Source: ANTHONY MIRHAYDAR -CBS

Are we looking at a major market meltdown?

Stocks are succumbing to selling pressure of at type not seen since 2012. Yes, it's been that long.

After a meteoric rise in 2013, fueled by the apparent never-ending flow of cheap money from the Federal Reserve and the Bank of Japan, the Dow Jones industrial average is already down nearly 1,200 points from its high on New Year's Eve -- and by all indications, it's got further to fall. Selling on Monday accelerated late in the trading dow with the Dow falling more than 300 points by 3 p.m. 

In fact, with the Dow marching in eerie lockstep with the run up to the 1929 market crash, as shown in the chart below, we could be looking at a complete wipeout of the 2013 market gains by March or April if the parallel pattern, known in charting as the price analog, holds.

Buckle your seat belts. Things are going to get exciting.

Price analogs, like much in the field of technical or chart analysis, are based on the fact that people, whether now or in the 1920s, are susceptible to the same emotional biases when they make buy or sell decisions. Old highs and old lows provide resistance and support because people are more sensitive to losses and breaking even than they are to gains, for instance. 

As a result, a regression analysis shows that the current market behavior can be nearly 90 percent explained by what happened in 1929. That's an incredibly tight relationship, statistically speaking, for something that happened so long ago.  

It's worth remembering that bond buying stimulus from the Fed in the late 1920s helped fuel excessive optimism and unsustainable market gains; so the analog isn't just based on price.

But the fundamentals are looking tough as well, with growth in U.S. factory activity slowing at a rate not seen since 2011. A cavalcade of concerns has replaced the quiet strength that seemed so resilient just a few weeks ago.

The Fed is pulling back on its bond buying programs, with the taper taking the "QE3" monthly bond buying pace down $20 billion to $65 billion as the unemployment rate drops faster than policymakers expected (largely, because people are leaving the workforce). And with inflation causing problems in Japan, as the trade deficit grows on higher food and fuel import prices as wages fail to keep up, the Bank of Japan looks less and less likely to expand its own bond buying program this spring.

As a result, the tide of cheap money is receding. And that's causing problems in the emerging markets as capital flees -- the subject of my recent article.

I see three potential accelerants heading into February that could keep the pressure on stocks.

First, the emerging market currency crisis is quickly spinning out of control. Last week's surprise interest rate hike by Turkey, taking rates from 7.75 percent to 12.5 percent in an effort stabilize their currency, failed to halt the slide. We also saw rate hikes by India and South Africa. The problem is that raising rates, which is the textbook cure for capital flight and inflation (the problem being faced in emerging market countries), results in stock market losses, a weaker economy, and higher credit defaults.

If the 1997 Asian crisis is any guide, we're going to see bailouts from the International Monetary Fund before this settles.

Second, the market is vulnerable to panic selling because bullish sentiment was so high. In fact, levels had reached bullish extremes not seen since the lead up to the 1987 market crash. Margin debt had swelled to record highs while available cash had dwindled to nil. The Nasdaq Composite hasn't closed below its 20-week moving average since 2012, enjoying an unblemished uptrend last year of a kind not seen since the final stage of the dot-com bubble. Additional price declines will be necessary to restore the balance between greed and fear.

Finally, additional budget battles loom in Washington. As soon as February 28, the U.S. Treasury will effectively run out of cash as it hits the drop-dead debt ceiling date. According to Treasury Secretary Jacob Lew, it would jeopardize Social Security payments and military pay unless action is taken. Democrats and Republicans have repeatedly clashed on the debt ceiling over the last few years.

Add it all up, and investors need to remain cautious and defensive. I continue to recommend a focus on cash or U.S. Treasury bonds (which, ironically, do well during debt ceiling fights). The leveraged Direxion 3x Treasury Bond Bull (TMF) is up more than 14 percent since I added it to my Edge Letter Sample Portfolio on January 10. 

There are also opportunities on the short side for more aggressive traders such as Brazilian steelmaker Companhia Siderurgica Nacional (SID), which is down 14 percent since I added a short position on January 23.

Disclosure: Anthony has recommended TMF and SID short to his clients. 

