Internet? Do the operators need to download porn and denounce Trump on Facebook to stay awake? What is the possible utility, so to speak, of a process control computer system being on the Internet? If the software is updated once every year, why not do that with a 5.25″ floppy or, if modernity is required, a USB drive?

Related:

• Swiss pour cold water on our Internet dreams

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Elizabeth Holmes, the founder of Theranos, has been fined $500,000 by the S.E.C. and likely prevented from making a profit from her work at Theranos (nytimes).

I wonder if this is unfair. Was it a 19-year-old college dropout’s job to know that she didn’t have an edge over a small lake of chemistry Ph.D.s at Siemens? If I tell you “I am smarter than Gauss so give me $700 million,” whose fault is it if $700 million evaporates?

Commenters on the nytimes article are often outraged because, supposedly, peoples’ lives were put at risk by a few inaccurate test results. How can that be right? Where is the evidence that any medical procedure was ever performed as a result of a test number coming back from Theranos? (And, while we’re at it, let’s see if we can find useful medical procedures that have been done in response to test results in general!)

There is one funny comment: “The lesson here: If you’re gonna steal, steal big!” (from NDanger, Napa Valley, CA)

Readers: What do you think? She pissed away a huge amount of money because she and her Silicon Valley pals overestimated their collective intelligence and value to humanity. Is that a crime?

[Note that a standard financing structure for Theranos, in which cash investors get preferred shares with liquidation preferences, would have already done most of what the S.E.C. has tried to do. If the company had sold for less than the total invested, all proceeds would go to the preferred shareholders (the cash investors), not to founders and employees holding common shares.]

Related:

• list of bad things that Theranos did (nytimes)
• “Five Visionary Tech Entrepreneurs Who Are Changing the World” (nytimes 2015), which says “It’s hard to overestimate the potential benefit of what Elizabeth Holmes has developed with her tech company Theranos.”
• What happens when Silicon Valley meets Washington (me, 2015)
• Good article for inspiring young people to learn Mandarin (me, 2014, quoting an expert friend who was skeptical about Theranos, a year befpre the company was trashed by the WSJ)

 

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University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting (Pecaut and Wren 2017) is interesting for students of probability. We celebrate Warren Buffett as America’s smartest investor. But how much of that is survivorship bias? In November 2008 it looked as though Berkshire Hathaway might default on its debt (see “Betting Against Buffett” (Forbes): “Spreads on insurance against a debt default by Warren Buffett’s triple-A-rated Berkshire Hathaway are trading about on par with that of the embattled General Electric and worse than Goldman Sachs and Citigroup.”)

If the company was risky enough to nearly go broke in 2008, but didn’t, of course it should have done pretty well since then.

The authors, themselves money managers, start with some history:

Berkshire Hathaway was originally a New England textile company. It was a deeply discounted stock, with a book value of $19. Its net working capital was over $11 a share. Buffett bought shares at around $7–$8 per share. Buffett was buying shares at a discount to net cash and near-cash items. The decline of the textile industry was underway. Berkshire Hathaway was consolidating and selling assets. Then, with the cash, it was buying in its stock—which was intelligent because the stock was so cheap. In 1963, Berkshire did a massive buy-in of almost a third of its shares. The owners of Berkshire Hathaway saw Buffett’s position and didn’t want him in their little fiefdom. They called Buffett, offering to pay him $11.50 a share. He agreed. He’d make about a 40% profit in a short period. When the letter came for the offer, however, it was less than the agreed-on amount—but only by pennies. Nevertheless, their dishonesty upset Buffett. They were trying to chisel him out of 12.5 cents per share. So Buffett went the other way and started buying increasingly more shares of Berkshire until he took control. He then booted out the guy who had tried to chisel him out. In 1964, Warren Buffett took control of that small New England textile firm, and it became his new base for making investments. At the time, the move made no sense. Buffett had bought a business in decline that he didn’t know how to run. He later joked that he should have taken the money. That would have been the smarter thing to do. As it turned out, this textile company was an ideal vehicle for making investments. With Berkshire Hathaway’s stock, Buffett had a publicly traded corporation with captive capital. The benefits of this corporate structure for managing money are significant.

In 1967, Buffett bought an insurance company, National Indemnity. Insurance has been a core operation at Berkshire Hathaway ever since. He loves the insurance business. With its float characteristics, it creates a powerful platform for compounding wealth.

Insurance companies collect premiums, of which a significant portion goes into reserves to pay future claims. This reserve (the “float”) earns money for Berkshire, leveraging the company’s return on capital. If you can operate in a way where that float is generated at a low cost and you can grow it over time, you have built a wealth-compounding machine. As Munger once put it, “Basically, we’re a hedgehog that knows one big thing. If you generate float at 3% per annum and buy businesses that earn 13% per annum with the proceeds of that float, we have figured out that’s a pretty good position to be in.”

For every $1 of equity at Berkshire, over time there has been roughly another 50 cents or so in float. By investing $1.50 for every $1 of capital over the years, Berkshire has leveraged its returns. A significant portion of Berkshire’s long-term outperformance can be attributed to Buffett and Munger’s ability to execute on this brilliant insight. That’s not something you or I can go out and do.

