Month: October 2013

By HY Markets Forex Blog

European stocks  were seen  opening higher on Friday with investors raising hopes on the possibility that the US political parties will end the ongoing US government shutdown.

The European Euro Stoxx 50 advanced 0.36% at 2,976.50 at the time of writing, while the French CAC 40 rose 0.02% at 4,218.30. At the same time the UK FTSE 100 gained 0.30% to 6,448.30, while Germany’s DAX 30 edged 0.25% higher to 8,707.50.

European Stocks – Germany’s Inflation

Germany’s consumer prices advanced 1.4% higher in September compared to the same period last year, assisted by the upside from education and food prices, the Federal Statistical Office confirmed on Friday.
Meanwhile health prices and energy prices had a negative effect on the overall prices level.

European Stocks – US Shutdown

The ongoing government shutdown in the world’s largest economy has reached its eleventh day on Friday. Investors are expecting the US president Barack Obama and the Republicans to finalize an agreement to end the ongoing government shutdown and avoid the alarming debt default before the deadline on October 17.

On Thursday, House Republicans announced a new strategy to extend the debt limit to $16.7 trillion.

“It is our hope that the president will look at this as an opportunity and a good-faith effort on our part to move halfway, halfway to what he’s demanded in order to have these conversations begin,” Republican House Speaker John Boehner said in a press conference in Washington.

US Treasury Secretary Jack Lew warned that the ongoing partial government shutdown is affecting the nation’s economy and the financial markets.

Jack Lew also advised the government to raise the debt limit before the deadline or it could be very dangerous.

The number of unemployment claims in the US rose from 66,000 to 374,000 in the week ending October 5, according to the official data released.

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The post European Stocks Open In Green; US Shutdown In Focus appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

WTI crude oil prices dropped during the early hours of the European trading sessions on Friday, as discussions continued in the US to finalize a solution before the debt limit deadline. The WTI dropped to 1% lower.

WTI crude oil was seen trading 1.23% lower at $101.74 a barrel at the time of writing, while the European benchmark Brent crude edged 0.64% lower to $111.08 at the same time.

The crude oil stockpiles rose by 6.8 million barrels in the week ended October 4^th, according to reports from the Energy Information Administration.

WTI Crude – US Partial Shutdown

The US president Barack Obama met up with the Republicans on Thursday, where President Obama rejected a proposal from the party for a short-term debit ceiling plan.  However he hinted his keenness to discuss a solution to end the government shutdown with congressional Republicans.

The world’s largest economy has entered its eleventh day of the partial shutdown, after Democrats and Republicans in Congress failed to finalize an agreement for the country’s government funding. The partial shutdown has left approximately 800,000 federal employees without pay and work, while federal institutions remain closed.

The shutdown could cost the US government almost $300 million a day, which would affect the economy and markets.

The standoff has marred the markets as questions were raised as to whether the Congress would raise the $16.7 trillion debt ceiling.

“In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth – with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression,” the report from the US treasury stated.

Democrats and Republicans in the congress are expected to finalize a way out before October 17, the day the US treasury is expected to end its borrowing limit.

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The post WTI Crude Declines Amid US Budget Plan appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By WallStreetDaily.com

It’s Friday in the Wall Street Daily Nation!

That means the long-winded analysis is out. (Hallelujah!) And some carefully selected charts are in. (Amen!)

So without further ado, check out these snapshots on the scariest development in the gold market… one correlation we can’t afford to ignore… and an appalling example of why the government can’t possibly be trusted with our money.

Gold Bugs Beware

It’s official. The next chairman – err, chairwoman – of the Federal Reserve is going to be Janet Yellen. So come January, Ben Bernanke is officially out of a job.

You know what else is out, too? Evidence of a near-perfect correlation between growth in the Fed’s balance sheet and gold prices.

Talk about a crisis for gold bugs! Guess they’ll justify clinging tight by swearing up and down (again) that a nasty bout of hyperinflation is imminent. Because, of course, selling is never an option…

Stocks and Earnings: Still in Lockstep

Speaking of correlations, here’s one that certainly hasn’t broken down: stocks and earnings.

