Venezuela’s Bolivar Has Biggest Black-Market Fall in Year

Venezuela's bolivar slid the most on the black market in a year, as the government’s new currency market failed to meet pent-up demand for dollars.

The bolivar fell 19 percent today to 72.82 bolivars per dollar from 58.63 yesterday, according to dolartoday.com, a website that tracks the rate on the Colombian border. The bolivar had strengthened on the black market in the past month on anticipation of the new, legal way to buy greenbacks.

“The only way to make the black market disappear is to allow free legal trading in dollars,” Henkel Garcia, director of Caracas-based consultancy Econometrica, said by telephone. “It appears the government is placing some restrictions on the operation of the new platform, which is fuelling demand for the ‘black’ dollar again.”

Venezuela’s credit rating was cut by the third ratings company in three months today, as Fitch Ratings said foreign exchange distortions, soaring consumer prices and weakening growth had fueled social unrest. Eleven years of currency controls have made dollars in Venezuela increasingly scarce, causing shortages of imported goods ranging from diabetes drugs to laundry detergent.

The rating was reduced one level to B, five steps below investment grade, Fitch said in a statement. Venezuela is now rated in line with Lebanon, Ecuador and Rwanda.

“Macroeconomic instability has increased in Venezuela, as highlighted by spiraling inflation and recessionary conditions in the economy,” Fitch analyst Erich Arispe wrote in the e-mailed statement.

Venezuela allowed the bolivar to weaken 88 percent on a new currency market yesterday after loosening controls.

The Sicad II market will permit the government to “crush” the black market for dollars, stabilizing the economy, Economy Vice President Rafael Ramirez said this month.

The bolivar was sold for an average 51.58 bolivars per dollar today in the second day of trading on the new system, known as Sicad II, the central bank said on its website. The official exchange rate used to import medicine and food is 6.3 bolivars per dollar and a secondary dollar auction system for non-essential imports last sold greenbacks at 10.8 bolivars.

“There is very little motivation to sell foreign currency no matter what the price is,” Rees said in an e-mailed report to clients today. “Hard currency is extremely scarce and obtaining it in the future cannot be guaranteed.”

Venezuela’s international reserves have plunged 23 percent in the past year to $21.1 billion. Reserves minus gold were $6 billion in December, down 39 percent from a year earlier, according to International Monetary Fund data.

Fitch’s rating remains higher than competitors’. Since December, Standard & Poor’s rates Venezuelan debt one level lower at B-, while Moody’s Investors Service has a Caa1 rating. All three agencies maintain a negative outlook.

An additional downgrade by S&P would cause a bond rout because some money managers can’t hold assets rated C by two separate agencies, Barclays Plc economist Alejandro Grisanti said in a Jan. 17 report.

Venezuelan dollar bonds have returned 4.4 percent on average this year, pushing yields down to 13.6 percent, which is still the highest among emerging markets tracked by JPMorgan Chase & Co.

Benchmark dollar bonds due 2027 gained 0.82 cent today to 77.30 cents on the dollar. Dollar bonds due in 2017 issued by state-owned Petroleos de Venezuela SA erased earlier gains, falling 0.19 cent on the dollar to 84.67 cents.

The government needs to sell $20 million to $30 million a day on Sicad II to make it productive, according to Siobhan Morden, the head of Latin American fixed income at Jefferies Inc. “If turnover remains low, then this devaluation is just symbolic and would risk a pullback of all recent gains on Venezuelan bonds,” she said by e-mail.

Allowing market forces to determine the price of dollars in Sicad II would enable the government to improve its budget balance significantly, Grisanti said in a report published today.

Having three different legal exchange rates will divert hard currency from useful imports to speculation, Joe Kogan, chief emerging market strategist at Bank of Nova Scotia in New York, said by telephone yesterday.

One in three dollars in the country is misused or stolen, Ramirez said in February. Venezuela, which has the world’s biggest oil reserves, earns about $120 billion from oil exports a year, according to PDVSA’s annual report.

“Instead of doing something productive like making goods or importing and selling them, you’re much better off looking for ways to arbitrage those different exchange rates,” Kogan said.

Source: Bloomberg

 This system of having several exchange rates for the dollar was also a fact during the 1st Government of Alan Garcia in Perú, during the period 1985-1990.

The result was widely distortions in the relative prices of the goods in the economy,inmense corruption,speculation(arbitrage is to elegant) and properly named lots of looting,by officials.

  I am afraid this is the same experience in Venezuela today.

 Socialism of The XXI'st Century, what a farce!

Warren Buffet's thoughts on the real intrinsic value of Bekshire Hathaway

Berkshire Hathaway shares will outperform the Russell 2000 Index over the next 10 years — perhaps significantly. 

Such a high level of conviction comes from the fact that both Berkshire the stock and Berkshire the company possess powerful ingredients for meaningful appreciation and growth of per-share intrinsic value. Berkshire Hathaway   is currently the largest portfolio holding at Wedgewood Partners, where I am chief investment officer, with a 9.5% weighting.  In addition, our clients have owned Berkshire almost continuously since 1998.

