Month: March 2014

Source: George S. Mack of The Life Sciences Report   (3/13/14)

http://www.thelifesciencesreport.com/pub/na/exuberant-yes-michael-king-on-how-the-oncology-drug-development-machine-builds-biotech-wealth

Veteran biotechnology analyst Michael King of JMP Securities has seen drug development evolve from hit-or-miss to the sophisticated, high-throughput discovery techniques in place today. He understands the sector, the entrepreneurs and the valuations as well as anyone on Wall Street. In this interview with The Life Sciences Report, King zeros in on the oncology space, his focus for nearly two decades. Never single-minded, King’s stable of thoroughbred names includes a bonus pick he likes very much in the field of fertility.

The Life Sciences Report: Mike, are you seeing a lot of new interest in biotech? Do you see generalists coming into biotech conferences to try to catch the wave?

Michael King: Yes, for sure. I would say generalists have been in the sector for the last 12–15 months, if for no other reason than job preservation, because there has been so much alpha generated in the space. Interest has ebbed and flowed, but it’s certainly at its highest level in more than a decade. If you’re a growth manager, then you have to pay attention to the biotech space.

TLSR: Traditionally, we think of the last guys in as foretellers of doom. Is this activity in biotech starting to feel a bit like a bubble to you?

MK: A little bit, but I think we should enjoy it for a while. It’s not out of control. The valuations on some companies are obviously quite high, but I wouldn’t say they’ve reached levels that are impossible to justify. When you see something like Facebook making a bid for WhatsApp for $19 billion ($19B)—that, to me, is when you get to a bubble phase. But I don’t see that happening in biotech. I think investors are much more rational in this space.

TLSR: You have written that in the second week of February, $1.1B was raised in equity and convertibles. That was just one week, right?

MK: Yes. One week.

TLSR: Does this look exuberant to you?

MK: Exuberant, yes. Irrational, no. The middle of the biotech market was hollowed out over the last decade by a lot of mergers and acquisitions (M&A), and at the same time companies were being formed. The mid-cap guys with products were getting gobbled up, and venture capitalists were creating companies for the purpose of being acquired. That was the vogue. You really weren’t getting a repopulation of the $250 million ($250M)–$2B sweet space, where molecules go into the clinic and a lot of value is created.

Today, a lot of the money is going into the sweet spot, because the mega caps are self-funding. Celgene Corp. (CELG:NASDAQ) doesn’t need to raise money, although it did. Gilead Sciences Inc. (GILD:NASDAQ) certainly doesn’t. Amgen Inc. (AMGN:NASDAQ) certainly doesn’t. The money today is going into names like—and I’ll just name some that we’ve been involved in—Karyopharm Therapeutics Inc. (KPTI:NASDAQ), Acceleron Pharma Inc. (XLRN:NASDAQ), Epizyme Inc. (EPZM:NASDAQ),Ultragenyx Pharmaceutical Inc. (RARE:NASDAQ) and Dicerna Pharmaceuticals (NASDAQ:DRNA). These are the kinds of names that filled out the biotech ecosystem after it was depleted by M&A and a lack of funding from the venture community. We are not seeing irrational exuberance—I think we have a ways to go.

TLSR: Is there a theme you’re thinking about and working on for investors for the rest of 2014?

MK: There are a couple. First, we’ll continue to focus on oncology. A recent survey by the Biotechnology Industry Organization (BIO), just before its BIO CEO Conference in New York in February, asked respondents for their favorite investment topics in the biotech space. By a wide margin, oncology came out on top. Companies are advancing clinical candidates to value inflection points, whether that’s a phase 2 or phase 3 study. Other companies have novel approaches. We’ve seen very good reception to companies in what I’d call the molecular oncology space. That is why an Epizyme or a Karyopharm, in my coverage universe, has been received so well; they have a differentiated approach to the treatment of cancer.

Another huge theme is cancer immunotherapy, but right now that is the province of large pharmas:Bristol-Myers Squibb Co. (BMY:NYSE), with its programmed death 1 (PD-1) blocking antibody nivolumab in non-small cell lung cancer (NSCLC); Merck & Co. Inc. (MRK:NYSE), with its anti-PD-1 drug MK-3475, also in NSCLC; Roche Holding AG (RHHBY:OTCQX), with its anti-programmed death ligand (PD-L1) antibody MPDL3280A. In mid-February Novartis AG (NVS:NYSE) acquired a private company, CoStim Pharmaceuticals, to gain access to an anti-PD-1 agent. AstraZeneca Plc (AZN:NYSE)is also in the game.

But a lot of people are looking at small-cap ways to play the craze for cancer immunotherapy. The problem is that there aren’t a lot of great ways to do that because of the big pharmas.

TLSR: You mentioned the BIO CEO Conference; I wanted to ask you about the panel you hosted and moderated there. Was there a lot of interest?

