Saturday, January 31, 2009

Buy American- And Let's Make Canada Our 51st State

So, at this year's annual World Economic Forum meeting in Switzerland, the United States trumped up the "Buy American" dogma. Canadian Finance Minister, Jim Flaherty, responded by pronouncing that American "protectionism" would be "met by resistance" by countries around the globe- but that Canada would not effect trade restrictions of its own.

After all, why should Canada stand in the way? They are the number one trading partner of this United States.

Although other countries fear the latest US evolution in its trade policy, Canada does not. And, it's all good- we need them. They need us. They ARE us. We are one and the same. Keep reading.

And, therefore, I say- let's get this charade out of the way already- and officially make Canada our 51st State.

Seems outrageous doesn't it?

I know. I know.
Hate me today. But, love me tomorrow, eh?

But, in an overwhelming variety of ways- it makes a lot more sense than you might think.

Canada, that Great-White land mass due north of the United States contains, quite possibly, the richest body of natural resources in the world- iron ore, nickel, zinc, copper, gold, lead, molybdenum, potash, diamonds, silver, fish, timber, wildlife, coal, petroleum, natural gas and hydro-electric power.

Canadian-based companies such as Canadian Natural Resources Limited (CNQ), Barrick Gold Corporation (ABX) and Potash Corporation of Saskatchewan, Inc (POT) are just a few of Canada's major players in the global resource boom of recent years.

Yet, as of 2008, there were only 33 million Canucks living in a surface area of 3.85 million square miles- or roughly 5.4 people per square mile of arable land- which is ranked 166th out of 168 of the world's arable countries. All those resources- and so few people. Sounds suspicious. Where's all that money going? All Canadians must be rich. No? Or maybe just a handful have all the dough- and the rest go to hockey games with flasks of wine and beer, wondering the same thing.

Anyways, let's face it- the only way you can tell Canadians apart from Americans is if you listen to the accent- and, you know we Americans love to make fun of it. But, it's not unlike Sarah Palin having bred children, don't ya know, in Fargo, North Dakota.

So, hey- let's not throw stones.

And, of course, Canadians grow up wanting to be Americans. They watch exactly the same television shows as us on US-affiliated Canadian networks. They supply us with an endless star-studded list of talent- from Jim Carey, Mike Meyers and Howie Mandel on the comedic side (all of whom, when they had the chance, took the first American-bound bus out of Canada they could find), to K.D. Lang, Celine Dion and Sarah McLachlan on the singing side.

And- as, everyone knows- Captain Kirk is Canadian.

On an economic basis- Canada's gigantic resources would offer the USA an incredible, indescribable boost. The United States, in fact, is already the major importer of Canadian resources. Suffice to say, the U.S has become entirely dependent on Canadian oil. We import nearly $5 billion worth of steel and iron from the North. The combined resources of the two countries would offer all types of industries a seemingly endless backstop of supply. Whether for internal use, or for export.

Indeed, there is enough oil in all that Canadian shale to last us oil-addicted Americans several lifetimes- and then some. Plus- we wouldn't have to go digging in the near-term, certainly, for our own vast 3 trillion barrel shale deposits buried under Colorado, Utah and Wyoming- so U.S. environmentalists might smile a bit the next time Senator Orrin Hatch gurgles about trofting the Rockies (although, of course, oil shale extraction is definitely not green).

I mean- at least in Canada- mostly all their oil shale can be found in the tar sand boonies of those pitless-wonders, Saskatchewan and Alberta.

Of course, from a security stand-point- merging Canada into the United States effectively eliminates one giant coast-to-coast border: a border which scoundrels have used for years to enter into our country; all they've had to do is fly into Canada and then sneak over the vast porous border into the U.S. If Canada became part of the United States- security could be greatly enhanced, especially by only allowing international flights into Montreal, Toronto and Vancouver.

You know- I'm not alone in wanting to grab a big piece of Canada as an investment in our future. China, over the last several years, has been steadily, stealthily and methodically buying up Canada right behind our backs.

And, China's Huawei Technologies Co. Ltd. reportedly recently made a play to buy Canadian telcom equipment giant Nortel Networks (NT)- all of it. The entire company- which is now in chapter 11 bankruptcy. This, even though in March 2008, the Committee on Foreign Investment in the United States (CFIUS) had previously nixed Huawei's desires to buy a 16.5% stake in Massachusetts-based, 3Com Corp. (COMS) citing national security concerns. It makes no sense, either from an economic, or a security point-of-view, to let China keep doing what they're doing unabated. In fact, it is outrageous that this has been going on up in Canada- in our own backyard. What are you Canadians thinking???

