6 Ways to Short the Obama Health Plan 79 comments
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Barack Obama is proving to be a masterful president just six months into office. I am not talking about policy or legislative initiatives - the first role of any president is to lead and he has led the nation from a sense of panic - perhaps panic itself - to calm - real calm. He has been wildly successful, regardless of what the "paid to scream" pundits in the conservative and financial media may say about him.
And now that calm is here, and his policies and proposals are more rather than less important than his ability to reassure the American people about their own strengths, it may be time to, metaphorically and literally, short Obama. Specifically his health plan, whatever shape it may take. At least some of the profits can be used to pay the extra taxes we are going to pay for the next 25-50 years. (For purposes of full disclosure, I voted for Obama.)
The problem for Obama, and why it is possible to develop a short view of his administration going forward, is his loss of control of Congress. Most Senators and a handful of Congressmen know something of money, the budget, deficits and markets. But most members of the House do not - and they are showing way too much influence and power in the setting of policy. That means a make-believe energy bill/cap and trade bill, because they don't want the cost of energy to go up; too much support for a housing market that would best be left to itself, to correct itself quickly; and a health care bill that has its heart in the right place and its head up, well, this is a family blog - a health care bill that sets the nation on an untenable course.
And that is where it is best to start looking for short and long opportunities - health care. The health care bill will probably pass; it will probably mandate everyone to have or buy health care insurance; it will include thousands of pages of regulations that will not work as planned; it will be based on cooked data about cost reductions that will never happen; and when it all gets too expensive, 12-18 months after enactment, medical care for those dependent on the government will be further rationed and medical care paid for by the private sector will become increasingly expensive as private payors' subsidy of government programs increases. And then 3-5 years after that, something will blow, led by the need for Medicare to dip into the general tax fund, roughly around 2016.
Short something that will blow up in 2016? No.
But look at short positions in companies that will be first in line to be seriously squeezed - some with merit, others not.
Who will be squeezed? And when?
The squeeze will begin about six nanoseconds after the health care bill is passed and the remaining responsible adults in Washington - there are a few - take a look around and go "omigod." They will be seeing an obese, aging population unwilling or unable to take care of itself hurtling towards government paid health care with frightening speed. And an industry still used to printing money at will with new products or fees and in control of their local Congressman or Senator. And they will go after the usual suspects first -- and then some not so usual ones.
So, who gets squeezed?
Big Pharma: I follow the industry more closely than most, and used to write a biotech letter; Big Pharma was my comic relief whenever I got too serious. This industry deserves to be squeezed if not on economic principles but everyday idiocy and a total inability to match real consumer needs with their business model and product development. For example, if you talk to doctors, the best proton pump inhibitor around is Aciphex (I take it, it changed my life, no kidding). It runs almost $300 a month without insurance while generic Prilosec costs less than it does to feed someone at Chipotle (well, maybe not my sons). If I had the best product, I would hire the right people and go head to head with Prilosec. Nope - just jack prices and milk profits until the patent runs out. And this is the preferred mode of business in the entire, traditional Big Pharma industry. And Congress knows this as well - so you can expect a big squeeze on drugs that do not directly save lives.
For short sellers, this intersects with the greatest, most cost saving patent expiration ever - Lipitor, November 2010 - so take a hard look at Pfizer (PFE). They are facing a revenue downturn of up to $9 billion in Lipitor sales within 12-18 months of patent expiration. That would require 9-10 blockbusters to emerge - and they have none in the pipeline worth mentioning. In my book Sell Short, which is about process, not specific recommendations, the Lipitor expiraton and Pfizer are central to explaining how one can find and use great short opportunities.
Other candidates? I have a personal bias against the frequently overprescribed Aranesp and Procrit (an anemia drug) from Amgen (AMGN) - way overprescribed compared to Europe, where people typically live longer. Mind you, Pfizer and Amgen print cash, they are simply overvalued and it will take a while for the market to catch up with them. Between the two of them, and hundreds of billions in R&D over the past twenty years, they have produced, I believe, one blockbuster in their labs.
