Nine months into the year and we've experienced:

1. The stock markets crashed in March 2009 and we're moving to higher highs.
2. We've witnessed a nasty virus (H1N1) and it spread to level 6 pandemic levels.
3. Gold has rocketed to almost breaking 1038/oz.
4. The US dollar is close to breaking another low (Bloomberg).
5. We are at the brink of national healthcare reform.
6. Sell-in May and go away (did not happen, the markets rallied).
7. September crash month of 2008 did not occur (so far).
8. The infamous fear index (^VIX) is trending lower.

What do you think will be in store for the rest of 2009? Where do we go from here?

One thing for sure has happened is problems continue to worsen but the reaction has gotten less and less (even the media has stopped talking about the bad things).

We've printed lots of $ and the conclusion at the G20 was we need to continue supporting a recovering economy. Few are buying gold jewelry but for some strange reason, someone or something is parking lots of money into gold. Some guess it is could be China.

Yes, stability has occurred and it may be here to stay with a cost. The cost will be a weaker dollar. If the problems require even more printing, the dollar may further weaken and gold may break to higher levels despite lack of jewelry demand.

Only time will tell what 2009 holds in store for Christmas this year.

U.S. consumers have changed and showed that change is possible. Articles on being frugal (aka Financially Fit) is the new trend: story.

What do you see for the remaining 3 months?

One thing is for sure. Oil has remained expensive and increased demand could make it go higher. Less demand means less recovery (so we don't want that either). How about food? Will food get cheaper or more expensive? The only solution would be to mass produce more animals, more plants in confined conditions.

Here is some humor to pass the time:

Question: But wouldn't that create more H1N1 like viruses?

Answer: Yes, but let's put that off for now and worry about a financial recovery. By the way, those genetically modified crops could offer a way to lower food costs.

Question: But wouldn't we run the risk of single genetics that could get infected (i.e. the potato blight in Ireland)?

Answer: Anything is possible. Let's put that off for now and worry about feeding the family with lower cost foods. By the way, those genetically modified crops taste quite 'similar'. You'll get used to it and soon forget there was ever an issue.

Question: Those banks that were too big to fail have gotten stronger. This seems like creating a bigger bubble than before.

Answer: Nah, you're just being oversensitive. If there is another bubble, we'll take care of it just like we always do.

Question: The water doesn't taste so good. There are medical publications about acinetobacter being multi-drug resistant. Do you think the wastewater facilities are working?

Answer: What do you want? It is free. Low cost. How can you complain about free stuff. Now if we could start charging for it, we might improvise.

According to the Mayo Clinic, the pathogenesis of acne (diagram) is formed when the

1. pore is clogged (no oxygen)

2. Propionibacterium acnes a gram positive species which thrives under anaerobic conditions increases in numbers (this can be detected by measuring for endogenic porphyrin–coporphyrin III). Unlike most anaerobic bacteria, P. acnes is aerotolerant so it survives in the presence of oxygen.

3. When a pore is blocked, this anaerobic bacteria overgrows and secretes chemicals that breakdown the wall of the pore, spilling other bacteria such as Staphylococcus aureus into the skin. Interestingly, Staph. aureus is a Gram positive, facultative anaerobe (it can exist in the presence and absence of oxygen).

Comparisons of Liquid Growth (this figure provides good insight)

4. the sebum/oils become infected with a mixture of bacteria

5. inflammation pathway is triggered, re-triggered and scars develop

Common typical solutions:

Usage of benzoyl peroxide, antibiotics (i.e. tetracyclin, Clindamycin, Azithromycin), tretinoin -for scarring, U.V. light

Common problems:

Treatment resistance getting intolerable, ineffective with side effects (dry skin, pigmentation), problems reappear in weeks/months, enviro-toxic, unnecessary chemo-induced aging.