As Dan Greenhaus, Chief Global Strategist at BTIG, says, the chart above shows “quite convincingly” that stocks aren’t in bubble territory thanks to too much government intervention. Instead, they’re moving in lockstep with trailing 12-month earnings. (As they should.)

Rest assured, the strong correlation holds true on the micro level, too. Here’s the proof…

Remember how I told you to avoid Ruby Tuesday, Inc. (RT) like the plague this week? Well, I hope you listened.

The company reported terrible earnings after the bell on Wednesday. Lo and behold, its stock price followed suit, dropping 18% at the open yesterday.

I’m not sure who feels worse – shareholders or the analyst at B. Riley & Co. who initiated coverage with a “Buy” rating and a $10 price target Wednesday morning. (Talk about a bad day at work.)

Throw the Bums Out

Anyone who tells you the government does it better than the private sector is either lying or just plain stupid.

The latest proof? The flagship technology piece of the Affordable Care Act – the healthcare exchanges.

Forget being plagued by bugs and buckling under heavy traffic even after “major code renovations” were made in the first week, as Digital Trends puts it. The most appalling failure is the cost to build the monstrosity that is Healthcare.gov.

According to government records, taxpayers (i.e. – you and me) forked over a whopping $634.3 million (and counting). It was originally supposed to cost only $93.7 million.

Clearly, politicians have never met a budget they can’t bust.

To put those figures into perspective, consider this… Entire internet-based businesses that are now generating billions in actual sales cost way less to get up and running.

Facebook (FB) and Twitter (Proposed Ticker: TWTR) each only needed about $350 million in their first three years of operation. And it only took a few million for them to create websites that actually work. (Maybe the President should have put Mark Zuckerberg in charge of the healthcare exchanges.)

I find it hard to believe that politicians can’t find any money to cut from spending. How about handing over a little control to the private sector? Just a thought.

That’s it for this week. Before you go, though, sound off on government waste, gold investing and your predictions for the next earnings report disaster by going here.

Ahead of the tape,

Louis Basenese

The post Friday Charts: Gold Bugs, Government Waste and the Latest Stock Implosion appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Friday Charts: Gold Bugs, Government Waste and the Latest Stock Implosion

By HY Markets Forex Blog

The fluctuations that gold has experienced over the last few years illustrate the uncertainty surrounding how the metal is priced.

The ambiguous nature that surrounds the various determinants of the commodity's value should be known by anyone who wants to make money trading this asset.

Yellen nomination coincides with price drop
A perfect example of this uncertainty is how the commodity has behaved amid the recent government shutdown and also the announcement that Janet Yellen has been selected to serve as the next chair of the Federal Reserve.

The precious metal declined on October 9, the same day that President Barack Obama announced his decision to select Yellen, who currently serves as vice chair of the Fed, for the top post at the central bank, Reuters reported.

This scenario might seem confusing to some, as Yellen is perceived by many financial services industry participants as being a "dove," meaning that she has frequently indicated her preference for harnessing asset purchases to stimulate the economy, Robert Brusca, chief economist at FAO Economics, told MarketWatch.

Yellen is expected to sustain the bond buying that was started while Ben Bernanke was at the helm of the Fed, economists have predicted, according to the news source. In the event that they are correct, gold should receive support from the continued use of these purchases.

If the aforementioned scenario is accurate, one would think that gold would surge once they found out that the vice chair of the Fed was nominated for the top post. However, the metal fell during the day that her selection was publicized.

Gold lacks surge amid shutdown
Another occurrence that can illustrate the uncertain nature of gold's price movements is the fact that even though the federal government has been shut down for more than a week starting on October 1, gold did not surge in price, Reuters reported.

It was also noted that even though the U.S. government had been experiencing a partial shutdown for more than one week, global market participants did not cause the commodity to spike in price, according to the news source.

Gold has frequently been considered a safe-haven asset, drawing the interest of investors when their tolerance for risk deteriorates. Gold reached an all-time high later in 2011, driven higher amid concerns that the United States would default on the payments for its debt. The appreciation experienced by the precious metal was largely attributed to the lackluster sentiment of global investors.