Berkshire’s stock nowadays is notably cheap — particularly in the context of the great bull market that has marked its fifth anniversary earlier this month. Berkshire’s Class B shares currently trade at little more than 1.3 times book — a tad over Buffett’s oft-stated buyback level of 1.2 times book.  Do not ignore Buffett’s carefully chosen words from his recent chairman’s letterwhen he stated that “Berkshire’s intrinsic value far exceeds its book value,” and that if Berkshire stock breaches 1.2 times book value, he will be “aggressive” in buying back shares. 

Given that a value-investor’s “margin of safety” has been the pillar of Buffett’s investment philosophy (and success) for the past 60-odd years, share repurchases at 1.2 times book would be significantly accretive to Berkshire’s earnings-per-share growth.

Source: Marketwatch

Facebook to acquire Oculus VR for $2 billion

Facebook Inc agreed to pay nearly $2 billion in cash and stock to acquire virtual reality goggle maker Oculus VR Inc.

Facebook said it would pay $400 million in cash and 23.1 million shares of the company’s stock. At Tuesday’s close of $64.89, the stock portion would be worth $1.5 billion.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” Facebook founder and Chief Executive Mark Zuckerberg said in a prepared statement. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Oculus VR is a startup that is trying to popularize virtual reality with its Oculus Rift goggles. Oculus has said it intends to charge $350 for the new version of the headset, which is due to ship to developers in July.

Obama Gives Putin A Billion Dollars! INO.com Traders Blog

march 25, 2014 by adam hewison.

A friend sent this to me over the weekend, I thought you might find the premise interesting.

Adam

The Ukraine buys almost all its energy (natural gas) from Russia. Revenues from natural gas sales are a primary source of income for Russia.

Because of the recent disagreement between the Ukraine and Russia, Russia is raising the price of the natural gas it sells to the Ukraine.

The Ukraine is almost broke and can't afford the increase in the natural gas price because it would be forced into bankruptcy.

Obama just announced the United States is giving the Ukraine $1 billion to assist in paying for the higher priced natural gas it buys from Russia.

So, the United States is actually giving Russia $1 billion because the money is just passing through the Ukraine.

The first question: Has Putin figured out a way to raise the price of his natural gas sales and make the U.S. pay for the increase?

Next question: Was he really in the KGB or was he a commodities trader?

If this analysis is accurate, Putin just got Obama to pay him $1 billion by holding a press conference and trucking some troops across town from the Russian Navy base in the Ukraine.

Who is the smartest guy in the room now?

This is the most cynical comment I've read lately, Adam,indeed.

U.S. : New home sales in February couldn't match the strong pace of January

Sales of new single family houses in February 2014 were 440,000 at a seasonally adjusted annual rate, down 3.3 percent from January’s revised rate and down 1.1 percent from February 2013.

New Home Sales

Released On 3/25/2014 10:00:00 AM For Feb, 2014 Prior Prior Revised Consensus Consensus Range Actual New Home Sales - Level - SAAR 468 K 455 K 440 K 415 K to 460 K 440 K

Highlights New Home Sales Released On 3/25/2014 10:00:00 AM For Feb, 2014 Prior Prior Revised Consensus Consensus Range Actual New Home Sales - Level - SAAR 468 K 455 K 440 K 415 K to 460 K 440 K Highlights New home sales in February couldn't match the strong pace of January, coming in at an annual rate of 440,000 vs a revised 455,000 in January. But the slowing helped give supply a boost, to 5.2 months at February's sales pace vs 5.0 months in January. Supply has been thin in the housing market which has been a major factor holding down sales. Total new homes on the market increased slightly in the month and, at 189,000, are at their highest level since December 2010. High prices have also been holding down sales, though there's signs that prices are moderating. The median price for new homes did rise 0.4 percent in February to $261,800 but the year-on-year rate, at minus 1.2 percent, is right in line with the year-on-year rate for sales, at minus 1.1 percent. Regional data in this report are dominated by the South which far exceeds all other regions combined. Sales in the South slipped 1.5 percent in the month vs a 1.1 percent decline for total sales. This report did not exceed expectations but is still positive, especially when taking January and February together. The housing market may begin to pick up steam as the weather warms. Source: Econoday

After seasonal adjustments, home prices in January rose 0.8%

Reflecting the cold weather, U.S. home prices ticked down 0.1% in January, a third month of declines, with 12 of 20 tracked cities posting drops, according to S&P/Case-Shiller's 20-city composite index released Tuesday. After seasonal adjustments, home prices in January rose 0.8%. Meanwhile, longer-term trends show that price growth is slowing down. On a year-over-year basis, home prices rose 13.2% in January, down from 13.4% in December and a recent peak of 13.7% in November. "Although most analysts do not expect the same rapid increases we saw last year, the consensus is for moderating gains," David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. Including January, prices remained about 20% below a 2006 peak. 

Source: Marketwatch

Lin Huaimin White Snake

                                    The Magic of Lin Huai-Min Art

WSJ: Venezuelan Bolívar Trades 80% Weaker Than Official Rate

       The Wall Street Journal reports,"Venezuela’s bolívar traded nearly 80% weaker Monday compared with the country’s fixed official exchange rate, in a new currency market unveiled by the government to make dollars more accessible and ease shortages of food and consumer goods".

"Dollars changed hands at an average rate of 51.86 bolívares in the debut of the foreign-exchange market, dubbed Sicad II, the Central Bank of Venezuela said.