So maybe you could have gotten some of Berkshire Hathaway’s performance, especially after the firm had gotten big, simply by leveraging the S&P 500? A 10-year chart shows that BRK.A and the S&P 500 have performed almost identically (i.e., you wouldn’t even need leverage to match BRK.A with the S&P 500). Actually the S&P 500 has paid dividends over the years, not reflected (I don’t think) in the pure index price. So the slightly better performance of Berkshire Hathaway (no dividend) would disappear if you factored in the dividends that the S&P 500 has paid.

Over a 20-year period, BRK.A looks a lot better, with a return of nearly 500% versus 170%. But a leveraged S&P 500 would also have done much better than the straight S&P 500. Maybe the argument is that using insurance float instead of borrowed money is a less risky way to use leverage?

As I did, Buffett lived through the traumatic inflation of the Jimmy Carter years. The authors record Buffett warning investors at every meeting that, due to the U.S. government’s deficit spending, significant inflation was just around the corner.

[1986] Buffett says it’s a political phenomena, not an economic one. As long as politicians lack self-restraint, they will print a lot of money at some point. Though it is probably two years or more down the road, Buffett sees “substantial inflation” and “rates we’ve never seen before.”

[1987] Like John Templeton, Buffett believes significant inflation is inevitable due to our government’s quick-fix attitude. “The availability of a printing press as a short-term band aid is very tempting . . . Inflation is a narcotic.”

[1993] While amazed at how low inflation has stayed, Buffett said that, at some point, inflation will return. “It’s just in remission.” Munger agreed, noting in his characteristically upbeat way that “the failure rate of all great civilizations is 100%.”

[2004] With perhaps the most significant statement of the meeting, Buffett asserted that inflation is heating up in the U.S. This explains Berkshire’s shift from bonds to cash.

[2006] Buffett noted that the CPI (Consumer Price Index) is not a particularly good measure of inflation. First, “core” inflation excludes food and energy. “Not much is more core!” Buffett exclaimed. Second, since CPI uses a rent equivalent factor for living costs, it hasn’t captured the rising cost of housing. In sum, the CPI understates inflation. Munger noted that inflation is where you look. [i.e., when your predictions don’t come true, declare measurement failure!]

[2009] Buffett guaranteed that the dollar will buy less over time, and that is happening with all other currencies as well. All major nations are electing to run major deficits in the face of the economic crisis. Buffett was emphatic: “You can bet on inflation.”

At nearly every meeting Buffett talks about how it is nearly impossible to lose by investing in Coca Cola due to its valuable brand. From the 1999 meeting:

Dismissing concerns about Coca-Cola’s prospects with the strength of the dollar, Buffett said what really matters is share of market and share of mind. Coca-Cola’s market share is marvelous, and its share of mind is overwhelmingly favorable with a ubiquity of good feeling. The keys to analyzing Coca-Cola’s economic progress are l) unit cases sold (more is better), and 2) number of shares outstanding (the fewer the better). While it’s true case growth slowed over the last four quarters, Buffett believes that is temporary and unimportant to a 10-year projection. (Munger interjected that 10–15 year projections can tune out a lot of noise.) Buffett concluded that it’s hard to think of a better business in the world. There may be companies that could grow faster, but none as solid.

What’s happened since 1999? Maybe Buffett was right… Coke is up 32 percent. But on the other hand, the S&P 500 is up 105 percent (double your money in only 20 years). See this comparison chart.

Buffett and Munger predicted the Collapse of 2008:

Buffett continued that when things go bad, all kinds of things correlate that you wouldn’t think of. Buffett said this is deadly. If you are not aware of these correlations, you have an unrecognized concentration of risk. When telecom debt collapsed, for example, people found that all of it was correlated.7 Munger warned that derivatives have the same sort of danger and that the accounting for them exacerbates the problem.8

Buffett added that, while participants claim derivatives help spread risk, he believes that they have actually intensified risk since a few large players do much of the business.10 Buffett cautioned that the counter-party risk in the system has been little examined despite the warnings of past mishaps. Munger stated that he would be amazed if he lives another five years and doesn’t see a significant blow up.

Buffett warned that when there is trouble, everything correlates. Thus, in managing catastrophic losses, one must think through the ripple effects. California, for example, has had 25 6.0 earthquakes in the last 100 years. Such a quake in a populated area would have enormous consequences. At Berkshire, not only would it hit the insurance operations, but it would correlate with the businesses of See’s Candy, GEICO, Wells Fargo and other Berkshire subsidiaries.

As with many Wall Street prophets, however, he was apparently able to predict the collapse but not the date. The above quotes are from the 2003 and 2005 meetings.

