Month: September 2013

By www.CentralBankNews.info
     Trinidad and Tobago’s central bank held its benchmark repo rate steady at 2.75 percent in the inaugural meeting of its expanded Monetary Policy Committee (MPC), saying it would “continue to nurture financial conditions supportive of the recovery.”
    The Central Bank of Trinidad and Tobago, which recently added two external members to its MPC, said inflationary pressures were contained, the domestic economy appears to be on a path of recovery but it was concerned over the eight successive month of lower business lending in July and elevated liquidity conditions that reflect continued caution by the private sector.
    Economic growth has mainly been driven by the non-energy sector and the central bank expects this to continue in the second half of the year. Gross Domestic Product expanded by an average annual 1.7 percent for four successive quarters to June 2013, up from a contraction of an average 1.6 percent in the preceding four quarters, the bank said.
    Trinidad and Tobago’s headline inflation rose to 5.1 percent in August from 3.8 percent in July due to higher food prices
    As part of its new policy framework, the central banks will supplement its monetary policy announcement every two months with a biannual monetary policy report and an economic bulletin.
    The central bank cut its rate by 25 basis points last year.

    www.CentralBankNews.info

By www.CentralBankNews.info     Colombia’s central bank held its benchmark interest rate steady at 3.25 percent, as expected, and extended its program to purchase foreign exchange worth $1.0 billion from October through December.
    The Central Bank of Colombia, which has held rates steady since April after cutting them by 200 basis points since July last year to boost growth, said the decision to purchase foreign exchange takes into account, among other factors “the recent evolution of the exchange rate and the existence of an expansionary monetary stance.”
    Colombia’s peso has appreciated this month following the U.S. Federal Reserve’s decision to delay tapering asset purchases after easing through August. It was trading at 1,914 to the U.S. dollar today, down 7.7 percent from 1,767 end-2012.
    “Economic indicators and projections show a level of output that is converging to its potential,” the central bank said, adding that its recent policy stance and fiscal policy should consolidate this trend although “downside risks are not negligible.”

    Colombia’s Gross Domestic Product expanded by a stronger-than-expected 2.2 percent in the second quarter from the first for annual growth of 4.2 percent, up from 2.8 percent in the first quarter, and the central bank said recent indicators suggest that growth in the third quarter will be higher than in the first half of the year, boosted by higher investment in buildings while consumption will be steady.
    “The new information increases the probability that GDP growth this year will be similar to that of 2012,” the central bank said, adding that risks from advanced economies may be less but those from emerging economies may be growing.
     Colombia’s inflation rate rose to 21.2 percent in August from 2.22 percent in July, continuing its recent rise since hitting a low of 1.83 percent in February. The central bank said inflation expectations remain anchored around the bank’s 3.0 percent target.

    www.CentralBankNews.info

By www.CentralBankNews.info     Malawi’s central bank held its bank rate steady at 25.0 percent, the world’s highest policy rate, “to sustain the tight monetary policy stance against the backdrop of emerging risks to inflation.”
    The Reserve Bank of Malawi (RBM), which raised rates by 12 percentage points last year to combat inflation, said the stability of the financial system had improved following a deceleration in inflation and the recent stability in the exchange rate but risks remain due to continuing high interest rates, which calls for tighter supervisory oversight.
    Malawi’s inflation rate eased to 23.3 percent in August from 25.2 percent the previous month, the seventh month in a row with a slower rate since after hitting a recent high of  37.9 percent in February. The RBM said the fall in inflation was due to a sharp slowdown in food prices and an appreciation of the kwacha currency.
    “Looking ahead, inflation is expected to be higher than earlier forecast as prices of food, fuel and utility tariffs pick up,” the central bank said.
    Malawi’s kwacha fell from the start of the year through late May, then rose sharply but has declined in recent weeks. Today it was trading at 366 to the U.S. dollar, down some 11 percent from 324 at the end of 2012.

    Liquidity in Malawi’s money market has risen substantially due the central bank’s intervention to build up reserves and recent government borrowing, the bank said, with the average Treasury yield dropping to 19.37 percent in August from 45 percent in March.
    “To contain the inflationary impact of this liquidity, the Committee underlined the need for intensified monetary operations,” the central bank said.
    Credit to the private sector has been declining, reflecting the tight monetary policy stance needed to stabilise the exchange rate and bring down inflation, the bank said, adding the annual growth in gross credit fell to 8.5 percent in August from 29.9 percent in August 2012.
    Malawi’s economy this year is still estimated to expand by 5.0 percent, up from 1.9 percent in 2012.
    Malawi’s gross official reserves remained at US44.6 million in August, the equivalent of 2.4 months of imports due to higher-than-expected proceeds from the tobacco auction and going forward reserves are expect to remain above two months of imports, the bank said.

    www.CentralBankNews.info

US bonds are still pushing higher, now at the new high of the week within wave 5 of 3) targeting 121.26 on 5year and 126.70 on 10 year US noted. Correlation with USD is still negative so EUR remains supported as bonds rise. We however could see a retracement next week as we know that after every five waves correction follows. This will be a corrective wave 4) then.
US Bonds

EURUSD is now finally accelerating to the upside which we suspect its wave iii in red wave v) that is expected to reach levels above 1.3600 in the next few sessions and probably higher after that if we consider that move from 1.3460 should unfold in five waves. Trend on euro remains bullish as long as market trades above 1.3472.
EURUSD 1h

Written by www.ew-forecast.com

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FCM360’s robust low-latency infrastructure cited as key benefit 

New York and Auckland, NZ — September 24, 2013 — FCM360 was recently selected to provide high-speed, low-latency hosting to Fidelis Capital Markets, the Auckland, New Zealand-based Foreign Exchange (Forex) broker that is known for flawless Straight Through Processing (STP), superb banking relationships and deep bank liquidity with tight spreads.

