On the New Neutral; A China Top?; How Phytates Fight Cancer Cells!

From: aditya rana
Date: Sat, Jun 6, 2015 at 4:30 PM
Subject: On the New Neutral; A China Top?; How Phytates Fight Cancer Cells!


Identifying secular trends, and their investment implications, is a critical component of successful investing over the longer term. The bond manager PIMCO, holds an annual forum where they invite prominent outsiders to brainstorm and identify key trends in global markets over the next three to five years. This year’s invitees included people like the former Fed Chairman Ben Bernanke, Rob Arnott (founder of Research Affiliates) and Jean-Claude Trichet (former President of the ECB). To summarise the report produced by their CIO and other senior members of the investment team:

-The “New Neutral” theme developed by PIMCO a year ago, where policy makers will hold short-term rates well below the average prevailing before the financial crisis, has played out and is now the accepted norm amongst policy markers ranging from the Fed to the PBOC.

-The market has also embraced this theme, with the terminal forward neutral rate (at the end of the expected rate tightening cycle) moving down from 4% prevailing in January, 2014 to 2.5% today (see chart below).

-The “New Neutral” theme is likely to continue over the next several years, underpinned by a multi-speed world of countries converging to modest trend growth rates, a view now shared by the IMF. The global financial system is also less susceptible to a systemic financial crash given it’s better capitalised, but will be prone to “flash crashes” as the global balance sheet available for market-making continues to decline.

-The other key trends include: moving from an energy scarcity to an energy abundant world driven by the shale revolution; trending away from a deflationary risk world towards 2% inflation in the developed world; shifting from a global savings glut to narrowing imbalances driven by stronger demand (mainly from China); and implementation of better economic policies in emerging economies (China, India) as well as in the developed economies (Eurozone, Japan and perhaps even in the U.S.).

-The key tail risks for the global economy are: with low rates, low trend growth and high debt, few countries have room to implement aggressive stimulus in the event the global economy slips into a recession over the next five years; with the more regulated and better capitalized banking system allocating less capital to market-making the risk of “flash crashes” and higher market volatility is significantly higher; and the risk of higher inflation than what is currently assumed in the market.

Investment Implications:

1)Equities: Positive despite current full valuations, given the low discount rates, a drawn-out business cycle, a slowly rising inflation rate and steady corporate earnings. Emerging market equities, in countries with improving growth prospects and sound economic reform policies, should outperform.

2)Corporate credit: Positive despite current fair valuations, for similar reasons as for equities as described above.

3)European Bonds: Core European country yields are likely to be in a secular uptrend as deflation risk recedes and inflation rises slowly, but will be prone to cyclical downtrends driven by ECB QE policy and periods of sluggish growth.

4)EM bonds: In contrast to developed world bonds, they provide attractive potential for a secular uptrend in prices, interrupted by cyclical headwinds.

5)Currencies: Expect continued, but slower, dollar appreciation following the 15% appreciation over the last year, with the Fed likely to be the first of the central banks to embark on a “New Neutral” tightening cycle.

6)Commodities: While the commodity supercycle is over, the large correction following the supply response is also behind us, and they will continue to provide investors with an opportunity to diversify portfolios and hedge against inflation.

In conclusion, PIMCO views asset valuations (equities and bonds) to be reasonable and expect improving fundamentals to support riskier assets, but with the risk of investors aggressively pursuing riskier strategies and eventually creating unstable conditions.

Good summary, and broadly consistent with the strategy expressed in previous newsletters – stay long risk in a well diversified manner, with extra weighting to key EM markets (in particular China & India), Europe and Japan. Reduce risk, as valuations start approaching bubble territory and add to risk as we get sharp downturns driven by less liquidity.

A China Top?:

-The Economist carried a cover page (see below) in a recent issue titled “Flying too high: China’s overvalued stockmarkets” and warned about the “economic dangers of China’s manic bull market”. As the technical analyst firm EWI notes, magazine covers convey conventional wisdom and are seldom (if ever) right in terms of calling an end to a secular bull market, though they can sometimes be right in calling an interim top. So while we are likely to see a correction lasting several weeks (or perhaps even a few months), the next phase of the uptrend should commence subsequent to the correction (see chart below). Bull markets typically last longer than the bear markets that precede them, and with a bear market which lasted 7 years the bull market has longer to run.

The stock market upsurge should also result in stronger economic growth later in the year – as the legendary hedge fund manager Stan Druckenmiller noted recently “ Whenever I see a stock market explode, six to 12 months later you are in a full blow recovery”. This seems to be evidenced by the sharp rebound in the “Li Keqiang” index – comprising electricity consumption, rail freight volume and bank loans, since its low in February (see chart below):

How Phytates Fight Cancer Cells?

Dr. Michael Greger, May 26, 2015

-Phytate is a compound found in beans, grains, nuts and seeds. The average daily intake of phytate in vegetarian diets is about twice that of those eating mixed diets of plant and animal foods, which may help explain their low cancer rates. Aside from helping to prevent cancer, dietary phytate has been reported to help prevent kidney stone formation, protect against diabetes mellitus, dental cavities, and heart disease.