Safe haven questioned
While this relationship between risk aversion and the price of gold may seem simple enough, the failure of the precious metal to rise significantly amid this recent shutdown of the federal government has led some market experts to suggest that investors no longer thought of the commodity as being a store of value that could protect them from risk, the media outlet reported.

"This lack of response to the U.S. shutdown may mask an underlying negative investor sentiment," James Steel, chief precious metals analyst at HSBC, told Reuters. "At the very least gold's safe-haven bid is lacking. Some of the explanation for this may be that currency markets have not moved sharply."

Investors react to gold bear market
This is certainly not the only time that market participants have questioned the nature of the precious metal, as some expressed their lack of faith in gold earlier this year. In April, gold plunged into a bear market, having fallen 20 percent from the high that it reached late in 2011.

That month, investment bank Goldman Sachs Inc. reduced the commodity's price forecast, noting that the precious metal did not surge amid news that small euro zone nation Cyprus was suffering economic turmoil, according to The Sydney Morning Herald.

Gold falls to 34-month low
The commodity extended these losses over the next few months, with futures for the metal falling to less than $1,200 per ounce in June, Bloomberg reported. This represented the lowest value for these contracts in 34 months. Donald Selkin, who contributes to the oversight of $3 billion as chief market strategist of National Securities Corp., noted the sharp deterioration in confidence experienced by investors.

"When the market gets into a trend, people just want to follow it, and now we're in a severe downtrend, so the psychology has become terrible," he told the news source.

The metal recovers
Later in the year, the precious metal staged a recovery, rising above $1,400 an ounce and entering a bull market in August, according to MarketWatch. Gold experienced some sharp gains that month, which were attributed to concerns related to the U.S. debt and potential military action in Syria.

"Gold will be a beneficiary of any military action in Syria," Paul Herber, portfolio manager of the Forward Commodity Long/Short Strategy Fund, told the news source. He said that at the time, "investors are selling equities and moving into safer assets … of which gold is one."

This explanation would support the role of the precious metal as a safe-haven asset. Amid all these different signals, those who want to make money by trading gold should be aware of the uncertain nature of the commodity.

The post Uncertain price determinants of gold illustrated by recent fluctuations appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

GBPUSD’s fall from 1.6259 extends to as low as 1.5914. Deeper decline is still possible, and next target would be at 1.5800 area. However, the fall would possibly be consolidation of the uptrend from 1.4813 (Jul 9 low), as long as 1.5800 level holds, the uptrend could be expected to resume, and one more rise towards 1.6500 could be expected. On the downside, a breakdown below 1.5800 will indicate that the uptrend from 1.4813 had completed at 1.6259 already, then the following downward movement could bring price to 1.4500 zone.

Provided by ForexCycle.com

By www.CentralBankNews.info     Peru’s central bank held its policy reference rate steady at 4.25 percent, citing economic growth that is close to the country’s potential growth rate, inflationary expectations that are within the target range, a reversal of supply factors that pushed up inflation and uncertain international financial conditions despite a recovery in recent indicators of global activity.
    The Central Bank of Peru (BCRP), which has held rates steady since April 2011, also said it expects inflation to remain within the bank’s target range in the following months due to better food supply and inflation expectations that are in the bank’s target range of 1.0 to 3.0 percent.
    Peru’s inflation rate eased to 2.83 percent in September from 3.28 percent in August after also exceeding the bank’s upper limit in July.
    Current and advanced indicators show that Peru’s economy is close to its long-term sustainable level of growth while indicators associated with the external market have shown a slight recovery and this has had a favourable impact on export prices, the central bank said.