From the 2007 meeting:

As one example of what can happen under forced sales, Buffett reviewed October 19, 1987: The infamous Black Monday when the Dow Jones Average dropped 23% in a single day. It was driven by portfolio insurance, which was a joke. It was a bunch of stop/loss orders, but done automatically, and the concept was heavily marketed. People paid a lot of money for people to teach them how to put in a stop/loss order. When a lot of institutions do this, the effect is like pouring gas on a fire. They created a doomsday machine that kept selling and selling. You can have the same thing today because you have fund operators with billions of dollars—in aggregate, trillions of dollars—who will all respond to the same stimulus. It’s a crowded trade, but they don’t know it. And it’s not formal. They will sell for the same reasons. Someday, you will get a very chaotic situation.

Buffett shared that when he and Charlie were at Salomon, they talked about five or six sigma events, but that doesn’t mean anything when you’re talking about real markets and human behavior. Look at what happened in 1998 and in 2002. You’ll see it when people try to beat the markets day by day.

We have expressed great concerns about the subprime mortgage meltdown. However, Buffett does not see that this will be “a huge anchor on the economy.” Especially if unemployment and interest rates do not go up, Buffett believes it unlikely this factor alone will trigger anything major in the general economy. … Buffett concluded that it will be at least a couple of years before real estate recovers. The people who were counting on flipping the homes are going to get flipped, but in a different way.

From the May 3, 2008 meeting (four months before the Collapse):

Buffett opined that “a chief risk officer is an employee that makes you feel good while you do dumb things.”

He talked about CDOs (collateralized debt obligations), which were aggregations of tranches of thousands of different mortgage claims. They were so complicated that there could be 15,000 pages to read to understand all the mortgages and tranches involved. As if that wasn’t complicated enough, there are also CDOs squared, which might be a security that comprises 50 CDOs. At 15,000 pages per CDO, one would have to read some 750,000 pages to understand one CDO squared.

When asked about CDS (credit default swaps), a $60 trillion national market, Buffett felt the CDS market was not a big risk to tumble into chaos.

At the first meeting after the collapse, May 2, 2009, Buffett talked up Wells Fargo. How has it done?

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Pravda tells us that a righteous Democrat has won an election in a Pennsylvania district that Hillary Clinton lost by 20 points. Can we infer from this that voters were rejecting Hillary (spouse of former leader, recipient of $billions in foreign cash via her family-controlled foundation) rather than rejecting the Democrats’ promise of a planned economy (fair wages for all races and gender IDs determined by a central bureaucracy, fair (means-tested) prices for housing, food, and health care, experts allocating appropriate levels of resources to the health care industry, etc.)? Therefore if the Democrats simply nominate someone in 2020 who didn’t get rich via involvement in politics and who didn’t succeed in politics through marriage or family connections, Trump is in serious trouble? And if Trump is in serious trouble will it be time to go short the U.S. markets?

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From our town’s K-4 principal on March 9:

The recent tragedy in Parkland, FL and the inspiring advocacy of the Stoneman Douglas students have prompted the [Happy Valley] Public Schools to plan learning opportunities at our schools. Wednesday, March 14 at 10:00 is a National ‘Walk Out of School’ event for schools across the country. Some schools are using this time as a way to raise awareness about school safety or as a time for remembrance. As K-4 educators, we know that it is not developmentally appropriate to talk with our students about gun violence, specific events like Parkland, or the politics associated with these issues. Additionally, we recognize that many families do not want these complex topics to be a part of their children’s world yet and prefer that introductions to these topics take place at home.

Therefore, the Happy Valley School K-4 plans will be focused on peace, kindness, and our CARES values – Cooperation, Advocacy/Ask, Respect, Empathy, and Safety.

A few questions…

• Is this the first time that bureaucrats running a school have sponsored a “walk out of school” event?
• What are the Stoneman Douglas students advocating, specifically, that is “inspiring” to school administrators in Massachusetts?
• Given that our country is now packed full of mutually antagonistic people, at what age is it developmentally appropriate to disclose to children that one thing that Americans like to do is kill fellow Americans?

Readers: What happened in your corner of the U.S.?

[Our schools actually went above and beyond today, closing for the entire scheduled four-hour block (teachers need to have a short schedule every Wednesday). It might have been due to the nearly two feet of snow that fell yesterday rather than a passion for raising awareness.]

[Update: Our school rescheduled the walkout for the next day. Here’s the email from the principal…

Because of the snow day yesterday, our students opted to walk out today.

About 100-150 students, across the grades from 5-8, exited the building at 10:00 a.m. Student council read names and brief pieces of information about each of the 17 people who were killed in Parkland, FL. The names were interspersed with poems, moments of silence, and one impassioned plea to end gun violence. At about 10:19 our students quietly filed into class and resumed their learning.

The building was calm inside and learning continued to happen. Adults were in classrooms, hallways, and outside with students giving the support that was necessary for all of our students to be safe. Thank you for preparing your students to make decisions that were right for them. We appreciate your support.

So this was roughly 50 percent of the students. It was a beautiful sunny day so I can’t figure out why it wasn’t 100 percent. Why would students elect to remain imprisoned in their classrooms rather than be outside in the fresh 40-degree air?

Note that there was no snow “yesterday” (Wednesday). It had stopped snowing at roughly 7 pm the night before (Tuesday), but at least some people were still digging out.]