Devices: Medical devices routinely get approved by the FDA - when effective - then a hyperactive sales force pushes them onto the market and patients pay for them. The 10% better widget results in a 100% increase in fees to the hospital or center - endorsed by Medicare, who sets the price for the new procedure that is copied and used as a floor by the private sector. Well, according to Bob Dylan, the "times they be a changin." It is easy to see Medicare and then insurance companies balking at new devices that sell well here, barely sell in Europe and do little to actually improve patient outcomes. This includes services for treatment and for diagnosis. Who looks ripe for trouble? Medtronic (MDT). Unlike Pfizer and Amgen, this is a well managed company with a great product development organization - but they are in the wrong place at the wrong time and their size means they need a great deal of success with new products to move the needle on sales and continue as a growth company. Other losers are the big imaging players - GE, Toshiba (TOSBF.PK) and Siemens (SI) - but these huge multinationals are so diversified you cannot consider shorting them based on this thesis alone.
Payors: Stay away - long or short - who knows what is going to happen to them.
Providers: Ditto for providers - price pressures will be offset by increased business and reduced or eliminated bad debt, but a lot of their billing nonsense is going to get squeezed. A friend was just billed $26 for one spoon of Pepto Bismol - impossible to say where this will end up.
Biotechs: If you want to go long, look at the great biotechs with real life saving products and start with Gilead Sciences (GILD). Best managed biopharma company on the planet - by a mile. They own the HIV marketplace and are pushing into pulmonary and also have a promising, high risk hypertension drug. They are also a great stock to hedge - very high premiums on their calls. If there is a buy and hold company left on the market, they are it.
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This article has 79 comments:
If one likes Fascist Socialism one has to love Obama. What has he done besides push through useless bills that neither he or anyone else read or understand? Has any of those "shovel ready projects" produced anything except political graft?
Besides Congressional Term Limits I would like Congress to pass a bill whereby no member can vote on a bill unless they swear under oath, under penalty of perjury, that they have studied and understands the bill. Then they can vote. We have to virtually do this to download a software program.
Is there an Ultra Short Obama ETF?
This guy would be on the Titanic and say, "Look, someone's bathtub is overflowing, there is water on the floor"
Obama might be calm because its OTHER PEOPLES MONEY AND HIS PLACE IS SECURED FOR LIFE
His ACORN now COI people are and were only use to handouts so they too can be calm
Its the working people the ones who have pride and care that are not calm as a basic non Afirmative Action understanding of economics 101 tells you what a hole is being dug, no less by a hole.
Chicago style strong arm politics is gettin WalMart to even play along so that the thugs in DC can get "credibility" by saying, Look folks you know if it was bad Walmart wouldnt go along
Hell, I would go along if the government had threats veiled or otherwise hanging over my head.
Then again, maybe I would remember I am a man and fight those socialist thugs
How are you going to feel when the pipelines dry up due to the lack of profits from patented products to offset the ridiculous costs of obtaining FDA approval?
On Jul 02 09:28 AM stocknerd wrote:
> Poor poor conservatives, the planet going a little too fast for you?
> Gee, hold on and smile. If you don't like it here I suggest you move
> to....South Africa. Any person shorting in this market rally....well,
> he or she gets what they deserve. The climate for investing is changing
> and you can scream socialism or try to make a buck. BTW, say hello
> to Rush your leader in this fight for America. Short neocon thinking,
> but that is redundent.
Liberty has its costs. Those of the "Better Red than Dead" cowards are the ones who want the Fascists to make their decisions for them. Well, I Rather be Dead than Red as it is not all about money it is about Freedom, something, evidently, stocknerd, never learned anything about. He must have loved Jimmy Carter because that is the current socio-economic trend, only steeper.
Stocknerd probably thinks losing a buck and getting back forty cents is a bull market. Must be a misspelling as it should be stockterd.
On Jul 02 09:28 AM stocknerd wrote:
> Poor poor conservatives, the planet going a little too fast for you?
> Gee, hold on and smile. If you don't like it here I suggest you move
> to....South Africa. Any person shorting in this market rally....well,
> he or she gets what they deserve. The climate for investing is changing
> and you can scream socialism or try to make a buck. BTW, say hello
> to Rush your leader in this fight for America. Short neocon thinking,
> but that is redundent.