MK: My panel was very well attended. We addressed questions about T-cell immunotherapies at the end. Some attendees wanted to talk about TCARS—T-cell antigen receptors, where you transplant CD19 receptors into T cells and then infuse the T cells back to the patient. The outcomes have been quite remarkable—very high response rates, and some complete responses. Companies have been formed to exploit this technology. Novartis has invested a lot of money in technology being developed out of the University of Pennsylvania School of Medicine by a physician named Carl June. A company out of Seattle called Juno Therapeutics Inc. (private) raised $145M to access technology coming out of Fred Hutchinson Cancer Research Center and Memorial Sloan Kettering Cancer Center.

While TCARS are very interesting from a scientific and intellectual standpoint, you have to think about how you commercialize this technology when it’s patient-specific, is done at the site and is not something that you can put in a vial or make a pill out of. While I think TCARS will be important, my guess is that it’s going to be for patients whose cancers have gone past all conventional therapies.

TLSR: It would have to be very high in efficacy to justify that kind of expense per patient, wouldn’t it?

MK: It’s not just the expense. Think about it: If you can sit home and take your Imbruvica (ibrutinib;Pharmacyclics Inc. [PCYC:NASDAQ]) for five years and feel good, control your chronic lymphocytic leukemia (CLL), not go to the hospital and not have to undergo a procedure that’s going to make you feel like death for a few days, you probably want to do that. But when the disease starts to gain an advantage over your immune system and you don’t have a lot of bullets left in the medicine cabinet, then you want to go down to Penn or over to Memorial Sloan Kettering and have your T-cells armed.

TLSR: Are you following any companies currently involved in the TCAR technology platform area?

MK: There’s really nobody out there per se. It’s either Novartis or the private companies. I do monitor the technology because from time to time it comes up as a potential competitor to Imbruvica, to Gilead’s idelalisib or to Infinity Pharmaceuticals Inc. (INFI:NASDAQ) IPI-145.

TLSR: Let’s talk about some companies. You’re following a very interesting non-oncology company,OvaScience (OVAS:NASDAQ). It’s in the fertility market. Could you address it?

MK: Yes. We wrote on OvaScience on Feb. 24, and reiterated our Market Outperform rating. I think this is going to be a good year for the company. When it went public in 2013, it had two technologies—Augment (autologous germline mitochondrial energy transfer), which is the company’s lead program, and OvaTure. It now has two more programs: OvaXon, a joint venture with synthetic biology companyIntrexon Corp. (XON:NYSE), and OvaPrime, its newest proposed fertility therapy, through which a clinician will be able to isolate a patient’s EggPCs (egg precursor cells) and then deliver them back into her ovaries before a normal in vitro fertilization (IVF) procedure.

Management has done a great job building up the core product offerings of the company, and has added some very important people to its advisory board and board of directors. It has added David Stern as executive vice president of global commercial operations; he joined the company in February. He has tremendous bona fides for taking OvaScience’s product offerings ex-U.S., where the market opportunity is larger. I was astonished to see that Japan has almost twice as many IVF procedures as the U.S. does—and it only has about one-third to one-half the U.S. population. The use of IVF procedures is much larger in Japan per capita. The opportunity in the European Union (EU) is quite large as well. The opportunity to commercialize ex-U.S. is enormous.

TLSR: The U.S. market is nothing to sneeze at, but there are some regulatory questions with its lead program, Augment, aren’t there?

MK: In the U.S., Augment is stuck in a bit of regulatory limbo, but I think that will resolve itself fairly soon. Though Augment will launch in four global regions before the end of this year, some investors have worried that the U.S. Food and Drug Administration (FDA) will not approve Augment in the U.S. There was a FDA panel meeting on Feb. 25; the panel was more about mixing DNA from different donors in a single egg cell, which I don’t think would ever fly in the U.S. And that is not what Augment is all about.

Once that confusion lifts, I think the stock will take off nicely. The market cap is about $175M. The company is very well funded, with almost $45M in cash.

TLSR: Mike, you’ve talked about the opportunity in Japan and the EU, but when Augment is ready in the U.S., do you see it as a large market? The overhang is that this is a cash business, and group insurance policies may not cover this.

MK: Augment has an enormous market opportunity ahead of it because of the demographics. Many women have decided to delay pregnancies, but still want children. Women just don’t have kids at 19 and 21 years old anymore—they’re having children when they are 30, 35. I have seen the clinics here in New York, and I can tell you they are absolutely mobbed—weekdays and weekends. There is tremendous demand.

A statistic from one of the professional societies states that in 2012, the percentage of IVF procedures as a percent of all live births in the U.S. hit a record high. I don’t think there’s any slowing down from here. I think OvaScience is a great way to play this burgeoning demographic trend.

TLSR: What would be the next catalysts for OvaScience?

MK: It would be the commercial launch of Augment ex-U.S. David Stern is ready to go, so we’ll see how that proceeds. If we get some regulatory clarity in the U.S., that would be a positive catalyst too.