The new rate, which will also be a reference rate for tourists, came in close to the black-market rate, which on Monday sat at 58.63 bolívares to the dollar, according to DolarToday.com, a website that tracks the market".

President Nicolás Maduro’s government launched Sicad II to get more dollars readily available to locals and weaken a thriving currency black market, which it says is part of an effort by its foes to destabilize the economy.

“Mega-devaluation is a hard blow to the incomes of all Venezuelans,” opposition leader Henrique Capriles said in a Twitter message. Calling it “Nicolas’ black Monday,” he accused Mr. Maduro’s regime of trying use the country’s political tensions as a cover to unveil an economic adjustment that punishes average citizens. “The government doesn’t want us to talk about it but we won’t let that happen,” Mr. Capriles said.

Devaluing the currency helps the government fetch more in local currency terms when it converts dollars earned through overseas oil sales and helps narrow a fiscal deficit estimated at 15% of gross domestic product.

Mr. Maduro said the new market is expected to supply as much as 8% of Venezuela’s dollar needs.

Despite welcoming the move, many economists said the new market isn’t likely to be enough to settle the economy’s imbalances or meet dollar demand. “I give this market a short life,” said Angel Garcia Banchs, director of Caracas-based consultancy Econometrica, adding that local people selling dollars will still want to go to the black market, where they can fetch more in bolívares than in Sicad II.

WSJ: Shiller Metric Carries Warning for Stocks

        The Wall Street Journal reports,"many have quibbled with Yale professor Robert Shiller's use of a cyclically adjusted price/earnings ratio. Few can fault his timing in calling out perhaps the greatest stock mania of all time with the publication of "Irrational Exuberance" in the spring of 2000, though".

"Mr. Shiller's technique uses a decade of inflation-adjusted earnings to derive a P/E ratio. That is in contrast to the more common practice of basing it on a year of analyst forecasts. By his measure, stocks now trade at 25.5 times earnings, 54% above the average going back to 1881.

Peaks in this measure have come before downturns in 1929, 2000 and 2007, but also many times in between. The Shiller P/E is thus no market-timing tool. Still, a look at the big picture should give pause".

The ratio is now in the top tenth of historical observations. Previously, at such levels, real compound annual changes in the S&P 500 have averaged negative 1.4% over the next 10 years. At the other extreme, the change has been a positive 6.4% when P/E ratios were in the cheapest tenth of observations.

Until recently, critics complained that the 10-year sweep of the Shiller P/E covered two market washouts, early and late last decade, which was unusual. That argument has expired now. But some still insist write-downs during the financial crisis skewed even a 10-year average P/E.

Furthermore, some Wall Street strategists argue that historically high profit margins at the moment are sustainable. Don't get complacent, though. Since profit margins also were inflated during the housing boom, the Shiller P/E actually might be understated.

WSJ: Crowd Hangs Over Oil Prices

         The Wall Street Journal reports,"the oil trade looks very crowded. The latest data from the U.S. Commodity Futures Trading Commission show that speculators held a net-long position—betting light, sweet crude oil prices would rise—of about 380 million barrels on the New York Mercantile Exchange as of March 18. That is close to the all-time peak reached earlier this month.

Bets on stronger U.S. oil prices rose through last year, but got an extra leg up as trouble flared in Ukraine. Yet this particular crisis looks, if anything, bearish for oil. It reinforces uneasiness over emerging markets, the center of growth in oil demand. And oil inventories aren't that low at second glance".

"In terms of days of demand covered by oil inventories, the industrialized world's current level is just one day less than the five-year average, according to Barclays. Moreover, the standoff with Russia gives the White House ample reason to release strategic stocks, which now cover more than 200 days of net oil imports from outside North America. In addition, oil supply from the Organization of the Petroleum Exporting Countries has been surprisingly strong recently, particularly from Iraq".

With so much money banking on oil prices rising, further signs of looser supply could cause a stampede out, pushing prices down sharply.

In contrast, while shale resources cap gas prices in the long term, the harsh winter has pushed seasonal inventories to a 10-year low even as the number of U.S. rigs drilling for gas has hit its lowest level since 1995, according to ISI Group.

Tempting drillers back will likely require gas futures for this year and next to rise. Yet, even though speculative length in gas contracts has risen of late, the net position overall remains short, indicating a prevailing view that prices will fall. Energy investors would do well not to follow the crowd.

WSJ: Latin American Stock Markets Poised for Recovery in 2014-Investors

                 The Wall Street Journal reports,"investors have high hopes for Latin American stocks in 2014".

Stock market indexes from Mexico to Chile fell enough over the course of 2013 to offer up plenty of bargains, and weaker currencies around the region add to the potential for smart stock picking.

"It's a good buying opportunity," said Geoffrey Dennis, head of global emerging-markets strategy at UBS. "People are saying 'It was a terrible year in 2013, it has to be better in 2014.'"

Foreign-exchange woes have piled on further misery. The region's currencies have been losing ground against the dollar for months, with the Brazilian real weakening 15.2% last year and the Peruvian sol weakening 9.7% partly because of investor concern about the looming end to the U.S. Federal Reserve's $85-billion-a-month bond-buying program.