In 2002, Leger Marketing of Montreal polled Americans about annexing Canada to the United States, and roughly 40% said they would be in favor it. 49% disagreed. In September 2001, Leger had done a similar poll of Canadians- and, in regard to Canada being annexed by the USA, only 20% of Canadians agreed. In fact, 76.5% rejected the idea! And there have been similar polls conducted over the years. Seems like the same results. A strong minority of Americans favor it. And the strong majority of Canadians firmly reject the idea.

Hmmn. Sounds to me like Canadians need some more prodding. Are you Ontario Loyalists still bitter about what happened in 1776? Are you French Canadians still hanging your chapeaux on trying to separate altogether from Canada and becoming your own country- OUI or NON? "Je me souviens?" -don't make me laugh...

Time to get over it. We need each other. For economic and security reasons, to name just two. Is there really even a Canadian "identity," in the first place, in which to vest any nationalistic pride whatsoever?

No. That went out the window when Pierre Trudeau went to Harvard.

So I say- let's make you Canadians an offer.

"We'll make you our 51st State." And you say, "Sure- what a great idea. We're one and the same, anyways. Thought you'd never ask!"

GT McDuffy

(The author holds no positions in any of the stocks mentioned in this article)

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Tuesday, January 27, 2009

The Coming Of The February Stock Market Bull Run

As most experienced traders already know, February is the trigger-month for long bull runs in the stock market. It seems that whenever bulls finally decide to stare menacingly into the bear-faces of doom 'n gloom, the bears quickly cower and retreat back into the caves from whence they came. Bear hibernation period- at least 5 years.

Every bear market ends the same way. With the same "worst since this" and "worst since that" headlines blasting in the media for a few months- actually "one too many" months- which finally ignites the fury of the bull. Shorts, feeling arrogantly invincible, bashing everything in sight, go head-to-head with longs who have been feeling utterly frustrated and seriously beginning to doubt if the market will "ever go up again."

But, you see, the market always does go up again.

And it happens in February- usually after a good 6 months of "bottom-churning."

Then, the Big Money Players finally decide, "Honey, git the guns 'n wagons- we're headin' due north."

And, just like that, the markets reverse course, and head back up for the next 5 years. So, what finally causes the big money cowboys to "hitch up the wagons and head north?" To me, it's simple. The "short" ("put") trade gets old. And the long becomes the new short.

Since, media headlines always follow the trend (they don't create the trend), the headlines reverse course, as well. Which scare any remaining bears into seclusion- short-squeezed out of town.

This scenario has happened so many times over the years and years- that it's not even worth providing examples. This article is not for those who need to be educated in this regard. It's for those who have been here before. And you know who you are.

Which sectors stand to benefit most? All sectors. Anything remotely resembling DIA, QQQQ, SPY, XLF, XLE. Biotechs. Healthcare. You name it. It's going up.

So. Get your Valentine's Day hearts and wallets ready.

February is the time for the true running of the bulls.

GT McDuffy

(The author has no positions in any of the stocks mentioned in this article)

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Sunday, January 25, 2009

The Weekly Top 5: Stocks To Watch

Weeks Of February 2-February 13

NovaDel Pharma (NVD): Company recently received FDA approval for its Zolpimist™ 5 mg and 10 mg Oral Spray. NovaDel is currently engaged in commercializing Zolpimist™, which will surely attract big pharma partners. Additionally, NovaDel is currently finalizing commercialization plans for NitroMist™ - which was their first FDA approval. Logic dictates that, with two FDA approvals now under their belt, NovaDel's niche in offering oral spray versions of big name drugs that are currently available in tablet (or non-spray) form- is a bonafide and potentially very-lucrative market. Particularly interesting at this point in time for companies such as NovaDel Pharma, is recent M&A activity from large pharmaceuticals looking to partner up big and small. EDGAR filings, just reported (February 2 and 3), are extremely interesting as well.

GTC Biotherapeutics (GTCB): Company is awaiting approval from the FDA per its transgenic goat-based ATryn® drug. In an historic move, an FDA advisory committee recently endorsed the drug. The FDA decision is due by February 7, 2009. Pharma drugs made from/with genetically-engineered animals is a hot topic, and related final guidelines from the FDA have recently been issued- in anticipation of the Obama administration's pro-stem cell agenda.