TLSR: Which company did you want to discuss next?

MK: Synta Pharmaceuticals Corp. (SNTA:NASDAQ) is one of the names we like for 2014. The company has a market cap of about $369M. Synta has a heat shock 90 protein (Hsp90) inhibitor called ganetespib that could be useful for a variety of oncology applications.

The company has created a lot of controversy around itself, which I wouldn’t say is undeserved. One school of thought holds that ganetespib is basically a dressed-up placebo, but I would submit it is far from that: I think ganetespib will have a positive result in the ongoing GALAXY-2 trial (NCT01798485). GALAXY-1 (NCT01348126) was a phase 2 study meant to select a patient population in which to perform the phase 3. This has caused confusion because a lot of investors have tried to apply phase 3 thinking to the phase 2 trial.

A phase 2 trial is a signal- and dose-seeking trial. The point is to figure out the appropriate patient population, the one in which a drug will create the greatest benefit, and then take that knowledge to a larger study in phase 3. I would say, in Synta’s case, the company probably thought it had an agent that would produce greater effects in the lung cancer patient population that was being studied, but it has turned out to be a fair bit less effective. That doesn’t mean the drug is ineffective at all. The statistics that ganetespib has shown so far strongly suggest the drug has a benefit in overall survival and progression-free survival.

In the phase 3 GALAXY-2 study, Synta is intelligently looking at overall survival as its key outcome metric, its primary endpoint. When the GALAXY-2 results are out, which will be late 2014 at best, or more likely early 2015, I think this stock will float up to a valuation that’s more reflective of a peer group valuation, which is several hundred-million dollars higher than where the stock is today. What’s important for investors to understand is that a subset of a subset of a subset in lung cancer is still a very large market opportunity. Adenocarcinoma of the lung in patients who have had an inadequate response in first-line therapy is still a very attractive commercial market.

In addition, at least two other studies are being conducted with ganetespib at no cost to Synta and its shareholders, other than drug supply. These are studies in triple-negative breast cancer and acute myeloid leukemia, which are being funded by governmental sources.

I see multiple opportunities to drive value from the clinical data with ganetespib, and there is some evidence that the tumor-targeting approach Synta is taking with synthetic Hsp90 inhibitors could work. At some point—and, hopefully, that is in 2014—Synta will find itself a corporate partner for its tumor-targeting technology and, thus, build credibility to its story. I’m not building a partnering agreement into my expectations because I think that is a fool’s errand, but this tumor-targeting approach has garnered a lot of interest of late.

TLSR: Mike, the GALAXY-2 phase 3 study is in 500 patients, twice the enrollment of GALAXY-1, and randomized. Is this powered well enough?

MK: The company recently said it’s going to increase the size, so it will more likely enroll 700 patients. If trial size had remained 500 patients, the data would almost assuredly have been out in 2014. Adding that extra 200 patients pushes read-out to later in 2014 and, potentially, even into 2015.

TLSR: The GALAXY-2 trial is open-label, not blind. Does that mean that a pivotal trial must be run after GALAXY-2?

MK: No. Many cancer trials are open-label because their trial designs prohibit blinding of studies. Being an open-label study shouldn’t matter because overall survival is the primary endpoint.

TLSR: You’re saying, then, that a placebo effect won’t lengthen life?

MK: That’s right. Overall survival is an endpoint that you can’t fake.

TLSR: Another name?

MK: We’ve been a bit cool on Infinity Pharmaceuticals. We rate it Market Perform. We’re cool on the company for two reasons. One is because we’re concerned that Infinity is getting sandwiched between two 800-pound gorillas—Pharmacyclics on the one side and Gilead on the other. Pharmacyclics now has approval for Imbruvica in CLL, although it is trying to expand the CLL patient population that’s eligible for therapy with the drug. The point is, Imbruvica is on the market.

The other potential competitor is idelalisib, the Gilead drug, which has a September Prescription Drug User Fee Act IV (PDUFA) date. Infinity’s IPI-145 is in the same category as idelalisib: It inhibits phosphoinositide-3-kinase (PI3K)-delta, and the data suggest that IPI-145 might be a more potent drug than idelalisib. But IPI-145’s development becomes problematic when there are two drugs already approved and on the market. If I’m a CLL patient, why would I want to go on an experimental drug if I know I can get an approved drug that will be reimbursed?

Another point is that Infinity is burning a lot of money. It has guided to spending $170–180M this year, versus a cash balance at the end of 2013 that was in the $214M range. Infinity is going to have to raise money at some point this year, or find a partner. Partnering would be a preferable route in one respect, because the company wouldn’t have to dilute the shareholder with more shares. However, Infinity would be diluting its interest in IPI-145. Partnering would also be a credibility-building step for Infinity; I think its star is a little tarnished because of the halting way in which the company has brought IPI-145 forward so far.

TLSR: You mentioned that IPI-145 may be more efficacious than idelalisib. What is the evidence for that?