Brazil's benchmark Ibovespa index lost almost 16% in 2013 and in dollar terms plummeted 26%. The index's most heavily weighted shares, iron miner Vale SA and oil company Petroleo Brasileiro SA,  lost the most market value in the year, according to Economatica. Vale lost $30 billion and Petrobras lost $34 billion.

Worst hit was Peru's IGBVL index, which dropped 23.6%, while Colombia's IGBC fell 11.2% and Chile's IPSA declined 14%. All three were even worse off in dollars. All stock index and currency figures were provided by FactSet.

Mexico's IPC  index fell 2.2% in 2013 and retreated 3.1% in dollar terms. 

While opinion is mixed about the potential for the region as a whole this year, investors see plenty they like in individual countries, though not always in the same countries.

The forward price/earnings ratio for Brazil's Ibovespa index was at 10.7 on Dec. 31, down from 19.2 a year earlier, according to FactSet. That compares with 15.4 for the S&P 500 on the last day of 2013.

In Mexico, Latin America's second-biggest economy after Brazil, the economy should bounce back in 2014, with an expansion of 3% after 2013's 1.2% growth rate, according to the IMF.

The growth slump last year may have been tied to Mexico's political cycle. Government spending rises ahead of a presidential election then declines rapidly afterward. Last year was no different with newly elected President Enrique Peña Nieto focusing on guiding reforms through Congress rather than on boosting short-term growth.

The biggest reform of all, the opening up of the country's oil industry to outside investors after a seven-decade monopoly by Pemex, could start to pay off quickly.

The next tier of Latin American economies, Chile, Colombia and Peru, will all see faster economic growth in 2014 than Brazil and Mexico, according to the IMF's forecasts. None of the three offer the breadth of options available in Brazil and Mexico, but there may be opportunities for careful stock-pickers that can hang on to shares, said Sammy Simnegar, a portfolio manager at Fidelity Investments

Nikkei Futures Slip With Aussie Stocks as Crude Oil Falls

"Japanese index futures fell while Australian stocks followed U.S. equities lower amid signs of slowing factory output in the world’s largest economies. Crude oil dropped before a report on American supplies as silver extended declines and gold held near a one-month low.

Nikkei 225 Stock Average futures lost 0.7 percent to 14,300 in the Osaka pre-market as Australia’s S&P/ASX 200 Index slipped 0.5 percent, snapping a two-day advance. Standard & Poor’s 500 Index (SPX) futures rose 0.1 percent by 8:21 a.m. in Tokyo after the gauge fell 0.5 percent in the U.S. Crude in New York dropped 0.2 percent. Silver declined a second day with gold trading steady after yesterday’s 1.9 percent slide. Indian rupee forwards climbed after the currency reached a two-week high".

"The Markit Economics preliminary index of U.S. manufacturing dropped to 55.5 from March from 57.1 in February, the London-based company said today. Readings above 50 indicate expansion. While it was the second-highest reading since January 2013, the March index level trailed the 56.5 median of 19 economists’ estimates compiled by Bloomberg".

Signs of faltering factory output in the world’s two biggest economies come as U.S. policy makers reign in stimulus and as Chinese lawmakers pledge to maintain growth while curbing shadow banking and credit expansion. The MSCI All-Country World Index fell 0.3 percent to a one-week low after reaching a more-than six-year high earlier in the month.

"Futures on on South Korea’s Kospi Index (KOSPI) fell 0.2 percent in most recent trading, while Hang Seng Index contracts declined 0.5 percent. Futures on the Hang Seng China Enterprises Index of mainland Chinese stocks listed in Hong Kong retreated 0.7 percent. The Bloomberg China-US Equity Index of the most-traded Chinese shares in New York gained 0.6 percent.

The MSCI Asia Pacific Index advanced 1.2 percent yesterday as the surprise drop in the HSBC Holdings Plc/ Markit Economics China manufacturing purchasing managers’ index ignited speculation the government will take steps to support economic growth. A gauge of emerging-market stocks added 1 percent in a second day of gains.

The yen was little changed for a fourth day, gaining less than 0.1 percent to 102.22 per dollar and holding steady at 141.44 per euro. The Australian dollar was little changed at 91.31 U.S. cents following yesterday’s climb of as much as 0.8 percent to the highest intraday level since December".

Source:  Bloomberg

WSJ: Goldman: Stock-Market Worries About Higher Rates ‘Overstated’

"Goldman Sachs U.S. stocks strategist is brushing off the talk of a more hawkish tone from Federal Reserve Chairwoman Janet Yellen.

The possibility of earlier-than-expected interest rate hikes was a surprise, said chief U.S. equity strategist David Kostin, but last week’s Fed statement didn’t “meaningfully change our positive medium-term outlook for the S&P 500.” The bank’s year-end target for the S&P 500 remains at 1900, which is 2.4% above where it was recently trading Monday.

And “concerns may be overstated as our economics team believes the first hike will not occur until early 2016, although the risks have shifted toward an earlier hike,” he said. He noted that while Treasury yields jumped on the news, the 10-year note’s yield was has been trading in a range between 2.8% and 2.6% since February, and remains well below its highs from late December.

