New Melanoma Therapies Are Ready for Primetime: Sanjiv Agarwala

Source: George S. Mack of The Life Sciences Report (4/29/14)

http://www.thelifesciencesreport.com/pub/na/new-melanoma-therapies-are-ready-for-primetime-sanjiv-agarwala

Melanoma confronts patients and their physicians with unique barriers to treatment and successful outcomes. In this interview with The Life Sciences Report, Dr. Sanjiv Agarwala, chief of medical oncology and hematology at St. Luke’s University Hospital, illuminates some of the new paradigms being developed in the treatment of this deadly skin cancer. Along the way, he spotlights interesting work in the field.

The Life Sciences Report: You have been a principal investigator in several different clinical trials exploring skin cancers and their metastatic manifestations. Because of your position at a major teaching institution, do you see mostly advanced-stage or late-stage patients? Are you ever able to see early-stage or treatment-naďve patients?

Sanjiv Agarwala: Being in an academic/teaching institution, it can go either way. Because of my specific interest and expertise in melanoma, and having maintained good working relationships with community oncologists and other physicians in the area, I tend to have patients referred at all stages. Of course, many of them are advanced stage because those patients need me more. But I do get patients with early-stage melanoma, at least for an opinion.

Here at St. Luke’s Cancer Center, when a patient is referred to us, we keep him or her in our database and on our clinic schedule so that we are able to pick up any kind of recurrence or metastases early and intervene in a timely manner, either with treatment or with enrollment in a clinical trial.

TLSR: Were you trained as a hematologist/oncologist?

SA: Yes. Some melanoma specialists come from a dermatology or surgery background, but I was trained in hematology/oncology and, before that, in internal medicine. I’m technically triple-boarded. But as I have developed my career, I have focused on melanoma and the immune system, and that’s pretty much all I do now.

TLSR: Would you briefly compare melanoma versus squamous cell carcinoma versus basal cell carcinoma? What sets melanoma apart? Is it a propensity to metastasize to very tragic areas, such as the brain and liver?

SA: Absolutely. Skin cancer as a whole is extremely common. More than several million patients per year develop skin cancer in the U.S. But melanoma is the least common of all the skin cancers, and is diagnosed in approximately 90,000 (90K) Americans per year. What sets it apart, aside from being the least common, is that it is also, unfortunately, the most dangerous. However, the good news is that if melanomas are picked up early, most of them can be cured—and thank goodness most of them are picked up early.

There are a couple of issues that make melanoma so dangerous. One is that many melanomas don’t look like what you might expect a melanoma to look like, and so they’re hard to identify. The second issue is that melanoma does have a propensity to metastasize. But it’s a tricky cancer that metastasizes even when it’s small, which is somewhat unique. When you think you’ve picked it up early, and you dig deeper, clear the margins, do the sentinel lymph node mapping and so on, you might find that even a small tumor has already metastasized. These factors make melanoma unique.

Another thing is that when melanoma metastasizes to different parts of the body, it tends to metastasize to more dangerous areas—the more tragic areas, as you put it—like the brain and liver. Any organ can be involved, however, and in fact, the most common site of melanoma metastasis is the lung, as well as other subcutaneous tissues, where patients tend to have a better prognosis and survival rate than those with metastases to the liver or the brain.

TLSR: Squamous cell carcinoma occurs much more frequently, and it also metastasizes, doesn’t it?

SA: Yes. But squamous cell metastasizes much less frequently than melanoma. Basal cell carcinomas very rarely metastasize. Still, both these cancers can metastasize and become a clinical problem, and should therefore not be ignored.

TLSR: All tumors, solid as well as those of hematologic origin, learn to circumvent chemotherapeutic agents and even antibodies. Tumor cells evade and even learn how to pump out therapeutic drugs. At a later stage of disease, do you see melanoma as more resistant to chemotherapy than, let’s say, squamous cell carcinoma?

SA: Yes, indeed. Melanoma is actually one of the most resistant tumors to any kind of chemotherapy—not only compared to squamous cell of the skin, but to any cancer, including lung cancer, head-and-neck cancer and breast cancer. This extreme resistance to chemotherapy is why classic chemotherapy drugs are rarely used in melanoma, and almost never as a frontline option. Melanoma has the ability to evade the immune system, but it also arouses the interest of the immune system more than some other cancers. That is why we have used immunotherapy as a treatment modality for melanoma with some success.

TLSR: Is this the reason that interferon, an immunotherapy, has been such a popular therapeutic agent in melanoma?

SA: Yes. In fact, until recently, there were basically three drugs that were U.S. Food and Drug Administration (FDA)-approved for melanoma. One is interferon, an immunotherapy that is used in adjuvant therapy, which is prevention of relapse or recurrence. Another drug used in the metastatic setting is interleukin-2 (IL-2), which is given in high doses that can produce significant toxicity. It’s a bit hard to use in most patients. There is also a chemotherapy drug called dacarbazine, which was approved in an era when treatment regimes were different. It’s been around for 30 years and has never actually shown a survival advantage in melanoma; I honestly don’t think it would be approved by the FDA today.

A lot of progress is being made in melanoma therapies right now, mostly in immune and targeted therapies. As I said, the immune system is very important in melanoma, which is exactly why interferon has been used quite extensively in the adjuvant setting for a while, and will continue to be used for some time to come.