In making the decision, Rajinder Singh Grewal, Fidelis CM Director, cited FCM360’s ability to eliminate all worries over execution speeds due to latency. “With FCM360 we have servers in NY4 and NY2 with our aggregator and liquidity providers in the same data centers to eliminate any latency concerns. The servers are the lifeline of our business. Knowing that FCM360 is managing them allows us to provide a reliable trading environment to our traders and lets us concentrate on growing our business.”

FCM 360 (http://www.fcm360.com) provides brokers of any size with a trading infrastructure comparable to the largest banks and financial institutions in the world. With FCM360, Fidelis CM can connect with anyone in the industry over low-latency, high-end infrastructure giving the firm a presence in every financial center in the world. To reduce latency to microseconds, algorithms are uploaded to sit in Eqiunix NY4 and LD4 or at any of the other major foreign exchange trading locations in the world.

Fidelis CM (http://www.fideliscm.com) is the latest client in FCM360’s global partner network of Forex brokers and liquidity providers.  Last month, FCM360 brought high-speed, low-latency trading connectivity to South Africa by partnering with one of South Africa’s largest financial technology providers. FCM360 offers global brokerage firms and traders a level playing field in high-speed, low latency infrastructure.  They have recently expanded these services to brokerage firms and traders in Moscow, Cyprus, India, Hong Kong, and Tokyo.

Grewal also noted, “FCM360 has been instrumental in fulfilling our company goal of providing low-latency trade execution to all our clients. They provide us with a turnkey solution to meet our data-center management needs which is already helping us grow at an accelerated pace.”

Fidelis CM was founded in 2011 on a Non Desk Dealing (NDD) business model and is known for delivering a true Electronic Communication Network (ECN) with Straight Through Processing (STP). Fidelis CM also provides Tier 1, multi-bank liquidity, low latency access to exchanges.

Grewal’s selection was also based on FCM360’s worldwide reputation for reliability – especially during major weather events or terrorist activity. During Hurricane Sandy FCM360 clients remained operational throughout the hurricane and its aftermath while other institutions had to cease trading. Said Jubin Pejman, FCM360, managing director, “To further enhance our reliability we are moving parts of our operation away from the more vulnerable financial centers. For example, FCM360 has established data center engineering operations in the Washington, DC area and a Network Operation Center (NOC) and Call Routing Facility in Seattle, Washington.”

The managed dedicated hosting solutions provided by FCM360 allow clients to run any black box, algorithm or exchange approved OMS/ISV software within low latency proximity to exchanges and liquidity pools in the North America, Europe and Asia.

Fidelis CM offers a true institutional environment and is able to provide liquidity to other brokers with a robust aggregation engine that supports any prospective client. The firm also provides dedicated MT4 broker servers in Equinix NY4 and LD4 locations as is often needed by its institutional clients.  Fidelis CM is offering turnkey Forex servers for its MT4 and FIX trading clients within micro-seconds of the matching engine.

Future plans call for offering daily trading call, online tutorials and market analysis.

Fidelis offers free Forex demonstration accounts and tutorials. 

FCM360 (http://www.fcm360.com) specializes in turnkey datacenter solutions for traders and exchanges. This includes proximity hosting for high frequency trading, low-latency trading, automated trading, algorithmic trading and exchange connectivity. FCM360 provides low-latency exchange connectivity to over 50 exchanges including CME Group, NYMEX, COMEX, CBOT, KCBOT, ICE OTC, ICE Futures, CBOE, Toronto Montreal Exchange (TMX), Australian Securities Exchange (ASX), Singapore Exchange (SGX), BM&F Bovespa, Mexican Derivatives Exchange (MexDer), BATS, NYSE LIFFE, NASDAQ OMX United States/Europe, NYSE Euronext, London Stock Exchange (LSE), Toronto Stock Exchange (TSX), Currenex, Hot Spot FX, Integral FX, Direct Edge, FX All, TradeStation, ICAP EBS, Reuters Dealing 3000, Lava FX and more.

Fidelis Capital Markets Limited (http://www.fideliscm.com) is an award-winning fast growing online Forex broker regulated in New Zealand. The company’s management has decades of experience in the Forex industry and have used their industry experience and relationships to get the best product offering for its clients. Fidelis CM’s experience gives it the insight needed to precisely understand the requirements of its traders. The business culture has been built on the core values of trust, credence and transparency. Fidelis CM offers a flawless and reliable STP model and has ceaselessly fostered excellent banking relationships to provide deep bank liquidity with tight spreads. Its work methodology is based on the NDD model facilitating cleaner execution without re-quotes. Fidelis CM serves all spheres of the market such as retail traders, institutional clients, network of IB and Money Managers, white label solutions and offers liquidity solutions to its partners. At CIOT Expo 2013, China, Fidelis was awarded the fastest growing online Forex broker award in 2013. Fidelis is registered under FSPR, New Zealand.