MK: The evidence is a very high complete response rate in indolent non-Hodgkin’s lymphoma patients. The numbers are small, but those data were reported in December 2013 at the American Society of Hematology (ASH) meeting. We have to wait and see if that exciting efficacy holds up. You can also look at some of the preclinical data. We know that IPI-145 binds its target more avidly than idelalisib does. That’s not the be-all and end-all, but when you connect the dots, there is at least some suggestion that IPI-145 could be a best-in-class PI3K-delta inhibitor.

TLSR: There is also a PI3K inhibitor being developed by TG Therapeutics Inc. (TGTX:NASDAQ). Do you know that product?

MK: It’s TGR-1202, also in hematologic cancers. It’s early stage. One advantage that TG has over Infinity is the benefit of a monoclonal antibody that it can study in combination. That’s TG’s competitive edge.

TLSR: You have a diagnostic platform company that you’re following with huge oncology exposure—Navidea Biopharmaceuticals Inc. (NAVB:NYSE). Could you address that?

MK: Navidea is struggling for respect. It has a great product that is living up to its hype. Many drugs and products on the market today have claimed to do one thing and not fulfilled expectations. In contrast, Navidea’s diagnostic agent Lymphoseek (technetium Tc 99m tilmanocept) does everything it’s supposed to do. However, there has been a history of awkward financings at the company, which has served as an overhang on the stock. That’s unfortunate because, again, I think this company has very sound products.

Lymphoseek is approved as an intraoperative diagnostic to detect cancerous lymph vessels and nodes draining primary tumors in breast cancer and melanoma. It guides the surgeon in dissecting and excising cancerous tissue and sparing healthy tissues. The company also has a pipeline of imaging agents, including NAV4694 (fluorine-18 labeled radioisotope) for imaging Alzheimer’s disease and the Huntington’s disease, which it picked up for next to nothing. This agent could add a lot of value to the stock. Investors just have this concern about whether Navidea is adequately financed or not. It is doing a very good job with the launch of Lymphoseek, but it will take time to get uptake.

TLSR: Are there competing agents to Lymphoseek? What are they? How do they compare?

MK: I think it’s game over as far as the competition is concerned. There are two competitors to Lymphoseek, both of which are more difficult to use. Just based on that, Lymphoseek should be a very easy sell.

Lymphoseek also fits routinely into the surgery center’s standard practice, so clinicians don’t have to alter their practices. Often, when new technologies come along, the physician community has to adapt its practice, rather than the new product fitting into the practice. Lymphoseek fits the practice. I think Navidea has done a great job with that.

I do think Lymphoseek will ultimately be successful. Navidea has partnered with Cardinal Health Inc. (CAH:NYSE), which is the largest distributor of imaging agents in the country. I think Navidea has all the elements in place. We just have to get some momentum behind the sales.

TLSR: Do you feel like Cardinal is doing a good job of showing this product to surgeons?

MK: Yes, it would appear that way. I wouldn’t say I have the world’s best visibility into the sales right now, but Cardinal has every incentive to do so. The sales people are properly incentivized to get the product out there. The Cardinal sales team has an established relationship with its customers.

TLSR: Lymphoseek was approved nearly a year ago. Navidea’s shares are down 40% since that time. It seems counterintuitive, especially when you look at the survival of patients and the tissue-sparing surgeons can do with a product like this. Is Navidea now a market-penetration and revenue story?

MK: Yes. To your comment about the stock performance being counterintuitive. . .it is somewhat counterintuitive, but at the same time, the short-to-launch approach is fairly common in the biotech space. Since Lymphoseek was never going have huge hockey-stick performance right out of the box, it was pretty easy for that short-to-launch crowd to win on that argument.

That doesn’t mean Lymphoseek won’t ultimately be successful, because I think the value of sentinel node scanning is clear. I don’t know if you saw the New England Journal of Medicine article published on Feb. 13, 2014, entitled “Final Trial Report of Sentinel-Node Biopsy versus Nodal Observation in Melanoma,” which showed that melanoma patients who undergo sentinel lymph node biopsy live longer than those who do not.

I don’t know what else you need to improve adoption of this technology. Of the different options that are there, Lymphoseek has the best sensitivity and specificity, its ease of use is superior and the price is right. Adoption will come. It will take time because old practices die hard.

TLSR: I’m wondering if you could think of this stock as a value play currently, since Navidea does have an actual marketed product?

MK: I guess you could say that. I haven’t looked at it that way. I’m familiar with value plays in biotech, although given the market that we’ve had lately, they are fewer and far between.

TLSR: There is also a PDUFA date in mid-June for Lymphoseek as an intraoperative diagnostic agent in squamous cell carcinoma of the head and neck. Could this be a catalyst? Will there be a huge uptake for surgeons in that setting?

MK: It’s clearly important. I think the likelihood of approval is very high, but I think melanoma is where you’re going to get the most significant economics.

