Eat the Rich

Addison Wiggin – April 5, 2012

• “Eat the rich,” the graffiti says: One day after the shot heard ’round… er, Europe…
• Bailed-out banks or “overpriced” video games? What really gets Americans’ goat in 2012…
• “Adventure capital” in one of the world’s great untapped markets… and a way for you to get in on it at home…
• Bypassing the brain and going straight for the fat: Patrick Cox on a “revolutionary” and potentially profitable approach to weight loss…
• A ZIP code all your own… elegies for Andrew Wordes… firsthand reader testimony to the power of “nutraceuticals”… and more!

   “He shouldn’t have killed himself,” an old man said. “He should have taken that gun and killed them (members of parliament).”

“The politicians killed him!” cried another.

“Hang them all!” added a third. “Traitors!”

We thought it was too early yesterday to tell whether Europe would treat the suicide of an old man in front of parlaiment in Athens like another Andrew Wordes… or break into its own “Arab Spring.”

This morning, we see green shoots… of raw fury.

   “News traveled fast,” Chicago Tribune columnist John Kass reported from the scene, “and by nightfall, rioters were breaking up marble steps and throwing the chunks of rock at a phalanx of police.

“The cops returned fire with tear gas as the so-called anarchists with their faces covered attacked the beautiful Hotel Grand Bretagne. They painted the hotel wall with this slogan: ‘Eat the rich.’”

”And that’s how I watched despair turn into rage.”

   Turns out the man, a retired pharmacist named Dimitris, left a suicide note. And an incendiary one, at that. “The… government has annihilated all traces for my survival, which was based on a very dignified pension that I alone paid for 35 years with no help from the state.

“And since my advanced age does not allow me a way of dynamically reacting (although if a fellow Greek were to grab a Kalashnikov, I would be right behind him), I see no other solution than this dignified end to my life so I don’t find myself fishing through garbage cans for my sustenance.

“I believe that young people with no future, will one day take up arms and hang the traitors of this country at Syntagma Square,” the note said, “just like the Italians did to Mussolini in 1945.”

Protesters are back at the scene today. The situation is under police control. For now.

   We can’t help wonder what it would take to get Americans to take up M-16s. Bailouts? Sweetheart deals? Legalized corruption? How about… “overpriced” video games?

Consumerist, a website run by Consumer Reports (who knew?) holds an annual poll to find the “Worst Company in America.”

In 2008, the sleazy mortgage lender Countrywide Financial topped the list. In 2009, it was corporate welfare queen AIG. Worthy contenders, indeed.

This year? Electronic Arts. It beat Bank of America by a 2-to-1 margin.

“For years,” Consumerist writes, “while movies and music became more affordable and publishers piled on bonus content — or multiple modes of delivery — as added value to entice customers to buy, video games have continued to be priced like premium goods.”

This sin, in the estimation of Consumerist readers, amounts to a graver sin than being
“a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we’ll all be paying for until the end of time,” to borrow a phrase from Rolling Stone’s Matt Taibbi.

Overpriced video games are apparently a more grievous infraction of the public trust than foreclosing on a house whose buyer paid cash… or, indeed, pioneering the entire “robosigning” practice that’s clouded the title on millions of homes. Or knowingly selling worthless mortgage-backed securities to pension funds.

(Let’s not forget BofA’s cute trick last fall. It took $21.6 trillion in derivatives off the balance sheet of Merrill Lynch — which can’t borrow from the Fed’s discount window and isn’t backed by FDIC deposit insurance. Said derivatives were moved onto the books of BofA’s commercial banking arm — which can, and is.)

Still, the fact Dead Space costs nearly $30 including sales tax is the far greater outrage. Bummer, dude.

It’s enough to make us reconsider the reader whose email began, “I disagree with your scenarios of riots in the streets…” and then proceeded to rant about “sheeple” and “bread and circuses.” Maybe the coming riots at the NATO summit in Chicago and the political conventions will make good fodder for a reality TV show.