Even though the possibility of higher interest rates could take a bite out of U.S. stock valuations in the short term, “investors don’t seem concerned with this either,” he said, noting that while the S&P 500 closed down 0.6% on Wednesday after the Fed statement and press conference, it rose 0.6% the following session.

Still, he recommends that investors look for stocks that benefit from rising bond market yields against a backdrop where he expects the yield on the 10-year U.S. Treasury to reach 3.25% by the end of this year".

Mr. Kostin sees one extra risk for stocks that is attracting less investor focus:

“Investors are focused on the near-term implications of interest rate hikes, but they should also be mindful of the long-term implications of a pick-up in wage growth, which should negatively affect margins.”

European Stocks fell , China's WEAK HSBC PMI and Preliminary report from Markit Germany unexpectedly slowed in March

U.S. stocks drift lower after weak PMI

U.S. stocks continued the previous session’s downward drift on Monday after Markit’s initial purchasing managers index for March fell slightly.
The initial or “flash” Markit PMI for the U.S. fell to 55.5 in March from 57.1 in February, but still showed improving conditions for manufacturers. Readings over 50 in the purchasing managers index indicate growth.

Source:  Marketwatch

New vacuum elevator installs in a few hours at a budget price

One of the major problems with installing an elevator in a home is the amount of space required, not to mention the costly infrastructure and maintenance issues and the immense problems and cost associated with any retrofitting. Now a new type of elevator developed in Argentina looks set to revolutionise the residential lift market, making elevators affordable to everyone. The self-supporting vacuum elevator is constructed of aluminium and polycarbonate and takes just a few hours to install. Unlike previous elevators, the new lift is completely self-supporting, extremely light, has a footprint of just one square metr e and requires no excavating pit or hoistway, it can be fitted to almost any two or three storey building at a fraction of the cost of a normal elevator.

The Residential Pneumatic Vacuum Elevator may be a little challenging to look at the first time you see it – the hoistway is transparent and there are clearly no cables supporting the elevator cab, so it looks distinctly like some thing out of Star Trek, operating on some advanced levitation principle.

It’s actually very safe with over 300 lifts already installed and working perfectly and works entirely according to the simplest laws of physics - the difference in air pressure above and beneath the vacuum elevator cab safely raise and lower it on a cushion of air and though there’s not much room inside, the lift is rated to a capacity of 450 pounds.

Though it might look precarious, it is absolutely safe even in the case of an electricity power failure as the descending car automatically stops and locks on the next floor.

Some clever locking mechanisms mean that the lift always stops exactly at floor level and as air pressure rather than mechanical apparatus move the lift, the starting and stopping is very smooth.

What’s more, the unique installation and streamlined design will adapt to many non-conventional living spaces in a variety house styles.

Source: Gizmag

Modafinil - the time-shifting drug

The wonders of pharmacology keep appearing regularly, each new drug seemingly too good to be true. In recent times there have been several killer apps for the drug industry – chemical substances that replace depression with a happy disposition or bolster a flagging sex drive to royal command performance (with encore) levels. Prozac and Viagra provided benefits so compelling they have entered everyday language and have a global following. Now there’s another “drug-most-likely-to-succeed” – this one enables you to stay awake for 40+ hours with close to full mental capacity with few side effects

Modafinil improves memory, and enhances one's mood, alertness and cognitive powers. The drug has a smoother feel than amphetamines and enables the user to stay awake and alert for 40 hours or more. Once the drug wears off, you just have to catch up on some sleep.

Marketed as Provigil ', 'Aletec' and 'Vigicer', Modafinil is a psychostimulant approved by the US Federal Drug Administration for improving wakefulness in patients with excessive sleepiness associated with shift work sleep disorder, obstructive sleep apnea / hypopnea syndrome and narcolepsy.

Not surprisingly, a drug that enables people to stay awake for 40 hour periods at close to full mental capacity with no real side effects could quickly gain widespread usage as a time-shifting drug. Got a project to do, Particularly, when it is devoid of the jitteriness associated with most drugs commonly used in such circumstance such as dextroamphetamine, cocaine and the world's most popular drug, caffeine.

"Au natural", (without drugs) humans don't deal well with lack of sleep and thanks to our fast-paced lifestyle and ever-increasing job demands, sleep deprivation is a commonplace occurrence in modern culture.

Australian researchers recently found that people who drive after being awake for more than 17 hours performed worse than those with a blood alcohol level of .05 percent (the local blood alcohol limit). Tests the world over have found that sleep deprivation significantly reduces human performance capabilities, coordination, reaction time and judgment.

Twenty four hours without sleep is enough to reduce most humans to half their normal mental capacity and it declines rapidly from that point.

Not surprisingly, the military are showing the most interest in the drug.

A large part of battle fatigue is sleep deprivation. When the military is on the move, almost everybody is required to perform mission-critical tasks way after they should be asleep. From the personnel at command HQ to the soldiers at the front, two or three weeks of activity with just a few hours sleep per day is routine in combat situations.

For years the military has been exploring new methods to safely combat sleep deprivation and to prevent the associated degradation of performance.

A drug that can double the mental capacity and alertness of a fighting force has more than doubled its effectiveness.

On top of that, with military communications now in real-time, this is a drug that might keep a small fighting force in heavy contact going until the sky's open up and help arrives.

