Comments on: Big Tobacco and Government Collude http://whiskeyandgunpowder.com/big-tobacco-and-government-collide/ Whiskey and Gunpowder features articles on gold, oil, currencies, emerging markets, energy, and more. Sun, 12 Feb 2012 15:22:51 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: rancherlady http://whiskeyandgunpowder.com/big-tobacco-and-government-collide/comment-page-1/#comment-2382 rancherlady Tue, 23 Jun 2009 23:43:08 +0000 http://whiskeyandgunpowder.com/?p=4588#comment-2382 Dear Jim: I'm going to comment in your text. Great article, as always. You wrote: As a menthol smoker, nothing got me more upset than that infuriating passage in the recent tobacco bill that explicitly gives the FDA authority to ban menthol. It’s so clear what’s going on, I can’t stand it. TELL ME ABOUT IT. IF IT DOESN'T HAVE MENTHOL IN IT, I WON'T SMOKE IT. I think Linda got most of it right the other day. This bill is definitely a test of strength for the government. And I even think the term “Nicotine Nazis” perfectly describes the group doing this. But, I think she missed one point… It’s not all about governments suppressing its citizens… at least not in this case. The reasons behind this bill are twofold: First, smoking bans and taxes have actually helped incumbents remain seated — no matter what the level of government. Therefore, a huge federal bill restricting it - “to save the children from those damn luring flavors” - is the obvious step for liberals looking to stay in power. VERY TRUE. IT MAKES PEOPLE FEEL SO SANCTIMONIOUSLY SMUG TO BELIEVE THAT THEY ARE PUNISHING US "FOR OUR OWN GOOD," THROUGH TAXES AND RESTRICTING ACCESS TO OUR USEFUL WEED. LORDY, I'VE GOTTEN THROUGH TEN THOUSAND CRISES ON CIGARETTES AND ICED TEA, AND THE SMOKE DESTROYS MOLD AND MILDEW TO WHICH I AM EXTREMELY SENSITIVE. Second, and here’s where true greed takes over, it’s the tobacco industry itself. Why do you think the largest U.S. cigarette manufacturer supported this legislation? It helped write it! I DIDN'T MENTION THAT AGAIN, JIM, BECAUSE ONE OF MY MANTRAS IS THAT THE BIG DOGS WRITE LEGISLATION TO FAVOR THEMSELVES AND RESTRICT COMPETITION AND UM, ENCOURAGE CONGRESS TO PASS IT WITH AH, "INDUCEMENTS" THAT ARE IRRESISTIBLE APPARENTLY. I’ve been following the tobacco industry pretty close as of late… not just because I’m a 2-pack-a-day smoker, but because as the resident income guy, I know how these companies can be cash cows. Many kick off huge dividends. It’s bills like this that brought me to a tobacco play outside the U.S. In that research, one thing became painfully obvious: the U.S. market is drying up. Apparently, and quite to my surprise, those Truth.com ads are actually working. Just in the first quarter of this year, Philip Morris USA sold nearly 6 billion less cancer sticks than Q1’08. It even saw its enormous market share slip a few basis points. THIS SURPRISES ME, ALTHOUGH I DON'T CREDIT TRUTH.COM. IT FIGURES THAT BETWEEN THE DISASTROUSLY PUNITIVE TAXES OF THE LAST FEW YEARS AND THE FALLING DISCRETIONARY FUNDS MOST FOLKS HAVE MORE AND MORE SMOKERS JUST CAN'T PAY FOR IT. TEN YEARS AGO MY SALEM LIGHT 100S COST $9/CARTON AT THE COMMISSARY, AND SMOKING COST ME $72/MONTH, A SUM THAT WOULDN'T FUND A SMALL STARBUCK'S HABIT. I GAVE UP MY FAVORITE TWO YEARS AGO AND WENT TO PALL MALL'S, MADE BY THE SAME COMPANY. THE LAST HIKE DID ME IN AND I'M SMOKING A DREADFUL OFF BRAND, BUT IT IS $17 INSTEAD OF OVER $56/CARTON--PLUS SALES TAXES, OF COURSE. THE RATIO OF SMOKERS SHOOK OUT AT 28% LONG AGO AND HAD REMAINED STEADY FOR DECADES. LOOKS LIKE THEY FINALLY MADE THE THINGS SO EXPENSIVE THAT SMOKERS CAN'T CUT THE BUDGET ELSEWHERE TO GET THE MONEY FOR FAGS. OH, SORRY, BETTER MAKE THAT...NO, CAN'T SAY "SMOKES," EITHER...CIGARETTES AND CIGARS. I'M SUCH A BIGOT THESE DAYS UNINTENTIONALLY. CHIRP OF LAUGHTER. YESTERDAY GARY SENT ME THE "HI--BROWN NECK HERE" LETTER HE USED TODAY, AND I WROTE BACK IN CONFUSION ASKING WHO BROWN NECK WAS, HOW HE GOT INTO THE CONVERSATION, AND SINCE WHEN HAD WE WHISKEY-ITES EVER ADVOCATED PAYING ANYONE ELSE'S BILLS?! I COULD DISCUSS GARY'S MANIFOLD EXCELLENCES FOR DAYS WITHOUT EVER SAYING HE'S BLACK BECAUSE THAT HAS NO RELEVANCE AND ISN'T EVEN INTERESTING. I ADMIRE HIM FOR HIS COMPETENCE, KINDNESS, GOODNESS, INTELLIGENCE, HUMOR AND THOSE OTHER QUALITIES WE VALUE IN OUR FRIENDS. You can say the same about its largest competitor RJ Reynolds. These two giants are in a lose-lose situation. They have to deal with a shrinking customer base and still battle with smaller competitors like Newport - my brand. Newport, owned by Lorillard, is the country’s best selling menthol. The two big players were starting to lose to this small-time operation and they didn’t like it. This bill will give the FDA the power to both ban menthols AND stop new competition. The FDA will have the authority to deny any new tobacco product that doesn’t “demonstrate health benefits to society as a whole.” What kind of tobacco product would “benefit society as a whole” according to the FDA. WHAT ANYTHING WOULD BENEFIT SOCIETY AS A WHOLE OTHER THAN GOING BACK TO THE ORIGINAL