By www.CentralBankNews.info     Rwanda’s central bank held its key repo rate steady at 7.0 percent to “maintain the current monetary policy stance to foster macroeconomic stability and to continue to stimulate financing of the economy in the coming fourth quarter of 2013.”
    The National Bank of Rwanda (BNR), which cut its repo rate by 50 basis points in June, said the outlook for the economy remains stable, with moderate inflation and the financial sector is resilient with adequate capitalization as of June, liquid and profitable with satisfactory asset quality.
    Rwanda’s Gross Domestic Product expanded by an annual 5.7 percent in the second quarter, down from 6.0 percent in the first quarter, and the inflation rate rose slightly to 4.04 percent in August from 3.59 percent in July due to higher prices for food, non-alcoholic beverages and eduction.
    Rwanda’s currency, the Rwandan franc, has depreciated by 3.9 percent this year as of today,”but the situation is expected to stabilize by the end of 2013 on account of an increase in foreign exchange flows as well as regained confidence in the foreign exchange market,” the BNR said.

    www.CentralBankNews.info
   
   

Source: Moderated by John Budden of Sprott Resources (9/25/13)

http://www.theaureport.com/cs/user/print/na/15626

What happens when you bring together four of the top minds in the precious metals investing space to share insights from the front lines of gold, silver platinum and palladium investing? These excerpts from a Sprott Resources Roundtable featuring Gloom, Boom and Doom Report Publisher Marc Faber, Sprott Asset Management Chief Investment Strategist John Embry, Sprott Global Resource Investments Founder Rick Rule and Sprott Asset Management Founder Eric Sprott prove that great minds think big.

Sprott Resources: Marc Faber, help us understand the Federal Reserve’s recent announcement regarding tapering.

Marc Faber: When the Fed began Quantitative Easing 1 (QE1) in 2008, I said it would continue until QE99. So I’m not so surprised by the “no tapering decision.” But this money printing has numerous unintended consequences and actually does not help the economy much. Asset purchases benefit maybe 1% of the population, the super-rich. I’m not complaining because I own stock, bonds and real estate, but from a social point of view, it’s undesirable because it creates widening wealth inequality and dissatisfaction among the majority of voters. This could lead to more votes for a populist leader who will then tax the wealthy more heavily.

SR: You are based in Asia. China, India and Russia have been very big buyers of gold bullion. What is behind that trend?

MF: In the Far East, we have a tradition of owning physical gold, but what is new is the Chinese government encouraging citizens to own gold. I believe that in the face of political instability and a lack of faith in the U.S. dollar, Asians will continue to accumulate physical gold and silver.

SR: What is the component that you have in your own portfolio of precious metals? And to add onto that, would you comment on the fact that precious metals shares are vastly oversold and they are a complement to physical bullion holdings?

MF: I recommend an asset allocation of about 25% in equities; 25% in fixed income, securities and cash; 25% in real estate; and 25% in precious metals—gold, silver. I think I have around 25% in gold whereby I don’t value my gold. I have it and it’s my insurance policy. It is important that one day when the so-called shit hits the fan—and I think the Fed is well on its way to creating that situation—you have access to your gold, that it is not taken away.

Read Marc Faber’s latest interview with The Gold Report here.

SR: John Embry, you went through the market correction in 1975–1976. Would you share some perspective from that time?

John Embry: That’s a very good question because there’s a remarkable correlation with what is happening today. For the first three years of the 1970s, the gold price rose almost sixfold, and there was great enthusiasm. Then from 1974 to 1976, it was virtually cut in half. At that point, you could cut the pessimism with a knife it was so thick. Then, gold rose another eightfold from there. The price correction of the last two years has been even more counterintuitive than it was in the 1970s. The sentiment arguably is even more negative, yet the fundamentals are better than they were in the 1970s, so I think we’re setting up for a major reversal. The only thing we’re debating here today is whether it’s going to happen tomorrow, next week or several months from now. It’s just a matter of short-term timing because everything is in place.

SR: We have seen an incredible correction. During the upward trend we have seen during the past 10 years, we have had a number of corrections along the way, including some “puke” days. It looked like we had a bottoming at around $1,200 an ounce ($1,200/oz). We’ve corrected back to $1,300/oz, and now we seem to be heading upward. Can you help us put some perspective on that?

JE: We have had, from top to bottom, over a $700/oz correction in the past two years. That attests to the power of the central banks, the Bank for International Settlements (BIS), the bullion banks and their ability to control the paper market aggressively. I think that is coming to an end because it has driven the price down to remarkably undervalued levels. Talk of gold going to $1,000/oz and below is ridiculous. It’s not going to happen. I think this is a fabulous opportunity because it’s hugely undervalued and the fundamentals are compelling. We’re just on the verge.

SR: What happened to the gold shares in that period?

JE: Gold shares were similarly under pressure, but their subsequent gains were historic. After gold topped in 1980 and then started to re-rally, the gold shares exploded again. You’re talking in many cases, ten- or twentybaggers. So I wouldn’t get discouraged here for the simple reason that I think gold and silver shares are now as cheap as they’ve ever been in history relative to where they are going. So it’s a great buying opportunity, but very few people seem to be willing to take advantage of it.

Read John Embry’s latest interview with The Gold Report here.

SR: Rick Rule, what is happening in the platinum and palladium sector?

Rick Rule: Platinum and palladium benefit from all of the factors concerning precious metals. They have for many centuries fulfilled the same roles with regard to stores of value and mechanisms for transferring or storing wealth as gold and silver. Where they differ a bit is on the supply side. All of us know that a lot of the gold and silver that has been mined historically has been stored in vaults. So in the near term, supply considerations in gold and silver have to do with sellers’ intentions. I, like the prior speakers, believe that the holders’ intentions will turn very bullish, and it will be very good for gold and silver prices. But platinum and palladium supplies are different. They don’t get stored. They get used.

Currently, worldwide stocks of finished platinum and palladium bullion are less than one year’s platinum and palladium fabrication demand. The supply story gets more interesting because as a consequence of not having any stored bullion, the only supply is new mine supply and recycled supply. That new supply is very, very concentrated. South Africa constitutes 75% of world platinum supply and 39% of world palladium supplies. Russia supplies 13% of platinum supplies, 41% of palladium supplies. In many cases, current metal prices do not earn the cost of production. The consequence is that new mine supply, which is the most important source of supply, is declining. This isn’t something that’s going to occur in the future. It’s something that is occurring right now. Further, costs are going up because workers’ wages have to go up. Social take in the form of taxes, rents and royalties have to go up, but they can’t because the industry doesn’t earn its cost of capital. On the demand side, platinum and palladium provide incredible utility to users. We anticipate that the utilization of platinum and palladium will continue to grow even in the face of supply declines. There is only one way that dichotomy can be resolved, and that’s in the form of price.