But likely candidates for the modafinil fan club aren't hard to find beyond the military, if the world's caffeine consumption is any indication.

Caffeine is a drug used across the planet for combating fatigue, restoring mental performance and enhancing exercise endurance. Caffeine occurs naturally in more than 60 plant species each contributing to a whopping global per capita consumption estimated at around 70 milligrams (mg.) per person per day some 20 years ago. That figure is growing.

More than half of all American adults consume 300 mg. or more of caffeine every day. Nine out of ten Americans consume caffeine every day.

The most prolific caffeine contributor is coffee, the second most valuable legally traded commodity on Earth (after oil) with annual global retail sales more than US$70 billion. Caffeine is also contained in tea, chocolate and caffeine-enhanced cold drinks such as Coca Cola, Pepsi Cola, Red Bull et al.

In recent times, the caffeine-enhanced softdrink market has burgeoned.

In 1970, the average american drank 36 gallons of coffee and 23 gallons of carbonated soft drinks. By the year 2000, coffee consumption had more than halved to 17 gallons and soft drinks had grown 130% to 53 gallons. Caffeine consumption has grown significantly and a large proportion of that caffeine was imbibed with the sole aim of performance enhancement.

Unfortunately, the benefits of caffeine are such that constant use builds immunity, leaving the jitteriness but not the enhanced performance and most of the world's habitual coffee consumption is used to stave off the effects of caffeine withdrawal. Modafinil does not appear to have such drawbacks, though users should be acutely aware that prolonged and regular use of the drug will lead to health issues.

Almost any profession requires being switched on (mentally alert) at least some of the time, and if it's good enough for the most scientifically-analysed elite warriors on the planet, we suspect it'll be good enough for all other armed forces personnel, emergency and rescue workers, police, firefighters, and doctors, who are faced with very long hours of making potential life and death decisions ... and all those who need or choose to work long hours in their profession, from truck and taxi drivers, through to computer programmers.

Sportspeople are another likely marketplace - at the June 2003 United States Track and Field Championships, a star studded field of athletes tested positive for modafinil including sprinters Kelli White, Chris Phillips, Calvin Harrison and Chryste Gaines, hurdlers Sandra Glover and Eric Thomas and hammer thrower John McEwen. Modafinil now attracts a two year ban from all elite sports, but can be expected to proliferate at any level where drug testing does not occur.

Then there will be those who will take Modafinil for recreational purposes - it just might be the ultimate party drug with the user awake, alert and balanced and no problems remembering what happened or what got said the next morning.

So how good is it? Researchers recently had the opportunity to compare a group of America's finest with and without modafinil.

The testing was done using elite F-117A Nighthawk pilots - an F117-A Nighthawk is one of those black triangular stealth attack aircraft used with surgical precision by the US airforce in all recent wars.

Just over 60 Nighthawks were built and only one F-117A unit exists - the 49th Fighter Wing, at Holloman Air Force Base, N.M. The single-seater can fly at high subsonic speeds for unlimited distances with air refuelling. On their first deployment to Kuwait in 1992, a group of F-117s flew non-stop for 18.5 hours, a record for single-seat fighters that stands today.

With the right pilot aboard, the Nighthawk is a formidable weapon - a precision-strike aircraft with exceptional combat capabilities particularly suited for penetrating high-threat airspace with its stealth and speed and hitting critical targets with surgical accuracy using laser-guided weapons.

During Operation Desert Storm the Nighthawk flew approximately 1,300 sorties scoring direct hits on 1,600 high-value targets in Iraq. At US$45 million each, the Nighthawk is one of America's most effective weapons. When the United States declares war on you, the chances are the Nighthawk will be the first to tell you hostilities have begun. It was the ONLY U.S. or coalition aircraft to strike targets in downtown Baghdad and it led the first Allied air strike on Yugoslavia in March, 1999.

Our test group was the people who fly these aircraft - people who push the limits of human performance day-today using one of the most expensive and sophisticated aircraft on the planet. For the records, the F117-A is built by Lockheed Aeronautical Systems, is powered by two General Electric F404 non-afterburning engines is 19.4 metres long, 3.9 metres high, weighs 23,625 kilograms and has a wingspan of 13.2 metres.

The Laboratory and simulator tests studied the effects of being awake for 40 hours on alertness and flight performance.

The tests were repeated every five hours to help track the pilots' level of fatigue by monitoring body and brain activities. One test is a one-hour flight simulator mission. Researchers looked at the aviators' ability to monitor flight gauges and calculate basic mathematical equations. They also monitored eye movements and changes in pupil size.

While no one crashed or even came close to crashing, researchers said flight precision most noticeably changed between 33 hours and 38 hours into the test.

Armed with this initial data, the scientists returned to Holloman a few months later for the modafinil study.

Scientists said that while the pilots were on the medication, their performance "significantly improved," especially after 25 hours without sleep. The pilots also sustained brain activity at almost normal levels despite their sleeplessness.

During the simulator tests, modafinil "significantly" reduced the effects of fatigue during flight manoeuvres, researchers said.

Under the influence of modafinil, flight performance degraded by 15 to 30 percent. Performance by pilots without the medication degraded by 60 to 100 percent compared to fully rested performance levels.