CONSTITUTION AND OUTSOURCING ALL THE HARD CORE LEFT WING TO AFGHANISTAN? This is the same federal agency that picks and chooses which drugs should be sold in this country depending on which pharmaceutical company put the largest bribe in its pocket. RIGHT, AND WE ARE SPECULATING ON WHETHER OR NOT A DOCTOR'S PRESCRIPTION WILL BE REQUIRED TO PURCHASE CIGARETTES. HOWL OF LAUGHTER! HOW WILL THAT FIT IN WITH SOCIALIZED MEDICINE?! Even if you do get approval for a new product, you sure as hell can’t market it. The marketing restrictions in this bill are just as astounding. GEE, FUNNIEST THING ABOUT THAT. NAH, THAT'S NOT RESTRICTION OF TRADE, MONOPOLY, UNCONSTITUTIONAL, AND ABUSE OF ASSUMED POWERS. IT'S FOR THE CHILDREN AND OUR OWN GOOD, YOU KNOW. Regardless of Linda and my rants, the bill did pass. Obama is signing it. It is law. Now what? Well, I may be an income guy that’s long international tobacco, but I’m also a penny stock guy too. I like to gamble from time to time. Here’s an easy way to take advantage of the probable ban on menthol: 98% of Lorillard’s sales come from Newports [49.5% of all Newport sales were to blacks according to the 2005 National Survey on Drug Use and Health —ed]. That means, 98% of the company’s revenue will disappear overnight - the minute FDA Commissioner Margaret Hamburg decides to ban menthol cigarettes. Lorillard, which otherwise would be a great long opportunity, is now a perfect short play. QUESTION: DOESN'T LORRILARD MAKE OTHER TYPES? IF SO THE REVENUE LOSS WILL BE 98% OF THE NEWPORT SALES, NOT CORPORATE-WIDE. You can either do that, or pick up some put option contracts. It’s hard to say when the ban will come, but as a gambler, I’d say by the end of this year. The Lorillard January 2010 $60 puts (LTOML.X) look like one way to play it. Depending on where you stand, you can check out various contracts with different strike prices and expiration dates here… Most of these have very little volume. So, be careful. And if you are a smoker, my best advice is “smoke ‘em if you got ‘em!” JIM, THANKS FOR STANDING SHOULDER TO SHOULDER AS A DIE HARD SMOKER! I HAVE THREE MORE THINGS TO ADD: 1. This bill should be wildly popular with one of the Left's biggest voter blocks. As Gary noted, blacks are far more likely to smoke menthol "flavored" cigarettes, and they smoke more per capita than whites do. Sooner or later it will occur to some of them that The Chosen One not only raised their taxes outrageously but that their food stamps aren't covering the bills. The favored brand has always been Kools, the strongest menthol of all. 2. The best solution I can find is to grow our own tobacco (still legal) and to find out where we get that infamous menthol flavoring which comes from the Orient. I bought seeds last year! Will it come to a drug bust when they find me in the kitchen adding menthol to the tobacco?! Hmmm...wonder how mint smokes? It grows well and can be found growing wild; anything with a square stem is a form of mint. Mint comes in wild flavors like chocolate and pineapple! 3. The real issues are that tobacco smoke--particularly stale smoke--smells. Cigarette smokers are easy to locate, because every predictable period (whatever the length) we start reaching for our packs. How refreshing after the frustrations of trying to stop drug use. The health issue is an even easier one: all each "cancer stick" does is destroy 20 mg. of vitamin C, aka ascorbic acid. Humans and guinea pigs are the only mammals which do not produce their own C, which is why the little fuzz balls are useful for research. The reason "smoking-related" diseases have not decreased in the quarter of a century tobacco has been the target of jihad is that they aren't smoking-related, they're deficiency diseases. With the modern American diet there is insufficient C, which is a water-soluble vitamin. Unless it is ingested four times a day in sufficient quantitites thousands of chemical reactions cannot take place. If you take a tablet or drink orange or lemon juice for times a day you can offset the effect of smoking and malnutrition. I wrote an article on that a couple of months ago and just tucked it away, but perhaps the patrons in the bar would be interested in the therapeutic effects of a Marguerita a day! WARNING!!! Stock up now because cigarettes keep very well in the freezer and quite well in a chilled room. However, when you go to Sam's to get cases, DO NOT PURCHASE MORE THAN 49 CARTONS AT A TIME. If you do the computer will sound an alarm and you will have to fill out a long form reporting your purchase to the BATFE! Down to your license plate number. Now we know why they were worried about "black marketeering!" No sensible profiteer buys an item at full price and pays all the taxes...unless he or she knows that a change is coming. There is a similar restriction on wine purchases, so we had better start figuring out how Harry and Nancy intend to make our lives harder other than raising alcohol taxes oppressively. Is it time to do as I've threatened for years and start a SMOKERS' RIGHTS! movement? Cordially, Linda Regards, Jim Nelson Dear Jim:

