- How Alzheimer’s might bankrupt the country by 2050
- But one group of maverick scientists could change all that in five days
- Small caps rebound… disappointing 2014 IPO bought out… Keystone XL delayed (again)
- A follow-up to the awful way Social Security might be “saved”… a reader’s unconventional Social Security strategy… the $43 million gas station and the “black budget”… and more!
If you’re over 65… or if you love someone over 65… or if you simply expect to live past 65… this chart should frighten you. Both the numbers themselves… and the financial implications.
The 2025 and 2050 numbers are projections if science doesn’t make any progress fighting the disease. And as you’ll soon see, progress of late has been pitiful.
“The risk of getting Alzheimer’s doubles after the age of 65,” says our Ray Blanco. And with the nation generally growing older, the number of Alzheimer’s cases will likely grow 40% in the next 10 years. It will nearly triple between now and 2050.”
“The growth in the number of Alzheimer’s-related deaths over the past several years is in the high double digits,” Ray continues.
“This is a stark contrast to other big killers like heart disease and various cancers, in which we are seeing mortality reductions thanks to better technology. Alzheimer’s is now the sixth biggest killer in this country.” Believe it or not, Alzheimer’s kills more people than diabetes.
And then there’s the cost of treatment — $226 billion a year at present, according to the Alzheimer’s Association.
By 2050, when the number of cases is set to triple, the costs are set to explode more than 600%… to more than $1.5 trillion. As Ray reminded us last week, that’s nearly as much as the combined annual cost of Social Security, Medicare and Medicaid.
“Alzheimer’s, unfortunately, is a complex disease, which means it isn’t an easy one to beat,” Ray goes on.
“There have been some spectacular clinical failures of potential Alzheimer’s compounds in the last few years, and nothing new has been approved for the condition in a decade.”
Most of these failed attempts have targeted “amyloid plaque” in the brain — on the assumption it contributes to Alzheimer’s in the same way plaque clogs up your arteries.
Pfizer developed a drug that attacked the plaque. It didn’t work. Eli Lilly tried its own version targeting plaque. That drug was so flawed it accelerated patients’ Alzheimer’s symptoms… and Lilly halted the trials.
For nearly eight years, Ray has been following the work of some maverick scientists following a very different path toward combating Alzheimer’s. The work is very close to paying off big.
“Simply clearing out the protein plaques in the brain doesn’t seem to be the best way to halt or reverse the disease,” Ray tells us. “Something further upstream is causing them, and it also shares responsibility for damaging the brain’s function. It may be that beta-amyloid plaques are some sort of defense mechanism against the root causes of the disease.”
These maverick researchers have been testing a drug they’ve developed — one that tackles those “upstream” causes. “It strikes at multiple targets through a cellular receptor called sigma-1,” Ray goes on. “Receptors are proteins that sit at the edge of a cell’s membrane and act as signaling mechanisms. They act like tiny molecular switches, turning different functions on or off.”
Early results have been both promising and profitable — and it’s not too late to seize the moment.
“In July of this year, the company presented early Phase 2a data,” says Ray. “The data showed that in 83% of patients, the drug had positive cognitive effects, and this is despite the fact that dosing has not yet even been optimized.
“And the drug works fast. In 36 days, patients showed a 38% improvement in measured cognitive functions. This is four times better than donepezil, an Alzheimer’s drug that enjoyed yearly sales in the $2 billion range before it went off patent.”
That was good enough to propel the company’s share price by 320%.
The next step comes this Saturday — when the firm presents the final Phase 2a data. If they’re as promising as Ray suspects, “hundreds of patients could enroll in wide Phase 3 testing.” And the share price would move substantially come Monday morning. “The stock could shoot up so much, so fast starting on Monday that only those positioned before the full Phase 2 results are discussed will collect the biggest, most life-changing gains.” Ray makes a compelling case — and an urgent one — when you click here.
The major U.S. stock indexes are little moved this morning. At last check, the S&P 500 was off a quarter-point after cresting 2,100 yesterday — a level last seen just before the big tumble in August.
Bonds and gold keep selling off. The yield on a 10-year Treasury is now 2.2%. The Midas metal sits at $1,124 — a four-week low.
“While the Russell 2000 small-cap index trailed the S&P 500’s comeback in October, these small stocks are closing the gap fast,” says Greg Guenthner of our trading desk.
Small caps sprinted higher last Wednesday and then took a couple of days to digest the move. “That’s perfectly normal after a powerful, one-day rally,” says Greg. And small caps tend to outperform large caps going into a new year. “Seasonality is now on the side of small caps.”
The big merger-and-acquisition news this morning reinforces the ugly reality about IPOs — the best time to get in is before a company goes public.
King Digital (KING) — the company behind the smash-hit mobile game Candy Crush Saga — is selling out to competitor Activision Blizzard for $5.9 billion.
