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This Says Our Favorite Biotech Is Off to the Races

Shares of a promising biotech we recommended back in February 2013 – jumped as much as 27% to a three-month high of $14.20 yesterday after the company said a new cancer drug met its main goal in a midstage clinical trial.

Its shares backtracked a bit as the day progressed but still closed 17.6% higher for the session. These shares have advanced 361% since we first told you about them. The stock has generated a peak gain of 456%, making it one of the 31 recommendations we’ve made to you that have doubled or better since we launched Private Briefing in August 2011. (More on that later…)

  • Featured Story

    Eurozone Debt Crisis Exposes What EU Leaders Fear Most

    Flag of EU hanging on the gold flagpole

    European Union leaders have seemingly changed their tune lately on how best to deal with the long-running Eurozone debt crisis.

    Increasingly, EU politicians have been sounding the theme that economic growth - not Eurozone austerity - is the answer, and that deadlines set for reductions in public spending needed to be loosened.

    It started about a month ago, with none other than European Commission President Jose Manuel Barroso.

    "While I think this policy [of austerity] is fundamentally right, I think it has reached its limits," Barroso said. "A policy to be successful not only has to be properly designed, it has to have the minimum of political and social support."

    Shortly afterward, French Prime Minister Pierre Moscovici chimed in, "We're witnessing the end of the dogma of austerity."

    Meanwhile, the European Commission seemed to confirm the policy shift when it recently extended the deadlines for most of the troubled EU nations to fix their budget deficits.

    News headlines throughout Europe trumpeted the "end of austerity."

    But what the EU leaders have really done is buy themselves more time by stretching out the Eurozone austerity policies - which are mostly still in place - over a longer period of time.

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  • Eurozone Debt Crisis: Now It's a Hopeless Game of Whac-a-Mole wackamolehome

    The Eurozone debt crisis that was supposed to have blown over long ago instead has become more like an endless game of Whac-a-Mole, with both new and old problems popping up faster than European leaders can bop them.

    As Europe's finance ministers gathered in Dublin today (Friday), they faced at least half a dozen major issues threatening the fiscal health of the Eurozone.

    Although Europe's leaders, in concert with the International Monetary Fund (IMF), have succeeded in keeping a lid on each successive crisis over the past three years, that streak can't survive in the face of the new and old fiscal woes that have been peppering the Eurozone.

    U.S. investors can't let those past successes deceive them into thinking the Eurozone is no longer a worry.

    When the Eurozone debt crisis finally implodes - and sooner or later, it has to - it will hammer stock markets around the globe.

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  • The Eurozone Hangs On By a Whisker Four days after the Italian elections, only one thing is really clear: A majority of Italian voters have rejected austerity.
    The problem is, their victory came up short by the slimmest of margins.
    0.36%.
    That's the difference between a firm new government that could move Italy out of the Eurozone and the constitutional logjam Italian voters woke up to the next day.
    Here’s why that's likely bad news for us all... Read More...
  • Eurozone Debt Crisis: Why U.S. Investors Still Can't Relax Currency euro paper

    After nearly four years, billions in bailouts and increasingly strict austerity measures, not only is the Eurozone debt crisis no closer to resolution, but the attempts to solve it are pushing the region deeper into recession.

    According to Eurostat, the Gross Domestic Product (GDP) for the 17-nation Eurozone plunged 0.6% in the final quarter of 2012, a steeper drop than the 0.4% economists had expected and the worst decline since 2009.

    It's the third consecutive GDP decline for the Eurozone, reaffirming that the area is mired in a recession that started with the 2008 financial crisis and has been exacerbated by the ongoing Eurozone debt crisis.

    For all of 2012, the Eurozone economy shrank 0.5%, while the U.S. economy grew 2.2%. Even the GDP of beleaguered Japan increased 1.9%.

    Most ominously, the GDP decline of the Eurozone's largest and strongest economy, Germany, mirrored that of the region as a whole, falling 0.6%.