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Thirteen-year-old author writes own success story

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PONTE VEDRA, Fla. -- Jake Marcionette is like any basketball-loving 13-year-old in Ponte Vedra, Fla., taking his big shot. Except his isn’t on the court.

It’s on the shelves -- Jake’s book goes on sale tomorrow. 

Jake Marcionette

 CBS NEWS

 “I love writing, so if there's any free time, I'd rather write," he says.

“Just Jake” is a humorous take on middle school life, culled from his own challenges as the new kid in town trying not to be bullied.

He’s not to first author this young to publish, although he may be the first to do it this way.

“Just typed in on Google, ‘how to get a book published,’” Jake says. “And it said, ‘First you should get a literary agent.’”

Twelve years old at the time, he started cold calling them. 

“Just Jake” is a humorous take on middle school life.

 CBS NEWS

 “One time, there was this lady in San Francisco, and I called her up, and she just went on a rant, in a way, how she's been getting calls, that this isn't the way to do it,” Jake recalls.

Like a lot of kids, Jake didn’t listen so well to the rules. The next call was to Dan Lazar, who works for one of the top literary agencies in the world.

“My assistant walks in and she said there’s a kid on the phone,” Lazar says. “I said, ‘OK, tell him to email me.’”

Ten minutes later, a sample was sitting in Lazar’s inbox.

“I wrote back to him right away, and I said I finished, I read it, it’s great, can I give you a call,” Lazar says. “He wrote back and goes, ‘Yes, sure, call me after lacrosse.’”

Which led to a conversation that night most kids don’t have with their moms.

“I told her from my room,” Jake says. “I just kind of shouted out, ‘Hey, Mom! Can you come here? I have a contract here for you to look at!’” 

 “I said, ‘What do you mean there’s a contract?’” Jake’s mom, Debra says. “He goes, ‘Yeah, somebody’s interested in the book.’ We were just freaking out.”

A month later, Jake had a  book deal. His agent won’t say for how much -- only that it’s thousands of times more than his allowance.

Jake developed his idea during summer vacations when his mom Debra requires an hour and a half of writing each day.

“I was probably writing more for the kids my age who might read it,” Jake says. “Just for -- to have them know that they’re not the only ones going through this. And, you know, it stinks, but it’s going to get better.”

It definitely got better for this author, who’s already at work on his sequel. No surprise to anyone who knows him, because that’s just Jake.JIM AXELROD-CBS NEWS

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Want to Be a Scientist? Maybe You Better Learn Chinese

Source:  LEE DYE - ABC

According to scientists, the United States may lose its global dominance in biomedical research.

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Alexis Carulli is one of those terribly bright grad students in universities across the country who face an equally bright future. Maybe.

She's been working on two doctorate degrees, one in medicine and one in scientific research, for six years now and she should be able to see the light at the end of that long tunnel.

But the light is dimmer than it used to be, and it's getting even dimmer. She's worried enough that a couple of months ago she poured out her concerns in a letter published in a professional journal.

Funding for biomedical research in this country has declined so much in the past few years that the United States could lose the global dominance it has held for decades. So even with all she has to offer, Alexis can't be sure there will be a job waiting for her when she wraps up her academic career.

"The decreased funding levels for science aren't just affecting research right now," she said in her letter, published in the American Journal of Physiology: Gastrointestinal and Liver Physiology. "If this situation lasts longer, it will have very long-term consequences because the scientists won't be there."

Where will they be? Quite possibly in other countries that are ramping up their funding for biomedical research even as the U.S. reduces its own funding. One of them may be Carulli.

This shouldn't be dismissed as the whining of a student who is worried about her own future. It's backed up by research from many institutions -- including her own university -- showing a national trend that could affect every American.

