Mike Shedlock - US Spends $1 Billion on Russian Helicopters for Afghan Military: Why?
Posted: 12/9/2013 12:58:00 PM EST

According to a top secret 2010 report the Russian-made Mi-17 helicopter is better then the US-made Chinook helicopter built by Boeing in Pennsylvania. Army Secretary John McHugh wrote in a 2011 memo "that the Mi-17 stands apart" when compared with other helicopters.

Another study shows the Chinook was found to be "the most cost-effective single platform type fleet for the Afghan Air Force over a twenty year" period.

This has the Christian Science Monitor and many others asking Why is US buying Russian helicopters for Afghan military?

Higher Quality Questions

I am not qualified to comment on which helicopter is better. Instead I want to ask a higher quality question:

What the hell are we still doing in Afghanistan?

We should have declared the war won 10 years ago and left. Better yet, we should not have gone there at all in the first place.

Based on that simple logic, we should buy neither the Russian-made Mi-17 helicopters nor the Boeing Chinook for Afghanistan.

Either way, I wonder if the real reason we bought Russian helicopters is fear for what happens to Chinook technology once we leave Afghanistan and the country falls to the Taliban once again.

Regardless of "why" many important high-level questions remain.

Open Questions

  1. In what ways does the top secret report show the Russian-made Mi-17 to be superior?
  2. If the Mi-17 is superior, how much money are we wasting on the Boeing Chinook program?
  3. How much money did we waste in Afghanistan?
  4. 13 years! Why?
  5. When, if ever, are we going to learn from such stupidity?

Addendum: Here is the rationale for the Mi-17
There is no reasonable rationale for being in Afghanistan for 13 years

Mike "Mish" Shedlock

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John Ransom - Cure for Cancer? Pretty Close
Posted: 12/9/2013 12:52:00 PM EST

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:

Stock number one: Twitter

And the headline says: Twitter gains as tech leaders call for curbs on spying - MarketWatch:

Tech stocks held a mild positive edge Monday, with Twitter Inc. among the advancers as the microblogging company joined with several tech leaders to call upon President Obama to push for tighter controls on government efforts to spy online.

In a letter published Monday , Twitter, along with Apple Inc., Microsoft Corp., Facebook Inc., Google Inc., Yahoo Inc., AOL Inc. and LinkedIn Corp. took a unified front to urge President Obama and the U.S. Congress to take steps to reform how governmental agencies are able to access data from online services.

Note: Twitter is trading about 26 times next year’s sales in the best-case scenario. It has a very limited trading history. Just to repeat: I rarely like IPOs unless I own them at pricing.

Symbol: TWTR

Dividend: NA

Forward PE: NA; Trailing PE: NA

Estimate Trend: Up

Ransom Note Trendline: Avoid Twitter

TWTR Chart

TWTR data by YCharts

Stock number two: J. C. Penney Company, Inc

Today's Dead Cat Bounce Stock Is J.C. Penney - The Street.com:

Trade-Ideas LLC identified J.C. Penney (JCP) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified J.C. Penney as such a stock due to the following factors:

JCP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $390.4 million.

JCP has traded 48.4 million shares today.

JCP is up 3.2% today.

JCP was down 8.7% yesterday.

Symbol: JCP

Dividend: NA

Forward PE: NA; Trailing PE: NA

Estimate Trend: Whatever

Ransom Note Trendline: Avoid JC Penny

JCP Chart

JCP data by YCharts

Pharmacyclics Inc.

Market Action: Taper Concern Still J&J, Pharmacyclics leukemia drug effective long term –study—Reuters:

A closely watched leukemia drug developedby Johnson & Johnson and Pharmacyclics Inc maintained its effectiveness in keeping the disease at bay formost patients, according to long-term follow-up data from amidstage study being presented at a major medical meeting.

The oral drug, ibrutinib, last month won U.S. approval totreat a rare and aggressive form of non-Hodgkin lymphoma knownas mantle cell lymphoma. It is awaiting a Food and DrugAdministration decision on treating chronic lymphocytic leukemia(CLL), a slowly progressing form of blood cancer that primarilyaffects people aged 65 and older.