I’m going to comment in your text. Great article, as always.

You wrote: As a menthol smoker, nothing got me more upset than that infuriating passage in the recent tobacco bill that explicitly gives the FDA authority to ban menthol. It’s so clear what’s going on, I can’t stand it. TELL ME ABOUT IT. IF IT DOESN’T HAVE MENTHOL IN IT, I WON’T SMOKE IT.

I think Linda got most of it right the other day. This bill is definitely a test of strength for the government. And I even think the term “Nicotine Nazis” perfectly describes the group doing this. But, I think she missed one point…

It’s not all about governments suppressing its citizens… at least not in this case. The reasons behind this bill are twofold:

First, smoking bans and taxes have actually helped incumbents remain seated — no matter what the level of government. Therefore, a huge federal bill restricting it – “to save the children from those damn luring flavors” – is the obvious step for liberals looking to stay in power. VERY TRUE. IT MAKES PEOPLE FEEL SO SANCTIMONIOUSLY SMUG TO BELIEVE THAT THEY ARE PUNISHING US “FOR OUR OWN GOOD,” THROUGH TAXES AND RESTRICTING ACCESS TO OUR USEFUL WEED. LORDY, I’VE GOTTEN THROUGH TEN THOUSAND CRISES ON CIGARETTES AND ICED TEA, AND THE SMOKE DESTROYS MOLD AND MILDEW TO WHICH I AM EXTREMELY SENSITIVE.

Second, and here’s where true greed takes over, it’s the tobacco industry itself. Why do you think the largest U.S. cigarette manufacturer supported this legislation? It helped write it! I DIDN’T MENTION THAT AGAIN, JIM, BECAUSE ONE OF MY MANTRAS IS THAT THE BIG DOGS WRITE LEGISLATION TO FAVOR THEMSELVES AND RESTRICT COMPETITION AND UM, ENCOURAGE CONGRESS TO PASS IT WITH AH, “INDUCEMENTS” THAT ARE IRRESISTIBLE APPARENTLY.

I’ve been following the tobacco industry pretty close as of late… not just because I’m a 2-pack-a-day smoker, but because as the resident income guy, I know how these companies can be cash cows. Many kick off huge dividends. It’s bills like this that brought me to a tobacco play outside the U.S.

