UP DATE ON MENDELEZ

We've written about this company before, most recently just a few days ago and befor that back in March.  So we won't repeat ourselves. Here's another link.

http://www.marketwatch.com/story/3-value-stocks-the-smart-money-is-buying-now-2013-06-04?pagenumber=2
________

Interesting gold graph from Visualizing Economics about real price of gold.

http://visualizingeconomics.com/blog/2013/6/4/the-real-price-of-gold-since-1791?utm_source=Email+Subscribers+for+Blog&utm_campaign=44b3ac0208-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_98db807ad8-44b3ac0208-3309561
________

WEDNESDAY READS

Sorry Now
http://wallstreetsectorselector.com/2013/06/sellers-remorse-for-gold-stocks/#

Abe's Big Plan
http://www.marketwatch.com/story/japans-abe-unveils-major-new-policies-2013-06-05

June Swoon?
http://news.investors.com/investing-mutual-funds/060413-658757-mutual-funds-gained-again-in-may.htm?p=full

JP Morgan In The News Again
http://www.bloomberg.com/news/2013-06-05/jpmorgan-s-alabama-debacle-set-to-cost-bank-1-5-billion.html

Here It Comes Again
http://online.wsj.com/article/SB10001424127887324423904578525701936124838.html?mod=ITP_pageone_0

Fed Policy Hurts Retirees
http://www.foxbusiness.com/personal-finance/2013/06/03/low-rates-make-retirees-gnash-their-teeth/?cmpid=prn_investorplace

Safe Water?
http://www.medscape.com/viewarticle/772712

Good Jobs? What Good Jobs?
http://blogs.wsj.com/economics/2013/06/04/feds-raskin-bemoans-quality-of-new-jobs/

MORE ON MERCK

Lots of investors have been frightened by Obama Care and it's so-called negative implication on health care in general. Rather than saving money or lowering overall costs, as its proponents propose, we believe just the opposite.

It will prove a disaster of major proportions. Disasters draw attention.

With that theme in tow, as pointed out previously, pebbles tossed in water have ripples. Those ripples often take the form of necessity leading to adjustments or altered behavior. Big pharma will adjust, people want cures, wanting cures crosses all boundaries, cultural, racial, religious, age and gender.

Once upon a time Merck ran one of the finest research units. Despite some obvious potholes ahead, we believe they are headed in that direction again though it won't necessarily look or act exactly like the previous one.

http://online.wsj.com/article/SB10001424127887324063304578523560981960152.html?mod=WSJ_qtoverview_wsjlatest

http://online.barrons.com/article/SB50001424052748704509304578515391643495844.html?mod=BOL_hps_highlight_top

TUESDAY READS

Problems Everywhere
http://www.zerohedge.com/news/2013-06-03/18-signs-massive-economic-problems-are-erupting-everywhere

Interesting Read
http://cafehayek.com/2013/06/quotation-of-the-day-652.html

Losing Momentum
http://www.cnbc.com/id/100786488

Not Everyone Wants To Cut Austerity
http://www.bloomberg.com/news/2013-06-03/slovenia-shows-why-the-eu-shouldn-t-discard-austerity.html

Natural Gas Boom
http://money.cnn.com/2013/06/04/news/economy/natural-gas-exports/index.html

Fed-Inspired Move
http://www.marketwatch.com/story/us-stocks-mixed-ahead-of-manufacturing-data-2013-06-03?pagenumber=2

Weak Manufacturing Numbers
http://online.wsj.com/article/SB10001424127887324563004578523100247860088.html?mod=ITP_pageone_0

EU Fiddles
http://www.thefiscaltimes.com/Columns/2013/06/03/Post-Austerity-Europe-Gropes-for-a-Game-Plan.aspx#page1http://www.zerohedge.com/news/2013-06-03/18-signs-massive-economic-problems-are-erupting-everywhere

NOT ON MY WATCH

Today's WSJ  lead story, "Deficit Deal Even Less Likely," cites the near-term shrinking fiscal deficit coupled with a slowing increase in health care costs and "partisan gridlock" as the reasons.