Las Vegas Sands (LVS): Casino sector has recently sold-off in tandem with some negative sentiment amongst a few Wall Streeters, however, LVS is now oversold- and with its 20% short-interest squeezing into the coming February broad market rally- this stock is poised to run like mad. Stock came down from a January 6, 2009 high of $9.15 all the way to a low today of $3.89. 52 Week High: $95.26!

Tenet Healthcare (THC): Company has just received a few analyst upgrades- and the stock price has pulled down from a January 9, 2009 high of $1.49 to a close of $1.07 today. As with LVS, this stock can rally 30-40% in a flash with a broad market pop.

Alkermes Inc. (ALKS): Company, fresh off a January 20, 2009 JP Morgan "highest-score" upgrade, has also attracted a lot of other Wall Street proponents. Particularly as healthcare and bio pharma stocks are in favor per defensive strategies in a weak stock market in conjunction with President Obama's healthcare and stem cell pedal-to-the-metal agendas. Company boasts such partners as Johnson & Johnson (JNJ), who are also awaiting an FDA decision due by Valentine's Day 2009 in regard to an sNDA for Rispredal Consta™- an adult bipolar disorder treatment (say that 5 times fast)!

GT McDuffy

(None of the above stocks are recommendations to buy or sell. The author has no positions in any of the stocks mentioned in this article).

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Friday, January 23, 2009

Captain Sully Sullenberger: Can You Please Land This Market Safely?

The markets have hit a "double bird." Engines are out. Captain Finance has radioed the tower- "We're going down. Please alert the ground crew."

Ah, but we have a hero in our midst. Calm. Cool. The Master Of Avoiding Disaster.

The one. The only.

Captain Chesley B. "Sully" Sullenberger III.

Savior Of US Airways Flight 1549.

Sully, we need your expertise. We have a bunch of so-called "pilots" in Washington, D.C. and New York who are flying a lumbering financial jet by the seats of their pants. No flight plan. No radar. Lost- somewhere over the Potomac.

Sully. Please land this aircraft safely. Somewhere. In a field. In a river.

Do your thing. You've earned our awe and admiration. We can't do what you do. If we could, we already would. We're only terrified passengers on this crazy plane- strapped into our seats. Heads in crash positions. Praying. Remembering. Bull markets flashing through our brains in slow motion. Helpless. Desperately trying to believe in the pilot and co-pilot in the cabin. Strangers whom we've never met. Whom we now entrust with our financial lives.

Sully. How fast can we drop you to the tower? How about today? Will that work for you?

And, when you get there, radio Geithner ASAP. Tell him to jettison all capital injection fuel and, instead, activate the emergency "bad bank" switch, to lift toxic assets off of struggling banks' books.

Captain Chesley B. "Sully" Sullenberger, we give you our blessing.

God speed.

Let's roll...

GT McDuffy

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Monday, January 19, 2009

Is There Any Stock Out There That Is Not Being Manipulated (Obama Are You Listening)?

Most traders religiously go about their business on the stock market. They do the research; scouring the news reports, the EDGAR filings, the financial statements. Analyzing charts. Looking for trends. Is the stock overbought? Is the stock oversold?

They faithfully keep CNBC or Bloomberg on in the foreground )or the backround), waiting for "breaking news," the latest economic reports, commentary and analyst sentiment.

They manage and re-manage their Java-based stock tickers to reflect their latest "plays" and holdings. They open up their Level 2 applets for stocks they already own, or are thinking of getting into- long or short.

They watch the futures and the DIA, QQQQ, SPY, XLF and XLE "ETFs."

Traders have it down to a routine. Almost a science.

But, I wonder if traders are even aware of one other critical component of trading- that is, the extent of the manipulative "goings-on" involving, pretty much, every stock in the stock hemisphere, and just how much manipulation affects the choices traders end up making each and every trading day.

No one likes to talk about market manipulation- whether in the stock market or in other financial trading markets. It's almost "taboo" to speak about it openly- although, recently, more and more well-known traders and marketeers have been speaking out.

It's gotten to the point now, by early 2009, that savvy traders no longer trust the markets- not one thing about them. And for good reason. To date, no single regulatory body or enforcement agency has been able to effectively deal with market manipulation- mostly because of either a lack of manpower, a lack of understanding of actual trading- or even due to a complete lack of caring.

Shady traders, big and small, know this. And they go and go and go- with utter impunity- convinced they will never get caught. They take their profits and don't give one iota about who gets hurt because of their acts. Then, they move on to their next unsavory trades.

I don't believe there is a trade-able financial instrument out there that is "clean." Seems like there's always some shenanigans going on- or being attempted- by at least someone with the funds to do it.