Here's a few troubling facts in a paper authored by experts in both research and economics, published in the New England Journal of Medicine, documenting global changes in biomedical research funding from 2007 through 2012:

• Japan increased its funding by $9 billion, while the U.S. reduced its funding by $12 billion.
• China had the largest percentage increase, a whopping 313 percent, from about $2 billion in 2007 to $8.4 billion in 2012. That's a relatively small investment, but it suggests a trend.
• The U.S. share of global biomedical research funding fell from 51.2 percent to 45.4 percent, although this country is still the largest investor in the world. The amount dropped from $131.3 billion in 2007 to $119.3 billion in 2012. During that same period Asia and other Pacific countries hiked their investment from $41.1 billion to $62.0 billion with Japan leading that region, climbing from $28.2 billion to $37.2 billion.

Just a bunch of numbers, so why should anyone care?

"There are many reasons we should all care," Reshima Jagsi, associate professor of radiation oncology at the University of Michigan Health System and coauthor of that study said in a telephone interview.

"But why should we care about our own expenditure in the U.S.? Because biomedical research is critical when we think about the economy and economic health" as well as the health of Americans and people all over the earth who are dependent on progress led by this country for so many years, she said.

So much depends on further progress, especially at a time when so many doors have been opened -- including the sequencing of the human genome that many hope will lead to treatments that are directed at personalized solutions to specific issues for each individual.

That's the hope, but it won't be cheap.

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Heavy drinking in mid-life men speeds memory loss, study finds

Middle-aged men who drink more than two and a half drinks a day may speed their memory loss by nearly six years, according to a British study published Wednesday.

The study, released in the journal Neurology, did have good news for those who enjoy an occasional nip: It suggested that moderate alcohol intake could be good for the brain. But for male heavy drinkers, there was a significant, quantifiable loss of cognitive powers akin to premature aging.

Unlike most studies of how alcohol affects thinking and memory, the researchers were able to track cognitive changes over time by using 7,513 members of the so-called Whitehall II cohort, a study of British civil servants that’s been going on since 1985. About every four years since, the cohort has undergone a variety of examinations and answered questionnaires about their health habits, including alcohol intake.

Testing started in 1997 and was repeated at three intervals, the last in 2009 when the people ranged in age from 55 to 80. 

There were three tests. One tested inductive reasoning. For example, people were asked to answer a series of questions like “Fish is to swim as bird is to ____,” and “Here are three figures: 325. Add the largest two figures together and divide the total by the smallest figure.”

The people were then tested for verbal fluency by writing down as many words beginning with the letter “S” as they could in one minute, and the names of as many animals as possible in one minute.

Short-term verbal memory was assessed by speaking words to the subjects, and then giving them two minutes to write down every one they could recall.

When the results were analyzed, and matched for consumption, it turned out that for men, consuming 36 grams of alcohol — about 2.5 drinks — or more per day “was associated with faster cognitive decline in all domains” compared to drinking lesser amounts.

The effect was especially harsh for memory. Male heavy drinkers added 5.7 years of memory decline. It's as if a 60-year-old man had the memory loss expected in a 66-year-old, lead author Séverine Sabia told NBCNews.com. Executive functions were affected too, with an extra 1.5 years tacked on for heavy drinkers.

The results held up, Sabia said, even after controlling for health factors like depression, which could lead people to drink and also has been shown to impair brain power. 

Women were not nearly as affected, though women who abstained from alcohol for 10 years showed a faster cognitive decline than moderate female drinkers. Both Sabia and Dr. Meir Stampfer, a professor of medicine and epidemiology at Harvard Medical School, who also has studied cognitive decline in drinkers, cautioned against coming to any conclusions about the apparent gender difference.

While heavy drinking certainly seems to be bad for you, and not just for your mind, there's also some good news. There was no significant difference in cognitive decline between moderate drinking men and total abstainers. For women, moderate drinkers fared better. 

Moderate drinking is defined as one drink a day for women and up to two drinks a day for men, the Centers for Disease Control and Prevention says. 

Stampfer said his own work, and that of studies like Sabia’s, indicates that “moderate drinking is beneficial.”

Several mechanisms might be at work to confer this good effect, he said, but especially the way moderate alcohol intake benefits the cardiovascular system.

“There are shared risk factors,” between cardiovascular disease and cognition, he explained. People who suffer strokes, heart attacks and atherosclerosis often also suffer from mental decline due to impaired blood flow the brain. Because moderate boozing is beneficial for the cardiovascular system, the brain gets some benefit, too. “We know there is a strong relationship there.”