Note: Analysts say that this is almost a $5 billion global market. Says Bloomberg: “Ibrutinib was approved by the U.S. Food and Drug Administration last month for mantle cell lymphoma, with a decision expected for CLL by the end of February. A study presented at last year’s hematology meeting and published in June in the New England Journal of Medicine showed that 71 percent of patients responded to the drug. Further data are being presented at this year’s meeting.”

Symbol: PCYC

Dividend: N/A

Forward PE: 848; Trailing PE: 201

Estimate Trend: Up

Ransom Note Trendline: Buy Pharmacyclics

PCYC Chart

PCYC data by YCharts

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Nick Sorrentino - (An important interview) Saving the Net from the surveillance state (And Crony Media): Glenn Greenwald speaks up (Q&A)
Posted: 12/7/2013 12:10:00 AM EST

In the attached interview Glenn Greenwald (the former Guardian reporter who has worked closely with Edward Snowden) speaks about the danger of a surveillance state, and the complicity of the #oldmedia. Where the press once was at least somewhat adversarial it has become a lapdog. In many ways it is mere propaganda for the crony capitalist state.

Greenwald also speaks of the need for a free Internet, and why privacy must be respected for human beings to be truly free. (In this country the 4th Amendment should protect us from a ubiquitous surveillance state but the government has tossed aside this part of the Constitution it seems.)

“But if we know we’re being watched all the time, then we’re going to engage in behavior that is acceptable to other people, meaning we’re going to conform to orthodoxies and norms. And that’s the real menace of a ubiquitous surveillance state: It breeds conformity; it breeds a kind of obedient citizenry, on both a societal and an individual level. That’s why tyrannies love surveillance, but it’s also why surveillance literally erodes a huge part of what it means to be a free individual.”

Think what you want about Greenwald and Edward Snowden – and Snowden camping out in Russia was a mistake – they, in the words of a very socially conservative friend of mine – “did us a favor.”

In the interview I am particularly taken by how much Greenwald is a citizen of the Net. Many of the experiences he has had online, pushing personal political assumptions, learning about new cultures and new ideas, engaging in real debate outside of his insulated world, are similar to my own and to the experiences of millions of other people around the world.

It is the marketplace of ideas, and it must be defended.

Click here for the article.

See more at Against Crony Capitalism.org

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John Ransom - Ten Year Notes Continue to Sag
Posted: 12/7/2013 12:05:00 AM EST

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:

Stock number one: Ballard Power Systems

And the headline says: Partnership Fuels Ballard Power's Gains- The Street.com:

In what is turning out to be a positive day for alternative fuel-cell developers, Ballard Power Systems (BLDP) soared 25.2% to $1.79 by mid-morning Friday. The micro-cap has risen 35.6% this week.

The Canada-based business is making gains after signing a non-binding memorandum of understanding with Van Hool NV, Europe's fourth-largest bus manufacturer, to develop zero-emission fuel-cell vehicles. Van Hool has committed to 27 fuel-cell buses, powered by Ballard technology, in operation across Europe through 2014.

Note: This stock recently traded at $1.79. The company’s stock price peaked near $130 back in 2000. In the day Ballard was like the Tesla of solar—which is why I included it today.

Symbol: BLDP

Dividend: NA

Forward PE: NA; Trailing PE: NA

Estimate Trend: NA

Ransom Note Trendline: Avoid Ballard.

BLDP Chart

BLDP data by YCharts

Stock number two: Sell Lumber Liquidators Holdings, Inc.

Fastenal November Daily Sales Above Oct- Yahoo Finance:

Fastenal Company (FAST) released decent sales results for the month of November wherein net sales rose 3.1% year over year to $621.3 million. Currency was a 0.4% headwind.

November daily sales grew 8.2% to $13.1 million, showing an improving trend from growth rates of 2.9%, 7.2%, 5.7% and 7.7% in the months of July, August, September and October, respectively. The daily sales growth was flat from November last year.

Fastenal carries a Zacks Rank #4 (Sell). Better-ranked stocks in the building products/ building construction sector include Liquidators Holdings, Inc. (LL), Builders FirstSource, Inc. (BLDR) and CaesarStone Sdot-Yam Ltd (CSTE). While Lumber and CaesarStone carry a Zacks Rank #1 (Strong Buy), Builders FirstSource holds a Zacks Rank #2 (Buy).