   Ah, well… turning to the markets, we see stocks are “mixed,” to use the journalistic parlance we seldom hear anymore. The few traders who bothered to show up before a three-day weekend have barely budged the major indexes from yesterday’s closes.

“This week’s release of the March 13 Federal Open Market Committee (FOMC) minutes suggested no urgent push for a quick quantitative easing,” Options Hotline’s Steve Sarnoff opined to readers last night. “That helped bring some selling pressure down on overextended stocks.”

“A pullback to support is under way, but it may be premature to conclude the upside is exhausted. The rally may be strong enough to resume. As this holiday-shortened week comes to a close, we will be watching closely to see if bonds have begun a new leg lower.”

Steve laid on a falling-bond play earlier this week that gained 37% in a single day. That’s on top of other winners this year including 44% on a drugmaker… 55% on the S&P 500… and 88% on a precious metals miner. Steve’s next play comes this Sunday. Access here.

   Gold is finding its footing again after a two-day shakedown. The spot price is up to $1,628.

“At the low $1,600s and below $1,600,” writes the dean of the newsletter industry, Richard Russell, “it’s ‘enter the dragon’ That is, Chinese buyers will scoop up bargains and keep an effective floor under the Midas metal.”

Silver, meanwhile, is bouncing off a three-month low. At last check, the bid was $31.65.

   Maybe the Chinese are buying already. Gold’s strength comes despite the dollar index cresting 80 today.

   Oil is also finding a floor for the moment, dollar strength notwithstanding. A barrel of West Texas Intermediate is back up to $102.74.

   Suddenly, the door is opening to U.S. investors in one of the more lucrative emerging markets in the world. The Obama administration announced yesterday it will begin easing some sanctions on Burma, including “lifting restrictions on U.S. investments in the country,” writes The Washington Post.

We highlighted Burma — or Myanmar, if you prefer — on Monday. Our friend Doug Clayton from Leopard Capital compares its potential with that of Thailand decades ago.

“I would rate Myanmar’s long-term tourism potential just as strong as Thailand’s,” Doug writes, “which draws 14 million tourists a year, versus Myanmar’s 300,000.”

   “Burma is beginning, at last, to thaw,” says our own Chris Mayer, continuing the theme. “The grip of the military junta is loosening, by its own hand. The market is beginning to open up. Political prisoners have been released. Press censorship rules have been relaxed.

“Things are happening quickly. The hotels are full. Many are already sold-out for the first few months of the year. And Burma gets more and more mainstream attention nearly every week.”

Little wonder: “One of the last, large frontier markets in Asia,” The Wall Street Journal says, “it is rich in oil, gas, timber and gems and has the potential to be a major rice and seafood exporter.” Our planned visit next month appears to be timed perfectly.

What’s happening in Burma “is essentially the motive force behind the world right side up idea — this narrowing of historically anomalous large gaps in development to a world more in tune with longer historical experience (and, hence, right side up).”

In other words, the economic dominance of the West is an anomaly in the broad sweep of time. And it yields up scores of investment opportunities you’ll never hear about without visiting far-flung places. Or having an experienced guide do the visiting for you.

That’s what Chris has been up to the last two years, collecting his experiences in his new book World Right Side Up. And you have the chance to watch an exclusive pre-publication briefing from Chris. As an Agora Financial reader, you’ll be privy to information you won’t find in the book — including specific names and tickers.

This briefing is absolutely free, and it goes online one week from today. Sign up here.

   “It’s a revolutionary new approach to weight loss,” says Patrick Cox casting his spotlight on yet another opportunity in the biotech space.

“In the past,” Mr. Cox explains, “scientists have focused on drugs that work on the brain. They thought your brain ‘tells you’ when to feel hungry. Scientists tried a variety of biological approaches to controlling cravings.”

It hasn’t worked. Ten thousand baby boomer Americans now reach retirement age every day. And according to the Centers for Disease Control, over 45% are overweight or obese. By 2020, it’ll be 75%.