In that research, one thing became painfully obvious: the U.S. market is drying up. Apparently, and quite to my surprise, those Truth.com ads are actually working. Just in the first quarter of this year, Philip Morris USA sold nearly 6 billion less cancer sticks than Q1’08. It even saw its enormous market share slip a few basis points. THIS SURPRISES ME, ALTHOUGH I DON’T CREDIT TRUTH.COM. IT FIGURES THAT BETWEEN THE DISASTROUSLY PUNITIVE TAXES OF THE LAST FEW YEARS AND THE FALLING DISCRETIONARY FUNDS MOST FOLKS HAVE MORE AND MORE SMOKERS JUST CAN’T PAY FOR IT. TEN YEARS AGO MY SALEM LIGHT 100S COST $9/CARTON AT THE COMMISSARY, AND SMOKING COST ME $72/MONTH, A SUM THAT WOULDN’T FUND A SMALL STARBUCK’S HABIT. I GAVE UP MY FAVORITE TWO YEARS AGO AND WENT TO PALL MALL’S, MADE BY THE SAME COMPANY. THE LAST HIKE DID ME IN AND I’M SMOKING A DREADFUL OFF BRAND, BUT IT IS $17 INSTEAD OF OVER $56/CARTON–PLUS SALES TAXES, OF COURSE. THE RATIO OF SMOKERS SHOOK OUT AT 28% LONG AGO AND HAD REMAINED STEADY FOR DECADES. LOOKS LIKE THEY FINALLY MADE THE THINGS SO EXPENSIVE THAT SMOKERS CAN’T CUT THE BUDGET ELSEWHERE TO GET THE MONEY FOR FAGS. OH, SORRY, BETTER MAKE THAT…NO, CAN’T SAY “SMOKES,” EITHER…CIGARETTES AND CIGARS. I’M SUCH A BIGOT THESE DAYS UNINTENTIONALLY. CHIRP OF LAUGHTER. YESTERDAY GARY SENT ME THE “HI–BROWN NECK HERE” LETTER HE USED TODAY, AND I WROTE BACK IN CONFUSION ASKING WHO BROWN NECK WAS, HOW HE GOT INTO THE CONVERSATION, AND SINCE WHEN HAD WE WHISKEY-ITES EVER ADVOCATED PAYING ANYONE ELSE’S BILLS?! I COULD DISCUSS GARY’S MANIFOLD EXCELLENCES FOR DAYS WITHOUT EVER SAYING HE’S BLACK BECAUSE THAT HAS NO RELEVANCE AND ISN’T EVEN INTERESTING. I ADMIRE HIM FOR HIS COMPETENCE, KINDNESS, GOODNESS, INTELLIGENCE, HUMOR AND THOSE OTHER QUALITIES WE VALUE IN OUR FRIENDS.

You can say the same about its largest competitor RJ Reynolds. These two giants are in a lose-lose situation. They have to deal with a shrinking customer base and still battle with smaller competitors like Newport – my brand.

Newport, owned by Lorillard, is the country’s best selling menthol. The two big players were starting to lose to this small-time operation and they didn’t like it. This bill will give the FDA the power to both ban menthols AND stop new competition.

The FDA will have the authority to deny any new tobacco product that doesn’t “demonstrate health benefits to society as a whole.” What kind of tobacco product would “benefit society as a whole” according to the FDA. WHAT ANYTHING WOULD BENEFIT SOCIETY AS A WHOLE OTHER THAN GOING BACK TO THE ORIGINAL CONSTITUTION AND OUTSOURCING ALL THE HARD CORE LEFT WING TO AFGHANISTAN? This is the same federal agency that picks and chooses which drugs should be sold in this country depending on which pharmaceutical company put the largest bribe in its pocket. RIGHT, AND WE ARE SPECULATING ON WHETHER OR NOT A DOCTOR’S PRESCRIPTION WILL BE REQUIRED TO PURCHASE CIGARETTES. HOWL OF LAUGHTER! HOW WILL THAT FIT IN WITH SOCIALIZED MEDICINE?!

Even if you do get approval for a new product, you sure as hell can’t market it. The marketing restrictions in this bill are just as astounding. GEE, FUNNIEST THING ABOUT THAT. NAH, THAT’S NOT RESTRICTION OF TRADE, MONOPOLY, UNCONSTITUTIONAL, AND ABUSE OF ASSUMED POWERS. IT’S FOR THE CHILDREN AND OUR OWN GOOD, YOU KNOW.