TLSR: When the pathologist sees a melanoma lesion under the microscope and looks at its histopathology, the diagnosis of melanoma is not hard to make. Are we getting to the point where our diagnoses are becoming even more differentiated? Are we starting to see melanomas diagnosed by their genotype—by their epigenotype or mutations—as we see in breast cancer and some other areas?

SA: Those kinds of mutations are not so much used for diagnostic purposes. The melanoma is still diagnosed by its histopathology and the use of special stains performed by the pathologist. But the next step, which is now routine, is to test the melanoma genotype, specifically looking for certain mutations that have value both in prognosis and therapy. You used the breast cancer paradigm; certainly that is what’s happening.

I think that, ultimately, what we call melanoma will prove to be not one disease, but that we will diagnose different types of melanoma in a molecular sense. We know that melanomas that arise from the skin are different from those that arise from the mucosa. These melanomas, in fact, have different mutations, and the affected patients have different prognoses, as well as different responsiveness to drugs. We’re just beginning to scratch that surface. But in the future we will be diagnosing all cancers mostly on genotype.

TLSR: What targets look interesting to you today on the molecular level?

SA: The BRAF mutation is certainly the most important, and the most widely used. More than one drug has been approved for treatment of patients who have the BRAF mutation, and those drugs can be quite effective. The BRAF mutation is present in approximately 40–50% of patients with melanoma, and that makes it very interesting. We saw the approval of a first-in-class BRAF inhibitor, vemurafenib back in August 2011.

Genentech is also developing a MEK/BRAF combination inhibitor, which is not yet approved but is in clinical trial. We’re waiting for the results. Genentech, to my knowledge, is the frontrunner in the targeted therapy area, and is now studying its antibody, MPDL3280A, targeting PD-L1 (programmed cell death-ligand 1), which is upregulated on tumor surfaces. The idea behind the anti-PD-L1 and anti-PD-1 (programmed cell death-1) antibodies is to unmask the tumor cells, thereby taking the brakes off the immune system, in part by rejuvenating T cells. These drugs make the immune system much more powerful, and are changing immunotherapy for us. We’ve always thought of immunotherapeutic agents as having very low response rates and being very slow-acting. Now we think immunotherapy can actually have high response rates and can work quicker.

TLSR: Are there other targets you think could be interesting?

SA: There is a c-KIT mutation, which is more common in mucosal melanomas. Another mutation, called NRAS, is common in cutaneous or skin melanomas. NRAS, interestingly, does not occur if you have a BRAF mutation, so if you don’t have a BRAF, you should look for the NRAS. Clinical trials are in progress now targeting NRAS mutation-positive melanomas.

We’re just beginning to explore this arena. There are going to be other mutations out there, and we are just beginning to learn which drugs might target those mutations. The BRAF mutation is ready for primetime. The others are being developed.

TLSR: I note that you’ve been doing a study testing interferon alfa versus peginterferon alfa-2b. Could you comment on that?

SA: Most of my research has been done in high-dose interferon, and I have been involved with these trials through the Eastern Cooperative Oncology Group (ECOG), where I’ve been a coinvestigator and a coauthor of many papers. The pegylated interferon, or peginterferon, regimen work was done in Europe. Based upon a large European trial, peginterferon is now available in the U.S., and I’m using it with some of my patients right now.

The only study on pegylated interferon that I’m involved with currently is a quality-of-life study. It’s our theory and our observation that patients who receive pegylated interferon have a better quality of life, but no one’s actually proven that, so we are comparing pegylated interferon to high-dose interferon. It’s not a randomized trial.

TLSR: When you talk about quality of life, is this about terminal-stage disease?

SA: No—in fact, quite the opposite. Just to clarify, interferons are used in early-stage disease, such as stage IIB, IIC or III disease. We are talking about patients who are potentially cured from the surgical standpoint, but because of a high recurrence rate could be affected again in the future. Interferon is used in an effort to lower the risk of recurrence.

However, these drugs are not perfect, and we can’t guarantee they will work. Frankly, a patient may not need the drug, but we just don’t know. Therefore, when you have someone who’s potentially cured, quality of life becomes a very important issue. While the drugs do reduce the risk of recurrence and, in some cases, improve survival, the patient has to deal with the toxicity. The study focus is on maintaining a high quality of life during this treatment, and not on end-stage patients.

TLSR: This is an investigator-sponsored, observational study?

SA: It’s a 100-patient trial pilot study. It was a concept I put forth from our cancer center; we have funding, which makes interferon and is very interested in these data. We have an unrestricted grant to do this research.

TLSR: I note that the final data collection for this trial is supposed to be complete in December 2014.

SA: The trial will be open longer than that, I’m sure. We hope to get 100 patients in the study by December, but we may not. The trial will remain open until we get 100 patients. We’ll analyze the data and then, hopefully, we’ll learn something interesting, publish it, and potentially move into a larger trial.

TLSR: Three years ago there was a tremendous amount of excitement surrounding the approval of ipilimumab for melanoma. Are you using this antibody?

SA: I am. Ipilimumab is approved and indicated for advanced melanomas that are metastatic but not surgically curable—for stage IV patients, and unresectable stage IIIs.

There was tremendous excitement about the approval of this agent because it was the first-ever drug to be approved in advanced melanoma based upon a survival advantage in a randomized clinical trial. There have been others since then, but this was a breakthrough. Ipilimumab has a role, but not as an adjuvant therapy—not just yet. Trials with ipilimumab are ongoing in the adjuvant setting.

TLSR: Is the theory here that if ipilimumab works, and shows a survival advantage in stage IV, it could be helpful in earlier-stage disease?