    Long one of the few bright spots, Germany is slowly getting dragged down by its weak neighbors, which include Italy, Spain, Greece and even France.

    The bad GDP news also belies the sunny assessments recently delivered by many economists and EU leaders.

    "These are horrible numbers, it's a widespread contraction, which does not match this positive picture of stabilization and positive contagion," Carsten Brzeski from ING told the BBC.

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  • Berlusconi is Back, and So Is the Eurozone Debt Crisis Since the beginning of the year, the markets have been behaving as if the Eurozone debt crisis has been magically solved.
    Yields on Spanish and Italian debt are trading more than 1% lower than at their peak, while world stock markets have soared close to all-time highs.
    Unfortunately, you can expect that all of this euphoria will fade when the Italian elections take place on February 23 and 24.
    The reason is summed up in two words: Silvio Berlusconi. Read More...
  • Eichengreen: Eurozone Debt Crisis To "Heat Up Again in 2013"

    Contradicting optimism at the World Economic Forum in Davos, Switzerland, that the worst of the Eurozone debt crisis is over, U.S. economist Barry Eichengreen warned that it would "heat up again in 2013."

    While the pledge of European Central Bank (ECB) head Mario Draghi to buy short-term debt from struggling EU members has eased worries of an imminent Eurozone meltdown, Eichengreen contends it hasn't fixed the problem.

    "None of the underlying problems have been solved. There is no economic growth in Europe. Germany itself is on the verge of recession," Eichengreen told The Associated Press while attending the Davos conference.

    One flash point in particular, he said, is the lack of progress toward a banking and fiscal union.

    "The banking union doesn't exist. There's less consensus on completing it than we thought last year, so the markets are going to lose patience at some point and the crisis will be back," said Eichengreen, who has written books on international finance, the European Union and the Great Depression.

    Negative developments in the Eurozone debt crisis typically drag down U.S. markets, as the EU
    is a chief U.S trading partner. Fresh problems in 2013 would be bad news for U.S. stocks.

    Efforts of EU leaders to tame the Eurozone debt crisis succeeded in calming European stock markets in the later part of 2012, and have given some bond market relief to such debt-plagued nations as Greece, Ireland, Italy and Spain.

    But as Money Morning Global Investing Strategist Martin Hutchinson pointed out in December, the bond market isn't always the best judge of a nation's fiscal health.

    "Don't be fooled by those bond yields," Hutchinson said. "In 2006, after all, they were trading Greek bonds at less than 0.5% yield above German bonds. So much for rational markets."

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  • Even the Eurozone Debt Crisis Gets a Vacation …But Not For Long The Eurozone debt crisis has taken a late summer vacation. Since it would be very inconvenient for a disaster to erupt while everyone is on holiday, it doesn't.

    That's not to say this rule is infallible. One year, all the decision-makers went on holiday in late July, and came back to find themselves embroiled in World War I.

    What traders and decision makers will find waiting for them when they get home from the beach could be almost as serious. Here's why...

    A Laundry List of Problems

    Greece has done nothing to redeem its position other than prepare an application for more money. Italy's GDP declined by 0.7% in the second quarter, and we are shortly to enter the run-up to the next Italian election.

    What's more, Spain is trying desperately to avoid asking for a bailout, and may just succeed in doing so, but one more hiccup in its recalcitrant provincial governments will push it over the edge.

    Then there's Portugal, which has entered a deep recession, and is showing signs of missing its budget targets again.

    And that laundry list of potential problems doesn't include the biggest one of them all.

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  • Eurozone Debt Crisis: Will The Grexit Finally Become Reality? The Eurozone debt crisis has long needed a "Grexit" or some other landmark event to occur to change the direction the beleaguered continent is headed.