-But of all the things phytates can do, the anticancer activity of phytate (also known as phytic acid, is considered one of its most important beneficial activities. Dietary phytates are quickly absorbed from the gastrointestinal tract and rapidly taken up by cancer cells throughout the body, and have been shown to inhibit the growth of all tested cancerous cell lines in vitro.

-Phytates have been shown to inhibit the growth of human leukemia cells, colon cancer cells, both estrogen receptor-positive and negative breast cancer cells, voicebox cancer, cervical cancer, prostate cancer, liver tumors, pancreatic, melanoma, and muscle cancers. All at the same timenot affecting normal cells. That’s the most important expectation of a good anticancer agent: the ability to only affect cancerous cells and to leave normal cells alone.

-In my video, Phytates for Rehabilitating Cancer Cells, you can see how leukemia cells taken from cancer patients are killed by phytates, whereas normal bone marrow cells, are spared. This may explain why bean extracts kill off colon cancer cells in vitro, but leave normal colon cells alone.

-What are the mechanisms of action by which phytates battle cancer? In other words, how do phytates fight? How don’t they fight? Phytate targets cancer through multiple pathways, a combination of antioxidant, anti-inflammatory, immune-enhancing activities, detox, differentiation, and anti-angiogenesis. In other words, phytate appears to affect all the principal pathways of malignancy.

-The antioxidative property is one of the most impressive characteristics of phytate. Phytates can also act on our immune functions by augmenting natural killer cell activity, the cells in our body that hunt down and dispose of cancer cells, as well as neutrophils, which help form our first line of defense.

-And then phytates starve tumors as more of a last line of defense. Not only can phytates block the formation of new blood vessels that may be feeding tumors, but disrupt pre-formed capillary tubes, indicating that phytates may not just help blockade tumors, but actively cut off existing supply lines.

-What’s really remarkable about phytate, though, is that unlike most other anti-cancer agents, it not only causes a reduction in cancer cell growth but also enhances differentiation, meaning it causes cancer cells to stop acting like cancer cells and go back to acting like normal cells. You can see this with colon cancer cells for example. In the presence of phytates, human colon cancer cells mature to structurally and behaviorally resemble normal cells. And this has been demonstrated in leukemia cells, prostate cancer, breast cancer, and muscle cancer cells as well.

-Colorectal cancer is the second leading cause of cancer death in the United States. It arises from “adenomatous polyps,” meaning that colon cancer starts out as a benign little bump called a polyp and then grows into cancer that can eventually spread to other organs and kill. So the National Cancer Institute funded the Polyp Prevention Trial, highlighted in my video, Phytates for the Treatment of Cancer, to determine the effects of a high-fiber, high fruit and vegetable, low-fat diet.

-Researchers found no significant associations between polyp formation and overall change in fruit and vegetable consumption. However, those with the greatest increase in bean intake only had about a third of the odds of advanced polyps popping up. It could have been the fiber in the beans, but there’s lots of fiber in fruits and vegetables, too. So it may have been the phytate.

-If the tumors develop from polyps, they still need to spread. Tumor growth, invasion, and metastasis are multistep processes that includecell proliferation, digestion through the surrounding tissue, and migration through barrier membranes to reach the bloodstream so the tumor can establish new proliferating colonies of cancer cells. A critical event in tumor cell invasion is the first step: the tunneling through the surrounding matrix. To do this, the cancer cells use a set of enzymes. This is where phytates might come in. We’ve known that phytates inhibit cancer cell migration in vitro, and now perhaps we know why. Phytates help block the ability of cancer cells to produce the tumor invasion enzyme in the first place (at least for human colon and breast cancer cells).

-So what happens if you give phytates to breast cancer patients? Although a few case studies where phytates were given in combination with chemotherapy clearly showed encouraging data, organized, controlled, randomized clinical studies were never done—until now. Fourteen women with invasive breast cancer were divided randomly into two groups. One group got extra phytates; the other got placebo. At the end of six months, the phytate group had a better quality of life, significantly more functionality, fewer symptoms from the chemo, and did not get the drop in immune cells and platelets chemo patients normally experience.

-In the past, there were concerns that the intake of foods high in phytates might reduce the bioavailability of dietary minerals, but recent studies demonstrate that this co-called “anti-nutrient” effect can be manifested only when large quantities of phytates are consumed in combination with a nutrient poor diet. For example, there used to be a concern that phytate consumption might lead to calcium deficiency, which then led to weakened bones, but researchers discovered that the opposite was true, that phytates actually protect against osteoporosis (See Phytates for the Prevention of Osteoporosis). In essence, phytates have many characteristics of a vitamin, contrary to the established and, unfortunately, still existing dogma among nutritionists regarding its ‘anti-nutrient’ role.

-As one paper in the International Journal of Food Science & Technology suggests: “Given the numerous health benefits, phytates participation in important intracellular biochemical pathways, normal physiological presence in our cells, tissues, plasma, urine, etc., the levels of which fluctuate with intake, epidemiological correlates of phytate deficiency with disease and reversal of those conditions by adequate intake, and safety – all strongly suggest for phytates inclusion as an essential nutrient, perhaps a vitamin.”The paper concludes that inclusion of phytates in our diet for prevention and therapy of various ailments, cancer in particular, is warranted.

Here’s to getting adequate beans, grains and nuts in your diet!




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