SA: Exactly right.

TLSR: What’s the future of melanoma therapies, Sanjiv? Is it going to come down to training a patient’s system to deal with the disease?

SA: I think the future of melanoma therapies is going to be twofold. First, as we learn more about these various molecular pathways and targets, we’re going to find drugs that will specifically hit those targets and will potentially be very effective. We already see this with the BRAF mutation. The other path is with immunotherapies. We are developing and learning much more about the immune system and how we might stimulate it to be more powerful.

The great advantage of immunotherapy is that it doesn’t require or depend on a specific mutation, at least that we know of. We can give the therapy to all patients with advanced melanoma who qualify. For the mutational drugs, the patient has to be mutation-positive for the therapy to work. Immunotherapies also tend to be more durable in their outcome and response, though that could change as we develop new agents on the targeted side.

I think the future will feature both these therapies, and then we’ll work on how to put them together. Do we use them at the same time or in sequence? Which goes first, which goes second? We are going to spend many years doing the science and the research.

TLSR: Speaking of intralesional therapies, you have been a principal investigator in clinical trials studying drug PV-10 (10% rose bengal disodium). Tell me about that.

SA: PV-10 is an interesting agent. I have done work with it in a Phase 2 trial. We’ve presented and published abstracts on the data.

PV-10 is also an intralesional therapy. What is so interesting is that PV-10 produced not only a local shrinkage of tumor, but we also saw a significant number of patients with significant responses in noninjected lesions. We call that a bystander effect. The agent must have a distant effect, which we believe is working through the immune system. Our colleagues at the H. Lee Moffitt Cancer Center & Research Institute are coming up with nice data that explains how the immune system might be affected and improved with PV-10. Once again, though, PV-10 is an intralesional therapy, so it needs to be researched in patients with locoregional (restricted to a local area) disease. When you get a distant bystander effect, it’s a bonus—it’s great to see.

TLSR: With regard to the bystander effect, I’m wondering about how longer-term studies with PV-10 could turn out with respect to preventing recurrence of disease and metastasis. The problem with that, as I see it, is that you must have a tumor present in which you will inject the drug to achieve that immunological, or bystander, effect. The clinician must administer the drug before the tumor mass is excised. Is that indeed the case?

SA: Yes—a tumor needs to be in place. These patients have generally had multiple surgical treatments but the disease has recurred, and a tumor is present because of that. You need to inject a tumor to stimulate and set up the necrosis—the desired chemoablative effect—in the tumor, and potentially trigger the immune response as well. Currently, we are using PV-10 in clinical trials in disease that is not surgically resectable.

“Melanoma has the ability to evade the immune system, but it also arouses the interest of the immune system more than some other cancers.”

But, you do bring up an interesting concept. If you have a patient with a lesion that you can resect surgically—one that you can actually remove—perhaps you could give a single injection—or more than one—of PV-10 prior to resection in an effort to stimulate the immune system. You would remove the tumor after that. This is, however, a research question. I would love to see that trial happen, but it has not yet been done.

TLSR: I know we’re talking relatively small numbers, but have the responses to PV-10 therapy looked durable so far?

SA: What we’re seeing is that both the injected lesions and the bystander effect tend to be durable. Obviously, we are looking at a Phase 2 database, so we would need to confirm that in a larger trial, potentially in a Phase 3 trial. But with the 80-patient data we have in Phase 2, the responses look durable.

TLSR: I’m noting that expanded access (compassionate use) protocol going on with PV-10. A lot of companies, especially small companies, might not want to dirty up their new drug application or final label by including late- or end-stage patients. I think this shows a lot of confidence in the program.

SA: I agree. We have an expanded access program available for patients who might benefit from this therapy. Obviously, I would only use that protocol for patients who have tried and exhausted most other options, because this is still an investigational drug.

TLSR: Have there been any interesting responses that you’ve seen in these expanded access patients?

SA: There have been. What we’ve seen in the expanded access program pretty much reproduces what we’ve seen in the Phase 2 trial. It’s a smaller number of patients—I think we’ve had nine patients at my center so far. I don’t know the data from the other centers as yet. But what we’ve seen with our expanded-access patients gives us confidence that our data from the Phase 2 study are robust.

TLSR: Sanjiv, it’s natural, in most cases, for the first physician seeing a melanoma patient to want to treat that patient, whether that’s the dermatologist or the oncologist. Because they may specialize in this area, it’s not obligatory for the first clinician to refer the patient to a center like St. Luke’s, is it?

SA: That’s true to some extent. I think dermatologists are often the ones who diagnose the melanoma based on a skin lesion, and they sometimes refer and sometimes don’t. I find that as oncologists build relationships, dermatologists tend to refer more patients. Often, these patients need fairly good management. Also, by having access to a center with expertise in melanoma, dermatologists may feel quite comfortable in getting a blessing, if you will—or an opinion—because they never know when the patient might need us. The patient might as well get to know us early.

TLSR: It seems to me that as long as community physicians know you’re not their enemy or that you’re not going to make them look bad, they may be more willing to refer at an earlier stage.

SA: That’s exactly what we try to foster. I make it very clear that if a physician sends someone to me for a second opinion, and if whatever I’m going to offer that patient is exactly the same as what the referring physician can offer, I encourage the patient to go back. There’s no point in having a patient travel a long distance to see me.