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From our anonymous insider…

We return for the New Year after a one-month break to study oral health. Exquisite Emily, a 26-year-old Iranian-American traveled to Thailand with her boyfriend, a Deloitte consultant. Type-A Anita and her boyfriend, a work-from-home web developer, took a 1.5-week trip to Japan. She sent a snapchat of the opening “In a galaxy far away” with Japanese subtitles on opening night of Star Wars: The Last Jedi in Japan. Most students flew home to visit family for this extended break.

A recently retired 65-year-old hospital dentist (“former section chief turned professional grandpa”) leads a total of eight hours of lectures on head anatomy, the basic oral exam, and common oral pathologies. He described the various lesions of the oral cavity, such as leukoplakia (unscrapable white thickening of mucosa) and thrush (scrapable white plaque of fungus). “Whenever a patient comes in with an oral lesions that I am unsure about, I tell them, come back in two weeks. Most harmless things will go away on their own in two weeks as the mucosa is turned over. If I do nothing, it will disappear in two weeks. If I give you something, it will disappear in 14 days.”

“The dentist is the last bulwark of arrogance. Dentists do not like to refer anything out. We are notoriously bad collaborators. Compare that to you guys [doctors]. You are completely dependent on radiologists, hold extended cancer panels, reach out to specialists, etc. This collaboration ensures the very best care for the patient.” The dentists summarized why dentistry and medicine are separated. “There were two milestones in this divide. First, dentistry schools completely separated from medical schools. The second occured in 1965 when Medicare was begin created. The ADA [American Dentistry Association] lobbied to be excluded from Medicare. Dentists did not want to be involved with insurance.” Lanky Luke whispered, “Dentists are looking pretty smug now that they are still in private practice without having to negotiate with government insurance.” The internet at our school is quite slow as we attempt to play several linked videos in the slide. Gigolo Giorgio joked: “This must be the result of Net Neutrality being overturned. ISPs must be slowing our bandwidth because they think we are watching porn with all our anatomy searches.”

Wednesday was led by the “Dane”, a Danish-trained dentist and researcher. She was supposed to teach us oropharyngeal cancers but we never made it past the title slide as she answered questions. One student asked how is dental care different in Denmark than the United States. “Every child has free dental care. As an adult you pay for it, but it is much cheaper and we do not have such income inequality as you do. Only people with cavities are the immigrants. Our statistics are lower because of them.” She continued, “It is truly amazing the income disparity in the United States. And mark my words. This is only made worse by this horrible tax plan that will just make the wealthy wealthier. And this idiot president.”

[Editor: Denmark is not a paradise for everyone. An American child support plaintiff who collects $200,000 per year tax-free would be capped out at $8,000 per year per child in Denmark (see http://www.realworlddivorce.com/International ). The American who lives rent-free in means-tested public housing in an expensive neighborhood of Manhattan, San Francisco, or Cambridge would in Denmark wait many years for public housing in a dreary suburb.]

Lanky Luke: “If she thinks so little of our country, why doesn’t she go back to Denmark?” Gigolo Giorgio to the GroupMe: “Will they post the title slide?” Lanky Luke: “If not, I will report this infraction to the LCME.” Both got over 10 likes.

On Thursday we go over to the clinic to interview five patients with oral pathology. I started with a 70-year-old patient treated for squamous cell carcinoma of the oral cavity requiring surgical removal of most of his hard palate. He had a surgical obturator filling the space. He removed the obturator revealing a 3 cm diameter hole in the top of his mouth. Looking up into his mouth, we could see his maxillary sinus and nasal cavity, specifically the inferior turbinate! Gigolo Giorgio gasped. “What does it feel like to touch that with you finger?” “The gentleman responded, “Oh, nothing abnormal, it can be a little sensitive.” He described his routine for cleaning the obturator and cavity every evening: “Just like brushing your teeth!” A dentist explained the anatomy of the teeth. “If a dentist is asking you to replace amalgam filling with a fancy composite, they are just trying to steal your money. It frustrates me so much. Amalgam works just as well and lasts a lot longer. Composite will need to be replaced within 10 years. These dentists figure, they can get more money by fixing that in a decade. Amalgam will last a lifetime.” (This was in contrast to another patient we interviewed who had only a small indentation in his tongue remaining after recovering from a squamous cell carcinoma tumor that had spread all over his throat and oral cavity.)

At lunch, students debated if welfare benefits should include dental care when many Americans not on welfare cannot afford dental care. Students all agreed that dental health is an important part of people’s overall health. Nervous Nancy: “This is clearly a good investment. Inexpensive procedures like cleanings prevent the more costly deterioration of health.” We googled the dental care benefits for welfare and students were surprised to learn that states are required to provide dental care to children on Medicaid. Lanky Luke: “I do not see how our system is much different than Denmark’s. Children are guaranteed dental care if they cannot afford it, if they are on Medicaid.” Straight-Shooter Sally expressed concern for the working poor, potentially ineligible for Medicaid. Luke responded, “I wonder if the increased demand for dentistry from welfare participants might price out some of the working poor.”