The results of the testing were heavily conclusive - modafinil was effective for reducing the impact of fatigue.

International biopharmaceutical company Cephalon owns the worldwide rights to Modafinil.

Modafinil is available in more than 20 countries and is marketed under the brand name PROVIGIL in the United States, United Kingdom, Ireland, Italy, South Korea, Belgium and Luxembourg. Modafinil is available in other countries under the brand names, ALERTEC, MODIODAL, MODASOMIL, MODAVIGIL and VIGIL.

Modafinil is listed as a Schedule IV drug under the Controlled Substances Act. Schedule IV drugs as a class have a lower abuse potential than drugs listed in Schedule II or III. Other examples of Schedule IV drugs include Ambien, Xanax and Ativan. Examples of Schedule II drugs include Actiq, morphine, methadone and methylphenidate (Ritalin). Examples of Schedule III drugs include anabolic steroids, codeine and hydrocodone with aspirin or Tylenol, and some barbiturates.

Cephalon recently announced that it has filed an application with the U.S. Food and Drug Administration (FDA) requesting marketing approval of a new proprietary form of modafinil for the treatment of attention- deficit/hyperactivity disorder (ADHD) in children and adolescents between the ages of six and 17.

Blood test determines severity of concussions

It wasn't so long ago that shaking off a knock to the head and getting back on the field was seen as a sign of toughness for sportspeople. But in recent years, increased awareness of the potential for long-term damage has put the seriousness of concussion in the spotlight. Researchers at Sahlgrenska Academy in Sweden have now developed a blood test that reveals the severity of a concussion and when it is safe for a player to return to the game.

Diagnosing the severity of concussion is notoriously difficult, with many concussions not producing any noticeable signs or symptoms. Neuropsychological tests are one of the most common diagnostic testsused by sporting team medical staff to ascertain whether a person is concussed, but researchers from Sahlgrenska Academy at the University of Gothenburg wanted to find a more definitive diagnostic test.

To this end, the researchers monitored and examined all the players in Sweden's top hockey league. Ice hockey is a notoriously violent sport, with 35 of the 288 players in the Swedish Hockey League sustaining a concussion just half way into the 2013 season. These 35 players were asked to provide blood samples directly after and during the days after they received a concussion. These samples were then compared to samples taken from two full teams before the season began.

The tests showed that concussed players had elevated levels of a special nerve protein, called tau, in the blood. By measuring the levels of tau in a standard blood test, the researchers say it is possible to determine the severity of a concussion one hour after the injury was sustained. Additionally, the test can predict with an even greater degree of accuracy which players would experience long-term symptoms and therefore need to rest for longer.

"In contact sports like ice hockey, boxing and American football, concussions are a growing international problem," says Henrik Zetterberg, Professor at the Institution for Neuroscience and Physiology, the Sahlgrenska Academy. "The stakes for the individual athlete are high, and the list of players forced to quit with life-long injury is getting ever longer.

"We hope that this method will be developed into a clinical tool for club physicians and others in sports medicine, and is used as a basis for the decision on how long the player should rest after a blow to the head. It could even be used in general in emergency medical care to diagnose brain damage from concussions regardless of how they happened."

Results of the study, which was conducted in collaboration with researchers at Luleå University of Technology, Sahlgrenska University Hospital and the US biotech firm Quanterix Corporation, appear in the journal JAMA Neurology.

Source: Sahlgrenska Academy

Departure Ep. 2: Frontiers - ASMR Sci-Fi Series

TRY ASMR. Some people believe ASMR is a residual response from early childhood, an echo of the calming, soothing effect of a mother's voice on an infant, coupled with the close, caring personal attention a parent can give.

"Good" gut microbes revealed as the key to dark chocolate's health benefits

It has long been known that eating chocolate, particularly dark chocolate, has numerous health benefits. Although various studies have backed this up, the exact reason as to why this is so has remained a mystery. Now researchers from Louisiana State University have provided the answer – gut microbes.

Presenting their findings at the 27th National Meeting & Exposition of the American Chemical Society (ACS), the researchers revealed that, unlike so-called "bad" bacteria in the gut, such as some Clostridia and some E. coli, that are associated with inflammation and can cause gas, bloating, diarrhea and constipation, "good" bacteria, such as Bifidobacterium and lactic acid bacteria, feed on dark chocolate to produce anti-inflammatory compounds.

John Finley, Ph.D., who led the world-first research into the effects of dark chocolate on the various types of bacteria in the stomach, says that when these anti-inflammatory compounds are absorbed by the body, they lessen the long-term risk of stroke by reducing the inflammation of cardiovascular tissue.

Using a series of modified test tubes as a model digestive tract that simulated normal digestion, the team tested three different cocoa powders. Cocoa powder, which is a key ingredient of chocolate, contains several antioxidant compounds and a small amount of dietary fiber, both of which are poorly digested and absorbed in the stomach but are feasted on by good microbes when they reach the colon. Using human fecal bacteria, the team subjected these non-digestible materials to anaerobic fermentation.

"In our study we found that the fiber is fermented and the large polyphenolic polymers are metabolized to smaller molecules, which are more easily absorbed," said Finley. "These smaller polymers exhibit anti-inflammatory activity."