    When Mario Draghi announced that he would do whatever he can to preserve the euro, it seemed that moment was imminent. Since he uttered those words on July 26, the IBEX 35 in Spain has gained 17%, while Italy's FTSE Milano Italia Borsa is up 13%.

    But the rally may quickly fade.

    Draghi and the European Central Bank have not taken any drastic measures since then and investors will most likely have to wait until the September 6 meeting to hear what's next.

    On Monday ECB policy maker Joerg Asmussen played to the sentiment felt by many German officials that it might be time to let Greece go from the euro.

    "Firstly, my clear preference is that Greece should remain in the currency union," Asmussen said in Germany's Frankfurter Rundschau."Secondly, it is in Greece's hands to ensure that. Thirdly, a Greek exit would be manageable."

    However, Asmussen warned that a Grexit would be costly, not just to Greece but to the entire continent as well. "It would be associated with a loss of growth and higher unemployment and it would be very expensive - in Greece, Europe as a whole and even in Germany," Asmussen said.

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  • Eurozone Debt Crisis Won't Be Fixed by "Bailout Lite" The market red ink this morning (Monday) around the globe is the result of a usual suspect - Spain.

    These days, if someone even sneezes in Madrid, Barcelona, or Crdoba (one of my favorite places, actually), investors go into intensive care all over the world.

    This new Spanish influenza has been wiping out paper value from one end of Europe to the other. This morning came word that many of the regions in the country will need help. Attention is now directed from focused support for banks to wider calls for a sovereign bailout.

    And that is where the whole matter can turn nasty. Word is that we should now expect some Italian cities to be requesting money in the near future. Seems California and Pennsylvania are not the only locations where cities can go bankrupt.

    The accord reached at the end of June by the Council of Europe (the EU member heads of government) to bail out Spanish banks is already derisively referred to as "bailout lite." As the beer commercials attest, this is going to be "less filling."

    Unfortunately, it is the heavier version that Europe now needs.

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  • Soaring Spanish Bond Yields Another Hit to Growing Eurozone Debt Crisis Investors today (Monday) have been selling on news that Spain might need more bailouts as its 10-year yield reached a record high.

    Spanish bond yields reached a record high of 7.56% and the latest unemployment rate sits at a miserable 24.6%.

    Global stock markets plummeted Monday after Spain's borrowing costs soared on a third consecutive day amid concerns that an intensifying recession in the region would require Spain's government to request a full-fledged bailout.

    The fresh worries come on the heels of a report Friday from the Valencia region, revealing that its economy would contract by 0.5% in 2013 instead of 0.2%, as had been forecast.

    Spanish bond yields broke the critical 7%-mark last Thursday, a level many analysts worry could eventually alienate Spain from public markets and force it to seek a bailout similar to its ailing neighbor Greece.

    "Those levels indicate that Spain may soon struggle to fund itself in the market and therefore unless some positive action is taken, the country will need a full bailout," Gary Jenkins, managing director of Swordfish Research told the Associated Press.

    The deeper worry rattling markets worldwide is that with so many of its 17-member nations needing bailouts, European finance ministers will have a tough time finding funds to rescue an economy as large as Spain. Spain is the region's fourth-largest economy after Germany, France and Italy.

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  • How to Buy Gold in Today's Troubled World Gold turned in a fairly tarnished performance during the second quarter, falling $80 an ounce, or 4.76%, during the April-June period.

    Even still, most precious metals analysts see strong potential for gold prices in the second half of 2012 given the continued sluggishness in the global economy and increasing uncertainty about the Eurozone debt crisis.

    Some are suggesting that gold prices could top their previous 2012 high of $1,795.10 an ounce set back in February.

    Given that, the big question for investors is how to buy gold in a renewed bull market for the shiny metal.

    The answer largely depends on your expectations.

    If you expect renewed economic disruptions in Europe and elsewhere, growing tensions in Syria, Iraq, Egypt and the rest of the Middle East, and increasing political discord in the U.S. before and after the election, you'll likely want to take the traditional approach - holding the physical metal itself.