In its "What's News" section just to the left is a related story many will fail to connect. But make no mistake, they're connected.  In fact, the Illinois story holds part of the key to the deficit deal.

Illinois faces America's worst state-pension crisis, a nearly $97 billion shortfall. Higher borrowing costs are just one of the many negative ramifications of failing to resolve the issue. 

In Illinois Democrats enjoy big majorities in the House and Senate, making the issue mostly an intraparty squabble. And that should tell you something about politicians in general. They are not now and never will be your friend.

Bottom line both of these entities, the federal and state governments, are doing their best impersonations of the EU. Postpone the pain for as long as possible. Postpone it long enough and maybe it will just go away.

It's just one more less subtle way of saying: "Not on my watch."

http://online.wsj.com/article/SB10001424127887324423904578521600404730028.html?
mod=ITP_pageone_0

http://online.wsj.com/article/SB10001424127887324423904578521651802578678.html?KEYWORDS=illinois+pension

MONDAY READS

A Case Made To Keep Bernanke
http://www.reuters.com/article/2013/06/02/us-wapshott-bernanke-idUSBRE9510DU20130602

Gold Standard
http://online.barrons.com/article/SB50001424052748704895304578499103401657408.html?mod=BOL_hpp_mag#articleTabs_article%3D1

Micro In
http://www.reuters.com/article/2013/06/02/us-usa-apartments-micro-idUSBRE95105M20130602

Good And Not So Good
http://www.telegraph.co.uk/finance/jobs/10089932/If-companies-can-fire-at-will-they-can-also-hire-at-will.html

Heads Up
http://www.marctomarket.com/2013/06/heads-up-developments-before-new-week.html#more

Peak Gas Prices
http://www.marketwatch.com/story/gasolines-price-peak-are-we-there-yet-2013-05-31?pagenumber=2

 Your Theory On Gold Prices?
http://www.businessinsider.com/chart-gold-top-home-prices-bottom-2013-6?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29

Networking Tips
http://www.inc.com/magazine/201306/inc-staff/4-ways-to-be-a-better-networker.html

AN UPDATE ON MERCK

A while back we wrote about Merck, the big drug company, in a pieced called Full Disclosure. 

Like other big drug companies, Merck faces its difficulties generating growth owing to patents expiring on some of its big revenue generators and lack of new drug development.

Still another problem looms with its number one seller, Januvia, an oral hypoglycemic to treat diabetes. Recent research at UCLA apparently poses questions about the drug's safety. In this case, the issue is whether Januvia causes pancreatic cancer or pancreatitis 

At least one other drug in this class, not from Merck, has been reported to cause cancer in men. Pebbles that fall into water cause ripples. And Merck is not alone since other major drug companies also produce similar drugs for diabetes.

That's the potential downside.The upside for Merck is a recent report in the New England Journal of Medicine about Merck's 
new cancer drug for melanoma, a serious form of skin cancer.

More studies are scheduled but the US Food and Drug Administration last month called the treatment a "breakthrough therapy."

http://in.reuters.com/article/2013/06/02/health-cancer-melanoma-merck-idINL2N0EE00320130602

BRIEFS

If you don't mind owning companies that produce unhealthy foods, then you might find this link useful.

These are hardly the only ones. Repackaging or, as they say in Hollywood, reinventing oneself, is hardly new. Here's the link.

http://www.minyanville.com/business-news/editors-pick/articles/healthy-Foods-That-Aren2527t-healthy-foods/5/31/2013/id/50044


C12H22O11

Some of you may not recognize the simple chemical formula above. It's sucrose or as it's popularly known, sugar. Sugar is derived from two sources--sugarcane and sugar beets; and both are processed differently.

