Leapfrogging the Bureaucrats

Addison Wiggin – May 27, 2011

  • While Big Pharma and Big Government creak along, spunky competitor comes out of nowhere to "stall the aging process"…
  • Patrick Cox on the difficulty of confronting the "importance and magnitude" of his latest pick…
  • Greece threatens default, trading halted at major European bank… and the dollar falls; go figure…
  • Fund aims to profit directly from government folly… so it should be up, like, a million percent, right? Buy gold.
  • College education rip-offs, the Wigan pheasant and your last shot at discounted Breakthrough Technology Alert membership

   The wheels of Big Government and Big Pharma move slowly. Glacially, in fact. Look at these frosty nuggets from this week alone…

  • Johnson & Johnson says it will seek FDA approval for an Alzheimer's drug… in 2012. Or maybe 2013. The first results from four clinical trials won't be in till the middle of next year
  • The FDA gave Pfizer its blessing to market the drug Sutent — already used to treat tumors — for a rare form of pancreatic cancer. This highlights the fact that even though a drug might be approved for one use, other uses remain off-limits unless the bureaucrats are satisfied it's "safe and effective"
  • Abbott Labs and Boston Scientific won FDA approval for a new kind of stent to prop open clogged arteries. It's a smaller version of another stent that got the FDA's green light in July 2008… after it had been on the European market for nearly two years.

Bringing a new drug or device to market is expensive and time-consuming, we observe as pedantically as possible.

Meanwhile, if you've been following the narrative, a 'neutraceutical' Patrick Cox has been ogling — produced from a substance found in tomatoes and red peppers — looks like it can tackle almost all the diseases of aging.

Cancer? Check. Heart disease? Check. Alzheimer's? Check.

And because it's a natural agent and not classified as a drug… it remains outside the purview of the FDA.

   "It was difficult for me to accept the importance and magnitude of this discovery," says Patrick Cox of the recent laboratory breakthrough. "If you do not follow medical research obsessively, as I do, this story will sound more like science fiction than science."

   "In the last decade or so," Patrick writes, "it has become increasingly clear that inflammation plays a major complicating role in almost all diseases."

When tissues become inflamed damaged cells are destroyed, impaired cells are healed, new cells are grown. This is a good thing — but only at a certain age. "When we are young," says Patrick, "the primary role of this important biological response is to heal injury or infection.

"For Greeks during the Classical period of the 5th and 4th centuries B.C., the average person lived only about 28 years. It was nearly the same for ancient Romans. Life spans rose to about 30 years in medieval Britain and reached, in the developed world, about 45 in the early 20th century.

"Today, however, life expectancies are pushing 80 years in North America. We still have an inflammatory reflex that was tuned in ancient Greece and medieval Europe.

"It appears, in fact, that our immune systems react to the normal effects of aging as if they were injuries. This initiates inflammation, an immune response."

Tamp down that inflammation response and you have a solution for nearly all the diseases of aging. "The market for such a compound would be so big it is nearly incomprehensible." It would dwarf the $5 billion that Pfizer made last year from Lipitor — which tackles the inflammation that comes with high cholesterol.

"Not infrequently," says Patrick, "this hypothetical drug has been referred to as the 'holy grail' of drug discovery."

   It appears researchers in Florida have found this holy grail. "It took me weeks to overcome my initial skepticism regarding this technology," says Patrick. "I've spoken at length to extremely important respected scientists and have hours of taped interviews. I've read tens of thousands of words on the science behind this breakthrough. I've visited one of the world's top biotech research laboratories and have met researchers whom I've known about for over a decade, but never expected to meet."

It could work for Alzheimer's disease "It also could be adapted someday to treat cancers, macular degeneration, stroke, obesity, erectile dysfunction, allergies, Crohn's disease, rheumatoid arthritis, plus diseases of the organs such as the thyroid and the liver.

"I believe this will not only make you healthier and wealthier, it will have an impact on the U.S. and world economies."

The time to move on opportunities like this is now — before they start making headlines. Which could be any day now.

When that happens, expect things to move very quickly. In late 1996, when people were first figuring out how to connect a 14.4kb modem to use AOL, early investors in Yahoo could pick up shares for a split-adjusted 71 cents. Three years later, they were worth $108. That's a 15,111% increase.

[Ed note. Every once in a while, an idea comes along that's so big it makes new millionaires. Patrick's readers are already on their way with some of his early picks. "I want to thank Patrick Cox for his recommendations," says one. "They have made me over $500,000!"

"I made about $35,000 in 10 days!" says another.

"The $45,000 profit I made…is staying in my portfolio," writes a third satisfied reader. "I'll… invest in more of your future recommendations."

Patrick sees so much potential in this "super treatment" he says it could be "the last stock you ever need." It's that big. You can learn all about it here. Just know that when the clock strikes midnight on Monday, this presentation will no longer be available.]

   Stocks are rallying as the few traders who bothered to stick around today start thinking about their holiday weekend. Both the Dow and the S&P are up more than half a percent. Heck, at this rate stocks could have their first "up" week all this month.