Because melanoma is relatively rare, many oncologists would prefer to have the patient treated by me here at St. Luke’s because of some of the intricacies of the new therapies, especially in more advanced disease cases. But I always give patients that option. Also, you’re right that we never want to make referring physicians look bad. We also don’t want them to feel like if they send patients to us, they will never hear about the cases again. We provide good feedback and keep referring clinicians in the loop. We don’t steal their patients, so to speak.

TLSR: It has been a pleasure talking to you about melanoma. Thank you.

SA: It’s my pleasure. We can look forward to very interesting data from all the agents we have talked about at the upcoming ASCO meeting.

Dr. Sanjiv Agarwala is chief of medical oncology and hematology at St. Luke’s Cancer Center in Bethlehem, PA, and professor of medicine at Temple University School of Medicine in Philadelphia. He is nationally and internationally recognized as an expert in the research and treatment of melanoma and cutaneous malignancies. He graduated from the University of Bombay, and did residencies and fellowships at the University of Bombay in India, Dunedin University in New Zealand and University of Pittsburgh. Dr. Agarwala has special interest and expertise in immunotherapy for cancer. He has been principal investigator for several clinical trials involving immunotherapy and targeted therapy for melanoma and other malignancies. He has written more than 100 publications and book chapters on melanoma and other research areas. He is board-certified in oncology, hematology and internal medicine, and is an active member of several professional and scientific societies, including the American Association for Cancer Research, the American Society of Clinical Oncology, the European Society of Medical Oncology and the Society for Melanoma Research.

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Kitchen-Table Economics

By Dennis Miller, millersmoney.com

What is it about retirement that causes confident, successful businessmen and -women to lose that edge when they invest their own life savings? Many otherwise dynamic people become virtually impotent in the face of retirement investing. I have many friends who were very effective in business—folks who made sound decisions affecting how millions upon millions of dollars were spent. They would gather the facts, make a plan, and make the right call with confidence. Whywas it so taxing for these same friends to manage their personal retirement accounts?

I’m a staunch advocate for gathering around the kitchen table to hash out problems and pass on life lessons. It’s where we gathered as a family to open our mail, pay the bills, and teach (and worry about) our children. I might even say that everything we needed to teach our family about economics, we taught at that kitchen table.

The secret is there is no secret. Investment gurus, stockbrokers, and talking heads like to use fancy words to dazzle. Many would have you believe their university or Wall Street pedigrees give them investing powers outside of your reach. Though many do have a little more knowledge or a little more experience, there is no need to be intimidated by the mystique.

Why? Because you already know most of what you need to know. The underlying principles for protecting and growing wealth during retirement are the same principles that allowed you to make and save that money in the first place.

When former Federal Reserve chairman Alan Greenspan would talk to Congress, many bright people would look at each other and think, “What the hell did he say?” If folks like Greenspan are so darn smart, why couldn’t they predict or prevent the Internet or real estate boom and bust? Why can’t they speak plainly? Don’t let anyone’s “elite” status overshadow your own common sense.

For the last few years, the Federal Reserve has been printing a 100-year supply of money annually. No one needs a PhD in economics to grasp the potential for high inflation. A little knowledge of history and a bit of common sense will tell you where we’re headed.

The key to using kitchen-table economics in retirement is to apply the same fact-finding and research skills that made you successful in business. If you are uncomfortable making an investment decision, continue to educate yourself until you are. Of course, it’s sensible to take in input and ideas from experts. Just don’t get caught thinking they have any magic bullets.

If you ask four people to define “rich,” you would likely get four different answers. As we move into retirement, the definition tends to be more practical and realistic. “Rich” is enough money to live comfortably without countless hours of financial worry. It’s also a feeling of pride in the lifetime of work that built your nest egg and an appreciation for each and every trip you get around the sun.

How much do you have; how much do you need to earn to supplement your retirement income; and, how can you invest safely to reach that goal? Retirement investing is no more complicated than that. Simply put, it’s living within your means and protecting what you have.

If I could shout one piece of encouragement to retirees, it would be: Don’t let the fear of losing money immobilize you! Doing nothing can be just as dangerous as risking too much on a speculative or even downright foolish investment.

You may recall the old adage about the banker who never made a loan because he was afraid he might lose money. When the bank went out of business, he claimed it wasn’t his fault. After all, he never made a bad loan during his tenure.

To make your retirement money last, you have to take on some risk. There are, however, proven ways to limit that risk to manageable doses: sector, geographical, and political diversification, trailing stop losses—the list goes on. Good investors will lose money from time to time and learn from their mistakes. You just need to learn and make the right judgment call more often than not.

Don’t fret when others brag about how well they’re doing. Each year financial newsletters, mutual funds, and investment managers like to boast about how much money they’ve made their clients. Accountability is a good thing; we’re certainly proud of our own track record.

Though, when I see the list of top-performing funds ranked by the amount of annual return, my first questions are: How much did they risk to get there? Have they performed that well consistently? How much of those profits were eaten in fees?

Some mutual funds occasionally produce nice gains for their shareholders. I, however, would put my money on the well-educated grandfather investing from his kitchen table in Iowa any day of the week. Why? A recent report indicated that 78% of all US domestic equity funds were outperformed by their benchmarks during the past three years. Large-caps were worse, with 86% of falling short of their benchmarks. Benchmarks are the indices in the sectors funds specialize in, respectively. In short, there are countless statistics indicating that you can invest just as well as a fund manager.