    This assessment of the external market is more optimistic than in recent months when the central bank characterised the external market as weak, with the associated impact on export prices.
    In August the central bank lowered its growth forecast for this year to between 5.5 percent and 6.0 percent from an earlier forecast of 6.1 percent. The 2014 forecast was cut to 5.9 percent from 6.3 percent. Last year Peru’s economy expanded by 6.3 percent.
    In the second quarter, Peru’s Gross Domestic Product expanded by 1.1 percent from the first quarter for annual growth of 5.6 percent, up from 4.6 percent.
    Since April Peru’s central bank has been adjusting its reserve requirements to provide more credit to the financial system in the domestic sol currency and the bank repeated that “should it be necessary, the board will adopt additional measures to make the regime of required reserves more flexible.”
    In October the mean maximum rate of reserve requirements in the sol was lowered to 16 percent from 17 percent and the marginal rate was lowered to 16 percent from 20 percent.
    In addition, the central bank has also established additional reserve requirements based on credit issued in foreign currencies to encourage the “dedollarization of loans,” the bank said.
    The requirements will be applied if a bank’s balance of loans in U.S. dollars in the domestic market exceeds five percent as of September.

    www.CentralBankNews.info

By MoneyMorning.com.au

US stocks were up 2% this morning. See, we told you not to panic. We hope you took our advice and used the past few days of pullback to buy stocks.

But we’re not looking at stocks today. Instead we’re looking at something we’ve neglected for far too long.

Winston Churchill once said of Russia that ‘it is a riddle wrapped in a mystery inside an enigma.‘

In other words, the boozing old philanderer didn’t know what to make of Russia. That probably explains why the mass murdering Josef Stalin had the better of Churchill during the Second World War.

But if Russia is a riddle wrapped in a mystery inside an enigma, then gold is all of those things, with the added complexity of being locked in a box.

Certainly US Federal Reserve chairman Dr Ben S Bernanke doesn’t understand gold. He admitted as much to the US Congress in July. So if one of the world’s most important moneymen doesn’t get gold, what chance does anyone else have?

Fortunately, it’s not that difficult. Dr Bernanke just isn’t trying…or doesn’t want to try to understand it…

As Bloomberg reported this week:

‘Bernanke, who holds economics degrees from Harvard College and the Massachusetts Institute of Technology and led the Federal Reserve through the biggest financial disaster since the Great Depression, told the Senate Banking Committee in July that “nobody really understands gold prices and I don’t pretend to really understand them either.”‘

You’re not dumb if you hold degrees from Harvard and MIT. That’s for smart people. So why doesn’t Dr Bernanke understand gold and the gold price?

There’s a simple answer for that. It’s not that he doesn’t understand it, it’s that he can’t admit to understanding it. To admit to understanding the gold price would mean admitting that printing money devalues the money already in circulation and causes the price of assets such as gold to rise.

There’s no way in the world Dr Bernanke would ever admit to that.

Big Banks Lining Up to Sell Gold

But right now Dr Bernanke isn’t the only one to give gold the cold shoulder. With all the volatility in stock prices and interest rates, and political instability in the US and Europe, investors just can’t tell what’s bullish and bearish for any asset class.

Is the US government shutdown good or bad for stocks? Is it good or bad for gold? Will a positive resolution be good or bad for either asset? And likewise for no resolution?

Really, it’s anyone’s guess. In fact, it’s probably fair to say that investors will only decide the answer to those questions when the resolution (or non-resolution) arrives.

The market’s reaction could come down to whether most traders got out of bed on the wrong side or whether they had a good journey into the office.

And we’re not kidding either. It’s why on two different days you can see the same excuse given to explain why the market went up one day and down the other.

But whatever the reality, it seems the big investment banks aren’t about to risk too much of their money on gold. As Bloomberg reported yesterday:

‘Gold will extend losses into 2014 amid expectations the Federal Reserve will pare stimulus as the U.S. recovers, according to Morgan Stanley, adding to bearish calls from Goldman Sachs Group Inc. and Credit Suisse Group AG.

‘“We recommend staying away from gold at this point in the cycle,” Melbourne-based analyst Joel Crane said in a video report received today. Bullion will average $1,313 an ounce in 2014, down from the $1,420 forecast for this year, Morgan Stanley said in its quarterly metals report on Oct. 7.‘

Don’t underestimate the power of JP Morgan, Goldman Sachs and Credit Suisse. These guys have a lot of influence on asset prices. They can put a whole lot of money to work quickly to affect the price of stocks, interest rates and gold.

But that doesn’t mean they always get it right.