Among today's big gainers: the jeweler Zales, which we're happy to report delivered a handsome gain to readers of Penny Momentum Trader in only two days. If they played it conservatively, they're up 12%. If they played it aggressively, up to 50%.

Not bad for a little over 48 hours. If you want access to editor Jonas Elmerraji's trades, here's where to go.

   The greenback is sliding again today… as it has all week. After a two-month peak on Monday at 76.3, the dollar index has sunk below 75…

Pretty remarkable for a week in which the index's major component, the euro, has taken so many hits. Here are two from within the last 24 hours…

  • The International Monetary Fund (IMF), unconvinced that Greece is serious about austerity, is making noises about withholding the government's next bailout payment in June. Greece's finance minister says that would trigger instant default
  • The Belgian government suspended trading in Dexia, a French-Belgian bank that's a huge lender to local governments in Europe. Later, the bank announced it would take a $5.1 billion charge this quarter to cover future losses.

Less than two months ago, thanks to a Bloomberg News lawsuit that landed in the Supreme Court, we learned revealed Dexia was the biggest borrower from the Fed's discount window during the Panic of 2008 — $33.5 billion. Gee, that worked out well, didn't it?

For all the sturm und drang, the euro has strengthened this week — from a low below $1.40 on Monday morning to $1.428 as we write.

   Precious metals are rallying, with gold at $1,534 and silver only pennies away from $38.

   The housing recovery took a Muay Thai knee to the gut this morning. Pending home sales as tracked by the National Association of Realtors (NAR) tumbled 11.6% in April.

The index is now 26.5% below its peak a year earlier, when suckers — er, buyers — rushed to take advantage of the expiring homebuyer tax credit.

"We need to see if it's just a one-month aberration," says the NAR's hapless chief economist Lawrence Yun — who's been left all the dirty work after his predecessor David Lereah bailed just as the housing bubble was bursting in early 2007.

   With Congress going home for a few days starting this weekend, it might be safe to buy stocks again. At least that's how Eric Singer sees it.

Singer, a portfolio manager, developed a theory that stocks do better when Congress isn't in Washington mucking things up. "Every time they talk about a law, or changing the rules for an industry sector, companies have the uncertainty that their business model may change."

So Singer developed the Congressional Effect Fund (CEFFX). It buys the S&P 500 when Congress is in recess and stays in money market instruments while Congress is in session.

How's the performance compared to, say, and S&P index fund? Well, let's examine a two-year chart.

Granted, this time frame covers an epic bear market rally. If you go back to the fund's inception in May 2008 — before the crash — CEFFX is up 4%, while the S&P is flat.

Hmmm… When it comes to portfolio protection against the follies of politicians, we'd still rather buy gold.

   "Responding to your comments on the higher education bubble," writes a reader, "the flip side is the fact that most universities have an unsustainable business model.

"Their approach to education has not changed for 500 years. It now costs a student around $125 per hour to sit in a classroom. Once the market place figures this out, the universities will be in trouble, because there are presently much-less-expensive ways to learn useful information and develop skills."

   "Could a Wigan pheasant," writes the first of several wags responding to yesterday's issue, "be anything like a Welsh rarebit?"

"In 18th-century English slang," writes another, "it was a promiscuous woman, obviously from Wigan."

"Per Google," adds a third, "Wigan is a town where pheasant plucking contests take place.

"So… have a pheasant pluck, then."

The 5: Nice. Thanks for the help. We also got this dictionary definition:

wig.eon |wi jn| (also widgeon)
a dabbling duck with mainly reddish-brown and gray plumage, the male having a whistling call. Genus Anas, family Anatidae: several species, in particular the American wigeon (A. americana) and the Eurasian wigeon (A. penelope).
ORIGIN early 16th cent.: perhaps of imitative origin and suggested by pigeon 1 .

   "Having begun this interminable conversation surrounding your dubious surname," writes our seminal correspondent, "I am bound to report the desolate news that my blood tests show that I, indeed, have Addison's disease, but in its very mildest strain.

"In all, the disease does not impede me from informing you the word 'pheasant' hails from the Phasis (now inexplicably renamed the Rioni), a stream that empties into the Black Sea in Georgia and is famous for its plump, slow-moving and highly edible birds.

"The town of Wigan in Lancashire is similarly known for its plump and edible birds, jocularly but accurately referred to as Wigan peasants — from one of which, perhaps the champion of the slow-movers, you yourself are presumably descended.

"If so, jolly well done in all respects, I'd say!"

The 5: I'm sorry to hear of your condition. I can empathize. But enough on the name. Following this brief digression, I think I'll stick with the Chinese translation we learned last year in Beijing: Wiggin = Wei-Jin = Danger Gold.

Have a good holiday weekend,

Addison Wiggin
aka "Danger Gold"
The 5 Min. Forecast

P.S. A reminder, with the holiday weekend upon us: The 55% discount on membership in Breakthrough Technology Alert expires promptly at midnight Monday night. This could be your last chance to get the scoop on what Patrick Cox calls "the last stock you'll ever need."

We encourage you to move on this now… while it's fresh in your mind. The 5 will return on Tuesday. Enjoy yourself!


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