Sunday, November 25, 2012

Infant Mortality Rates In The U.S.

A country's infant mortality rate is a powerful indicator, the death of an infant has a bigger impact on the overall population's life expectancy than does a death from disease later on in life.  The lowest infant mortality rates in 2012 can be found in Monaco, Japan, Bermuda, Singapore and Sweden.  In Monaco the country averages just 1.80 deaths per 1000 live births, 2.04 male deaths and 1.55 female deaths per 1000 live births.  The U.S. does not make the top 50, the country averages 6 deaths per 1000 live births, 6.6 male deaths and 5.3 female deaths per 1000 live births.  The European Union averages 4.49 deaths per 1000 live births. 

According to 2012 estimates the life expectancy for someone born in the U.S. according to the CIA World Factbook is 78.49 years.  This number summarizes the mortality at all ages and the overall quality of life in a country.  These numbers reflect the ROI in human capital and are used by actuaries.  The U.S. comes in at number 51 and Monaco which not only has the lowest infant mortality rate also has the highest life expectancy rate with a life expectancy of 89.68 years.  The average man in Monaco can expect to live 85.74 years and a woman can expect to live 93.77 years.  The average man in the U.S. can expect to live 76.05 years and the average woman can expect to live 81.05 years.  For some women marrying a younger man may not be such a bad idea after all. The European Union in 2010 averaged an overall life expectancy of 79.76 years.

Although the U.S does not make it to the top 10 of any list mentioned above the country spends an enormous amount of money in health expenditures.  In 2009 the U.S. spent more than 16.20% of the nations total GDP on health expenditures.  Monaco only spends about 4.3% of the countries GDP on health expenditures according to a World Bank report published in 2012.  According to the World Bank the U.S. GDP was worth $15094.00 billion in 2011 about 24.35% of the world economy.  While it is true that the U.S. population dwarfs that of Monaco the U.S. underperforms compared to other countries with a population greater than 10 million.  There are other factors to consider.  In the U.S. the number one cause of infant mortality is congenital malformations which accounts for about 20-25% of perinatal deaths.  According to Doctor Teresa Marino a professor and attending physician at the Division of Maternal-Fetal Medicine at Tufts Medical Center many genetic disorders can be detected early in pregnancy using various noninvasive and invasive techniques.  Examples of the noninvasive techniques are ultrasounds and MRIs. 

Lack of education can contribute to the higher mortality rates in the U.S. women need to be informed on how to take care of themselves during the pregnancy period.  According to the Center for Disease Control and Prevention (CDC) a significant cause of infant mortality are neural tube defects not only in the U.S. but worldwide.  Neural tube defects are birth defects of the brain and spine one of the most common being spina bifida.  Something as easy as informing pregnant women to consume 400 mcg of folic acid daily can prevent neural tube defects. In the U.S. every year 3000 pregnancies are affected by these neural tube defects.

Chart showing prevalence of spina bifida from 1995 to 2006.  See long description for detailed explanation of this chart

Sunday, November 18, 2012

Investing in 2013

Where will we be in 2013, will the U.S. reach a compromise on spending and taxes?

Whether or not we enter January 1st with a deal investors have to prepare for any economic situation.  For the past few years in a near zero interest rate country dividend stocks were the best alternative.  Starting next year dividend income could be taxed as ordinary income, for high income earners that could be as high as 43%.  All of a sudden dividends may not be as attractive as they once were for some, for baby boomers dividend paying stocks still are one of the best alternatives keeping some of the gain is better than keeping none. 

Other issues to consider are the impact other countries will have on the global economy.  Europe is not getting out of recession nor fixing their economic woes any time soon.  Japan is also in deep debt and is a reminder of what can happen in a lost decade and beyond as a result of an asset bubble.  Even if the possibility of the U.S. entering a recession as early as the first quarter of 2013 is small, investors may continue to react quickly and aggressively by dumping equities.  Whether or not a tax hike and government spending cuts are necessary this could take the U.S. back into a recession.  Cuts on Medicare alone would cut jobs and cause havoc for the elderly who are already having a tough time stretching out their retirement nest. 