Finley says that combining the fiber in cocoa with prebiotics, (non-digestible carbohydrates available in dietary supplements, but also found in food like raw garlic and cooked whole wheat flour that stimulate the growth and/or activity of bacteria in the digestive system), could also help convert antioxidant polyphenolics in the stomach into anti-iflammatory compounds, which he believes is likely to improve a person's health.

"When you ingest prebiotics, the beneficial gut microbial population increases and outcompetes any undesirable microbes in the gut, like those that cause stomach problems," he said. Finley added that combining dark chocolate with solid fruits, such as pomegranates and acai could also provide even greater health benefits.

Source: ACS,Gizmag

Discovery of body clock reset mechanism could help shift workers and jetsetters

The human body clock is the curse of any shift worker or traveler arriving in a new time zone. Although one's body clock can be adjusted by external cues, such as light – a factor that devices such as the Re-Timer and Litebook are designed take advantage of – the adjustment period can vary significantly for different people. Now researchers have discovered the mechanism that controls how easily such adjustments can be made.

Body, or circadian, clocks orchestrate daily rhythms in our physiology. When this internal clock is thrown out of sync, be it by working nights or taking an international flight, it can negatively affect our sleeping patterns and metabolism.

"We are not genetically pre-disposed to quickly adapt to shift-work or long-haul flights, and as so our bodies' clocks are built to resist such rapid changes," says Dr David Bechtold. "Unfortunately, we must deal with these issues today, and there is very clear evidence that disruption of our body clocks has real and negative consequences for our health."

Dr Bechtold led a University of Manchester team that worked with scientists from Pfizer on a series of experiments involving mice that focused on an enzyme known as casein kinase 1epsilon (CK1epsilon), which is a component of the body clock.

"At the heart of these clocks are a complex set of molecules whose interaction provides robust and precise 24 hour timing," says Dr Bechtold. "Importantly, our clocks are kept in synchrony with the environment by being responsive to light and dark information."

The team found that mice lacking in CK1epsilon were able to adapt to a new light-dark environment much faster than normal. The team followed up this finding by showing that drugs that inhibited CK1epsilon were able to speed up the adaption rate of normal mice. Importantly, faster adoption to the new environment reduced metabolic disturbances caused by the time shift.

"As this work progresses in clinical terms, we may be able to enhance the clock's ability to deal with shift work, and importantly understand how maladaptation of the clock contributes to diseases such as diabetes and chronic inflammation," says Dr Bechtold.

The team's discovery is published in the journal Current Biology .

Source: University of Manchester

Asia shares pare gains after weak China survey

Asian shares gave up earlier gains on Monday after the China HSBC flash manufacturing purchasing managers index (PMI) fell to an eight-month low in March.

The preliminary reading of 48.1 fell from February's final reading of 48.5, while the "flash" March index also showed new orders slid for a fourth consecutive month to 46.9 -- its lowest point since July 2013, while output fell to 47.3, the lowest since September 2012.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent after the China data's release after gaining as much as 0.5 percent.

Japan's Nikkei share average bucked the trend and gained 1.3 percent.

"The concerns around China's growth are likely to remain over the coming weeks as the slowdown in orders over the winter months and Chinese Luna New Year filter out," Eva Lucas, market strategist at IG in Melbourne, wrote in a note to clients.

The Australian dollar, a liquid proxy for China, fell around a quarter of a U.S. cent after the disappointing reading.

The yuan suffered its biggest weekly drop against the dollar last week as policymakers try to flush out hot money from the market.

Overall, appetite for risk remained somewhat suppressed as geopolitical tensions continued to simmer after NATO's top military commander said on Sunday Russia had built up a "very sizeable" force on its border with Ukraine, and Moscow may have a region in another ex-Soviet republic, Moldova, in its sights after annexing Crimea.

The euro edged away from a recent low hit against the dollar as traders continued to recalibrate expectations around U.S. monetary policy after Fed Chair Janet Yellen last week raised the prospect of an earlier start to interest rate hikes.

It was $1.3788 after hitting a two-week low of $1.3749 on Thursday.

Investors snapped up the greenback last week as they swiftly brought forward the risk of a U.S. interest rate hike early in 2015 after Yellen surprised markets by raising the prospect of such a move.

The dollar rose 0.2 percent to 102.495 yen, with the Japanese currency continuing to draw safe-haven bids as investors continued to fret over the crisis in Ukraine.

Currency markets were also keeping an eye on emergency talks between leaders of the Group of Seven leading nations scheduled to take place later in the session at The Hague, where the G7 will probably discuss how to exert further pressure on Russia and at what potential cost.

Three-month copper on the London Metal Exchange fell 0.8 percent to $6,429.75 a tonne in wake of the China data, erasing small gains from the previous session.

Spot gold dipped to $1,327.06 an ounce, still reeling from a sharp fall triggered by Yellen's comments last Wednesday. Russia's assurance last week that it had no plans to invade other parts of Ukraine has also taken some of the gloss off gold.

Crude oil held some distance above last week's low as fresh U.S. and European sanctions on Russia renewed fears of a supply disruption from the world's second largest oil producer.

Brent crude traded at $106.65 a barrel with supply disruption worries keeping it off a six-week trough of $105.41 hit on Thursday.

Source: Reuters