So Much for the Harvard Education

The big banks have talked down gold for most of the past 10 years, although even they jumped on board as the commodities boom flourished through to the end of 2007.

Now it’s the opposite. It’s hard to find anyone prepared to bet on a rising gold price. That’s not surprising. As we wrote to you yesterday, a big part of investing is psychology.

Seeing as the gold price has trended downwards since peaking in 2011, and is down 20% in Aussie dollar terms in the past year, it’s only natural that many investors have had enough. That’s the same with any asset. If you hold a stock that’s done nothing but sink lower and lower, eventually you’ll give up on it.

That’s one reason why gold could go lower, even though logically with the torrent of cash unleashed by central banks, gold should go higher. But that’s the psychology of the moment.

Even so (and call us mad if you like), whatever happens to the gold price, there is zero chance we will sell even one single ounce of our gold holding. In fact there’s a greater chance that we’ll top up our holding.

After all, gold is the ultimate long term investment. Unlike a stock portfolio, we know gold will still be around in 40 or 50 years – 100% guaranteed.

But we can’t put the same guarantee on stocks, even the bluest of blue-chip stocks. There’s no guarantee they’ll still be around in their current form 50 years from now. And that’s coming from someone who’s as bullish as you can get when it comes to stocks.

Gold is for the long term. We’ll always own it. It’s an absolute certainty that the US Federal Reserve will keep rates low for the foreseeable future and print more money.

It’s only a matter of time before investors wake up and rediscover that the reason for buying gold – the reason Dr Bernanke won’t admit to understanding – is to protect your wealth from the constant and persistent devaluation of paper money.

It’s so simple we just can’t believe a Harvard man like Dr Bernanke doesn’t get it.

Cheers,
Kris+

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Special Report: UNAVOIDABLE: Australia’s First Recession in 22 Years

By MoneyMorning.com.au

You may have seen in the press recently that the US Federal Bureau of Investigation (FBI) has shut down drug website Silk Road.

With this news many commentators have tied in the fact that many customers of Silk Road use Bitcoins to make transactions. Some have even suggested that now the FBI potentially has a grasp on Bitcoin it will mean the end for Bitcoin and all other private digital currencies.

But from what I can see, the Feds shutting down Silk Road is evidence Bitcoin will survive and be a permanent fixture in the global economy, whatever shape or form it might take in the future.

The biggest issue with Bitcoin is the insane price volatility and people using it in a way not suited for its intended design. Most people see Bitcoin as an investment.

Because Bitcoin is so new, people are confused about what it is and how to use it.

And that’s half the issue, people are trying to pigeon-hole it into a definition, ‘Oh it’s like gold. Oh it’s like cash. Oh it’s like a stock.’ In fact, it’s all of the above and more.

It’s a whole new medium of economic exchange.

It’s most similar comparison is to gold. But it’s as flexible and liquid as cash…with the potential to appreciate in value like a stock. You can’t define it as anything other than Bitcoins.

You need to also remember its history to appreciate its actual current resistance to turmoil.

If You Think $30 to $230 was good, Try 60,000% in a Year

Let me take you back to October 2010. At that point Bitcoins traded at 5 cents. But just four months later on 9 February 2011, Bitcoin (BTC) hit parity with the USD: $1 = 1 BTC.

From there it steadily grew, and then climbed substantially around April/May to touch around the $6-7 mark. Then the price of BTC exploded.

On 1 June 2011, blogger/reporter Adrian Chen wrote a piece on Gawker called ‘The Underground Website Where You Can Buy Any Drug Imaginable’.

His piece was solely based on the website Silk Road. Of course in writing about this, he made reference to Bitcoin, the anonymous digital currency. Until then Bitcoin was really only known to those in the know (so to speak). But following Chen’s article it hit the mainstream.

Ecommerce had gone to a whole new level with this ‘drugs, guns and anything illegal’ website and the mysterious Bitcoin was all a part of it.

The mystery of how Bitcoin worked and who created it added to the digital intrigue. Within days of Chen’s article the price of Bitcoin peaked at US$31.91. Within the space of four months Bitcoin had increased by 3,000%.