But these head-and-neck procedures are just barbaric. If you can spare someone having their neck laid open along the carotid artery from the ear to the collarbone—I mean, no brainer. Absolutely, you’d use Lymphoseek to avoid that.

TLSR: Mike, thank you. It’s been a pleasure.

MK: Yes; good to talk to you.

Michael G. King Jr. is a managing director and senior biotechnology analyst at JMP Securities. King comes to JMP from Rodman & Renshaw LLC, where he was managing director and senior biotechnology analyst. He has more than 17 years of experience as a leading biotechnology equity research analyst, consistently ranking at the top of Institutional Investor magazine’s annual sellside research survey, in addition to being named that publication’s “Home Run Hitter” in 2000. King also served as senior vice president of corporate development and communication at ZIOPHARM Oncology (ZIOP:NASDAQ). Prior to joining ZIOPHARM, King was a managing director and senior biotechnology analyst at Wedbush Securities. He holds a bachelor’s degree in finance from Baruch College.

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DISCLOSURE:
1) George S. Mack conducted this interview for The Life Sciences Report and provides services to The Life Sciences Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Life Sciences Report: None. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Mike King: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: Acceleron Pharma Inc., Epizyme Inc., Karyopharm Therapeutics Inc., Navidea Biopharmaceuticals Inc., OvaScience, Synta Pharmaceuticals Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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By CentralBankNews.info
    Chile’s central bank cut its policy rate by another 25 basis points to 4.0 percent, as expected, and said it “will consider the possibility of making additional cuts to the policy rate,” signaling that it may be getting closer to ending its easing cycle.
    The Central Bank of Chile, which has cut its rate by 100 basis points since embarking on an easing cycle in October last year, said that it would consider additional cuts in line with the evolution of domestic and external economic conditions and how they impact the outlook for inflation.
    “The Chilean economy has continued to lose strength,” the bank said, adding that domestic output and demand had grown less than forecast, particularly in investment-related sectors.
    Chile’s Gross Domestic Product expanded by 1.3 percent in the third quarter of 2013 for annual growth of 4.7 percent, up from 4.0 percent in the second quarter.
    But in January the unemployment rate jumped to 6.12 percent from 5.67 percent in December.
    At the same time, inflation continued to accelerate in February, hitting 3.2 percent and continuing the rise since a 2013-low of 0.9 percent in May.

    The rise in inflation reflected higher cost of food and fuel along with the depreciation of the peso.
     Chile’s peso started depreciating in May last year, along with many other emerging market currencies, and has continued falling this year. In 2013 it lost 8.8 percent against the U.S. dollar and this year it has lost another 8 percent, trading at 570.9 to the dollar earlier today.
    The central bank said recent developments in China had a negative impact on the prices of copper and metals – Chile is the world’s largest copper exporter – and agricultural prices had picked up recently while fuels were close to where they were a month ago.

    http://ift.tt/1iP0FNb

By MoneyMorning.com.au

Repeal day is a-coming!

The Australian government has set aside the 19th March to remove outdated, burdensome legislation and government regulations.

Sounds good, right?

Well unfortunately this looks like a bit of a stunt, which isn’t surprising given the inspiration for this special day of legislative action came straight from US congress.

There are undoubtedly a lot of old laws on the books.

The minister in charge of this drive, Josh Frydenberg, lists a few in his press release. They include:

• an act from 1904 governing State Naval Divisions, when the Royal Australian Navy was formed in 1913;
• a War Service Homes regulation, which changed the rate of interest charged to any purchaser or borrower from four pounds to three pounds fifteen shillings, when Australia switched to decimal currency in 1966;
• four acts from the 1950s that allowed for the construction of the Snowy Mountains Hydro Scheme, which was completed in 1974; and
• the Weights and Measures Acts 1964 which set standards for calibrating imperial measuring equipment, including for pints and gallons, when Australia transitioned to the metric system in 1970s.

There’s no argument that these laws are not now useless, but what isn’t clear is how this is supposed to free up businesses from regulation.

It’s not as if it will free a whole bunch of managers from calibrating their measurement of pints after repeal day rolls on.

Australian retail needs less regulation

If the Government wants to cut regulations to save $1 billion dollars a year (a figure pulled from the same press release), they could look elsewhere.

Taxi operators and pharmacies are restricted by competition laws which determine how they operate and where they can open stores.

Even universities suffer from excess regulation, creating armies of auditors and bureaucrats.

But one of the industries most stifled by regulation is Australian retail.

In an absurd hangover from another time, state Governments wag their finger at Australian retailers telling them when they can and can’t open. Woolworths laid it out in a submission to the WA government:

‘A Woolworths petrol station can sell film and flash bulbs on Sundays before 11am, but it’s illegal to sell a memory card for a digital camera at this time; can sell cigarettes before 8am on Mondays, but it’s illegal to sell nicotine patches at this time; can sell pantyhose after 9pm on Thursdays, but it’s illegal to sell underpants at this time; can sell needles before 8am on Tuesdays, but it is illegal to sell wool at this time.’