Less common problems:

Photosensitivity increased, Redness, itching, hives, swelling and a burning sensation after topical application

Cautionary statements specific to tretinoin (i.e. Retin-A):

It is a teratogen, and therefore can cause birth defects and tests have shown increases in foetal skull abnormalities in rats. Women who are or may be pregnant, or who are seeking to become pregnant, are therefore warned against using it. This teratogenic effect is caused by the interference of the exogenous retinoic acid with endogenous retinoic acid signaling, which plays a role in patterning the developing embryo. However the risks of topical tretinoin to the unborn child seems to be 'limited'.

Research Objective:

To find an alternative, low cost method to non-invasively disrupt bacterial mixtures while impregnating them into a facial cleansing system.

Background:

The electric dipole moment for a pair of opposite charges of magnitude q is defined as the magnitude of the charge times the distance between them and the defined direction is toward the positive charge. It is a useful concept in atoms and molecules where the effects of charge separation are measurable, but the distances between the charges are too small to be easily measurable. It is also a useful concept in skincare applications (see documents).

Water molecules as a liquid state are attracted to each other by electrostatic forces, and these forces have been described as van der Waals forces or van der Waals bonds. Even though the water molecule as a whole is electrically neutral, the distribution of charge in the molecule is not symmetrical and leads to a dipole field - a microscopic separation of the positive and negative charge centers. This leads to a net attraction between such polar molecules which finds expression in the cohesion of water molecules and contributes to water's properties of viscosity and surface tension. Van der Waals forces are what holds water in the liquid state until thermal conditions are violent enough to break those van der Waal bonds at 100°C. With cooling, residual electrostatic forces between the molecules cause water to liquify and eventually solidfy into ice.

Advantages:

Chemical free, 100% eco-friendly. Upon dilution, the activated dipole will become normalized drinking water, low cost, non-invasive, hypoallergenic.

Conclusions:

By utilizing uniquely dipolarized water, a unique action known to water molecules, aerotolerant, facultative and obligate can be reduced, removed without creating an enviro-compromising solutions. Additionally, resistance can not occur since the methodology is using molecular weight 18.0 g/mol smaller than oxygen (32.0 g/mol) as a penetration force.

Market size:

According to the 2003 annual report of Johnson & Johnson, the global skincare market is worth $43 billion per year. In June 2002, an Italian magazine: Italia Imballagio estimated that there are more than 14,000 cosmetics producers worldwide."Through acquisitions and, more importantly, strong post-acquisition growth, we now hold a leading position in the highly-fragmented $43billion per year global skin care market."Johnson & Johnson: 2003

Here is the 2008 annual report from Johnson & Johnson for comparisons:

http://www.myvirtualpaper.com/doc/jnj/Johnson-And-Johnson/2009030501/

Acne treatments will account for $561 million, or 16.9% of the market by 2008. Topical germicidals and antiseptic sector accounted for $469 million in 2003, representing 15.3% of total market value. (Source: GY T.)

Recently, I've been asked to work on a natural diabetic friendly sugar project in addition to the bacteria/virus research. Like anything, I usually do some market research to gain a perspective on the situation. I found that bacteria, molds and sugars are highly correlated. While we share the same desires (for sugar), only people will fight and create barriers to access by trading sugar as a commodity. The natural + diabetic friendly sugar that can also release benefits of minerals is clearly a tough one (finger's crossed).

Research summary:
Goldman Sachs said this year’s rise in prices was “just the beginning” of another rally that was likely ultimately to be even more extreme than past episodes as supply problems worsened.

There was once a game, heads I win, tails you lose. This seems to apply very much in the case of sugar.

1. If we get a recovery, commodities like sugar will skyrocket.
2. If we don't get a recovery, commodities like sugar should fall due to a decrease in demand, right? -Wrong.

A. Generally speaking, people eat more sugary foods when they are nervous.
B. Economically speaking, it is one of those cheaper excursions relative to everything else (just like women will buy less make up in harder economic times, it is the opposite for lipstick).
C. Environmentally speaking, India had its driest June in 83 years. Weather conditions in Brazil and around the world have increased risks for the 2009-2010 period.