“Cravings are not necessarily psychological,” Patrick goes on. “They are physiological. I get in a lot of trouble when I say it, but lifestyle solutions are simply not going to solve this problem. There are rare individuals with will power and time to stay trim and fit, but my wife is a dietitian. I know that statistically, most people, no matter how hard they try, fail to keep weight off.”

But what if a drug treatment targeted fat cells themselves… instead of trying to trick the brain? That’s the key to the discovery that’s caught Patrick’s attention. “This treatment cuts off the blood cells that supply oxygen to one type of fat cells. If you cut off the blood cells, fat can’t get into the fat cells, and the fat cells die.”

Early trials look very promising. Patrick believes this treatment could capture a huge share of the $40 billion weight-loss industry. He lays out a compelling case in this report. Check it out in the next four days and you’ll have a chance to access Patrick’s premium research at the lowest possible price. This offer expires at midnight next Monday.

   As U.S. real estate opportunities go, this one is… certainly unique.

The town of Buford, Wyo., is for sale. The auction is today. Minimum bid: $100,000.

For that, you get about 10 acres with five buildings — including a three-bedroom house, a gas station and a cabin currently used as a toolshed. Oh, and a post office with your own ZIP code — 82052.

Buford’s population is down to one. His name is Don Sammons. And he’s the seller. Whoever buys, he says, “I just hope their dream continues to keep Buford moving in the 21st century.”

The auctioneer touts it as a “unique opportunity” to “own your own income-producing town.” The income, presumably, comes from the gas station — conveniently located just off Interstate 80, midway between Cheyenne and Laramie.

Act now and you get the tumbleweeds for free…

   “The state of Delaware already claims the unused balance of expired gift cards,” a reader writes after seeing our item from New Jersey.

“It has been quietly going on for a while. Most of the gift card issuers begin a fee to deplete the card after it is once used. Needless to say, my wife and I never give gift cards.”

“Of all the Agora Financial emails I get, I read The 5 right after I read Strategic Short Report! Keep up the fine reporting.”

   “Thank you for continuing to mention Mr. Andrew Wordes in The 5,” writes another. “This man was the victim of unmitigated harassment by various ‘authority’ figures until he was worn down.”

“With a little authority, many individuals lose all common sense and humanity! The story of Mr. Wordes should be recognized for what it is: governmental overreach to the nth degree!”

“A sad commentary on individual freedom.”

   “Too bad,” adds another, “that even the local papers generally painted Wordes as a kook in what little coverage there was. I guess that the media can’t afford the truth — seems to be happening a lot these days.”

   “When I read about anatabine citrate in The 5, I was a skeptic, but decided to try it anyway,” a reader writes about Patrick Cox’s favorite “nutraceutical.”

“I am becoming a believer after a month of usage. I’m a 59-year-old ultramarathoner and my legs feel stronger after long runs and a stubborn plantar faciatis injury in the heel is improving much faster than under the normal treatment regimen of icing, taping and wearing a night splint (aka boot).”

“I’ll know more after my next ultra race in three weeks. Happy to provide a further update at that time. Hopefully, I’ll be running long-distance events for many more years to come.”

“Thanks for the information. Look forward to The 5 every day.”

The 5: Thanks. The product is sold through a major supplement retailer’s website, where we see 43 reviewers have given it an average 4.8 stars out of five.

One reviewer has an arthritic hip. After three weeks of use, “I now have almost no joint pain and working out, running and yoga stretches are much more enjoyable.”

The small (less than $500 million market cap) company behind this product has doubled its sales… it’s collected a huge celebrity endorsement… and insider buying is picking up steam. No wonder Patrick Cox is so excited.

Cheers,

Addison Wiggin
The 5 Min. Forecast

P.S. U.S. and Canadian markets are closed tomorrow for Good Friday… and it appears by day’s end Abe Cofnas will go 6 for 6 on his for-demonstration-purposes-only trades here in The 5.

Mr. Cofnas was counting on the Dow to end the week in a range between 12,975-13,275… and barring something unusual before day’s end, that’s exactly how it’ll work out. Averaging both sides of his recommended trade, you would have booked a 15.6% gain in four days.

Happy Easter… The 5 returns on Monday!