And compared to the 5 cents it had been not that long before, gains were off the chart – a 60,000% gain. Mass hysteria ensued.

But as you’d expect with the volatile Bitcoin price, a week or so later after claims that some Bitcoins were stolen, issues with the security of the BTC exchanges, and with the security of Bitcoin wallets, the price plummeted back down to around US$3 by the end of the year.

Bitcoin is Not a Fad

With that kind of boom and bust, many said Bitcoin was a fad. They said it was nothing more than a bunch of hackers and geeks playing around with computer code on the internet. The traditionalists passed it off as nothing more than a blip on the radar.

As such media coverage faded, the general public’s attention fell away and Bitcoin went back to being somewhat obscure. This was a good thing. Bitcoin continued on its merry way. But not back to the 5 cent or even the US$1 it had been.

It slowly crept forward, just doing its thing, hitting the $US20-$30 range by January this year.

Then, as you know, earlier this year trouble in Cyprus forced the security of the current money system back onto the front pages. Thanks to this Bitcoin once again captured the public’s imagination.

Subsequently Bitcoin smashed through $31 (previous peak) and charged all the way to about US$230. What’s worth noting is the recent peak and bust from US$30 to US$230 wasn’t even close to the 2011 peak and bust in percentage terms. If it had replicated the February 2011-June 2011 run, Bitcoin would have touched US$900. But it didn’t.

Source: Bitcoincharts.com

Suffice to say the price came off again, but hovered around the $140 range. That was until the events of the Silk Road shutdown. This time around though, mention Bitcoin and the world is an expert.

But still, ask the traditionalists what they think and they’ll pass it off as a fad and nothing of any serious concern. As far as the ignorant are concerned Bitcoin is all about money laundering and drug dealing.

Not Even the Feds Can Take it Down Now

But here’s the thing. The price of Bitcoin has failed to fall below US$100, even after the Silk Road operation. Today it’s over US$133. And it will probably hover around this mark for some time. At least until the next big global economic event that scares the heck out of everyone and sees them flood into the digital economy.

That tells me Bitcoin is a lot stronger than most have given it credit for. It also tells me this is one resilient piece of technology. So you can expect it to stick around for some time.

And although only 21 million Bitcoins will ever exist the decimal point moves 8 places to the left. That means Bitcoins are in effect infinitely divisible. Compare that to currency units such as the dollar which are only divisible to two decimal points (100 cents to the dollar).

Not only that but more merchants accept Bitcoin as payment now than ever before. This is a necessary trend if Bitcoin is to be widely accepted.

But what if merchants stop accepting Bitcoin? Well they’d become worthless. But what if merchants stopped accepting US dollars or Aussie dollars? Would the same happen? Of course it would.

Who can say with any conviction today that the US dollar won’t be worthless in 10 or 20 years? It may still be unlikely, but I bet you wouldn’t bet your house on it not happening.

The other thing is the ease with which you can get Bitcoins. For example, I just purchased 0.00324027BTC using my phone. It now sits in my Bitcoin wallet with my other Bitcoins. The cost is simply added to my phone bill at the end of the month.

Name any other currency, stock, or precious metal in the world that’s so easy to purchase.

With dodgy practices like Silk Road out of the way, it paves a clearer path for Bitcoin to gain some credibility and wider acceptance. It’s the beginning of change. It’s early on in the process, but there’s no doubt in my mind that Bitcoin is here to stay.

There will be competitors, and possibly even a better one. But at the end of the day someone’s got to be a first mover and Bitcoin is exactly that.

I don’t plan on selling my Bitcoins. I’ll use them for their intended purpose…as a medium of exchange over the internet. If I can stash some away for a rainy day or in the hope of making some money from them, that’s great.

What everyone needs to do now is take a deep breath. Accept the inevitable and take Bitcoins for what they are. It’s change, its new, it’s revolutionary and it’s exciting.

It will help change the entire global economic system, and people who dismiss it as a fad need to appreciate that’s a good thing.