Symbol: LL

Dividend: 3%

Forward PE: 30; Trailing PE: 31

Estimate Trend: None

Ransom Note Trendline: Buy Lumber Liquidators

LL Chart

LL data by YCharts

Ten-Year Treasury

Market Action: Taper Concern Still Hovers- Cheat Sheet

Just when you thought it was gone – it’s back. After stocks managed to advance last Wednesday following three positive economic reports, financial commentators had reached the conclusion that the Federal Reserve’s new mantra, “tapering is not tightening” had finally sunk in, and that investors no longer had the same fears concerning cutbacks to the Fed’s bond purchases.

Thursday’s trading action demonstrated that the only difference is that the fear has been reduced to concern. Instead of a huge stock selloff in the wake of positive economic data, we saw a more restrained, 0.43 percent decline in both the Dow and the S&P 500. The yield on the ten-year Treasury note rose slightly to 2.87 percent.

Symbol: ^TNX

Dividend: N/A

Forward PE: NA; Trailing PE: NA

Estimate Trend: Steady

Ransom Note Trendline: Avoid Ten-Year Treasury

^TNX Chart

^TNX data by YCharts

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Mike Shedlock - EU Simmering in a Pot of Misery
Posted: 12/5/2013 11:38:00 PM EST

A Gallup survey shows rising European joblessness is accompanied by falling living standards as Nearly Half of Younger Southern Europeans Underemployed

In 2013, nearly half of 15- to 29-year-olds in six southern European countries are underemployed -- meaning they are either unemployed or working part time but wanting full-time work.

Though the unemployment rate is the labor market indicator that typically grabs headlines, underemployment may be almost as damaging to younger people in terms of their own long-term prospects and their countries' labor productivity. Temporary and part-time jobs are those most often available to young people, and they are often the first to be laid off because they lack seniority. Underemployment rates are much lower among southern Europeans aged 30 to 49 (26%) and those aged 50 and older (24%).

Young people in southern Europe almost universally (90%) say it is a bad time to find a job in their communities, versus about two-thirds of young people in western Europe (67%) and eastern Europe (68%). However, at 57%, labor force participation among young southern Europeans is as high as it has been over the last several years, suggesting that those who find themselves out of work do not have the option of leaving the workforce altogether -- to pursue educational opportunities, for example -- until the labor market improves.

What's Needed vs. What Happened

What's needed is work rule reform, easier standards to fire people, fewer government workers, lower minimum wages, less regulation, and less taxation.

What happened was higher taxes thanks to pressure from the IMF, Troika, and EU nannycrats. Economic pundits incorrectly labeled the result as "austerity".

Yes, austerity did not work as implemented, as Keynesian economists predicted. But Austrian economists predicted the same thing.

Raising taxes in the midst of a recession is a downright foolish thing to do, and it happened in spades. The results speak for themselves.

Explosive Mix

Nearly half of young Europeans are simmering in a pot of misery. Something has to give because "austerity" as implemented is not working.

This is going to boil over in a political explosion of some sort, and when it happens, fully expect heads of state to say "no one could possibly have seen this coming".

Mike "Mish" Shedlock
Read more at http://globaleconomicanalysis.blogspot.com/2013/12/simmering-in-pot-of-misery-nearly-half.html#kA0lL3VSyBSBip0G.99

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Nick Sorrentino - Rand Paul proposes turning Detroit into a nearly tax free “Freedom Zone.”
Posted: 12/5/2013 11:33:00 PM EST
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John Ransom - Key to Biotech: Find Cures, Make Money
Posted: 12/5/2013 11:24:00 PM EST

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:

Stock number one: Puma Biotechnology

And the headline says: Breast Cancer Drug Data Boosts Puma Biotechnology- Investor's Business Daily:

Puma Biotechnology (PBYI) stock vaulted 42% to a new high in morning trading on the stock market today after the company reported surprisingly strong data from a phase-two trial of its breast cancer drug.

The study gave a regimen of Puma's neratinib combined with paclitaxel (better known as Bristol-Myers Squibb's (BMY) Taxol) to 115 patients with breast cancer at Stage 2 or worse, and compared those patients with a control group given paclitaxel combined with Roche's (RHHBY) blockbuster Herceptin. The results not only favored neratinib, according to Leerink Swann analyst Howard Liang, but presaged a good result for another study comparing neratinib to GlaxoSmithKline's (GSK) Tykerb.

