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Is The U.S. Prepared For Another Recession?

Daniel Chase

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Back in 2003, when Robert Lucas, a distinguished Nobel laureate and practitioner of economic principals, he discussed how the field of macroeconomics came to be “as part of the intellectual response to the Great Depression,” and he went onto explain that macroeconomics would continue to stave off depression for the foreseeable future. He was, of course, painfully incorrect.

In 2008, the United States endured its worst financial crisis since the Great Depression, leaving many without homes, jobs, or really much of anything. Naturally, when an economic meltdown takes place, voters blame the nearest sitting president which, at the time, was Former President Barack Obama. 

Over a decade has passed since the 2008 financial crisis and the U.S. economy has, for all intents and purposes, rebounded from such events. Having said that, trillions of dollars in were lost at the time in terms of personal wealth. The U.S. government itself lost somewhere around $5 trillion to $10 trillion worth of economic output. Pausing for a moment because I’ve been terribly rude. Some of you aren’t aware what caused the ’08 downturn in the first place. Well, it all started with those darned subprime mortgages and mortgage-backed securities. 

A subprime mortgage is a long-term loan issued to an individual who, at one time, may have not been a very trustworthy individual and failed to repay their accumulated debts. These risky borrowers were given loans from major banking institutions to purchase things like cars, houses, and other investments that most people don’t have cash on-hand to procure. Hmm, lending money to people who’ve defaulted on loans before, sure, there’s no way this can turn sour. 

So, we’ve given mortgages to people who’ve defaulted on loans before, no issue there, but banks needed to figure out how to cover their assets in the event that one of these people again defaulted on a payment. 

Enter Mortgage-Backed securities, stage right, looking just terrifying….

Mortgage-Backed security was created by banks to sell claims to repayment streams from of a group of people’s subprime mortgages. For example, one could purchase one of these securities that had within it several subprime mortgages from those risky individuals we spoke about earlier. Interestingly enough, banks sold mortgage-backed securities to other banks who would then split up the securities into smaller chunks and sell those off to other banks. 

Soon enough, millions of subprime mortgage borrowers had their loan repayments in the hands of banks across the country. But these banking institutions failed to recognize one crucial detail about all of this; the original borrowers of the subprime mortgages were approved for loans even though they had a history of failing to make good on payments.

To put it in more simpler terms, banks tried to make money off the fact that people wouldn’t pay their bills, but the revenue was supposed to be generated from people paying their bills; it made no sense. And, that, my friends, was the cause of the 2008 recession. 

When the recession hit ten years ago, there were signs of economic downturn but no one had even the slightest clue that it would end up like it did. The same set of scenarios are presenting themselves currently and many are worried that another recession sits on the horizon. Interestingly enough, several financial experts have said that, while we can’t predict a recession, the U.S. government can  enact certain automatic legislative policies to kick in as soon as economic troubles come around. 

In the newest edition of Law and Macroeconomics: Legal Remedies to Recessions, Yale economist and law professor Yair Listokin argues that in the event of future recessions, the federal government should lower the cost of utilities for the American people so, in a time of crisis, we still have access to electricity, water, and heat. Other analysts have suggested that the government offer more employment opportunities to stimulate the economy during a recessionary period. If the government were to offer federally subsidized employment programs, it could assist low-income families in staying afloat. 

When it all comes down to it, we have no idea if/when America will endure another financial crisis, but the U.S. government can prepare the nation in the meantime. 

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Alibaba (BABA) Stock Price Signaling Buy Or Sell After The Recent Surge?

Joe Samuel

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China has grown into the world’s second-largest economy over the past few decades. One Chinese company that mirrors the remarkable growth of the country is Alibaba Group Holding Ltd – ADR (NYSE:BABA). The e-commerce behemoth is rightly called the ‘Amazon of China’ and it has grown at a remarkable pace over the past two decades.

Key Details

However, Jack Ma, who oversaw the company’s rise has decided to depart. Most analysts believe that Alibaba stock is still a buy despite this development. There are several factors to consider, however.

Jack Ma may have departed but the robust business model that he has created is still in place. That will likely continue to help drive the company’s growth. The Alibaba marketplace is massive and it allows Chinese companies to sell abroad, while at the same time allowing domestic consumers to sell to each other.

Sales Continue To Drive Margins

On mobile devices alone, the company recorded as many as 755 million monthly active users in China. On top of e-commerce, Alibaba has also branched into a tech company. It has its own cloud service known as Alibaba Cloud and has also created its own payments platform Alipay. Alipay already boasts of as many as 600 million users.

Moreover, despite trade tensions with the United States, the Chinese economy is expected to grow over the next decade and expand the size of the middle class. China is already the biggest market for e-commerce companies and the expanding middle class will continue to contribute towards its hyper-growth. Joseph Tsai, the company’s vice chairman stated that even smaller cities in China are expanding rapidly and that retail consumption would hit $7 trillion by 2030.

Last but not least, the company has consistently delivered impressive financial results and in the recent quarters, it has managed to beat analysts’ earnings estimates comfortably.