Sugar has a long and in many ways checkered past. Much like crude oil today sugar was once the most profitable, sought-after commodity on the planet. Wars have been waged to gain access to the sweet-tasting sugary stuff, not to mention huge fortunes made and people enslaved.

 The history of sugar can be broken down into several phases starting with the extraction of the juice from sugar cane plants about two thousand years ago in Southeast Asia, it's spreading to India where turning the juice into tiny crystals was invented and to Persia where invading Arabs discovered the highly profitable pleasure-giving substance and took it to Spain and North Africa centuries later.

Christopher Columbus was said to have taken sugar cane plants with him to the West Indies owing to the region's ideal growing conditions for it. The Portuguese introduced sugar to Brazil in the 15th century. When England in the 17th century blockaded France during the Napoleonic Wars, French refineries found themselves cutoff from sugar imports, causing the price of sugar to soar in France.

Growing sugar cane is labor intensive. England at the time had become, as one writer later wrote, "totally hooked on the issue of sugar." Want, as is frequently the case, had for England become necessity.  And in this case that meant defending, since much of the sugar trade then depended on slavery, sugar and slavery if need be by using the world's most powerful navy.

Sugarcane requires a tropical climate to grow successfully, not so sugar beets; they can do well in more temperate areas. Napoleon put huge pressure on French scientists to use sugar beets to produce the critical sweet stuff and produce they did. Planting more than 5,000 acres, in a very short time the French turned out nearly 8 million pounds of sugar from homegrown beets and Napoleon again had one of the main food sources along with salt to fuel his huge army.

America got into the sugar game rather late. Sugarcane was brought to America in1619,  just a decade after Jamestown, Virginia was settled in 1609. But sugarcane proved difficult to grow in the local climate, so much of the early sugar came in via Cuba and points south. In 1789 the US government imposed a tariff on sugar imports. Since the US was a non-sugar producer at the time, the move was viewed as non-protectionist. In 1803 when the US negotiated the Louisiana Purchase that tariff aided a fledgling sugar industry there, spiking further development in an effort to raise revenue.

By the time of the Civil War Americans were receiving much of their sugar fix from Cuba and Louisiana.  At the 1904 World's Fair in Saint Louis, an event that celebrated the centennial birthday of the Louisiana Purchase in 1803 and helped sponsor the 1904 Olympic Games on US soil for the first time, sugar played a prominent role since it is said the exhibition included a five-foot statue of Miss Louisiana carved out sugar cubes; and a new treat called Fairy Floss, also known as Cotton Candy, along with Jell-O made their debut. Another new favorite at the time was ice cream.

The term carbohydrate is an interesting one, meaning a substance that contains carbon, oxygen and hydrogen. Sucrose, table sugar, has been conveniently classified as a carbohydrate, a huge, deceptive misnomer of the first order. Here is one example from surgarcane.org, a Brazilian website affiliated with the Brazilian Sugarcane Industry Association, of how the misnomer gets spread. Under the heading Health and Nutrition:

Crystalline sucrose sugar is a carbohydrate and moderate sugar intake can be part of a healthy diet. Sugar not only sweetens foods and beverages, but also provides users with an instant jolt of energy. Humans should derive 50 to 55 percent of their daily energy consumption from carbohydrates.

Even with the most careful reading there's much room for confusion there.

In the early 1970s the Federal Trade Commission prohibited sugar manufacturers from advertising sugar as an energy and nutrient booster. Yet today we have numerous, expensive energy and so-called sports drinks, many of them loaded with sugar and caffeine as their energy boosters, with catchy names like Red Bull, Monster, Rock Star and Full Throttle.

Full Throttle, made by Coca-Cola, debuted in 2004. Here's a partial look at its ingredients: carbonated water, high fructose sugar (HFCS) and/or sucrose, citric acid, natural and artificial favors, sodium citrate, sodium benzoate (a preservative), d-ribose, caffeine, acacia, B6 and B12, B3, yellow 5, calcium pantothenate and glycerol ester of wood rosin. Now it would take way too much space to adequately discuss each of these ingredients (We do that in our next book about sports drinks.), but here's a brief sample. Sodium citrate is both a salt and a preservative; d-ribose is a sugar produced in the body, often recommended as a supplement in the bodybuilding world, glycerol of rosin is a stabilizer; yellow 5, also known as tartrazine, a food dye with, to say the least, though it's been around for a long time, a curious past.