It is also worth knowing that just in the last year and a half, platinum and palladium have begun to enjoy elevated status from an investment point of view. The physical inventory held by exchange-traded products (ETPs) like our own Sprott Physical Platinum and Palladium Trust have increased dramatically. This could exacerbate an already-troubled supply-demand imbalance.

Read Rick Rule’s latest interview with The Gold Report here.

SR: Eric Sprott, what is going on in the silver market?

Eric Sprott: Marc indicated that he was a 25% investor in precious metals; I am probably an 80% investor in precious metals. Silver COMEX inventories have held up even though the price has gone down. It’s sort of an interesting contrast with gold where there were huge redemptions in the ETFs. Those redemptions, in my mind, were created to solve the physical shortage. We had 700 tons of ETF liquidation. That would represent close to 50% of all mine supply annually, in other words, an increase in supply. But it was needed because we definitely have a shortage.

I continue to believe that silver will be the investment of the decade because 1) of its industrial uses and 2) it will take very little investment demand to really move things along.

We have years where people are buying 50 times more silver than gold, and yet mine production is only 11:1 silver versus gold. By my calculation, we only have 3 oz of silver available for investment purposes for every ounce of gold. Every time I’m talking to metal dealers, my favorite question is: What part of your business is silver, and what part is gold? And almost everyone says, 50/50. I guarantee you, that cannot continue.

What I really want to talk about is what I think is the investment opportunity of my lifetime. I happen to very firmly believe that within the next year, gold will be through $2,000/oz. I’ve chosen $2,400/oz as a target of where it will be in a year. That has amazing implications for gold equities. Back in 2000, I was beginning to aggressively buy mining stocks. We would buy up to 15% of companies like Eldorado Gold Corp. (ELD:TSX; EGO:NYSE) and Goldcorp Inc. (G:TSX; GG:NYSE), Cambior Inc. and High River Gold Mines Ltd. (HRG:TSX). At the time, I thought if gold could ever get to $400/oz, maybe these companies whose costs then were $300/oz could earn $100/oz and we could make three or four times our money. With most producers averaging around $1,000/oz costs, if the gold price goes to $2,400/oz, you have $1,400/oz of margin. That is 14 times the opportunity in 2000.

That could be huge. Take two examples. I’m not recommending these particular stocks; I just want to use them as examples. If production at Veris Gold Corp. (VG:TSX; YNGFF:OTCBB), for instance, is 150,000 oz and the margin is $1,400/oz, that could be $147M in earnings, put a measly 10 multiple on it, and you have a stock that can go up 2,000%. Veris has a royalty agreement with Newmont Mining Corp. (NEM:NYSE), which will kick in another $30M. And I think production next year will be higher than this. So you can add onto that.

Another example is San Gold Corp. (SGR:TSX.V). It has a market cap of $64M. We recently bought a private placement here, where we paid 2.5% of the five-year high in this producer. That’s how desperately underperforming that equity was and a lot of equities are in this market—2.5% of its previous five-year high. Same analysis, with a $64M market cap, production of 85,000 oz, and potential profit of $83M, the stock can go to $830M. You have a 1,200% gain, hopefully in a year. And it’s the in-a-year part that to me represents the opportunity of a lifetime.

I totally subscribe to the manipulation of gold and silver and the shortages of gold and silver. I’ve written many articles asking whether the central banks have any gold left and what is going to happen to gold when they finally give up the ghost, which I believe is coming. That is why I think the opportunity in the equities is spectacular. Of course, also I’m a great believer in owning physical gold and silver with my particular emphasis on silver these days.

Read Eric Sprott’s latest interview with The Gold Report here.

View the Sprott Precious Metals Roundtable webcast here.

Swiss-born Marc Faber, who at age 24 earned his Ph.D. in economics magna cum laude from the University of Zurich, has lived in Hong Kong nearly 40 years. He worked in New York, Zurich and Hong Kong for White Weld & Co., an investment bank historically managed by Boston Brahmins until its sale to Merrill Lynch in 1978. From 1978 to 1990, Faber served as managing director of Drexel Burnham Lambert (HK), setting up his own investment advisory and fund management firm, Marc Faber Ltd. in mid-1990. His widely read monthly investment newsletter Gloom Boom & Doom Report highlights unusual investment opportunities. Faber is also the author of several books, including “Tomorrow’s Gold: Asia’s Age of Discovery” (2002), which spent several weeks on Amazon’s bestseller list and is being translated into Japanese, Chinese, Korean, Thai and German. He also contributes regularly to leading financial publications around the world. Much also has been written about Faber. Nury Vittachi, one of Asia’s most popular writers and speakers, published “Riding the Millennial Storm: Marc Faber’s Path to Profit in the Financial Markets” (1998). The Financial Times of London described him as “something of an icon” and Fortune called him a “congenital contrarian and shrewd Swiss investment advisor.”

John Embry is chief investment strategist at Sprott Asset Management and Sprott Gold and Precious Minerals Fund. He also co-chairs the Central GoldTrust Board of Trustees. An industry expert in precious metals, his experience as a portfolio management specialist spans more than 45 years. He joined Sprott in 2003, after 15 years as vice president of equities at RBC Global Investment.