    Purists feel this is the only true hedge against global turmoil and declining values in the dollar and other fiat currencies.

    How to Buy Physical Gold

    For smaller investors, this typically means buying gold bullion bars, rounds (unadorned coin-shaped pieces) or minted gold bullion coins.

    Bullion bars - produced primarily by private mints like Engelhard, Johnson Matthey PLC (LON: JMAT) and Credit Suisse Group AC (NYSE ADR: CS) - come in an assortment of sizes to suit the needs and means of every investor.

    The smallest bars weigh just one gram, priced this week at about $52.75, while the largest is 400 ounces and was going this week for around $645,000.

    Gold rounds are produced by the same private refiners, as well as some government mints, and are also available in a variety of sizes, typically ranging from one-tenth of an ounce to five ounces. Prices range from as little as $15 per round over the spot price of gold at the time of the order for smaller pieces to $40 over the spot for larger specialty pieces.

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  • Three Cheap U.S. Stocks with Huge Profit Potential Bargain-hunting investors this year have been able to feast from a market buffet of cheap U.S. stocks.

    Reports have surfaced in the past few months about how the Standard & Poor's 500 is offering the lowest-priced stocks in years based on price/earnings ratios.

    Bloomberg in March reported that companies in the S&P 500 were trading at 14.1 times earnings, the lowest valuation of all 34 peak periods since 1989.

    Then in May former U.S. Federal Reserve Chairman Alan Greenspan declared that "stocks are very cheap."

    Again just last week Bloomberg noted that the S&P 500 is trading 16% below its average valuation since the 1950s.

    Now, after the S&P 500 recorded its best June since 1999, investors want to know if it's still the time to buy or if the party's over. With the Eurozone debt crisis still looming and a spate of recent gloomy U.S. economic reports, market optimism has thinned.

    But there are still bargains to buy.

    How to Find Cheap U.S. Stocks

    First, to determine if a stock is undervalued with high profit potential, and not cheap and going nowhere, investors need to scrutinize the driving factors of why a stock's price has fallen.

    For instance, you must look at what's happening to the stock's sector - is there a macroeconomic or cyclical reason for the stocks to slip?

    Then look at the company - is it in healthy financial shape? What are its future prospects?

    Some stocks like Bank of America (NYSE: BAC) may seem undervalued when looking at tangible value, which tells us BAC is worth almost double what it is trading at now. But the company posted negative earnings per share last quarter. Analysts expect it to post a positive EPS of 16 cents this quarter and give it a forward P/E just above 8, which is cheap - but it's a stock that comes with a lot of volatility, so its low price is risky.

    Others have had a long slide and may be at a bottom, such as tech struggler Hewlett Packard (Nasdaq: HPQ). CEO Meg Whitman is trying to turn the company around, but HP has lost more than half of its market value over the past year. With its forward P/E less than 5 it seems like a bargain, but there isn't a strong case for why this stock could rally.

    And finally look at General Motors (NYSE: GM) or Ford Motor Co. (NYSE: F). Both currently have P/E ratios below 6 and even though the auto industry has been one of the hardest hit U.S. sectors over the past few years it looks to be on the upswing now.

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  • Spain Squeezed by Eurozone Bailout Deal In attempts to ease its mushrooming financial pains, Spain unveiled new austerity measures today (Wednesday) that aim to reduce 65 billion euros ($80 billion) from the public deficit by 2014.

    The move is part of an agreement Spain's Prime Minister Mariano Rajoy made when he accepted a Eurozone bailout for his country's ailing banking system. Rajoy surrendered to mounting pressure to at least make an effort to avoid a full state bailout.

    "We have very little room to choose. I pledged to cut taxes and now I'm raising them. But the circumstances have changed and I have to accept them," Rajoy told the national parliament.