Retail is one of the biggest employers in Australia. If the government is looking to stimulate the Australian economy by cutting regulation with repeal day, then the Australian retail sector is the place to look.

Callum Denness
Contributing Editor, Money Morning
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By MoneyMorning.com.au

Over the past few years automated trading has become more and more popular. Traders have embraced the fact that automated trading can alleviate the problem of emotion. One problem that is usually faced to traders that has become difficult to overcome is that their system may be right but emotion takes over during the trade.  By creating an automated trading system the trader is instilling the confidence in the system itself.

We have seen an explosion in the use and popularity of automated trading especially in the Forex market especially after MetaQuotes introduced their MetaTrader 4 trading platform, which featured the ability to create and use expert advisors. This revolutionary software really changed the Forex industry forever. Even a novice or average Forex Trader could create build and implement their own trading system, something which was thought to be unheard of before. Now there are expert advisors and trading systems all over the Internet available to download and to try out.

Binary options trading, in many ways, is similar to Forex trading in terms of its need for automation. For many traders, they are looking for either an event or some indication of when to place a binary options trade. Until recently, most binary options brokers work for providing a very simple web interfaced with very little in terms of automation or analytics for that matter. Now through a select few binary option brokers one can trade binary options on MT4. As it did with Forex, this will revolutionize binary options trading.

To learn more about automated binary options trading please visit www.clmforex.com

Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.

By MoneyMorning.com.au

Queensland’s drought is now the biggest on record, with 80% of the state declared drought-affected.

While this undoubtedly means many farms are doing it tough, there is a silver lining for them: drought-affected Australian farms have access to taxpayer funded assistance.

And this assistance recently got a lot more generous, with Prime Minister Tony Abbott committing to an extra $320 million dollars of drought assistance.

The decision was a political winner, with Labor joining the agrarian socialists of the National Party in supporting the move.

That doesn’t say anything of public support for Australian farmers. Though most Australians live in capital cities, the image of farmers taming a wide brown land still seduces us.

Yep, it’s popular all right- but still bad policy.

Tony Abbott made the best case against farm assistance when he attempted to dispute the link between climate change and droughts—Australia, he said, has always faced periods of intermittent drought.

You may disagree with interpretation of the science, but he’s right about the frequency of droughts which makes it hard to understand why farmers seem so surprised when the rain stops.

The Queensland drought will end

The Australian farming business enjoys good returns in times of rain, and endures low or no returns in drought. A case in point: while Queensland farmers were begging for assistance, new figures showed WA and SA farmers recorded their highest incomes in 37 years.

WA broad acre farmers generated an average $317,000 income, which is farm revenue minus costs, in fiscal 2014. SA broad acre farmers will pocket an average $231,000.

It wasn’t that long ago that these Aussie farmers were enduring droughts too which highlights the nature of agricultural businesses. The best run farms are able to navigate these bad times by planning for them.

Such assistance only encourages poor farming practices, and does nothing to address agriculture’s real challenge: a lack of investment.

Why farmers need foreign investment

In fact, the same people furiously lobbying for special assistance for Australian farmers are the ones who rail against foreign investment.

The problem with Australian farms is that they’re mostly small to medium enterprises unable to target a growing market: Asia.

Our neighbours in the region are getting richer, and changing their tastes.

They’re transitioning to a more western diet consisting of more meat and dairy. Australia should be well positioned to take advantage of our high quality products and close proximity to Asia.

Instead, our small farms can’t raise capital to ramp up production, or move into value-added products such as dairy.

While Australian farmers and rural politicians lobby for handouts protecting poorly run businesses, they rail against foreign investment with jingoisms. It’s crazy.

For perspective, we could look to New Zealand.

They’ve successfully ridden the wave of soaring Asian demand. Chinese imports of milk products have grown by an average of 32% over the past five years, and some 60% of China’s dairy imports come from New Zealand. Dairy accounts for a staggering 25 % of New Zealand’s economy.

Australia’s economy should be competing with New Zealand selling dairy and beef to Asia.

But as a protected industry, bloated with government handouts and ideologically opposed to much needed foreign investment, it isn’t.

The Queensland drought will end, but this policy nonsense looks set to continue.

Callum Denness
Contributing Editor, Money Morning
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By MoneyMorning.com.au

Is this China’s Lehman Brother’s moment? When the government refuses to step in, instead allowing defaults to occur, when intervention could have prevented a bigger crisis? That may very well be developing. One needs to look no further than Copper to see this crisis starting to unfold.

First, some background on Copper: it is a highly malleable metal with many industrial roles, including serving as a conductor for heat and electricity as well as a building material. But Copper has another role, specifically in China, which is why it appears that a financial crisis is brewing. It’s been estimated that roughly 60-80% of Copper imports over the past few years have been used as collateral for borrowing (Reuters).