Note: Roche’s Herceptin did about $6.5 billion in sales last year. Valuation for PBYI is likely to be expressed in percentage of worldwide market for breast cancer drugs.

Symbol: PBYI

Dividend: NA

Forward PE: NA; Trailing PE: NA

Estimate Trend: NA

Ransom Note Trendline: Buy Puma for speculative accounts.

PBYI Chart

PBYI data by YCharts

Stock number two: Microsoft Corporation.

Here's Why Microsoft and Electronic Arts are Plunging- Motley Fool

Microsoft was underperforming the Dow early on Thursday, shedding more than 3% after closing near a multiyear high on Wednesday. Speculation circulated that Ford CEO Alan Mulally would not be named Microsoft's next CEO. Mulally, who has had successful executive stints at Ford and Boeing, was widely expected to take over the Windows maker following Steve Ballmer's retirement.

Although he isn't know for being a tech visionary, Mulally helped design Microsoft's recent reorganization and may be best equipped to help remake Microsoft's corporate culture. Admitedly, it's only speculation, and Mulally could still be named Microsoft's next CEO, but for now, investors appear to be reacting by selling shares.

Symbol: MSFT

Dividend: 3%

Forward PE: 13; Trailing PE: 14

Estimate Trend: None

Ransom Note Trendline: Sell Microsoft

MSFT Chart

MSFT data by YCharts

Morgan Stanley

Citigroup, Morgan Stanley Downgraded on Fed Taper Fears- Barron's

Investors have been grappling for months with worries surrounding Federal Reserve policies. Upbeat economic reports reinforced fears that later this month the central bank could start to taper its $85-billion-a-month bond-purchase program. The Fed’s easy-money policies have been credited for helping fuel the 2013 stock market.

Symbol: MS

Dividend: N/A

Forward PE: 12; Trailing PE: 19

Estimate Trend: Steady

Ransom Note Trendline: Avoid Morgan Stanley

MS Chart

MS data by YCharts

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John Ransom - Krispy Kreme Not So Sweet Deal
Posted: 12/3/2013 1:53:00 PM EST

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:

Stock number one: Abercrombie & Fitch Co.

And the headline says: Abercrombie shareholder wants CEO replaced or company sold- Reuters:

An Abercrombie & Fitch Co (ANF) shareholder urged the teen apparel retailer to replace Chief Executive Mike Jeffries after his contract expires in February, failing which the company should consider selling itself.

Engaged Capital LLC, which owns less than 1 percent of the company's shares, said in a letter to the board on Tuesday that the expiration of Jeffries' term is an opportunity for the board to set a new direction for the company.

Symbol: ANF

Dividend: 2.3%

Forward PE: 15; Trailing PE 19- Respectable PEs

Estimate Trend: Downward

Ransom Note Trendline: Avoid Abercrombie & Fitch Co.

ANF Chart

ANF data by YCharts

Stock number two: Corning Inc.

What's In It For Corning And Samsung In The Samsung Corning Precision Deal? - Seeking Alpha

Corning (GLW) recently announced that it will buy out Samsung’s 43% stake in Samsung (GM: SSNLF) Corning Precision Materials (SCP), in exchange for $1.9 billion worth of new Corning convertible preferred shares. Additionally, Samsung will make an investment of $400 million in convertible preferred shares, which would give Samsung a 7.4% stake in Corning based on its current share count [1]. The shares are convertible at $20 per share after seven years, or can be forced for conversion if the share price rises above $35. SCP manufactures LCD substrates that are used in TVs, laptops, monitors, mobile phones and cameras.

Symbol: GLW

Dividend: 2.3%

Forward PE: 11; Trailing PE: 14

Estimate Trend: None

Ransom Note Trendline: Sell Corning

GLW Chart

GLW data by YCharts

Krispy Kreme Doughnuts, Inc.

Krispy Kreme Shares Plunge As Investors Go On A Diet- Investor's Business Daily

Investors are on a diet from Krispy Kreme Doughnuts' (KKD) stock, as shares plunged Tuesday after the chain issued a weak outlook Monday.