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Stock Price Newsletter – September 23, 2019

Jon Phillip

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biotech stock to watch 2019

3 Small-Cap Biotech Stocks To Watch In Coming Weeks

The fact that biotech companies often improve on existing treatments, makes them a far more attractive target for a range of investors. Here is a look at three biotech stocks to watch during the last few weeks of the quarter.

See For Yourself, CLICK HERE


This Stock is Looking to Disrupt the Multi-Billion Dollar Defense Industry

Global spending on security solutions is projected to reach $7.4 billion in 2019 and increase to over $11.3 billion by 2025 with a CAGR of 8.2% and is forecast to see consistent growth for the next several years. What Could This Mean For ONE COMPANY?

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Multi-Billion Dollar Markets Are Ready For A Shake-Up

There’s no denying that biotechnology is one of the hottest markets in the world. Right now a multi-billion-dollar segment is ready for a shakeup and one biotech stock could hold the secret to doing just that!

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Biotechnology

3 Small-Cap Biotech Stocks To Watch In Coming Weeks

Joe Samuel

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stock market today

Biotech has been one of the hottest sectors for investors for as long as it has existed and the reasons are self-evident. It is a sector that uses cutting edge technology and comes up with treatments for a wide range of diseases.

Moreover, the fact that biotech companies often improve on existing treatments, makes them a far more attractive target for a range of investors. Here is a look at three biotech stocks to watch during the last few weeks of the quarter.

PharmaCyte Biotech (PMCB)

There has been no lack of attention on biotech penny stocks this year.  At the beginning of August, one small biotech stock broke to highs of over $10 from a starting price below $2 a share after releasing news. PharmaCyte Biotech (PMCB) focuses on ways to effectively deliver treatments to patients with diseases ranging from cancer to diabetes. 

The company’s proprietary cellulose-based live-cell encapsulation technology known as “Cell-in-a-Box®is the platform that the company uses to develop its therapy delivery methods.  For most of the quarter, shares of PMCB stock have traded between $0.033 and $0.04 with volume recently surging.

On September 19, PharmaCyte saw more than 6 million shares trade; well above its daily average. Most of the attention surrounding the company has been on two things. First, its progress with Cell-In-A-Box and the application for Pancreatic cancer has continued to progress. The company brought on Dr. Manuel Hidalgo, has confirmed that he will be Principal Investigator (PI) for PharmaCyte’s planned clinical trial in locally advanced, inoperable pancreatic cancer (LAPC) now that he is at Weill Cornell Medical Center.

What To Watch For

This week PharmaCyte (PMCB) will host a call designed to update all shareholders and the investment community simultaneously of material developments. The call will cover PharmaCyte’s preparations for submission of its Investigational New Drug application (IND) to the U.S. FDA to treat locally advanced, inoperable pancreatic cancer. It will also cover developments related to PharmaCyte’s product pipeline. PharmaCyte has been working on these and will discuss things not yet reported in a press release.

Catalyst Pharmaceuticals (CPRX)

The first one to watch is Catalyst Pharmaceuticals Inc (NASDAQ:CPRX). It is a small-cap stock engaged in developing medicines for rare diseases. Catalyst managed to get an approval for one of its products from the FDA earlier this year.

Since the approval of the Lambert-Eaton myasthenic syndrome (LEMS treating medicine Firdapse, Catalyst stock went on a massive rally from January to April. The approval of a rival drug halted the rally. Only after a civil suit from Catalyst did the stock stabilize somewhat.

Last week, Catalyst stock received a fresh boost after the company announced that it was going to make a secondary offering. However, the company decided to pull the offering the very next day and that affected the stock price once again.

What To Watch For

Analysts believe that pulling the secondary offering was the right long term decisions and this stock could be heading for another rally soon.

Eyepoint Pharmaceuticals (EYPT)

The biotech stock that could prove to be a major winner in the biotech sector this month is that of Eyepoint Pharmaceuticals Inc (NASDAQ:EYPT). There are two factors at play. The company revenues are going to rise significantly in the coming years due to the commercial launch of two medicines.

The first one is Yutiq, which is meant for the treatment of chronic non-infectious uveitis and the other one is Dexycu, which is meant for postoperative ocular inflammation.

What To Watch For

The company is currently trading at only double that of its future revenue and that is a very attractive multiple. EYPT stock has caught the attention of analysts on Wall Street. Guggenheim has set a 12-month target price of $4, which reflects 116% gains during the period.

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Disclaimer: Pursuant to an agreement between MIDAM VENTURES, LLC and Complete Investment And Management LLC, a Non-affiliate Third Party, Midam was hired for a period from 07/09/2019 – 8/09/2019 to publicly disseminate information about PharmaCyte Biotech including on the Website and other media including Facebook and Twitter. We were paid $150,000 (CASH) for & were paid “0” shares of restricted common shares. We were paid an additional $150,000 (CASH) BY Complete Investment And Management LLC, a Non-affiliate Third Party, AND HAVE EXTENDED coverage for a period from 8/12/2019 – 9/12/2019. We may buy or sell additional shares of PharmaCyte Biotech in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. Click Here For Full Disclaimer

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