So, I chuckle sadly when I hear that President Obama and his team of wizards say they are going to effect change in the economy. Change of what, exactly? Why keep throwing taxpayer money against the wall hoping to fix things- when the inherent ethical underpinnings of the financial and trading markets have gotten so horrendously out of control?

There's no uptick rule. We have unabated "bear raids" and "bull cranks." We have "short and distorts" and "pump and dumpers" everywhere. We have the FASB 157's mark-to-market fiasco. And we have swaps and derivatives being traded in the dark. And, that's just the basics.

Given that environment- why would any trader even want to trade? You have to now spend more time trying to assess a stock's potential for manipulation- then the company's actual fundamentals or performance. And, trader's are trying to assess a big black hole when it comes to manipulation. You finally decide to get into a stock long, for example- only to suddenly have the stock hammered down by an unscrupulous trader with sufficient funds available to him, working his shorting agenda.

And that's just the traders being relentlessly blind-sided, you know- the people out there every day in the Wall Street trenches slugging it out. What about the thousands of people out on Main Street- the taxpayers who invest in the markets, who don't trade, and simply give their money to "professionals" to manage. If traders are being bamboozled. then the passive investor-taxpayers are simply being swindled. Not by the money managers- but by the same market place that money managers have to deal with, once they are in charge of where to put their clients' hard-earned money.

If taxpayers only knew just how shady the markets have become- they would pull all their money out before you could say, "Let Me Know When It's All Cleaned Up- And Only Then Will I Even Think Of Ever Investing Again." Makes for a great T-shirt, don't it?

I mean, who wants to play craps with loaded dice? It's that simple. The only thing that separates Wall Street from gambling in Vegas in the first place, is that, in Vegas, you are mostly at the mercy of luck. In the stock market, an investor armed with sufficient research and savvy is supposed to be able to have far more control over his "luck"- in predicting a stock will go the right way. Else, he would go to Vegas, put his money down- 50/50- and pray.

Now, manipulation issues place Wall Street investing further and further into the Vegas gambling camp. So, a smart investor would simply say, "Well, if that's the case- I'd rather go to Vegas- at least the food is better."

Obama, if you're listening. And, I know you are- you need to deal with this.


You can hire all the "dream team Summa Cum Laude" experts you want. But, unless you deal directly with what has happened to the very financial markets you are using taxpayer money to fix- nothing will change. You have to start with fixing the foundation. You've inherited a house whose walls are filled with hoards of termites- and, if you don't deal with the infestation- you, eventually, don't have a house.

It's enough already. Get a panel together. Make sure all it does is address market manipulation- including those policies that feed t. If the SEC needs better regulation as ammunition and vastly more manpower- give it to them. You can spend a trillion dollars trying to repair the house. But the termites will still be in those walls. Or, you can spend $10 billion and get rid of the termites once and for all- and make sure they don't come back.

And, if the markets are cleaned up- traders can trade better, money managers can manage money better- and everyone makes profits, including average taxpaying-investors (who can also begin to replenish their retirement nest eggs that have gotten tanked). All this, in turn, will help re-stimulate consumer spending. As stock prices go up- the fear and lack of faith in the current market will be replaced with stability and confidence. Companies will be far less anxious about their earnings, their debt, attracting investors- and their overall bottom-lines. And this will lead to hiring-back employees. Etc etc...

And when, ultimately, the markets recover, as the economy gets back on its feet- and stability and confidence are eventually replaced by greed and arrogance- then you keep the vigilance coming. Never let up.

Yes, there is supposed to be some "risk" to investing. Stocks shouldn't just go straight-up. But, at least, level the playing field. Institute fair play. Less Vegas. More chess playing.

The time is now, President Obama. Your time has come.

Repeat after me:

I, Barack Obama, do solemnly swear, to faithfully end all market-manipulation wherever it may be found. Yes I can!

Yes I can!

Yes we can...

by GT McDuffy

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Monday, January 12, 2009

GTC Biotherapeutics' $200 Million Goats

When Framingham, Massachusetts' pride and joy, Genzyme Transgenics Corporation, along with collaborating scientists from Tufts University School of Veterinary Medicine and Louisiana State University announced in spring 1999 that they had cloned the world's first transgenic goats, the world not only sat up and took notice- it also realized that nothing would ever quite be the same again. I mean, this was truly the stuff of science fiction coming to life in the real world.