Rick Rule, founder and chairman of Sprott Global Resource Investments Ltd., began his career in the securities business in 1974. He is a leading American retail broker specializing in mining, energy, water utilities, forest products and agriculture. His company has built a national reputation on taking advantage of global opportunities in the oil and gas, mining, alternative energy, agriculture, forestry and water industries.

Eric Sprott has over 40 years of experience in the investment industry. In 1981, he founded Sprott Securities (now called Cormark Securities Inc.), which today is one of Canada’s largest independently owned securities firms. After establishing Sprott Asset Management Inc. in December 2001 as a separate entity, Sprott divested his entire ownership of Sprott Securities to its employees. Sprott’s predictions on the state of the North American financial markets have been captured throughout the last several years in an investment strategy article that he authors titled “Markets At A Glance.” Sprott has been widely recognized for his strategic insights and his accurate market predictions over the years. His newest ventures are Sprott Money Ltd. and Sprott Physical Platinum and Palladium Trust.

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Source: George Mack of The Life Sciences Report

http://www.thelifesciencesreport.com/cs/user/print/na/15629

Sports analogies are used way too often in business, but MusclePharm Corp.’s Founder, President and CEO Brad Pyatt has used his experience as a wide receiver in the National Football League to build a nutritional supplement business, employing leadership tools he learned from great coaches and players. In this interview with The Life Sciences Report, Pyatt talks about his young company’s explosive growth, and how he expects to continue expanding both revenue and earnings to generate tremendous shareholder value.

MANAGEMENT Q&A: VIEW FROM THE TOP

The Life Sciences Report: You’re a young CEO, now 33 years old. You founded MusclePharm Corp. (MSLP:OTCPK) after playing wide receiver in the National Football League (NFL). I’m wondering about your personal experience. Did you find nutritional supplements to be a big help to you as a college and pro football player? Do they really make a difference when added to standard training?

Brad Pyatt: I would say yes. Supplements support athletes who are at a high level and non-athletes just looking to increase their fitness. And though I wish there were such a thing, supplements are not miracle pills and powders.

If you have a good regimen of nutrition and training, supplements become the third plank of the program. Athletes and others will see a huge difference in performance, particularly with our supplements—although there are certainly other good supplements out there. For those who want a miracle in a bottle and don’t want to put effort into working out or eating healthy, supplements won’t do much.

TLSR: What moved you to start this business?

BP: I’ve been taking supplements since I was about 16 years old, and I’ve taken everything from creatines [which build muscle mass] to proteins to fat-loss products. Oftentimes young athletes, young consumers—and even novice consumers, regardless of age—are duped by marketing. I bought into what the advertisements were saying. I was at a high level of training, lifting and eating well, but despite all of this—and the supplements—I continued to be injured.

It wasn’t until I got into the NFL that my strength coach looked at what I was taking, because he didn’t understand why my injuries persisted despite what I was doing to stay healthy. We found out that the products I was taking were the reason for my injuries. They were hindering my performance, unlike what the marketing materials claimed.

I decided to do something about this. But I couldn’t just stop taking supplements because, as an athlete who had taken them for so long, it was a crutch, a mental thing for me. They were part of my regimen. I had to find a way to make supplements better for athletes, particularly myself at the time.

TLSR: How did you start this process? Where did you go for help?

BP: Obviously, being in the NFL, I had resources at my disposal, so I was able to team up with some very keen doctors, recognized worldwide in terms of sports nutrition and diet. I teamed up with some of the best. We started working on a supplement line when I was in the NFL, and the product has evolved since then.

TLSR: How are your products differentiated from the other supplement brands on the shelves in stores?

BP: The difference is that we put real science behind our supplements. That’s the initial step in creating our formulations. We have a team of scientists, along with two full-time Ph.D.s and one full-time physician, on staff. We also have a full scientific advisory board that includes the likes of Dr. Roscoe Moore, our chief scientific director, who is a former assistant U.S. surgeon general. We have people who were with Bristol-Myers Squibb Co. (BMY:NYSE) and other pharmaceutical companies. Essentially, we have an array of talent and brains behind what we do.

We are also defined by the practical application of our program. Once our scientists and doctors come up with a formula, we can conduct tests in our 30,000-square-foot Sports Science Center in Denver, which is equipped with every exercise machine that you could think of. For athletes, it’s basically the NASA of sports science.

From playing over the years, there are several athletes who I still stay in touch with, and these athletes use our facility. We’re able to test our products on athletes before they go to market. We also have several Major League Baseball teams, NFL teams, players, coaches and trainers that we send products to for feedback, before they come to market. This practical application, combined with science, is what makes our products different at the end of the day.

TLSR: I’m noting that you have developed a partnership with Arnold Schwarzenegger, former governor of California but really more famous as an action-adventure movie star. He was also Mr. Universe at one time. Some of the products in your portfolio are going to be branded with his name and presumably his likeness. He’s an aging star now, having turned 66 back in July. Are you going after older clientele? Is this an untapped market?

BP: We’re not going after any select demographic. The unique thing with Arnold is that he’s probably the only figure in sports nutrition who can hit both the younger crowd and the older demographic, as well as the novice buyer. He appeals to everyone and anyone.

Most people think of Arnold’s name when they think about fitness. You mentioned that Arnold was governor of California, but actually his first political appointment was to the chairmanship of the President’s Council on Physical Fitness and Sports during the George H. W. Bush administration. The fact is, he’s been heavily involved with fitness his whole life. Whether you think of the 1970s or 1980s, when Arnold was dominating as Mr. Universe and Mr. Olympia, or you look at films like The Terminator or Conan the Barbarian, the bottom line is that when you think Arnold, you think fitness.