Sam Volkering+
Technology Analyst, Revolutionary Tech Investor

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Source: Daniel Levy of The Life Sciences Report (10/10/13)

http://www.thelifesciencesreport.com/pub/na/backing-biotech-growth-with-manufacturing-strength-brian-wilson

The focus of most small biotech and pharma companies is on discovery—looking for that next breakthrough in gene therapy, diagnostics, drug delivery and the like. While Bio-Wire.com’s Brian Wilson has explored and written about the possibilities in these fields, he sees potential outside the traditional discovery sphere, in companies focused on low-profile tasks like contract manufacturing services. In this interview with The Life Sciences Report, Wilson names one of his favorites in that space, and discusses a pair of companies using contract manufacturing services to advance their own development strategies.

The Life Sciences Report: Brian, your business, Bio-Wire, broadly covers the small pharma and biotech communities. What do you view as some of the key areas of development among these companies today?

Brian Wilson: The biotech community has become much better at understanding and manipulating genes, so there is enormous developmental potential in the application of modern genetics technology toward many rare disease indications. Much of the attention in the industry is now being placed on diseases that are particularly difficult to treat using conventional therapies. These advances also help us develop biomarkers, which creates opportunity in the diagnostics space.

I also think we’ll see significant development in drug delivery technology, which increases the efficiency and safety of existing therapeutics. Also worth mentioning is the huge progress being made in immunotherapy—particularly in the oncology indications.

TLSR: How do you see these different spaces developing over the next 5–10 years?

BW: The U.S. Food and Drug Administration (FDA) seems to be increasingly lenient, so I think we’ll see the introduction of a large number of new therapies and refined diagnostic tests to the market. We should also see the introduction of enhanced versions of older drugs that will utilize advances in drug delivery technology. We should see a lot of progress in cancer treatment too, since so much effort is being placed there.

TLSR: Some of the companies you follow provide contract manufacturing services. Do you see this as a long-term solution to meeting the needs of small companies? Wouldn’t it be more efficient to bring that expertise back in house?

BW: It is simply not cost-effective for a small life science company to acquire and maintain a facility that adheres to the FDA’s current good manufacturing practices (cGMP) regulations. Highly sophisticated pharmaceutical products can also be prohibitively difficult and/or expensive to make. A contract manufacturing organization (CMO) offers far more flexibility at a lower overall cost to most pharma developers.

TLSR: BioZone Pharmaceuticals Inc. (BZNE:OTCBB) is a company that provides contract services. What is it about the company business model that attracts you?

BW: BioZone is nicely positioned as a CMO. It has its own drug delivery platform, which allows it to generate income from its contract manufacturing business while developing enhanced delivery formulations of over-the-counter and generic compounds. BioZone can also issue licensing agreements. This provides stability for the business, with enormous potential for growth in the future.

TLSR: You mentioned that BioZone provides formulation services. Can you talk about the acquisition of licenses for BioZone’s drug solubilizing technologies by OPKO Health Inc. (OPK:NYSE)?

BW: Certainly. In February 2012, OPKO and BioZone entered into a limited license agreement that gave OPKO exclusive rights to BioZone’s QuSome drug delivery technology in ophthalmological indications, as well as non-exclusive rights in other indications. This gives OPKO the right to utilize the technology, and may provide BioZone with extra income later on.

TLSR: What is unique about the BioZone technology?

BW: In many cases, drug delivery can be enhanced through the use of tiny, artificial, phospholipid “bubbles” known as liposomes, which essentially trap and carry drugs farther into a patient’s tissues. QuSomes are second-generation liposomes that utilize a different lipid in their construction. They are far more stable than other technologies, and therefore much more versatile as a vehicle for drug delivery.

TLSR: With the current focus on outsourcing in today’s pharma economy, it is understandable that pharma and biotech companies would want a more secure stake in contract organizations. Why is a company like MusclePharm Corp. (MSLP:OTCPK), which focuses primarily on nutritional supplements, interested in BioZone?

BW: MusclePharm has been looking to streamline manufacturing for its product line, which makes a quality CMO like BioZone a great fit. The QuSome technology may also be of interest to the company, since liposomes have been used to deliver nutrients as well as pharmaceuticals to the body.