Mischievous Mary changed the subject: “Guys, I need your help. I am applying for a grant tailored to women in science. The essay asks: How do I promote other women in science? Any ideas?” Lanky Luke: “Tell them you empower students and patients to feel comfortable in their chosen identify.” (Our Office of Student Affairs keeps us advised weekly regarding scholarships targeted to specific subgroups of Americans. This week’s email mentioned the BuckFire Law Firm’s Diversity & Disability Scholarships. A requirement is “a disability diagnosis from any person qualified to make a diagnosis,” so perhaps medical students could diagnose each other?)

Our patient case: Harold, a 35-year-old grocery clerk with a history of alcoholism and tobacco use presents for worsening ear pain over the past two months. He reports a decrease in appetite, and denies fever. On physical exam, the external ear canal is not inflamed and the tympanic membranes are transparent. He has hard lymph nodes palpated on both sides of his neck. Erythroplakia (a nonscrapable white plaque with blood vessels) is noted on the posterior lateral border of the tongue. Smoking and alcohol use account for 80 percent of oral cancers and therefore squamous cell carcinoma is high on the differential. A biopsy reveals an invasive squamous cell carcinoma. He is referred to a oncology who initiates radiation therapy.

Harold described how he had to quit radiation therapy after 12 rounds. His ENT explained that Harold’s gold fillings caused the radiation to unexpectedly scatter and deliver higher does to his oral mucosa and salivary glands.” Harold: “I could barely drink, let alone eat, because it hurt so much. My mouth was so dry my tongue would get stuck to the top mouth, and I would have to take several painful sips of water to pry it down.”

Two years after the radiation therapy, Harold presents for a sense of “fullness” in the back of his throat. Harold’s cancer had returned. His ENT explained recurrence is not uncommon for oral cancer. “Field Effect” is the theory that a carcinogen, for example, smoking can cause mutations in a large area of tissue, but on different time tables. This time the cancer was far more advanced, spreading to his mandible.

Harold underwent a partial mandibular resection (jaw removal) with a fibular transplant and chemotherapy. A section of his mandible, from midline to the temporomandibular joint is removed, and replaced by a section of his fibula (a small bone in the lower leg not needed to support the body). “We preserved his temporomandibular joint so he still has some range of motion.” Mischievous Mary: “Oh my god! I would never have known. We can do that?”

Harold has lost most of his teeth due to periodontal disease and removal of unhealthy teeth prior to radiation therapy. As he described: “More teeth, more problems.” He eats mostly soft foods such as yogurt, fish, and smoothies.

At lunch students complete the 30-minute Y2Q medical school questionnaire conducted by the AAMC. Examples:

• “How frequently have you been publicly embarrassed?”
• “How frequently have you been threatened with physical harm?”
• “How frequently have you been physically harmed?”
• “How frequently have you been asked to exchange sexual favors for grades or other rewards?” [Editor: question lifted from the Harvey Weinstein Memorial School of Medicine?]
• My teachers and mentors have told me that they have high standards for my performance. (agree/disagree)
• The medical school experience, to this point, contributes to students’ ability to work in disadvantaged communities. (agree/disagree)
• I often feel as if my performance is being judged as a member of the identity group that I belong to more than as an individual. (agree/disagree)

After classes end at 4:00 pm on Friday, we drive 3.5 hours through a snowstorm to a ski resort for the second annual ski weekend (Jane and I did not go last year). 32 students, 28 classmates and 4 significant others, cram into a four-bedroom ski lodge located in a prime location that is walking (shuffling?) distance from entering a Black Diamond slope. Jane and I drive up with Nervous Nancy, soon to be celebrating her 29th birthday. “I feel like everyone from my former life is getting older and moving on with their lives. My best friend bought a house. My other friend is pregnant. When I went back to school, I got younger.” The car that booked the AirBNB had to drive down the other side of the mountain to pick up the rental keys. The rest of us sat in our heated cars for 1.5 hours drinking beer and wine until the keys arrived at 10:00 pm.

Once in the house, our class switched from drinking to drinking games, beginning with Kings. Tailgate Todd, a Clemson graduate with charming southern hospitality, suggests the game Fishbowl. Every Fishbowl participant writes down two or three words on small pieces of paper. We then divided into two teams, male versus female. One participant from each team tries to act out the words while the remaining team attempts to guess correctly as many words in one minute. The women destroyed us. We settled the score by beating them at Flip Cup, four rounds to one.

Persevering Pete who has been a teetotaler, due to a history of alcoholism in his family, had his first alcoholic drink, a Tito’s vodka cranberry with seltzer water. Around 1:00 am, students began to slumber off to bed for skiing tomorrow. The limited beds and bedroom floor space was settled according to who signed up and paid first. Jane and I were subjugated to the living room with Anita, her web-developer boyfriend and Nervous Nancy. Anita had brought a Queen size, self-inflating air mattress that took up most of the space. Nervous Nancy was relegated to the couch, while Jane and I inflated our twin air mattresses squeezed between the frigid sliding door and Anita’s mattress. I did not sleep the entire night.

[Editor: I wonder if alcohol consumption and lack of sleep may explain why the U.S. healthcare system is in trouble.]