Regardless of Linda and my rants, the bill did pass. Obama is signing it. It is law. Now what?

Well, I may be an income guy that’s long international tobacco, but I’m also a penny stock guy too. I like to gamble from time to time. Here’s an easy way to take advantage of the probable ban on menthol:

98% of Lorillard’s sales come from Newports [49.5% of all Newport sales were to blacks according to the 2005 National Survey on Drug Use and Health —ed]. That means, 98% of the company’s revenue will disappear overnight – the minute FDA Commissioner Margaret Hamburg decides to ban menthol cigarettes. Lorillard, which otherwise would be a great long opportunity, is now a perfect short play. QUESTION: DOESN’T LORRILARD MAKE OTHER TYPES? IF SO THE REVENUE LOSS WILL BE 98% OF THE NEWPORT SALES, NOT CORPORATE-WIDE.

You can either do that, or pick up some put option contracts. It’s hard to say when the ban will come, but as a gambler, I’d say by the end of this year. The Lorillard January 2010 $60 puts (LTOML.X) look like one way to play it. Depending on where you stand, you can check out various contracts with different strike prices and expiration dates here…

Most of these have very little volume. So, be careful. And if you are a smoker, my best advice is “smoke ‘em if you got ‘em!”

JIM, THANKS FOR STANDING SHOULDER TO SHOULDER AS A DIE HARD SMOKER! I HAVE THREE MORE THINGS TO ADD:

1. This bill should be wildly popular with one of the Left’s biggest voter blocks. As Gary noted, blacks are far more likely to smoke menthol “flavored” cigarettes, and they smoke more per capita than whites do. Sooner or later it will occur to some of them that The Chosen One not only raised their taxes outrageously but that their food stamps aren’t covering the bills. The favored brand has always been Kools, the strongest menthol of all.

2. The best solution I can find is to grow our own tobacco (still legal) and to find out where we get that infamous menthol flavoring which comes from the Orient. I bought seeds last year! Will it come to a drug bust when they find me in the kitchen adding menthol to the tobacco?! Hmmm…wonder how mint smokes? It grows well and can be found growing wild; anything with a square stem is a form of mint. Mint comes in wild flavors like chocolate and pineapple!

3. The real issues are that tobacco smoke–particularly stale smoke–smells. Cigarette smokers are easy to locate, because every predictable period (whatever the length) we start reaching for our packs. How refreshing after the frustrations of trying to stop drug use. The health issue is an even easier one: all each “cancer stick” does is destroy 20 mg. of vitamin C, aka ascorbic acid. Humans and guinea pigs are the only mammals which do not produce their own C, which is why the little fuzz balls are useful for research. The reason “smoking-related” diseases have not decreased in the quarter of a century tobacco has been the target of jihad is that they aren’t smoking-related, they’re deficiency diseases. With the modern American diet there is insufficient C, which is a water-soluble vitamin. Unless it is ingested four times a day in sufficient quantitites thousands of chemical reactions cannot take place. If you take a tablet or drink orange or lemon juice for times a day you can offset the effect of smoking and malnutrition.

I wrote an article on that a couple of months ago and just tucked it away, but perhaps the patrons in the bar would be interested in the therapeutic effects of a Marguerita a day!

WARNING!!! Stock up now because cigarettes keep very well in the freezer and quite well in a chilled room. However, when you go to Sam’s to get cases, DO NOT PURCHASE MORE THAN 49 CARTONS AT A TIME. If you do the computer will sound an alarm and you will have to fill out a long form reporting your purchase to the BATFE! Down to your license plate number. Now we know why they were worried about “black marketeering!” No sensible profiteer buys an item at full price and pays all the taxes…unless he or she knows that a change is coming. There is a similar restriction on wine purchases, so we had better start figuring out how Harry and Nancy intend to make our lives harder other than raising alcohol taxes oppressively.

Is it time to do as I’ve threatened for years and start a SMOKERS’ RIGHTS! movement?

Cordially, Linda

Regards,
Jim Nelson

]]> By: Douglas C Trant http://whiskeyandgunpowder.com/big-tobacco-and-government-collide/comment-page-1/#comment-2374 Douglas C Trant Tue, 23 Jun 2009 07:36:30 +0000 http://whiskeyandgunpowder.com/?p=4588#comment-2374 I’m a 2-pack-a-day smoker.... Happy to read that you have a long term health plan. I’m a 2-pack-a-day smoker….
Happy to read that you have a long term health plan.

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