Those numbers should embolden you, not frighten you. I shared them to keep things in perspective. There is no magic wizardry, secret code, or special knowledge. All investors gather facts, make an evaluation, and then allocate some money based on what they think the future will bring. Those are skills that can be honed through education and experience by smart folks sitting at their kitchen tables or in their home offices.

I’m happy to report that the most frequent comment we receive is that our newsletter explains investments in plain English. There’s a reason for that: the investments well suited for a conservative investor’s retirement portfolio are not that complicated.

You can overcome retirement impotence. The best way to build your confidence is to learn ways to invest safely. We think teaching our premium subscribers about protective mechanisms like asset allocation, diversification, position limits, trailing stop losses, and internationalization is just as important as the individual picks in the Money Forever portfolio. If you’d like to learn more too, sign up for a no-risk trial subscription today by clicking here.

 

 

The article Kitchen-Table Economics was originally published at millersmoney.com.

Things That Make You Go Hmmm: Gyver & Guffin

By Grant Williams

This week’s TTMYGH revolves around “Macs.” The first is a man-turned-verb who was capable of extricating himself from seemingly hopeless situations, armed with an array of tools seemingly singularly unsuited to the purpose; and the second is an ingenious, though ultimately futile, plot device which has been used by everyone from Welles to Hitchcock to Tarantino.

I%20Heart%20Japan.psd

Though at first blush it’s hard to see a link between the two, in today’s world there are Angus MacGyvers everywhere, beetling away with duct tape and Swiss army knives, trying to extricate themselves from completely hopeless situations; and if they are to succeed before the credits roll, they must rely upon one very important thing: the suspension of disbelief by their audience.

That’s where the other “Mac” comes in.

Man first.

Angus MacGyver was a troubleshooter. He worked for the fictional Phoenix Foundation as a secret agent and also for the US government in the (also fictional) Department of External Services.

Macguyver.psd

Educated as a scientist and possessing an encyclopedic knowledge of the physical sciences, MacGyver had been a bomb disposal technician during the Vietnam War and possessed a distinctly pacifist outlook on life — he hated guns.

Also, his luck could scarcely be described as merely “good.”

Somehow, over the course of seven seasons, MacGyver managed to get himself into some 139 impossible-to-get-out-of situations — each of which he managed to navigate successfully by using conventional items in a distinctly unconventional way.

By way of illustration, in the pilot episode alone, MacGyver managed to do the following:

Rig a machine gun with a cord, string, stick, and matches so that when the string burned through, the machine gun fell and was triggered by the stick and began firing (while still being held by the cord).

Plug a sulfuric acid leak with chocolate. MacGyver stated that chocolate contains sucrose and glucose. The acid reacted with the sugars to form elemental carbon and a thick gummy residue. (NB this was subsequently proven to work, as demonstrated on the show Mythbusters.)

Make a “rocket thruster” by hitting a flare gun with a rock, launching MacGyver and a man he rescued off of a mountain, whereupon he opened a parachute and made a clean getaway.

Create a bomb to open a door using a gelatin cold capsule containing sodium metal, which he placed in a glass jar filled with water. When the gelatin dissolved, the sodium reacted violently with the water and caused an explosion which blew a hole in the wall.

Impressive stuff. It’s no wonder he ended up becoming a verb. But to witness perhaps his greatest-ever escape, afford yourself two minutes to watch THIS little stunt to see how MacGyver escaped from his own coffin.

Coffin.psd

I couldn’t help but think of MacGyver this past week as I sat chatting with a colleague about the situation Japan now finds itself in.

I won’t recap the details of the straitjacket into which the Japanese have been strapped for the past two decades — enough ink has been spilled on that subject already, including in a recent Things That Make You Go Hmmm… entitled Avenomics — but my conversation this week stemmed from the following statement, made by me to myself, as I leaned back in my chair after reading an article about proposed changes to the GPIF (Government Pension Investment Fund), Japan’s public pension fund:

“Japan really is totally f*****.”

What led me to that well-thought-out and eruditely expressed conclusion? Read on.

In case you are not familiar with the GPIF, it is the largest pool of government-controlled investment capital on the planet — outstripping even the infamous Arab sovereign wealth funds.

The GPIF controls ¥128.6 trillion, or $1.25 trillion, and to say the organization is somewhat risk-averse is akin to calling the Kardashian family somewhat shameless.

The GPIF holds almost 70% of its assets in bonds — and the vast majority of them are of the local variety. The reason for this? Well that would be because the GPIF is (and has always been) run by bureaucrats from the Ministry of Health, Labour & Welfare, as opposed to, say, investment professionals.

But that’s probably no bad thing, because no investment professional worth his salt would have bought so many JGBs; so if GPIF didn’t buy them, THAT would be a big problem for the Japanese government AND the BoJ.

2269.png

Source: GPIF

How did that allocation to domestic bonds do last year? Well, as it turns out, not so great:

 

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Total 2013

Domestic Bonds

-1.48

1.18

0.18

-0.14

Domestic Stocks

9.70

6.07

9.19

27.05

Int’l Bonds

4.01

1.64

8.16

14.34

Int’l Stocks

6.14

7.13

16.23

32.17

Source: GPIF

Fortunately, over the last twelve years the GPIF has managed to meet its targets — by growing at an annualized rate of 1.54%.

Thankfully for the GPIF, despite their largest allocation throwing off negative returns, the BoJ’s actions in weakening the yen boosted the Nikkei, and the central-bank-inspired strength in equities and bonds elsewhere in the world helped GPIF’s performance to pass the smell test for 2013.