D. Medically speaking, large sugar intake cause wild swings in the insulin/glucagon response. This is one of the underlying causes for adult onset diabetes. Diabetes is projected to grow. This will impact productivity and healthcare costs.

Does this mean we are going to end up spending more on ice cream, sodas, maple syrup etc. ?

Not necessarily. As companies realize that consumers are sensitive to pricings, they will inevitably search for less expensive options. One option is the use of high fructose corn syrup as a substitute and to market it as a healthy alternative.

Another option is to use "synthetic sweeteners" that will boost the sweet taste without requiring the need to add more sugar. This has been catalyzed by the talk in Washington to tax sugar:

1. Want a Healthier State? Let's bring on the Soda Tax, Sugar Tax.


2. Sugar/Soda Tax considered to help pay for Healthcare Reform Bill


As sugar, soda and food companies feel pressured by changes ... options need to be considered to increase (or just to keep) bottom line profits. Companies running a business need to sustain profits for shareholders. Yet, every employee realizes that sugar is not healthy. US Consumers are purchasing less soda.

Therefore, the only areas of expansion is to look abroad at emerging economies and Chindia (China +India). You may recall Coca-cola's strong interest and failed acquisition of China's Huiyuan Juice Group which got slammed after Coca-cola was rejected by the Chinese government (stock).

So what are your thoughts? Do you have a sweet tooth? You're not alone. According to D.C.A.L., we found there's another organisms that LOVES sugar more than people. They are fungus, molds, mildew, bacteria ...

Once thought of as harmless, out of control growth of Candida Albicans can lead to bothersome yeast infections. Look around you at the supermarket and pharmacies and you'll notice that vaginal yeast products and options including placing a piece of crushed garlic remedies have skyrocketed (we'll save this one for another article) ...

Enjoy!

The Associated Press: Legal immunity set for swine flu vaccine makers: "Vaccine makers and federal officials will be immune from lawsuits that result from any new swine flu vaccine, under a document signed by Secretary of Health and Human Services Kathleen Sebelius, government health officials said Friday."

1. How severe is the current crisis?
2. UN health agency gives up on counting swine flu: The World Health Organization says it will stop counting individual cases of swine flu.
3. Tracking individual swine flu cases is too overwhelming for countries where the virus is spreading widely, the agency stated, "WHO will no longer issue global totals of swine flu cases, although it will continue to track the global epidemic."
4. WHO says countries should look for signs the virus is mutating, such as changes in the way swine flu is spreading, surges in hospital visits or more severe cases ...
5. WHO had reported nearly 95,000 cases including 429 deaths worldwide. But the numbers are outdated, with United Kingdom estimating it had 55,000 new cases last week alone.

DCAL=Directed Combinatorial Algorithmic Library has been able to investigate using filters to determine if your investment is sound vs. industry averages.

Current Ratio (initial liquidity) = Total Current Assets/ Total Current Liabilities

Industry Average Ratios:
Agriculture 1.31
Mining 1.19
Construction 1.44
Manufacturing
Leather/Textile/App 1.50
Chem. Petrol. Metal 1.54
Wood Related Prod 1.43
Mach-trans equipment 1.54
Trans-Communic 1.03
Wholesale
Non-Durable 1.53
Durable 1.42
Retail
Hardware 1.68
Gen. Merchandise 2.14
Automobiles 1.23
Apparel 1.90
Furniture 1.61
Restaurants 0.73
Financial Services 1.18
Business Services 1.36
Service Industry 1.29

Additional crucial questions that enter into DCAL:
Earnings before interest & taxes (EBIT)
Working capital
Retained Earnings

There are also methologies employed to measure the management and if they value shareholder return or their own positions. -This is crucial to consider.

Remember that giving out $$ is easy but making $$ as a viable business requires accuracy and precision to match demand with supply of the right customers. And if your retained earnings require too much capital expenditures -this is not a positive.

Interesting video:


Sophisticated Explanations of Henry Paulson:


NYT Article on Henry Paulson & Congress