TLSR: You just mentioned The Terminator and Conan. I’m noting that he has Terminator Vcoming out in 2015 and potentially another Conan film following that. Have you discussed the potential of MusclePharm–Arnold Series product placements in these films?

BP: Yes. Arnold and his team have been proactive in letting us know about future opportunities with movies that fit the supplement line, and we will have product placements in these movies. Though he’s just completed filming The Expendables, our partnership hadn’t begun in time to get product placement into that movie. It would have been a great one to be in. Arnold is filming a movie right now in New Orleans that isn’t in line with nutrition or supplements, so we won’t put products in that one. But as far as Terminator and Conan the Barbarian: If Arnold does those movies and there is a way to place the new Arnold Series products in those films, we would be very interested.

Let me say one other thing about Arnold. Given all of his fame, he’s unique in that he brings humility to a partnership. When we work with him, it’s not really an endorsement deal. He’s actually pushing us to do more stuff with him, which is unique. A lot of the athletes we’ve worked with on endorsements have been very good, but due to commitments they already have, they don’t go over and above. Arnold is one of those unique people who really engages a partnership and looks for every way to make it successful. Everything he touches turns to gold for a reason.

TLSR: I understand that you are attempting to get into the female athlete market. Tell me a bit about it.

BP: Yes, we are. Again, when we started this company, we had a male athlete-dominant focus because that’s what I know best. As we grew the market, we saw significant opportunity among women athletes, and saw how a line of products could potentially gain momentum in that market.

Let me give you a bit of background. At MusclePharm we have a cult following, and word of mouth is very good. A lot of our male customers were pushing their wives, girlfriends or moms to take the products. The only negative feedback we were getting was from male customers asking if the product might be too strong for their wives, or asking how much [their wives] should take. “She really likes the product and wants to take it, but she doesn’t know if she’s taking the right amounts. If I’m taking six pills, how much should she take?” We heard things like this over and over. It made perfect sense to keep it within the family, since there are already tons of men taking our product. If their wives or girlfriends want to take it, why shouldn’t we come up with a female-friendly, tailored line? That’s how the female athlete fitness product line evolved.

We cover all the product categories for women. We’re one of the few companies that have done that, and we have been very successful in terms of the reception we’ve gotten from women. Going forward in the next couple of months, we will be moving the female fitness product into some larger retailers, particularly with Walgreen Co. (WAG:NYSE), GNC Holdings Inc. (GNC:NYSE) and CVS Caremark Corp. (CVS:NYSE), whose buyers are 70% women. We are excited about the potential of this line.

TLSR: I see that your Q2/13 revenue was up 51% to $28.5 million ($28.5M) from Q2/12. Your sequential growth was up 14% in Q2/13 from Q1/13. You are on track for a $100M run rate this year. If you had done $2M a year ago, I wouldn’t be so impressed that you had done 51% better, but you’re starting to build significant percentages on larger numbers. What has happened to drive this kind of growth?

BP: First and foremost, our success is tied to the team we’ve built. I come from a team-building lifestyle, playing football my whole life. I’ve learned that you need to surround yourself with the best people.

It also comes back to our doctors, and the quality of the products we’ve put out to the market. MusclePharm came out at the right time, when the market was looking for safe, scientific products. Our industry is not FDA-regulated, but it’s getting more scrutiny. Companies must institute quality control, assurance and other safeguards.

I also think retailers enjoy partnering with us because they know we are here for the long haul, and that we’re not going to jeopardize shelf placement with fly-by-night ingredients. That could ultimately take us off the shelf and not only hurt us, but also hurt our partners, whether it’s Walgreens or Costco Wholesale Corp. (COST:NASDAQ). The two biggest things behind our growth are the people we’ve brought in and the safety and science that we put into our products.

TLSR: You turned cash-flow positive in Q2/13, but when do you expect to turn bottom-line positive? I’d also like to know when you think you can turn bottom-line positive and stay positive.

BP: That’s a great question. We’re doing everything we can to reach that goal, and our sales have been growing at light speed. The trajectory has been up. We’ve also done a lot of cleanup. I’m the first to admit that when I started this company, financing wasn’t my strength. At the time, in 2008, no one was giving credit lines. No one wanted to invest in a new company.

TLSR: You picked a heck of a time to go into business, didn’t you?

BP: Yes, but even in that crisis period I had the vision and knew I could get there. Climbing the financial ladder was tough, and we had to borrow and pay toxic rates. We took on every financing we possibly could; that we were allowed to do.

We got to the point where, about six months ago, we were fortunate to get some investors who opened the door to OPKO Health Inc. (OPK:NYSE) Chairman and CEO Phillip Frost. Dr. Frost bought into the MusclePharm story and played a significant role in changing the capital structure of the company. Once he was involved, other sophisticated investors—institutional investors—were interested. With the help of Dr. Frost and these investors, we’ve cleaned up all the financing issues related to debt from years past, and are now debt-free. We really thought 2013 would be the year that we could be fully profitable, earnings before interest, taxes, depreciation and amortization (EBIDTA), without pulling out one-time charges or any stock issuances.

To answer your question, going into 2014 all the cleanup will be done. We won’t do any more financings like those we had to do in the past. Nothing will be enacted that carries warrants or any type of derivative effect, because these are complex and have hurt our current valuation. Even for investors who are very sophisticated, our current balance sheet is complex and this is an area of focus that will be resolved in near future. Look for MusclePharm to have a full EBIDTA-type profit going forward, without any derivative liabilities associated.

TLSR: When you started this business, you had to give warrants. That was a very unusual time in our economic history, both in this country and globally. Do I hear you saying that you’re going to get better terms on financings now? Or will you be able to grow organically without diluting investors further?