At 5:00 am,

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Stephen Hawking died today. Among the eulogies is this one showing a 2017 Facebook posting by the physicist. I wonder if Facebook can be considered harmful to the progress of science. If a scientist is on Facebook then by definition he or she is not in the lab or at the blackboard, right?

Scientists also use Twitter, especially to let others know about an academic paper that they like. I wonder if this is harmful or helpful. If lots of people follow the most famous leaders then Twitter simply accelerates the trend toward groupthink? Or maybe this is helpful because there are no so many journals that nobody can cut through the clutter so one should just read what everyone else is reading?

Related:

• Facebook is bad for us
• Why Facebook is so addictive: the Like button
• Facebook uses a Malibu-flying engineering manager to promote careers in engineering (maybe Facebook will use its billions to shift folks from science to engineering?)

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“Cora is an electric ‘sky Uber drone’ from Google’s Larry Page and Sebastian Thrun, 2021 New Zealand launch plan” (electrek) shows a machine that can handle the roles of airplane or helicopter without depending on a human pilot or gasoline. Though it is still in development, I wonder if this means we should be thinking about shutting down flight schools. Despite the roughly $1 trillion spent by NASA plus a lot of R&D dollars spent by traditional certified aircraft manufacturers worldwide, we’re not that far from the 1930s when it comes to passenger-carrying airplanes and helicopters.

What do readers think? Will this kill interest in the Cessna 172, Robinson R44, and similar hands-directly-connected-to-flight-controls machines? Personally I would consider it a huge advance if the electric motors and relatively modest cruise speed means that Cora lacks the deafening interior noise and bone-shaking vibration of a piston-powered light aircraft.

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Friends have been asking me about the recent AS350B2 helicopter crash into the East River (nytimes). The pilot, who survived, mentioned the possibility of the fuel shutoff having been snagged by something in the cabin. At that point there was nothing to do but autorotate to the water. I asked a friend who is an experienced AStar pilot for an explanation. Here was his response:

The fuel shutoff on the B2 models and previous versions is on the floor just in front of the collective. They’ve had issues with passenger bag straps catching on the lever and pulling it back. Eurocopter now has a plastic guard to help protect this from happening but obviously still happens.

(It’s the partially hidden RED lever- yellow is the throttle and skinny red one is the rotor brake)

They could also catch and yank the throttle to the cutoff position as well.

He is currently flying a newer model of the same machine:

on the B3s and EC130s it’s now on the ceiling above your left shoulder. You wouldn’t think it be easy but passengers are always dropping their handbags and camera cases between the seats.

[Note that it was also an EC130, a related design, that crashed recently in the Grand Canyon (see NTSB report available on the Grand Canyon helicopter crash). Unfortunately, the pilot and a surviving passenger of that crash remain hospitalized due to their burns (update).]

Unlike airplanes, helicopters do not naturally float. Therefore if they are operated over water it is conventional to have pop-out floats that a pilot can activate via a button on the collective pitch control. This is supposed to be done right at the bottom of the autorotation as the helicopter rushes toward the water. The pilot, Richard Vance, should not be faulted for the helicopter flipping upside down. In theory it might be possible for a pilot to do a perfect autorotation and land with zero forward velocity and then float like a boat, but in practice getting the pop-outs popped and landing gently enough for the helicopter to remain intact is an achievement.

[The floats aren’t primarily designed to stop the helicopter from flipping over; they are to keep the helicopter from immediately sinking to the bottom of the river/lake/ocean. Flipping is usually a consequence of landing with at least some horizontal speed and catching the front of the skids in the water (the center of gravity of a helicopter is pretty high). If one were to land into a headwind and do a truly beautiful autorotation, like some of us occasionally do at the airport during practice, it is possible to land without any “ground run” (search YouTube for examples). But remember that even the heroic Captain Sully landed downwind on the Hudson instead of turning right and landing upwind, which would have resulted in about 20 knots less forward speed on impact. The cell phone video of this crash made the landing look almost perfect and the helicopter was upright for a brief time, so it is kind of mystery as to why it flipped.]

After that it is generally recognized that escaping from the flooded helicopter is not something that a typical person can do without training. People who fly regularly in helicopters (or even light airplanes) over water, e.g., offshore oil rig workers, may be required to take a water egress survival course (example). Escape was made more challenging in the case of this New York City crash because the passengers were in harnesses for doors-off photography rather than in conventional seat belts with a single-button release.

2018 has been off to a sad start for American helicopter enthusiasts (see also this Newport Beach R44 crash). However, at least one crash resulted in minimal injuries and a cautionary lesson for the rest of us. I have resisted adding an iPad or similar to our helicopter panel and workflow. It is painful to fly with certified in-panel avionics that were already obsolete when designed in the 1990s, but I fly VFR-only in the helicopter and want to be looking out the window. I’ve also avoided doing any kind of agricultural work due to a feeling that it is an accident waiting to happen. Maria Langer, a thoughtful and experienced pilot, combined iPad and ag flying and lived to write about the resulting crash.