Now, when it comes to bureaucracy, Japan is in a league all of its own. My first up-close experience of this came in 1989 when I went to get a driver’s license after moving to Tokyo. Anybody who has attempted to complete that fairly straightforward objective in Japan knows that it requires the best part of a day traipsing upstairs and down between several counters, getting the same piece of paper stamped by numerous people in a very specific order. Several visits are required to the same person — but only in the correct order.

Jap%20Drivers%20License%20small.jpg

Maybe this process has changed 25 years on, maybe it hasn’t. I’m willing to bet on the latter.

Anyway, amongst themselves, foreigners in Japan have a saying which strikes at the very heart of this little bureaucratic problem:

“Everything makes sense once you realize Japan is a communist country.”

Aki Wakabayashi’s book Komuin no Ijona Sekai (The Bizarre World Of The Public Servant) sprang from her 10 years working at a Labour Ministry research institute and lifted the lid on some of the peccadilloes of Japan’s civil service.

The facts unearthed by Wakabayashi are remarkable:

(Japan Times): The national average annual income of a local government employee was ¥7 million in 2006, compared to the ¥4.35 million national average for all company employees and the ¥6.16 million averaged by workers at large companies. Their generosity to even their lowest-level employees may explain why so many local governments are effectively insolvent: Drivers for the Kobe municipal bus system are paid an average of almost ¥9 million (taxi drivers, by comparison, earn about ¥3.9 million).

Click here to continue reading this article from Things That Make You Go Hmmm… – a free weekly newsletter by Grant Williams, a highly respected financial expert and current portfolio and strategy advisor at Vulpes Investment Management in Singapore.

Obama’s Secret Pipeline

By Marin Katusa, Chief Energy Investment Strategist, Casey Research

Isn’t it odd that an 800-mile pipeline that runs across environmentally sensitive land has been permitted without any mention in the media? Not a word about it from President Obama either.

Obama’s Secret Pipeline will be built over land that’s much more sensitive than that of the Keystone XL pipeline, which gets nothing but front-page coverage. It will actually be 17% (six inches) larger in diameter than Keystone XL (36 inches) and it will transport natural gas, not oil.

Bill 138

The Senate of Alaska, the state in which the pipeline will be built, has just passed Bill 138, which makes the state a partner of three of the world’s largest oil companies, including one that has a horrible environmental track record on US soil. In a nutshell, Alaska’s government is now partners with BP, ExxonMobil, and ConocoPhillips.

Only one more signature is required—Governor Sean Parnell’s—and it’s expected that he will sign the deal.

Not Even the US Government Wants US Dollars

For more than 100 years, the US government has been receiving a royalty and tax revenue paid on the amount of oil or natural gas produced on American soil—a fee that is paid in US dollars. Bill 138 has changed this forever.

Instead of Alaska receiving its dues in US dollars, the state legislature has decreed through Bill 138 that the state will be paid “in kind.” In other words, the state will be getting its share of royalty and tax revenue in natural gas instead of US dollars.

For the record, this is the first time ever that a US state has entered into a partnership like this. Essentially, Alaska is now a 25% equity partner with BP, ExxonMobil, and ConocoPhillips—which also requires the state to cough up cold, hard cash to build the entire project, including the 800-mile-long, 42-inch-wide pipeline.

Overall, the project is currently estimated to cost north of US$50 billion, and we expect that when all the capital expense overruns and government inefficiencies are accounted for, the whole project will come in at more than US$75 billion, using the total costs of similar projects for comparison.

But it will be 2015 before the final negotiations and the specific details of the partnership are agreed on, and remember, the devil is in the details. Who do you think will get the better end of the deal—a bunch of government bureaucrats with zero oil and gas experience, or the world’s top oil- and gas-producing companies? I know whom I’m betting on.

Which leads us to the point of this weekly missive.

And the Winner of Obama’s Secret Pipeline Is…

We already know which company will be building and operating Obama’s Secret Pipeline. The company I’m talking about has a lower price-to-earnings (P/E) ratio and a better yield than all of its peers. That’s good, because shareholders get paid a monthly yield for owning the stock while sitting back and watching the share price rise as well.

The Ultimate Oil Toll Booth

Think of it this way: this company charges the world’s most powerful oil and gas producers for every barrel of oil that passes through its “road network,” and now it can also charge the state of Alaska. Regardless of the price of oil or natural gas, this company gets its fee.

It’s a low-risk way to benefit from a high-risk enterprise. This company is a current Buy in our Casey Energy Dividends portfolio. The Energy team is currently working hard on the upcoming issue, which will in detail cover the company that’s bound to gain big from Obama’s Secret Pipeline.

I know you haven’t heard about this pipeline yet, but you will soon enough.

That’s what we do here at the Energy Division of Casey Research: We’re the first to uncover breakthrough stories, and the first to uncover the best energy investment opportunities in the world. Doug Casey and I just got back from a whirlwind European tour, where we visited many of Europe’s most promising energy projects.

Here’s a picture of Doug Casey and me at Europe’s largest onshore drill site. This drill rig is 15 stories high and uses about 16,000 liters of diesel a day to turn the drills—which Doug and I are holding in this picture. As a side note, just the crank shaft that we’re holding costs US$2 million—this rig is expensive and gigantic.

For you to get a better perspective on the true size of Europe’s largest onshore drill rig, here is a picture of Doug Casey and me with our friends Frank Holmes, Frank Giustra, and Matt Smith.