BP: Two things. We’re pretty much done with financings while our stock is so undervalued. Dilution just doesn’t make sense for the company and its shareholders at these levels. Our current capital position has improved dramatically over the last six months, we have a surplus of receivables coming in, and our cash flow is, for the first time, very strong. To your question, we’re always going to need capital to grow this business, but we’re in a much stronger and healthier position to negotiate with banks now, to get a standardized banking relationship.

Also, our balance sheet is strong. We have no debt, usually more than $6–8M on hand at any time and over $10M in receivables. Now banks are seeing this. At one point, even though our growth rate was huge, the balance sheet was so upside down that banks couldn’t get comfortable. Investors can look forward to seeing some type of banking relationship, with a credit facility or asset-backed line, in the future. We are not going back and diluting shareholders at these levels.

TLSR: Selling, general and administrative (SG&A) expenses, which include marketing, are major overhead for you. You have the $100M run rate now, but what number is going to be critical mass for you? Would it be $200M, $300M? Where do you have to get to?

BP: I think we’re almost there. If we can get the Arnold line into some bigger box stores, or our female athlete-targeted FitMiss product line into bigger box stores—Walgreens, Costco, Wal-Mart Stores Inc. (WMT:NYSE), whatever it may be—then this business will scale and hit a critical mass.

We feel confident that this business can scale to $150M in the coming years, if not more than $200M, without adding too much in SG&A costs—or marketing costs, for that matter. Marketing dollars will be allocated incrementally on what drives the sale. What I mean is, if we can spend $5M to get an extra $30M, we’re going to do that. But we’re going to monitor the marketing and SG&A through the next year to ensure we can hit that critical mass.

TLSR: You just mentioned some companies, one of which is Costco, where you have brand-new sales channels. Costco will be selling supersized, five-pound containers of your Combat Protein Powder, which will launch in mid-October in all the retailer’s 400+ stores. These membership stores are able to negotiate very low prices with vendors, and you have geared up with new packaging, new labeling and new manufacturing capability. What protections do you have against Costco deciding not to sell your product?

BP: We really don’t have any, but other strengths of MusclePharm are our sales and marketing teams. When a company breaks into these big retailers, there is always the risk of failure. . .but that comes with anything you do in life.

We have made a very calculated bet on what SKU (stock-keeping unit) we chose to go into Costco with. We picked Combat Protein Powder because it’s one of our best-moving products—probably our No. 2 product in terms of sales, and we have rarely advertised it in the past. We know this product works. We also know that our customers, globally, are happy with the taste.

We also understand that within Costco’s sports nutrition group of products, the biggest category is protein. We knew that if we could get into that grouping, we would be in the company’s highest volume category from day one.

Last, if Combat was to not do well by Costco’s standards, and if we had to pick it back up, we have other channels for Combat Protein Powder. Other than shipping costs, there wouldn’t be much risk associated with Costco deciding not to carry our product any longer. That’s our biggest damage-control strategy for this channel.

TLSR: Investors are always looking two or three quarters ahead. Obviously, revenue growth is going to be a catalyst for your shares, but what should investors look for as far as catalysts that would herald revenue growth?

BP: I think continued distribution is what investors should look for. We’re still a young company, barely five years old, and we’ve already picked up some of the large chains. Investors could look for a couple of specifics in terms of distribution. FitMiss would be a good category to look at, if it gets into some bigger channels. This is a high-margin product that will allow us to diversify our current MusclePharm customer base. Also, watch where the Arnold Series goes. That would be a great product to get out to the masses that shop in big box stores, and would really increase our top line.

Investors can also watch margins—and I think what they have to look for is margin dollars.There are certain initiatives that help us make money because we pay our bills with margindollars, not margin percentages.

I think investors got too caught up on the margins last quarter, when there was a little frustration because these were down 4%. However, our margin dollars were up because we had taken steps to ensure that. If we go into a Walgreens with one of our protein SKUs, our margins are probably going to go down because those are not high-margin products. But, our margin dollars are going to go up significantly because of increased sales. That is one thing we’re trying to make sure investors grasp when they think about MusclePharm. We have an array of products, and if we get a protein into a large, mass channel, it’s really a loss leader because it’s our first step in. These lower margin percentages allow us to expand within those distribution channels.

TLSR: Did you catch some of Peyton Manning’s passes in Indianapolis?

BP: Yes, I caught a couple. I was lucky enough to be around people like Peyton Manning, (former Indianapolis Colts head coach) Tony Dungy and Bill Polian, who was president and vice chairman of the Colts and picked Peyton in the first round of the 1998 draft. It’s funny to say this, but I built my business off what I learned from those three gentlemen. They represented the highest levels of success—from a general manager to a head coach to a future Hall of Fame quarterback. Each of them carried humility with them every day—and worked their butts offevery day—and they were very successful at every level. I was very fortunate to be around that group of individuals, particularly Peyton Manning. Having him as a peer was an amazing opportunity, allowing me to learn how one of the greatest leaders in sports approaches each day to build his legacy. He’s a machine.

TLSR: Peyton is like having another coach on the field, isn’t he?

BP: George, you’ve never seen anything like it, especially at that high level, the respect people have for him. When you’re in the NFL, everyone has already made it to the highest level. But to have someone like Peyton on your team, and to see how the players respond to him, is unbelievable. We’re all grown men, and most people don’t like to be lectured by a player, but Peyton does it in a way where you want to get behind him. He is one of very few people who can get on a player and have that player respond in a positive way. That’s because he lives it. He’s there every day, at the office before everyone else. He leaves after everyone else. He’s football 100% of the time. He’s one of the best leaders I’ve ever been around.

TLSR: Who is going to get to the Super Bowl this year? Tell me your AFC and NFC picks.