Where to now in Copper? If Chinese firms have been using the malleable metal as collateral the past few years, there is reason to believe that Copper isn’t the global bellwether that we thought it was. But that doesn’t necessarily mean that traders will discount Chinese data’s influence on Copper either.

Written by Daniel Elo, www.economiccalendar.com

CRUDE OIL: Weak And Vulnerable

CRUDE OIL: With Although a sign of price exhaustion is now seen, Crude Oil continues to maintain its broader downside pressure. Support comes in at the 97.12 level where a violation clear the way for a run at the 96.26 level. Further down, support is located at the 95.00 level. Its daily RSI is bearish and pointing lower supporting this view. Conversely, on recovery higher, resistance resides at the 99.59 level where a break if seen will aim at the 101.51 level. Above here will pave the way for a run at the 102.89 level. A violation of here will set the stage a for a run at 103.99 level. All in all, Crude Oil remains biased to the downside on further weakness.

Article by www.fxtechstrategy.com

German CPI data could provide traders with a bit of insight into the Eurozone economy and even hint at the upcoming ECB rate decision. German CPI (YoY), German CPI (MoM) and German CPI – EU harmonized (YoY) set for release on Friday, March 14. An all-bullish release will likely break through EUR/USD 4-year highs above 1.3900. An all-bearish release will reinforce resistance, and suggest EUR/USD downside towards 1.3822.

Written by Daniel Elo, Analyst at www.EconomicCalendar.com

By Dennis Miller

My biological clock is ticking—as is yours and everyone else’s. With each passing day, you are either moving closer to or further past the day you quit working full time. Baby boomers are retiring at a rate of 10,000 per day and will continue to do so for the next 17 years. Whether you count yourself among that group or not, understanding where economic data—such as unemployment rates and inflation—come from will make you a better investor and savvier retiree.

The Federal Reserve has some laudable goals. Its current mission includes inflation control and employment promotion, and it uses data from the Bureau of Labor Statistics (BLS) and the Departments of Labor and Commerce to formulate policy. Investors look at those same numbers, try to anticipate what the Federal Reserve might do, and invest accordingly.

On unemployment, the Fed notes:

“(I)n the most recent projections, FOMC participants’ estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 5.8 percent. Though a variety of factors influence the level of unemployment in the economy, the Federal Reserve makes monetary policy decisions that aim to foster the lowest level of unemployment that is consistent with stable prices.”

And on inflation:

“The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. … The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”

And here is how the Fed evaluates inflation when making policy decisions:

“(P)olicymakers examine a variety of ‘core’ inflation measures to help identify inflation trends. The most common type of core inflation measures excludes items that tend to go up and down in price dramatically or often, like food and energy items. … Although food and energy make up an important part of the budget for most households—and policymakers ultimately seek to stabilize overall consumer prices—core inflation measures that leave out items with volatile prices can be useful in assessing inflation trends.”

Hmm. There are many fallacies in that approach. Sometimes the premise or data is incorrect. Many times the Fed has made predictions that were totally incorrect and then had to jump in to try to clean up the mess when unforeseen bubbles have burst.

Debunking the statistics. The graph below shows the official BLS unemployment statistics. In December 2004 the unemployment rate was 5.4%. Since then it has gone from a low of 4.4% to a high of 10% in October 2009. The current reported rate is 6.7%.

The Federal Reserve committed to holding interest rates down until the official unemployment rate hit 6.5%. Mike Meyer, vice president at EverBank, weighed in via the Daily Pfennig:

“Based on this official number, the job market is getting a lot better. There’s only one big problem: the official number doesn’t really reflect the health of the labor market.

That probably explains why the Fed has moved away from the 6.5% target. Last November, former Fed chief Ben Bernanke said that short-term interest rates might stay near zero ‘well after’ the jobless rate falls below 6.5%. … It seems even the Fed has realized the official unemployment rate is flawed.”

Meyer also notes that many believe the reason unemployment numbers are dropping is because baby boomers are now rapidly retiring; however, the number of workers over age 55 has actually increased over the last five years.

The key to understanding unemployment rates is the Labor Force Participation Rate—meaning the percentage of the population that’s employed. When the BLS calculates the unemployment rate, it doesn’t consider a person whose unemployment benefits have run out and is no longer looking for a job to be unemployed. I guess that means if everyone quit looking for a job, the unemployment rate would be zero?

Meyers went on to write:

“The drop in the number of people who are looking for a job has helped bring the unemployment rate down. In fact, some economists estimate that if the LFPR was at the same level where it was before the recession (66.4% in January 2007), the unemployment rate would be 11.75%.”

Other think tanks like Shadow Government Statistics publish their own unemployment statistics:

“The decline in the headline U.3 unemployment rate, from 7.0% to 6.7%, was not good news. The large drop in the number of unemployed mostly reflected people becoming ‘discouraged’ and being statistically removed from the headline labor force, instead of finding jobs and returning to work. The increasing flow of discouraged workers through the broader U.6 measure, into the ShadowStats-Alternate Unemployment measure, boosted the ShadowStats unemployment rate to 23.3% from a revised 23.1%.”