Related:

• pilot’s Mayday call (interesting partly because the LGA Tower controller, after learning that 350LH had an engine failure over the East River asks “Do you require any assistance?”)
• FAA registration for N350LH, which confusingly shows that it was an AS350B2 helicopter, but made in 2013 (by which time the B2 model had been superseded by the B3; AINonline suggests that the B2 model was still in production as of early 2018 so perhaps it was possible to buy either a B2, with the vulnerable fuel shutoff, or a B3, with the relocated lever, in any given model year)
• “Teen survivor’s family blames chopper company for fatal crash” (Anchorage Daily News, May 3, 2010) describes a bunch of crashes related to this fuel lever on the B2

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From our anonymous insider…

We return from Thanksgiving break for exam week: two standardized patient (SP) encounters, clinical multiple choice exam, NBME multiple choice exam, and case-based exam. Lanky Luke, Straight-Shooter Sally, and I were most concerned about failing the clinical exams.

My first “patient” is a 38-year-old female presenting for diffuse abdominal pain and a two-week history of bloody diarrhea (“tar colored”) with no recent travel or sick contacts. She takes Aleve (naproxen) four to six times per week due to headaches and joint stiffness. After the 25-minute encounter, I left the room with no idea what the correct diagnosis should be. Peptic ulcer disease from NSAID use? Inflammatory bowel disease? Irritable bowel syndrome from low fiber diet. I forgot to ask so many basic questions. Several students commented how they similarly stared blankly at the computer screen writing up the H&P (history and physical note).

My second “patient” is a 26-year-old female presenting for a two-day history of a burning sensation on urination. She denies abnormal discharge or change in menstruation. I complete a full “5 P’s” sexual history: partners, practices, protection against STDs, prior history of STDs, protection against pregnancy. She is in a two-year relationship with a female partner. One week ago, she had a few to many eggnogs at her store’s christmas party. She had unprotected anal and vaginal intercourse with a male partner. She is now concerned that her partner will contract whatever she has, and she does not want to tell her. I diagnose her with cervicitis (inflamed cervix) due to chlamydia or gonorrhea. I recommend dual treatment of ceftriaxone/azithromycin with Hep B/C vaccine and HIV screening for risky behaviors

[Editor: One of my Manhattan friends, whenever a Ph.D. introduces himself as “Dr. …” at a party, takes the new acquaintance aside and says “Doctor: I have this burning sensation whenever I go to the bathroom. What do you think it could be?”]

The challenging clinical 60-question multiple choice exam covered nasogastric (NG) tubes, Foley catheters, nutrition, and sexual history. Questions included:

• Which of the following A-P chest xrays shows correct placement of the NG tube?
• Which of the following patients is least likely to admit he/she engages in homosexual sexual practices? (answer: African-American male.).
• What must be restricted on a renal diet? (answer: calcium, phosphorus, potassium, sodium… as a nephrologist explained, “nothing except for white bread”. )

Pinterest Penelope was frustrated at the clinical coordinator for including two questions on immunizations and screening tests based on sexual history, relationships that were not explicitly covered in lecture. The clinical coordinator responded, “Do not blame the messenger. We always tell you that information from prelecture readings and recordings can be tested.”

Pinterest Penelope after the NBME exam: “I knew everything, but a lot of the questions were poorly worded.” Gigolo Giorgio: “What did you put for the question asking about a vaginal ulcer. HSV [genital herpes] or syphilis [chancre]? It did not say if it was painful or not.” Penelope: “See poorly worded, there is a reason they are retired board question.” Students continue to complain about the black-and-white histology slides. One classmate who is color-blind apparently asked if there are any accommodations for the colorblind because the real NBME exam includes color pictures [Editor: “Pictures of Color”?]. “The answer is no.” One question asked about how to diagnose a penile ulcer due to syphilis. Straight-Shooter Sally: “I have no idea what is darkfield microscopy, but I think we’ve heard it before?” Jane: “Same! I just put it cause why not.” I also chose this answer, which is fortunate because darkfield microscopy is actually used to identify the culprit bacteria,Treponema pallidum.

Wednesday evening, with one exam remaining, Jane lost her studying motivation and indulged in a three-hour Buzzfeed binge. I was under strict instructions not to disturb her while she laughed hard enough to cry at cat videos and tweet compilations.

The case-based exam covered five patients: breast cancer, alcoholic liver cirrhosis, testicular cancer, acute kidney failure, and Crohn disease. Each case had eight short-answer questions.

Example questions:

Describe the treatment considerations in breast cancer. Answer: premenopausal women with ER positive breast cancer should begin tamoxifen; postmenopausal women with ER positive breast cancer should be aromatase inhibitor.

What are the histological characteristics of Crohn disease versus Ulcerative Colitis? Answer: Crohn disease is characterized by inflammation of the entire gut wall potentially causing strictures and fistulas (connection between two parts of the gut tube, e.g., small intestine and large intestine); ulcerative colitis is characterized by pseudopolyps, loss of haustra (gut lumen foldings) and enlarged crypts with neutrophilic infiltrate.