BP: I think the San Francisco 49ers have the best chance in the NFC. With the AFC, it could be a couple of teams. I think the Denver Broncos, with Peyton Manning, have an opportunity because the team has receivers and the machine—Peyton. The Broncos and Niners: That’s what I was thinking. How about you?

TLSR: I love your picks. I’m a 49ers fan. Quarterback Colin Kaepernick has turned out to be everything Coach Jim Harbaugh thought he would and should be. It’s just amazing to see a coach take a gamble like that, getting rid of a quarterback who was doing well and going with one who was not on the first team at the beginning of 2012.

BP: By the way, Kaepernick is one of our athletes. He signed a multiyear endorsement deal with us back in March and is going to represent MusclePharm in a series of radio advertisements, with television appearances and in social media outlets. We’ve been working with Kaepernick since he came into the NFL and he really fits our brand well. He was discredited, and people didn’t give him the good look and opportunity that he deserved. Then he takes the 49ers to the Super Bowl. We’re very excited to have him as part of our team. He has a bright future.

TLSR: Brad, this has been a lot of fun. Thank you.

BP: I appreciate it very much. I appreciate your time.

Brad Pyatt has served as the chief executive officer and director of MusclePharm Corp. since February 2010, and as president and CEO of MusclePharm LLC, since its inception in April 2008. His background includes seven years of experience as a professional athlete, and more than five years’ experience in the sports nutrition arena. Pyatt played in National Football League for the Indianapolis Colts during the 2003, 2004 and 2005 seasons, as well as for the Miami Dolphins during the 2006 season. Pyatt also played in the Arena Football League (AFL) for the Colorado Crush during the 2007 and 2008 seasons. Pyatt attended the University of Kentucky from 1999 to 2002, where he studied kinesiology exercise science, as well the University of Northern Colorado from 2002 to 2003.

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DISCLOSURE:

1) George Mack conducted this interview for The Life Sciences Report and provides services toThe Life Sciences Report as an independent contractor. He or his family own shares of the company mentioned in this interview: None.

2) MusclePharm Corp. paid The Life Sciences Report to conduct, produce and distribute the interview.

3) MusclePharm Corp. had final approval of the content and is wholly responsible for the validity of the statements. Opinions expressed are the opinions of MusclePharm Corp. and not Streetwise Reports or The Life Sciences Report or its officers.

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By HY Markets Forex Blog

WTI  crude  oil headed to its third weekly loss and is expected to end up in red for the sixth session out of seven on Friday as thee easing tensions in the Middle Eastern region continues to drag the crude lower.  The UN Security Council will vote on a resolution for Syria later in the day.

West Texas Intermediate crude futures for November delivery eased 0.40% to $102.62 per barrel on New York’s Nymex at the time of writing, while the European benchmark crude Brent was seen edging 0.22% lower at $108.98 a barrel at the same time in London.

The North American sweet crude closed the previous session in green, as it rose 0.35% following the highly volatile trading. Crude advanced footing on a string of positive US macroeconomic data.

WTI crude – Syria

Members of the United Nations (UN) Security Council, the US, Britain, China, France and Russia are expected to vote on a resolution to destroy chemical weapons from Syria.

Russian diplomats have agreed, as the Russian foreign minister Sergey Lavrov said the peaceful resolution may end in badly, as the US wanted the resolution to include a military action against the country under auspices of UN Chapter 3.

The UN Security Council is expected to draft a resolution later in the day.

US Inventories.

The US crude oil stockpiles rose unexpectedly by 2.63 million barrels during the week ending September 20, higher than the forecasted 0.8 million drop. A fall of 4.4 million barrels was seen in the previous week, the US Energy Information Administration confirmed on Wednesday.

A separate report released by the American Petroleum institute showed the crude supplies dropped by 54,000 barrels last week, lower than analysts’ 1.1 million- barrel drop.

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By HY Markets Forex Blog

European Equities futures were seen advancing on Friday, while talks in the US over the country’s budget and debt ceiling still weigh and the situation in Italy is also in the spotlight.

Futures for the European Euro Stoxx 50 rose 0.15% higher at 2,914 at the time of writing, while German’s DAX futures edged 0.13% higher to 8,671.80 at the same time. Futures for the French CAC 40 advanced 0.07% to 4,191.80 and UK FTSE 100 futures gained 0.04% to 6,533.30.

European Equities – Market Movers

The discussion over how to raise the US debt ceiling is still ongoing at the same time as the federal budget debate, while the lawmakers are expected to pass a budget by September 30 to avoid a shutdown.

In Europe, investors are keeping an eye on the political turmoil in Italy, where Silvio Berlusconi’s party said they will resign if the former premier ousted from the parliament for a tax fraud conviction. Italy’s Prime Minister Enrico Letta is expected to meet with the President Giorgio Napolitano to discuss the situation. The Senate is due to vote on October 4 on the issue, whether to strip Berlusconi of his seat.

Mario Draghi, President of the European Central Bank is expected to give a speech in Milan at Bocconi University later in the day.

European Equities – Economic News

Italy’s government will be holding an auction of bonds maturing in five and ten years with coupons of 3.50% and 4.50% respectively, while the country has a target to raise €6 billion.

Italy is expected to release a business confidence survey for September, which is expected to show a rise from 92.9 to 93.4.

Meanwhile, in France the gross domestic data for the second quarter is expected to be released and estimated to show that both annual and quarterly readings will show improvements, advancing by 0.5% and 0.3% respectively.

In Spain, the adjusted retail sales are expected to show a fall by 7% in August on an annual basis.

While the Eurozone as a whole, is expected to show a rise in the September for both economic and consumer sentiments. The economic sentiment is expected to show an increase from 95.2 to 96 points, while the consumer index is estimated to hit 15 points.

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