(From far left to right: Frank Holmes, Doug Casey, Marin Katusa, Frank Giustra, Matt Smith)

Do Your Portfolio a Favor and Try Out the Casey Energy Report

Doug Casey and I have done all the hard work for you. The current issue of the Casey Energy Report is a compilation of our Europe trip, including in-depth descriptions of our site visits and a new recommendation with a hugely promising project in an out-of-the-way European country that we personally checked out. The company is backed by mining giant Frank Giustra, and you bet he knows what he’s doing.

The Casey Energy Report comes with a free one-year subscription to Casey Energy Dividends (a $79 value), including, of course, the upcoming May issue with our “Obama’s Secret Pipeline” pick.

There’s no risk in trying it: You have 90 days to find out if it’s right for you—love it or cancel for a full refund. You don’t have to travel 300+ days a year (as we do) to discover the best energy investments in the world—we do it for you.

If you don’t like the Casey Energy Report or don’t make any money within your first three months, just cancel within that time for a full, prompt refund. Even if you miss the cutoff, you can cancel anytime for a prorated refund on the unused part of your subscription. Click here to get started.

 

 

The article Obama’s Secret Pipeline was originally published at caseyresearch.com.

Hungary signals next move to depend on data

By CentralBankNews.info
    Hungary’s central bank, which earlier today cut its base rate for the 21st time in a row, said the “slight improvement in risk perceptions associated with the economy provided room for a cautions reduction in interest rates.”
    The National Bank of Hungary, which cut its base rate by a further 10 basis points to 2.50 percent, repeated its guidance from March that the base rate had now approached a level that ensures price stability in the medium term and support for the economy.
    But it added today that “over the coming period, changes in the domestic and international environment might influence this picture,” signaling that the bank now considers rates to be broadly neutral and future policy changes would depend on incoming data.
    The central bank’s council said economic growth is likely to continue and while the pace of economic activity is strengthening, output remains below potential and is likely to return to close to that level during the next year.
    “Inflationary pressures in the economy are likely to remain moderate over the medium term and inflation is likely to move into line with the medium-term inflation target from 2015,” the bank said.
   
    (more to come)
 

USDJPY: Bullish, Extends Recovery

USDJPY: With USDJPY strengthening for a second day in a row today, further bullishness is envisaged. However, it requires a convincing break and hold above the 102.72 level to create scope for more upside. Resistance comes in at the 103.00 level where a breach will turn focus to the 103.50 level. Further out, resistance is seen at the 104.00 level and then the 104.50 level. On the other hand, support stands at the 102.00 level where a break if seen will aim at the 101.50 followed by the 101.00 and then the 100.75 level. Further down, support stands at the 100.00 level followed by the 99.00 level. On the whole, USDJPY remains exposed to the upside on corrective recovery risk.

Article by www.fxtechstrategy.com

 

 

 

 

 

 

 

 

Hungary cuts rate by 10 bps, 21st cut in a row

By CentralBankNews.info
    Hungary’s central bank cut its base rate by a further 10 basis points to 2.50 percent, its 21st consecutive rate cut, but made no further immediate comment.
    The National Bank of Hungary has now cut its rate by 450 basis points since embarking on an easing cycle in August 2012.
    Last month the bank signaled that it was likely to pause with further cuts, saying the base rate had approached a level that would ensure prices stability and support for the economy.
    From August 2012 until July 2013 the central bank cut its base rate in 25-basis point increments but starting in August 2013 the size of the cuts were trimmed to 20 basis points as the bank was aware of the need to keep rates high enough to attract global investors who had started to reassess their view of the attractiveness of investing in emerging markets.
    In January and February this year, the central bank further reduced the size of rate cuts to 15 basis points and in March the cut was 10 basis points, as today.
    Hungary’s headline inflation rate was steady at 0.1 percent in March and February and the central bank has said it expects inflation to remain below its 3.0 percent target this year at an average of 0.7 percent before moving into line with the target from next year.

    Hungary’s economy dived into recession in 2012 but rebounded last year and the central bank has said it expects growth to continue this year, supported by exports that are expects to play an important source of growth in coming years and investments that are likely to pick up more gradually.
    In March the central bank forecast 2.1 percent economic growth for 2014 and 2.5 percent for 2015, up from 1.1 percent in2013.
    The country’s Gross Domestic Product expanded by 0.5 percent in the fourth quarter of 2013 from the third quarter for annual growth of 2.7 percent, up from 1.8 percent in the previous quarter.
    Hungary’s forint currency has been weakening against the euro since mid-2012 and depreciated by 2 percent in 2013 and has continued to ease this year. Today it was quoted at 309.28 to the euro today,  down 3.9 percent this year.
    Last week the central bank changed its main instrument for managing liquidity, replacing the two-week bill with a two-week deposit facility from Aug. 1.
    The move is an attempt to reduce the country’s external debt by motivating domestic banks to hold more forint-denominated government debt as deposits with the central bank will no longer be accepted as collateral against loans. The bank hopes that funds up to 1 trillion forints, including 600-800 billion held by foreign banks, would be swapped into government debt from two-week deposits.

    http://ift.tt/1iP0FNb

     

Gold Trades Lower ; FOMC Meeting In Spotlight

By HY Markets Forex Blog

Gold futures were seen trading below the $1,300 threshold on Tuesday, while US reported an upbeat housing data and investors focus on the two-day monthly policy meeting held by the US Federal Reserve (Fed) which will begin later in the day.