What kind of acute kidney injury is this given the CMP with BUN:Creatinine ratio and urinalysis. Answer: BUN:Cr > 20 suggests prerenal causes, e.g., dehydration or hemorrhage; BUN:Cr < 15 with high urinary sodium excretion suggests acute tubular necrosis.

A patient with G6P deficiency gets a URI and develops colicky abdominal pain. What is happening? Answer: Red blood hemolysis is causing pigment (bilirubin) gallstone (cholelithiasis) formation.

An overweight, 40 year old female on birth control develops colicky abdominal pain. What is happening? Answer: Cholesterol cholelithiasis (gallstones)

A 30 year old male develops hypertension, hematuria and flank pain. Ultrasound reveals several dilated cysts on both kidneys. What other tests should be ordered? Answer: a patient with adult onset polycystic kidney disease (PCKD) should get regular MRIs and echocardiograms to evaluate berry aneurysms in the circle of Willis (cerebral vasculature) and mitral valve prolapse, respectively. What is the probability his child will have the same disease? Answer: Adult onset PCKD is an autosomal dominant trait, therefore 50 percent.

(On the liver case:) Explain eight etiologies of the disease shown in the above histology slides.” Answer: Hep B, Hep C, Hep B/D coinfection, idiopathic/genetic, alcohol, obesity, biliary obstruction.

After exams, 15 students trickled into our favorite burgers-and-beers spot. Conversation shifted to the Republican tax proposal when Pinterest Penelope showed a BuzzFeed-produced video lobbying against the elimination of the student loan interest deduction. The video featured a Tufts University drama and communications graduate working as a “freelance production assistant” and receptionist struggling to pay over $118,000 in student loans ($118,000 is roughly 7 times the cost of in-state tuition and fees at Texas A&M medical school).

Lanky Luke: “Wouldn’t the increased standard deduction cover the entire taxable income of a struggling, underemployed drama graduate? I feel like so much of the ‘millennial’ frustration is directed at the wrong people. How much were her drama professors making while she was paying sky-high tuition?” Straight-Shooter Sally: “What has changed to propel tuition so high? That is what I cannot understand. There were drama professors 10-20 years ago.”

The topic turned to ongoing sexual harassment/assault charges and the #MeToo movement. Pinterest Penelope: “Can we just talk about sexual assault and how everyone is a terrible human being.” Mischievous Mary: “Someone who cannot figure out how NOT to sexual harrass someone is an idiot and should be fired.” Straight-Shooter Sally: “As a Democrat, I want Al Franken to resign. I know some of my friends who want him to stay to resist Trump, but that sets a terrible precedent.”

Lanky Luke: “Mike Pence is looking pretty smug with his no dining alone with other women outside his wife.” Pinterest Penelope responded by referencing a Vox article, “Vice President Pence’s “never dine alone with a woman” rule isn’t honorable. It’s probably illegal” (sent in GroupMe chat). Luke: “So what are men supposed to do?” Three women all responded in unison: “Not sexually harass women.”

Type-A Anita: “When a male assaults a female, the male does not need to add that he is attracted to women. No, Kevin Spacey did not need to add that he is gay. Thank you for setting gay rights back a decade. You are trash.”

Friday evening, four female classmates independently shared Elizabeth Warren’s Facebook post. Pinterest Penelope added “Marry Me” on top of the link:

You might have heard that Donald Trump likes to call me “Pocahontas.” … today, he stooped to a disgusting low. This afternoon, in the Oval Office, Donald Trump was supposed to be honoring Navajo code talkers – American heroes who helped save the world from fascism and hate during World War II. Instead, Trump stood right next to those Native American war heroes and came after me with another racist slur.

[Editor: This is definitely an unfair comparison. Pocahontas died at 20 years of age, an attractive young woman whose cross-cultural marriage prevented a war. Elizabeth Warren is a divorced 68-year-old.]

After Type-A Anita and Pinterest Penelope, Lanky Luke played a Tucker Carlson segment on the TV in the small group room for Persevering Pete, the class Orthopod, Jane and myself. The segment interviewed a transgender activist who argues race and sex can be chosen. Lanky Luke: “This is fantastic. I am going to apply to residency as part Native American, part Black. Derm residency, here I come.”

My small group went to our retired orthopedic surgeon facilitator’s house on Friday for a dinner party. After a few glasses of wine, we discussed the opioid epidemic. Surfer Saul: “When it was minorities addicted to drugs, the state began the war on drugs. The war on drugs was a method to suppress and incarcerate minorities, primarily African Americans and Hispanics. Look at how we judge crack-cocaine versus opioids. The moment it is white youth struggling, the drug abuse becomes a public health emergency.” [Editor: Actually if it is white youth who want heroin, the government will buy it for them! See “Who funded America’s opiate epidemic? You did.”]

Statistics for the week… Study: 15 hours. Sleep: 8 hours/night; Fun: Saturday night dinner with Jane’s sister (26 year old), newly back together with her boyfriend, a U.S. Navy retiree. The apparently healthy 37-year-old is applying for long-term disability, which will enable him to shift all of his daughter’s college expenses onto the taxpayer. He is concerned he will not be approved before school starts this August.

More: http://fifthchance.com/MedicalSchool2020

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