Think about that the next time you’re tipping your bartender.  

Source: Brian Alexander , NBC.

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Drinking diet soda just makes you eat more

msnbc.com

Don't depend on diet soda to help you lose weight. A new study shows that overweight and obese people who drink diet beverages consume more calories from food than heavy people who consume sugary drinks, according to a new Johns Hopkins study.

“When you make that switch from a sugary beverage for a diet beverage, you’re often not changing other things in your diet,” says lead researcher Sara Bleich, associate professor in the department of health policy and management at Johns Hopkins Bloomberg School of Public Health. Bleich and other Johns Hopkins researchers used data from the 1999-2010 National Health and Nutrition Examination Survey. For this study, published Thursday in the American Journal of Public Health, they analyzed participants’ recollection of what they’d had to eat and drink over the past 24 hours.

They found that about one in five overweight or obese American adults regularly drinks diet beverages -- that includes soda and low-calorie juices, teas and the like -- which is about twice the amount that healthy-weight adults are drinking. “On the one hand, that’s encouraging. People are being told if you need to cut calories from your diet, discretionary beverages are a great place to start,” Bleich says. 

Diet soda consumption has increased steadily since 1965, when just 3 percent of Americans were regularly drinking the stuff, the study authors write. Sales of diet soda actually declined 7 percent last year, but Bleich thinks that just means habitual diet soda drinkers are switching to the many flavored teas, juices and vitamin-enhanced waters currently on store shelves.

Our bodies fight to try to keep our weight stable, which is one of the reasons weight loss is so hard —and it could help explain why overweight diet soda drinkers may be consuming more calories from solid food. 

For slimmer people, the study suggests that diet drinks can contribute to weight maintenance, explains NBC News diet and health editor Madelyn Fernstrom. 

Source: Melissa Dahl

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When in pain, are you a baby or linebacker? Brain study offers clues

Linda Carroll NBC 

When it comes to pain, do you cry like a baby at the slightest bump or are you a football player, pushing through the anguish without a pause? New research shows how you react to pain may be linked to how much grey matter you have in certain areas of the brain.

A study published in January in the journal Pain found less pain sensitivity in people who had denser grey matter in the areas that control how we focus attention and areas involved in daydreaming. The findings may help doctors to recognize which patients will need less pain medication after surgery and also give clues to the development of chronic pain syndromes.

For the new study, researchers tested the pain sensitivity of 116 healthy volunteers by touching them with a probe that was heated to 120 degrees Fahrenheit and then asking them to rate the level of the pain on a scale of 0 to 10. Several days later the volunteers were given an MRI, which found that those who were least sensitive to pain were the ones with the most grey matter in the posterior cingulate cortex, the precuneus, the intraparietal sulcus, and the inferior parietal lobule. The researchers suspect that people with more grey matter in these areas are better able to distract themselves from pain messages.

There’s a constant competition for what your brain will pay attention to, “and pain is very good at winning,” said study co-author Robert Coghill, a professor of neurobiology and anatomy at the Wake Forest Baptist Medical Center in Winston-Salem, N.C. “It’s very good at cutting through all that stuff floating around in your head. The more focused you are on something that is not related to the pain, the better able you are to disregard it.”

Our brains are constructed so we can be distracted from the sensation of pain in certain circumstances, such as when athletes are competing. For example, in a recent op-ed in The New York Times, former Denver Broncos tight end Nate Jackson said something in football “grants men temporary invincibility, makes them immune to pain and anguish.”

The Wake Forest findings support prior research showing "you need lots of brain matter to help reduce the amount of pain information that enters the brain," although it doesn’t address whether people who have less grey matter were born that way or became that way as a result of life experiences, said Dr. Jordan Karp, associate professor of psychiatry and anesthesiology at the University of Pittsburgh School of Medicine and medical director of geriatric psychiatry at UPMC Pain Medicine.