This market is about survival of the fittest old and young are having to invest with about the same amount of risk to make up for low interest rates.  The young are cutting pennies and eating out less as if they were in their golden years, elders are having to go back to work for lower salaries as if they were millennials.  In either case stocks are still the better alternative for the long run even if tax hikes are eminent.  Investors can hold on to their stocks for the long run and sell when tax rates become more favorable.  As the Fed continues to purchase bonds inflation is also a concern.  This can be hedged through stocks but if the situation gets out of hand real estate is an option that has to be considered.  During inflation and currency devaluation a piece of real estate can be a good hedge, it is an asset that can be lived in or rented out while the uncertainty and inflationary period goes on.  In difficult economic times and while the tax law is not clear diversification is the best alternative.  Leaving some money in cash is also a good financial move to wait and see where it should be allocated.  If inflation starts accelerating investors do not want to be mostly in cash that is why being 100% in cash is not a good idea for anyone.

Is a bear market creeping nearby for the U.S. or is this a good buying opportunity?

If there is a deal that extends our current tax rates in our stockings this year this could send all three indexes up by more than 5%.

Thursday, November 1, 2012

Obesity In The U.S.

Obesity has become a big problem in America not only does it add a huge cost to the already troubled health care system but it most importantly puts people at a higher risk for heart disease and stroke.  Pinpointing the major factor that has led to the ascent of weight in the U.S. population is debatable but we can get an idea as to why: lack of exercise, lack of education, bigger food portions, technology, anxiety and unemployment.  Having a sedentary lifestyle in a world ruled by computers and fast food spells disaster to one's health.  We live in an environment where all our major life activities can be done from home with little if any physical activity.  We can work from home, pay bills and do banking, get entertainment (Netflix, Youtube), eat (Domino's, Fresh Direct), socialize (FB, Skype, Text) and shop with very little physical activity. 

According to the Center for Disease Control obesity has increased in every state according to their Overweight and Obesity Data.  In 2011 Colorado had the lowest percentage of obesity cases 20.7% and Mississippi had the highest 34.9%.  There are ways to help us with the fight against the pounds  supplements that suppress appetite and shakes that fill us with protein, their efficiency debatable, if the obesity gets out of hand then bariatric surgery is the alternative.  The FDA has not approved a drug treatment for obesity in 10 years until now Qysmia from Vivus (VVUS) and Belviq from Arena Pharmaceuticals (ARNA).  Vivus is trying to get approval for the drug to be carried in retail pharmacies so far it has beat Belviq by being the first to reach the market through mail order pharmacies, in 2013 Belviq is expected to go on sale.  Both stocks have seen their share of high volatility but Vivus has had quite the roller coaster ride its 52 week range 8.60 - 31.21 says it all.  In September the stock was at 24 now it trades in the 14 point range the rise was in anticipation of sales the drop came after news that Europe would not recommend Qysmia due to concerns about safety.

Both drugs have their challenges ahead there is controversy in regards to which of the two drugs is more safe and which is more effective.  As with pharmaceutical companies and their stock prices there are times when FDA approval sends the stock to the moon, then reality kicks in when sales come in lower than expected lassoing the stock back down from the clouds.  We saw it happen with Human Genome Sciences and their treatment for lupus (Benlysta) investors that held on to the stock took the loss as HGSI is no longer listed GlaxoSmithKline (GSK) acquired them.  Vivus is likely to miss the analyst forecast for sales in the fourth quarter based on the amount of prescriptions doctors have written so far according to IMS Health, it will report third quarter results on November 6th.  In the midst of the battle of the two drugs another challenger emerges Orexigen Therapeutics (OREX) with its two candidates Contrave which has completed its phase III clinical trials and Empatic which has completed its phase II clinical trials.  Both are combination drugs that treat obesity both drugs use Bupropion which acts on the weight control circuit by stimulating the POMC neuron it is believed to increase the level of dopamine activity in certain receptors in the brain and thus lower appetite.  Mutations in the POMC gene have been associated with obesity and adrenal insufficiency.  Contrave if approved can be a game changer in the fight against obesity since it addresses the reward system in the brain that causes food cravings.

File:Obesity state level estimates 1985-2010.gif