We know the Federal Reserve was committed to holding interest rates low until the official unemployment rate dropped to 6.5%. That would tend to indicate people were back at work, the economy was improving, and the market could absorb higher interest rates without putting us back into a recession. Now the Fed has backed off on that commitment and is signaling it will hold interest rates down well after unemployment falls below 6.5%.

What difference does it make? For those who are investing their life savings—which they can ill afford to lose—it makes a lot of difference. There’s no point in arguing about whether unemployment is 6.7% or 23.3% or anywhere in between. What matters is how those numbers affect our investments decisions—and the decisions of others.

If the economy is doing well, that means companies are hiring and profits are increasing. It’s a good time to be heavily invested in the stock market. If the economy is not thriving and people are not working, then businesses will suffer, and many will fold. Retirees can ill afford to put a major portion of their nest eggs into the market based on a false premise. The risk is much too great.

How many of our favorite restaurants have shut down since the 2008 crash? In a down economy, business suffers and so do investors—eventually. The Federal Reserve, with its various stimulus programs, is just kicking the can down the road.

If data from the government or the private sector are unreliable—or suspected of being so—we’re investing in the unknown. Investors will move cautiously and spend less freely because they’re worried about an uncertain future.

What about inflation? The Federal Reserve has deemed a 2% inflation rate good for the economy. Inflation is a hidden tax that hurts seniors and savers immensely. If you invest in a Treasury bond paying 2% and inflation is 3%, when your bond matures you have more money in the bank but less buying power. Keep it up and you can kiss your lifestyle goodbye a lot quicker than most folks realize. Go to any potluck dinner in a 55-plus community and you will hear folks complaining about how expensive things are getting.

The Consumer Price Index is used to calculate inflation. Many people think the CPI is based on a constant basket of commonly purchased goods, with the current prices adjusted from year to year. That is inaccurate; the BLS has changed its formula many times.

Why does that matter? For one, the CPI is the basis for Social Security increases every year. Many Social Security recipients have noticed their Medicare premiums increase faster than their Social Security checks. The government has a great financial incentive to keep the official CPI number as low as possible: the lower the number, the less it has to pay.

The Federal Reserve uses many measures to calculate the impact of inflation; they just happen to exclude food and fuel, for example. That makes it hard for investors who happen to eat and drive to grasp the relevance of the numbers.

This is damn important for investors! Why? Interest rates rise during times of high inflation, which dramatically impacts the yield on government-backed securities and top-quality bonds. It’s because of inflation—and inflation fears—that savvy investors have backed off from safe, fixed-income investments. Right now, they’re a surefire way to make sure your money does not last forever.

The Fed’s zero-interest-rate policy (ZIRP) means that if you invest in US Treasuries, you will likely lose ground to inflation. That’s good for the government and bad for investors.

The BLS website has a handy inflation calculator. Most people are told to plan for 30 years of retirement. If you retire at age 65, make sure you have enough to make it to 95—and probably much longer.

According to the BLS calculator, something that cost $10,000 in 1983 will now cost $23,389.26. That presents quite an investment challenge—considering the Federal Reserve has been printing a trillion dollars a year for the last several years. Who knows what the inflation calculator will look like 30 years from now?

The market is currently trading in anticipation of what the Federal Reserve is doing (called “sentiment”) as opposed to the true growth of the economy and success of the individual businesses (called “fundamentals”). That, coupled with a great level of distrust in our government, our currency, and the role of the Federal Reserve, affects each and every investment we make.

In the meantime, the biological clocks of baby boomers continue to tick. The headline numbers for unemployment and inflation are for the benefit of the politicians, not investors. That’s why we’re dedicated to showing investors how to safely invest in today’s market. We have no choice but to put our money into investments that are riskier than the previous generation did. Still, there are safety belts available to minimize risk.

An educated investor who reads more than the headlines, understands what is really going on, and does not invest emotionally can still enjoy retirement.

Our Bulletproof Income strategy is designed to give conservative investors the best possible returns with minimal risk. Our Bulletproof Income portfolio is designed to provide safe income—well ahead of inflation—with good diversification and safety belts to protect you and your money. If you haven’t done so, I would urge you to sign up for a no-risk subscription ($99/year). Sign up and receive a copy of my book, Retirement Reboot, all of our special reports, and our monthly issues. If you decide we’re not for you, cancel within the first 90 days and receive a full refund, no questions asked. Feel free to keep the material you’ve downloaded as our thank you for taking the time to look us over. Click here to learn more and get started today.

The interest rates in the safe havens have fallen recently. Yields have been affected by the situation in Ukraine, the severe winter weather in the U.S. and turbulence in emerging markets. Jyske Bank believes increases in interest rates will shape the next 12 months.

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