Prior research has shown that chronic pain can lead to a thinning of grey matter. And, in light of the new research, those changes may set up a vicious cycle of pain killing off the very nerves that might help dull its cuts. “We do know that long-term exposure to pain really seems to have a toxic effect on both brain functioning and brain physiology and anatomy,” Karp said.

It may make sense that iron-will football players can be impervious to pain, but regular folks can be just as good at ignoring pain messages if they’re focused on something they deem to be important.

When 70-year-old Colleen Bickman is deeply involved in an activity, she barely notices when she bumps or bangs into something. “I’m fairly oblivious when I stub a toe,” said the Monte Sereno, Calif. retiree. “Sometimes I find a bruise and I don’t know where I got it. I don’t always feel it the instant it happens.”

Many people don’t realize that pain sensitivity varies.

“People are like, ‘OK, why are you whining? That wouldn’t hurt me,’” said Dr. Kirsten Tillisch, an associate professor of digestive diseases at the UCLA David Geffen School of Medicine. “Just why some people are more sensitive is a key question.”

So, is it hopeless for those who were born super sensitive to pain? 

You can train your brain to focus on other things, Coghill said. A prior Wake Forest study on pain and meditation found meditation not only affected people’s ratings of pain, but also their brains’ responses to it.

Ultimately, Coghill said, “when we have a rich and varied life, that’s going to be a real buffer against pain.”

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Too much added sugar can Kill you

Joe Raedle / Getty Images

Drink just one 12-ounce can of sugary soda every day, and you might be unwittingly increasing your risk of dying from heart disease, suggests a new study.

Using national survey data, researchers from the Centers for Disease Control and Prevention found an association between a diet full of too much added sugar from processed and prepared foods and an increased risk of dying of cardiovascular disease — the country’s number one killer of both men and women.

“Most Americans are consuming too much sugar,” said Quanhe Yang, who’s a senior scientist in the CDC’s division for heart disease and stroke prevention, and lead author of the new study, published today in JAMA Internal Medicine. “If you can limit your consumption of added sugar, it’ll help you to reduce your risk of cardiovascular disease.”

The researchers examined data from the National Health and Nutrition Examination Survey, looking at national trends on added sugar consumption from 1988 to 2010, combined with 14 years’ worth of analysis of cardiovascular disease mortality. For sugar-sweetened beverages specifically, the researchers found that seven 12-ounce servings per week—so, one can of soda a day—increased a person’s risk for cardiovascular disease by more than a third.

But the researchers didn’t limit their focus to sugar-sweetened beverages like soda. They also found a link between a diet with too much added sugars —that is, if sugar in processed and prepared foods made up more than 15 percent of a person’s daily calories—and a higher risk for cardiovascular disease. Put another way, that’s about 300 calories for the average person’s 2,000-calories-a-day diet—about 75 grams, or 18 teaspoons, a day. And it’s easier to creep your way up there without realizing it; in fact, most Americans consume 22 teaspoons of sugar each day, recent figures show. 

“If you look at all packaged foods, 77 percent of them have sugar added to them,” said Laura A. Schmidt, professor in the school of medicine at University of California, San Francisco. Schmidt wrote a commentary on the new study from the CDC researchers that was also published today in JAMA Internal Medicine. “For example, it’s added to breads, it’s added to bagels, it’s added to ketchup, it’s added to salad dressing … Foods you think are quite savory tasting have sugar added to them. So it makes it very hard for the consumer to know when they’re getting too much sugar.”

To limit the amount of sugar you’re taking in, New York City nutritionist Elisa Zied suggests that when a sugar craving hits, choose a food that’s naturally sweet first.

“Having some naturally sweet fruit before digging into that candy bar or bag of jelly beans can help fill you up and potentially have less of that empty calorie food,” Zied says.

And be sure to choose your added sugars wisely, she says.

“Don't waste calories on a cookie you don't like,” Zied says. “Save those sugar calories for the sugary food you enjoy most and that you can limit to a small portion. And have it at the time of the day when you want it most—even if that's with breakfast or mid-morning. 

“The good news is that when you get your body used to eating less sugar, you won't crave it as much,” Zied said. “It just takes time and patience.”

Source: Melissa Dahl NBC