Shares were down 16.8% to 20.41, below its 50-day line and at a two-month low, on the stock market today. Competitor Dunkin' Brands (DNKN) shares dipped 0.3% to 48.32.

Late Monday, Krispy Kreme reported a 33% jump in earnings to 16 cents per share, beating analysts' estimates by a penny. But sales rose 7% to $114.2 million, just under forecasts for $114.6 million. Company same-store sales increased 3.7%.

Symbol: KKD

Dividend: N/A

Forward PE: 26; Trailing PE: 62

Estimate Trend: Downward

Ransom Note Trendline: Sell Krispy Kreme

<KKD Chart

KKD data by YCharts

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John Ransom - Mark of Death? Penny's Gathers in Dollars from Heaven
Posted: 12/2/2013 2:32:00 PM EST

Welcome to Stocks in the News, where the headline meets the trendline.

Stock number one: Rockwood Holdings

And he headline says: Rockwood to From Venture With Tianqi for Lithium Unit- Bloomberg:

Rockwood Holdings Inc. (ROC), the world’s largest producer of lithium products, agreed to form a joint venture with China’s Chengdu Tianqi Industry Group Co. that will give it a stake in Tianqi’s Australian mining unit.

Rockwood will take a 49 percent stake in a venture controlling Talison Lithium Pty Ltd., with Tianqui holding the other 51 percent, Princeton, New Jersey-based Rockwood said today in a statement.

Symbol: ROC

Dividend: 2.7%

Forward PE: 36; Trailing PE: 5- estimates likely to be revised on the deal.

Estimate Trend: Downward

Ransom Note Trendline: Avoid Rockwood Holdings

ROC Chart

ROC data by YCharts

Stock number two: ZOOM Technologies, Inc.

And the headline says: ZOOM TECHNOLOGIES INC Financials- Edgar Online Financials

On November 19, 2013, an email transmitted to the Company by Marcum Bernstein & Pinchuk LLP ("Marcum"), the Company's independent registered public accounting firm, indicated that the Company's previously issued unaudited financial statements for the period ended September 30, 2013 could not be relied on because they were not reviewed by an independent registered public accounting firm in accordance with Statement on Auditing Standards No. 100, Interim Financial Information ("SAS 100"). On November 19, 2013, the Company accidentally authorized filing of the form 10-Q for the period ended September 30, 2013 (the "Original 10-Q") prior to completion of the review by Marcum.

Symbol: ZOOM

Dividend: N/A

Forward PE: None; Trailing PE: None

Estimate Trend: None

Ransom Note Trendline: Avoid Zoom

ZOOM Chart

ZOOM data by YCharts

Stock number three: J. C. Penney Company, Inc.

And the headline says: The 5 most interesting stock stories right now- CNBC

I know. You're probably getting tired of hearing about JCPenney. There are times I get tired of talking about it. But what can you say about a stock that is both the worst performer in the S&P 500 this year and the best performer in the S&P 500 in November?

Plus, this is the make-or-break month for the retailer. Everybody is watching new/old CEO Mike Ullman's turnaround plan closely. At least part of the stock's recent run is on holiday optimism. If Penney can post solid comps in December, watch out to the upside.

Symbol: JCP

Dividend: N/A

Forward PE: None; Trailing PE: None

Estimate Trend: Upward

Ransom Note Trendline: Sell JC Penny

JCP Chart

JCP data by YCharts

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Nick Sorrentino - Full List of Obamacare Tax Hikes
Posted: 11/25/2013 2:19:00 PM EST

Obamacare was crafted in the back rooms of Congress. Congressional staffers and industry lobbyists scribbled away, writing the massive law deep into the night, night after night. Everyone wanted to make sure they got what they wanted. The insurance industry and Big Pharma made sure they got new mandates forcing Americans to buy their products. The politicians got lots and lots of new taxes wedged skillfully into the nooks and crannies of the bill.

Here’s a list of these new taxes.

I thought that families that made under $250k/year weren’t going to see their tax bills rise. I am pretty sure that’s what the president said.

But I suppose we’ve learned by now that what this president says, and what he does are 2 different things.

For more visit Against Crony Capitalism

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