TLSR: How do you see the nutraceutical sector holding up against more mainstream pharmaceuticals?

BW: MusclePharm has a prominent brand, and operates in a niche market that has been built largely on brand association. Still, competition from mainstream pharmaceutical companies exists. Competitive pricing in the nutritional supplement market can be a problem, and it’s the reason that MusclePharm should be interested in delving into the manufacturing side of its business.

TLSR: You currently follow MusclePharm. Why did this company catch your attention, as opposed to other nutritional supplement companies?

BW: MusclePharm has the branding, and is therefore trusted by customers that would be interested in high-end nutritional supplements. It has developed a very strong association with professional athletics, making the company comparable to major sports brands like Under Armour Inc. (UA:NYSE) or Adidas AG (ADDYY:OTCPK).

TLSR: What is your overall view about the future direction of biotech and pharma companies in light of current social and political pressures?

BW: I think the immediate pressure would be placed on cost cutting in healthcare services rather than healthcare products, which makes the pharmaceutical space attractive from an investment standpoint.

The aging U.S. population also creates a natural wave of demand for healthcare products, which bodes well for both developmental and commercial pharmaceutical companies regardless of the political climate.

Reimbursement for more expensive drugs has been holding strong despite all the pressure to reduce expenditure on healthcare, which is why product development for rare disease indications should continue to flourish. I also think that private research and development in the life sciences space will continue to expand dramatically in coming years as we continue to utilize recent advances in genetics technology in pharmaceutical development.

Although the macro environment presents certain challenges to the broader economy, the biotech and pharma industry tends to exist in its own little universe. Because of this, I expect overall growth to continue for quite some time.

TLSR: Thanks for your time, Brian.

BW: Thank you.

Brian Wilson has been covering biotech stocks for two years, and has been published extensively in the online investment community. He founded Bio-Wire.com in 2012 to provide a more streamlined content platform for biotech investors, and continues to provide high-level content. Prior to founding Bio-Wire, he worked in the life sciences industry and attended Vanderbilt University.

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By The Sizemore Letter

I love data.    When I first started writing, I had no idea who my readers were, where they lived, or what medium they chose to do their reading.  But these days, the information collected by Google—for free— is almost overwhelming.  I decided to take a look at the numbers Google crunches to get a better idea of who my readers are and how they digest their financial media.

70.2% of the visitors to the Sizemore Insights site live in the United States with another 6.5% coming from Canada.  Third on the list was the United Kingdom, at 2.4%, followed by India, Singapore, and Australia at 1.3%, 1.2% and 1.1%, respectively.   I even had a measureable number from Sweden, at 0.81%.

Interestingly, the mix of readers receiving Sizemore Insights via email is a little different.   59.9% were American, and 3.9% were Canadian.  The rest were not disclosed.

Internet Explorer was the most popular browser used to visit my site, at 34.3%, followed by Chrome at 25.2% and Safari at 16.1%.  Even BlackBerry’s browser was represented, at 0.27%.

The email clients used to open the e-letter version  tell a very different story.  57.2% of readers opened the letter on a desktop computer, while 42.8% used a mobile device.

These numbers are a bit skewed, however.  35.3% of the mobile users were iPhone users, and iPhone figures get inflated due to a particular quirk of Apple’s mail client.  Apple devices automatically download images, whereas most non-Apple email clients do not.  (To be fair, Apple devices are not being “over-counted,” per se.  It’s more a case of all non-Apple devices being undercounted.)

The real ratio of desktop-to-mobile users is probably closer to 70/30.  But a large and growing number of my readers are reaching me via their iOS or Android device.

Among desktop users, the largest number were Outlook users at 15.9%.  No real surprise there.  But I was surprised to see Hotmail coming in at number 2 with 13.7% of readers.  Google’s Gmail was less than half that amount at just 6.8%.

It’s exciting to watch this develop.  My bet is that, a year from now, all of these percentages will be very different (particularly the desktop / mobile breakdown).

And naturally, whatever statistics above classify you, thanks for reading.

This article first appeared on Sizemore Insights as Where My Readers Come From

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