We’ve kept half an eye on King ever since it went public in March of last year. Its IPO price was $22.50 a share.
For a few nanoseconds in July of last year, it traded above that level. But not at any other time… not even this morning, despite a 15% pop on the news…
As we’ve been saying for two years now, there is a way to get in on some of the best IPOs while they’re still private. You can have venture capital experts working on your behalf, vetting the plays with the most explosive potential. And now’s an excellent time to get in.
Crude prices are up more than 2% today, at $47.22. Exports from a port in eastern Libya have been suspended as the war there drags on. And supply from Brazil is about to be crimped thanks to a strike.
But the big story in energy is TransCanada’s decision to put the Keystone XL pipeline extension on hold. We’ve followed the fates and fortunes of this project for four years. It’s become a political football. The Obama administration has dithered, but the buzz around Washington recently is that the State Department would reject the idea.
Now TransCanada is asking the State Department to suspend review of the proposal. The company says it needs more time to negotiate land rights in Nebraska. Which might simply be a way to buy time until the next president takes office…
Hell of a way to shore up Social Security’s finances: The death rate among middle-age white Americans is rising.
Princeton economists Angus Deaton and his wife Anne Case — Deaton won the Nobel economics prize last month — published eye-opening research yesterday. The death rate among whites age 45-54 with no more than a high school education exploded from 1999-2014. Fifteen years ago, the rate was 281 per 100,000 people. Now it’s 415. That’s enough to drive an increase in the death rate among all white Americans, regardless of their education level.
The cause? Suicides and substance abuse — especially alcoholic liver disease and overdoses of heroin and prescription painkillers. “Only HIV/AIDS in contemporary times has done anything like this,” says Deaton.
We can’t say we’re surprised. Earlier this year, The Daily Reckoning published an article by your editor called “The Awful Way Social Security Might Be ‘Saved.’” We pointed out that the most educated, highest-earning Americans are working longer and continuing to contribute to the Social Security system. Meanwhile, life expectancy among Americans who never finished high school is falling.
As we say, hell of a way to shore up the Social Security system.
“Following the thread of changes due in the Social Security system,” a reader writes after yesterday’s episode about the system’s stealth default, “I was wondering if it wouldn’t make the most sense to simply file as early as possible and invest all the proceeds in precious metals or diamonds or something of that nature.
“This is assuming, of course, that one is earning enough to live on for a while. The Fed might think we don’t have any inflation, but it sure feels like there is a ton of it coming down the road. I recall buying a new car in the ’70s for under $3,000 and my dad commenting that buying a new house in Hawaii for $18,000 was ridiculous and he would wait for the price to come down.
“A similar car today is close to $30.000, and that house topped a million dollars not that long ago.”
The 5: Hmmm… The trick is, as you say, “earning enough to live on for a while.” Many people file for Social Security at 62 precisely because they lost their jobs earlier than expected.
“Boohoo,” writes one of our regulars about the end of “file and suspend” to maximize Social Security benefits.
“Let’s see, how many private pension plans have a ‘file and suspend’ benefit, much less
spousal/dependent benefits, as part of the base package? With crap like this being loaded into Social Security, no wonder (at least partly) it is in trouble.
“Social Security has always been a bad deal, but let’s get it onto an even footing for everybody. You pay into the system, you get the formulated benefits. You don’t pay into it, the only benefits you get are what you can sponge from your spouse or ‘other.’
“I’m getting tired of having to forgo a good retirement and disability plan so that I can support all of the slugs who take out without having put in.”
The 5: According to the Urban Institute, the average wage-earner who turned 65 in 1980 paid $96,000 into Social Security and got back $203,000.
Meanwhile, the average wage-earner who turned 65 in 2010 paid $300,000 into the system and will get back only $266,000.
Those numbers will only get worse. Maybe our first reader is onto something…
“While Dennis Hastert’s woes are of his own making to a large extent,” writes a reader following up our war-on-cash coverage, “he should indeed be a huge signal to us all of what our ‘central bank’ and their billionaire friends have become!”
“Thanks for the update.”
“Sounds to me like you stumbled on a budget item covering a black ops topic,” writes a reader after our item yesterday about the U.S. military’s fuel station in Afghanistan that could have been built for $500,000 and instead cost $43 million.
“It’s called the black budget,” another reader chimes in. “What is the money really being spent on?”
The 5: Between 1996-2013, the Pentagon “lost track” of $8.5 trillion in expenses.
Under a law Congress passed in 2009, the Pentagon is supposed to be prepared for an audit like every other government agency by 2017.
But as we pointed out two years ago, there were no “or else” consequences attached to this deadline. We’re not holding our breath…
Best regards,
Dave Gonigam
The 5 Min. Forecast
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