Another hugely popular sports drink, Red Bull, marketed as a sports-improving product, contains caffeine, sucrose, phenylalanine, glucose, taurine-- a B vitamin and glucuronolactone, DGL, an energy booster often found in sports drinks. What makes Red Bull even more interesting is the results of two recent studies (December 4, 2012) published in the Journal of Strength and Conditioning showing that sugar-free Red Bull doesn't "influence high-intensity run time-to-exhaustion in young adults."


More importantly, a second study on sugar-free Red Bull published in the same issue involved the drink and resistance trained men. The study's title says it all: "Acute Ingestion of Sugar-free Red Bull Energy Drink has no Effect on Upper Body Strength and Endurance." As already noted, sports drinks are expensive. Most get whatever energy kick they have from caffeine and sugar. So bottom line save yourself some lucre, just brew some coffee or tea and throw in some sugar. Or eat a piece of good, quality dark chocolate that is at least 70% cocoa. Chocolate has caffeine and sugar plus anti-oxidants.

The distinction needs to be appreciated between naturally vitamin-rich occurring carbohydrates and processed, refined carbs where most if not all of the nutritional value has been stripped out. What makes this distinction even more important is in today's world of environmental concerns about planet earth most of the focus is on a pre or before the fact emphasis, ignoring, in the main, post or after the fact. One could ask the question: who cares if the planet remains pristine, producing quality natural substances if they're sullied and decimated afterwards in the name of progress and convenience?

Over the last two decades in the US there's been roughly a 25 pound increase in sugar consumption per person to an average of 135 pounds per person per year. In 1700 the average person consumed 4 pounds per year. By 1800 that number jumped to 18 pounds and in 1900 to about 90 pounds. By 2009 more than 50% of Americans were gulping down around 1/2 pound a day or about 180 pounds per year. Now keep in mind that these numbers are just estimates, but estimates or no, also keep in mind that there are forces at work to convince everyone they are actually much lower as you will see.

In the late 1970s and early 80s world wide sugar prices soared and beverage makers switched to sweetening their products with the much cheaper high fructose corn syrup (HFSC), a move that would in the eyes of many have far reaching unanticipated effects on the health of many Americans. Before long food processors followed and the HFSC race was on. In the beverage trade the percent of drinks using HFCS instead of sugar jumped from 5% to 44% in less than a generation. History reveals a similar tale in the world of processed foods. And why not since cost is a constant consideration in doing business.

The etymology of the word sugar is somewhat telling because of its geographical implications. The English word for sugar has its roots in Arabic, sukkar, which traces to Persia and the word shekar. Since Italian merchants, particularly around Venice, were noted for heavily trading the pleasant tasting commodity, it's believed that's the path the term took into England, via Italian merchants. The current Italian word for sugar is zucchero. In Spain and Portugal it's called azucar and acucan. In France the old French term, zuccheo, has given way to, sucre.

One of the reasons science has been unable to show a direct link between sugar consumption and many inflammatory diseases is nearly all reputable studies, in order to be taken seriously, need what's called a control group; that is, a large group of subjects who don't use the stuff being studied. Given that the average American today consumes around 2-3 pounds of sugar a week that's a pretty tall order.

In October, 2012, the New York Times ran an article stating the USDA, to the delight of sugar producers, came up with a new methodology to calculate sugar consumption in the US and, according to the new measurement, the average American eats only 76.7 pounds of the sweet stuff a year. Extending the benefit of the doubt that the new figures are accurate, it's still a big number. Imagine drinking 76 gallons of gasoline a year on average. Here is the interesting point. What the Times story also revealed is an e-mail obtained under the Freedom of Information Act between officials among sugar industry groups discussing the benefits of the reduced estimate and "how they might persuade the USDA to make a change that would lower it even more."