Transgenics is a process whereby DNA is taken from one species and implanted into the genetic structure of another. Genzyme Transgenics, which became GTC Biothereapeutics (GTCB) in 2002, uses this process to develop and produce human therapeutics in the milk of animals. After GTCB successfully cloned their first goat, testing showed that the animal was, indeed, transgenic, and the goat's milk tested positive for antithrombin III -the human protein. ATIII is a protein found in human plasma involved in helping to regulate blood clotting.

A transgenic form of antithrombin III, a/k/a recombinant human antithrombin III [rhATIII], is produced "by inserting human DNA into the cells of goats so that the targeted protein is excreted in the milk of the female offspring."

(One of GTC Biotherapeutics’ transgenic goats (T&G File Photo/DAN GOULD))

A little history:

Genzyme Transgenics Corporation was originally a subsidiary of Genzyme Corporation (GENZ), and ultimately morphed into GTC Biotherapeutics in June 2002. And, simply put, it is no longer tied to Genzyme Corporation. GTCB is an entirely separate entity.

The idea for an animal-milk protein was the brainchild of researchers at Biogen (BIIB) in Cambridge, Mass. (more than 22 plus years ago), and one of their scientist's, Harry Meade, pushed the idea that the udder of a farm animal "could be programmed to produce useful molecules too complicated and delicate to be manufactured in the large fermenting tanks used in most biotech plants. And it could generate the valuable substances in far larger quantities."

Meade left Biogen and was hired by Genzyme Corporation, whereby this technology spun its way into Genzyme Transgenics Corporation.

GTC Biotherapeutics has conducted clinical trials of rhATIII in coagulation disorders, but in 2006, Europe's top drug-regulation committee rejected the company's anti-clotting drug, ATryn®, on the basis that the drug had been tested in too few people to determine if it was safe and effective. ATryn® was eventually approved for use in the European Union for hereditary antithrombin deficiency (HD) patients undergoing surgical procedures. LEO Pharma A/S is currently commercializing and developing ATryn® in Europe.

Back in the USA, GTCB announced in June 2008 that it had signed a collaboration deal with Ovation Pharmaceuticals, Inc., to develop and market ATryn® in the United States. The agreement includes $257 million in potential payments to GTCB for meeting clinical, regulatory, and sales milestones.

GTCB is also milking other applications of its goat-based rhATIII technology, although the projected market initially for ATryn® is small- perhaps an estimated $50 million.

In September 2008, the FDA assigned priority review to GTCB's BLA for ATryn®. On January 9, 2009, the company announced that an FDA advisory panel (the Blood Products Advisory Committee of the U.S. Food and Drug Administration) gave "thumbs up" to the drug for the prevention and treatment of venous thromboembolism in hereditary antithrombin deficient patients undergoing surgery or childbirth procedures, which, if approved by the FDA, would be an historical event and tipping point in the progression of bio-pharma technology. The FDA usually renders its decisions based upon their advisory panels' recommendations. A final decision on ATryn® is due by February 7, 2009.

Looks like, what with pro-stem cell heavyweight proponent President-Elect Barack Obama about to take Office, that genetically-based biotech's time has finally come. The FDA has also just issued Final Guidance on Regulating Genetically Engineered Animals, "“Genetic engineering is a cutting edge technology that holds substantial promise for improving the health and well being of people...", says Randall Lutter, Ph.D., FDA deputy commissioner for policy.

However, this is not the only exciting thing for GTCB. In fact, it's "small potatoes" compared to what is now becoming a highly conceivable reality (assuming an affirmative FDA final decision) in regard to a main objective of the company.

You see, antithrombin currently costs $1.72 per international unit, or more than $100,000 per pound, when traditionally produced by purifying antithrombin from human blood. And, GTCB's herd of transgenic goats, 1,500 of them* (located on a highly-secure 19th-century "pharm" in Charlton, Mass -near Framingham), each produce more than 1.5 pounds of protein per year: or, more than $150,000 worth per goat- per year! This translates, potentially, to a top-end stream (no pun intended) of over $200 million per year in revenue for the herd- and, easily makes GTC Therapeutics' goats (transgenic or otherwise), the world's most valuable. And, of course, the company can easily breed more goats, at any point, to meet demand.
[* see bottom of page 7 in 10k filing]

My only question is: what do they eat?

"Udderly" amazing stuff. And GTC Biotherapeutics, after a very long and strange journey, is finally poised to get its multi-million dollar herd of goats moving off that farm in Charlton, and onto the rich and plentifully fertile plains of big pharma.

"Get along, Yip. Yip. Get along! Whoa-there, little fella, get back in the pack! Now there ya go..."

GT McDuffy

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