Bullion futures for June delivery edged 0.78% lower to $1,289.10 an ounce on the New York Comex at the time of writing, while silver futures fell 1.02% to $19.420 an ounce at the same time.

FOMC Meeting

Investors will be focusing on the outcome of the Federal Reserve two-day monthly policy meeting which will begin later in the day, with predictions that the Federal Reserve will announce another cut to its stimulus for the fourth time in a row.

Meanwhile, US Federal Reserve Chair Janet Yellen is expected to give a speech at the Independent Community Bankers of America’s Annual Policy Summit on Thursday.

Investors will also be focusing on the release of the non-farm payrolls figures due Friday, with estimates of 210,000 additional new jobs, compared to the previous figure of 192,000.

Gold’s net-long status climbed by 0.5% to 90,572 futures and options in the week ending April 22, the first rise since March 18, reports from the US Commodity Futures Trading Commission showed.

Gold has climbed by 8% this year, bouncing back from the 28% drop seen last year and boosted by the sustained physical demand. . “Although it is difficult to predict gold prices over short term, yet the increasing geo-political risks and increasing profit-taking pressure in US market are very visible and obvious as of now, hence fueling near-term positive sentiments towards gold price and gold stocks,” Helen Lau, a senior analyst at UOB Kay Hian (Hong Kong) Research, wrote in a note.

 

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The post Gold Trades Lower ; FOMC Meeting In Spotlight appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

Stocks Market Review 29th April

By HY Markets Forex Blog

Stocks – Asia

Stocks in Asia were seen swinging between losses and gains on Tuesday after the corporate data releases with a regional gauge near its lowest close in a month and the markets in Japan were shut for a public holiday.

Hong Kong’s benchmark Hang Seng index climbed 0.09% to 22,152.00 at the time of writing, while the Chinese benchmark Shanghai Composite edged 0.84% higher to 2,020.34 on Tuesday.

The property developer China Vanke slid 1.82%, while China Petroleum & Chemical Corp fell 1.6% after the refiner reported its first-quarter profit which came in lower than forecasted. China’s biggest carrier, China Unicorn climbed 3.60% higher, while the real estate company Hang Lung Properties gained 3.14%.

Stocks – Australia

In Sydney, the benchmark S&P/ASX 200 index fell 0.92%, to close at 5,485.30. Australia’s largest gold producer, Newcrest Mining, lost 3.1% while the food company, Goodman Fielder added 4.25%.

Stocks – Europe

In Europe, stocks were trading higher, following the release of several earning reports from major companies as the market wait for important macroeconomic reports from Germany, the UK and Italy.

The European Euro Stoxx climbed 0.54% to 3,182.85 at the time of writing while the German DAX rose 0.85% to 9,526.35. At the same time the French CAC 40 edged 0.29% higher to 4,473.57, while the UK benchmark FTSE 100 index gained 0.55% to 6,737.02.

In Spain, the Labour Ministry reported the unemployment rate for the first quarter, which climbed to 25.93%, up from the previous figure of 25.73%.

Italy’s retail sales are expected to show a flat reading in February month-on-month and expected to show a 0.7% drop on an annual basis.

FOMC Meeting

The Federal Reserve will begin its two-day monthly policy meeting later in the day with predictions that the Federal Reserve will announce another cut to its stimulus for the fourth time in a row.

 

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The post Stocks Market Review 29th April appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

Pressure On The U.S. Dollar And The Yen Remaining

Demand For The EURUSD Remaining

The EURUSD decreased to 1.3823 yesterday, where it was bough out and increased to 1.3879. It did not continue to rise, as having tested the level, the EURUSD retreated to 1.3839. Nevertheless, declines continue to attract steady interest to sales, and now the euro is approaching yesterday’s highs. The pair can continue rising, however it should overcome quite a few obstacles on the way to the psychological level of 1.4000. Falling to 1.3800 will increase a probability of a breakout through support with a further decline to 1.3720.

eur

The GBPUSD Continuing to Be Bought

The British pound in pair with the U.S. dollar traded quite positively yesterday. On wane to 1.6777 the pair was bought out, and then it rose to 1.6857, having overcome the levels of 1.6822 and 1.6841. However, the pound failed to consolidate higher that led to a decline to 1.6800. Demand for the pair remains here, but its immediate inability to consolidate above the broken highs is a negative factor, increasing the risks of the development of a descending correction. Today, data on the GDP in Great Britain will be published, which can either support a rise in the pound or contribute to its decline below 1.6762.

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The USDCHF Can Test 0.8700

The USDCHF continued falling and tested the level of 0.8770, after that retreated to 0.8810. Nevertheless, the dollar remains under pressure along with the downside risks towards the 87th figure. A breakout of which will strengthen its falling. The dollar should rise and consolidate above 0.8951 to weaken a bearish impulse. A steady breakout through the resistance around 0.9118 will give a reason to imply a base formation with the development of a large ascending correction.

chf

The USDJPY Increasing Again

The support around the 102nd figure held out and from which the USDJPY went steady upward. As a result of a rise, the dollar tested the resistance around 102.62, after that retreated to 102.30. Nevertheless, demand for it remains, and it approached to yesterday’s highs again. Thus, ability to consolidate above the 102nd figure increases the risks of a breakout through current resistance and further development of an upward momentum. In this case a rise to 103.40-104.00 should be expected. In turn, a breakout of the 102nd figure will lead to testing the support around 101.59.

jpy

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