Another story, December, 2012, in Health magazine, regarding the new standards, stated that the American Sugar Alliance certainly understands the importance of perception, noting the trade group vigorously "lobbied the authors of the report to lower the numbers even more."

One of the problems with estimating sugar consumption from foods (and this is any accountant worthy of the name's dream come true) is the USDA breaks foods into two groups, that purchased and actually eaten and that purchased and allowed to spoil or  tossed out for whatever reason unconsumed.  Using this as one of the criteria the USDA concluded a lower number was appropriate. The food gets bought but doesn't always get eaten. Besides, everyone realizes that poor folks waste more vittles than the wealthy. Just as everyone realizes that Type 2 diabetics among the wealthy are more prevalent than among the poor.

 In William Dufty's classic Sugar Blues, he notes the economic significance of the sugar trade throughout history. "The prophets tell us a few things about the status of sugar cane in ancient times: It was a rare luxury, imported from afar and very expensive." Judging from the impact it's had on peoples' health not to mention the health care system, a few things are still quite clear. It's no longer imported from afar and today it's hardly a rare luxury. But it remains very, very expensive.

The above is an excerpt from our forth coming book, Nutrition the Easy Way.

WEEKEND READS

Pot Legal Or Not http://online.barrons.com/article/SB50001424052748704509304578511261557343002.html?mod=BOL_hpp_highlight_top#articleTabs_article%3D1

Greater Risk In Market http://www.bloomberg.com/news/2013-06-01/fed-s-kocherlakota-sees-greater-concern-about-risk-in-markets.html

PMI Up
http://www.reuters.com/article/2013/06/01/us-china-economy-pmi-idUSBRE95001W20130601

Valero On The Upswing
http://news.investors.com/management-managing-for-success/053113-658391-revenue-is-ratcheting-up-at-valero-energy.htm?ref=HPLNews

It's In The Yield Curve
http://money.cnn.com/2013/05/31/investing/dividend-yield-stocks/index.html

More Millionaires
http://www.moneytalksnews.com/2013/05/31/the-world-has-more-millionaires/?utm_source=newsletter&utm_campaign=email-2013-06-01&utm_medium=email

FRIDAY READS

Schiff Firm About Bearish View http://blogs.marketwatch.com/election/2013/05/30/peter-schiff-doubles-down-on-doomsday-views/

US Equities Stable While Japanese Swoon
http://online.wsj.com/article/SB10001424127887324412604578514741159145594.html?mod=WSJ_hpp_sections_markets

Rising Interest Rates
http://news.investors.com/investing-etfs/053013-658214-rising-interest-rates-hit-reit-etfs.htm?ref=HPLNews

Interest Rates A Different View
http://www.thefiscaltimes.com/Columns/2013/05/31/Edgy-About-Interest-Rates-Dont-Pop-the-Xanax-Yet.aspx#page1

Unhappy With Bernanke
http://blogs.marketwatch.com/election/2013/05/30/critic-of-big-banks-wants-fisher-to-head-fed/

Mixed Signals
http://www.marctomarket.com/2013/05/japan-more-output-less-deflation.html#more

Learn What From Your Mistakes?
http://www.fool.com/investing/general/2013/05/30/why-you-never-learn-from-your-investment-mistakes.aspx

Losing Money The Government Way
http://oilprice.com/Latest-Energy-News/World-News/DoE-Lost-Billions-in-Deal-with-Tesla.html

Beef Prices Up
http://investorplace.com/2013/05/beef-prices-at-all-time-high-and-expected-to-rise/

Two Kinds Of Oil
http://www.futuresmag.com/2013/05/30/oil-fields-under-olive-groves-offer-italy-economic?ref=hp&t=commodities