    As protests erupted from anti-austerity crowds that gathered in Madrid, Rajoy explained plans to roll back social welfare protections and immediately raise taxes so that he could secure emergency aid and placate jittery investors.

    Rajoy announced higher taxes and cuts to unemployment benefits, union pay, and civil service perks.

    Amid boos and heckling, Rajoy told the parliament, "These measures are not pleasant, but they are necessary. Our public spending exceeds our income by tens of billion euros."

    The moves highlight how Rajoy and Spain are at the mercy of the EU"s tough bailout provisions if the government hopes to get any more money for its struggling banks.

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  • The Next Phase of the Eurozone Debt Crisis Today (Monday), as we digest what happened in Europe, the obvious question arises: What comes next for the Eurozone debt crisis?

    For starters, the heads of state coming out of the Council of Europe meeting last week pledged to have the new structure by July 9, even though the new stabilization mechanism will take longer to phase in.

    For the first time, there will be a greater accountability (and control) over continent-wide commercial banking and access to some underwriting of debt coverage. It also means that national banking systems will need to relinquish some oversight to the European Central Bank (ECB).

    For months, a number of people (myself included) have insisted that the solution to th e Eurozone debt crisis requires greater financial integration. The shortcoming seemed rather straightforward.

    The EU had ushered in a more centralized monetary system (single currency and all that) but had no centralized fiscal system to parallel it. Simply put, that required adherence to currency rules without any ability to coordinate the credit and fiduciary end of the spectrum.

    Well what came out of the Council in the early hours of Friday will not solve the debt problem in Spain , Italy , Portugal, or Greece. There is no magic short -term fix. But it might just provide the underpinnings for a credit system that may begin to operate.

    The banks are the problem right now.

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  • Can the U.S Economy "de-couple" from the Eurozone Debt Crisis? As the Eurozone teeters on the edge of a breakup, it begs the question: Can the U.S economy "de-couple" from the Eurozone debt crisis?

    Ultimately, the answer comes down to fate of the euro. It's the linchpin to everything.

    From the point of view of one who has travelled fairly frequently in the Eurozone I can tell you I find the euro very convenient indeed.

    In my London merchant banking days, when I used to go on marketing trips around continental Europe, I found that while the excellent European train service was a pleasure to use, the proliferation of local currencies made travelling a pain.

    There was nothing more annoying than to be on a long-distance train that had just crossed the border from Belgium to Germany at Aachen, only to discover that I could not enjoy the excellent Deutsche Bundesbahn bockwrst and fine local beer because I had only sterling and Belgian francs in my wallet, but no deutschemarks!

    The other problem was that after a long trip I ended up with my wallet stuffed with small amounts of ten different currencies, none of which could be changed back into anything useful because the bank charges ate up their value.

    In southern Europe, local exchange controls were a pain too.

    Walking through Madrid airport with $25,000 of legitimately earned pesetas in bills which could not be transferred to Britain through the banking system was far too exciting for my liking.

    From a British merchant banker's point of view, it was thus very convenient when all the local foreigners converted to the same currency, rather than lots of different ones.

    After that, you needed only two compartments in your wallet: one for British money and the other for foreign money. Then you could travel all over Europe without worrying about changing currencies.

    It was a very 19th century feeling, almost as good as being back on the gold standard!

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  • Eurozone Debt Crisis: EU Reaches Bailout Deal The recent marathon session in Brussels was the EU Council's 18th meeting on the Eurozone debt crisis. As it is comprised of the heads of government from European Union members, the Council was largely thought of as a grand debating society.

    Not this morning.

    In what may well be the first glimmer of light at the end of the tunnel, the EU will agree to coordinate bailouts across the continent. The details are still incomplete, and there is always devil in the details.

    In addition, EU members must approve the substantive plan, meaning more coming politics in parliaments from London to Warsaw.

    So this is not a done deal.

    Actually, until there is some flesh on the bones, we are still uncertain what the "deal" really is.

    But this much we do know.

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