If the goal is to provide healthcare for uninsured millions of Americans, you build a network of Charity Hospitals and Charity Clinics, staff the network with clinicians, affiliate it with medical and nursing schools, and shield it from malpractice suits because it will obviously inherit the highest risk cases that are hardest to treat and closest to having the ultimate bad outcome. You also increase the compensation paid to doctors, nurses, and other clinicians, and make sure doctors get paid more, on average, than lawyers to ensure that the brightest and best in our society go to medical school instead of law school. You also ensure that practice conditions for clinicians improve to the point that they rival the workplace environment at Apple Computers.
Look at the jobs report this morning: the ONLY CATEGORY THAT INCREASED JOBS IS HEALTHCARE. The president should never complain the 20% of our GDP goes to healthcare, he should celebrate the fact that 20% of our GDP is reasonably directed towards financing THE ONLY SERVICE YOU CANNOT LIVE WITHOUT.
If Obama cared about you, he would report how much of our GDP supports the legal profession, and do something to reduce wasteful spending on legal fees.
1. Frivoulous lawsuits. Doctors have to pay outrageous premiums for liability insurance and have to order unncessary tests to avoid being sued for malpractice. Clamp down on the lawsuits and costs will go down.
2. Pharmaceutical advertising. Pharmaceutical companies spend billions of dollars every year to advertise directly to consumers, telling them to ask their doctor if they need a medication. If the consumer needs the medication, the doctor will prescribe it. Clamp down on the ridiculous advertising and costs will go down.
"Stimulus" is a synonym for "government mandated spending". It is the ultimate nanny-syndrome policy. It implies that the government knows how to spend its citizens' money better than they do. Look at Japan's infrastructure stimulus - there are sterling steel bridges that lead to small towns with no traffic. If you want to upgrade infrastructure, provide tax credits to the utility companies for upgrades. Putting it in the hands of Congress means its directed based on political pull, not need. Stop repeating the garbage you read in Krugman's op-ed and think for yourself.
On Jul 02 11:32 AM Victor84 wrote:
> Hmm he has to spend future generation's money because someone inherited
> a $150 billion surplus and left Obama with a trillion dollar deficit
> with an indefinite mammoth black hole known as Iraq/Afghanistan.
> If you think we would've been better off sinking into a Depression
> and are okay with not spending the necessary resources trying to
> fix Health Care RIGHT NOW, then I have nothing to say to you. Newsflash
> PrudentIdiot, it takes sensible policy AND money to fix a broken
> system running for decades. The earliest "shovel-ready" projects
> take 6 months to ramp up so naturally they haven't produced much
> yet. Most of our infrastructure is 60 years old, creating temporary
> jobs and borrowing money to fix that is OK; we can argue about pork
> all day and how too much/too little money was spent on this and that.
> I find it amusing that you think he doesn't know the bill he is signing,
> but of course you do. Naturally you would find all the bills he's
> signed "useless" and "fascist socialism" such as expanded child insurance
> and the stimulus. You are the old guard of the nation where things
> were nice and cozy back when the stock market was shooting up 10%
> a year and the nation was exploding into the consumer-spending slob
> that it is today. Wake up dude, there's a new status quo.
As for PFE and lipitor, just look at the company, its current cash flow, its cost cutting measures and its clear path towards much improved profitability. While Liptor has been discounted by the market long, long ago, the positive factors have not. And I am not even talking about PFE's future move into generics - which will scare the living daylights out of smaller generic producers. PFE might be one of the few large cap stocks that may actually make investors money over the next 3-5 years - after lagging badly over the past 5 years.
Now let's get back to what Obama is doing. He is channeling resources into programs that every American man, woman and child can benefit from, not only the well-to-do. And yes, this will take money especially in the beginning but the benefits will outweigh the costs in the long run. Infrastructure spending will generate jobs and help make sure our schools, roads and bridges don't fall into disrepair during these bad economic times and well into the future to come. Advocating for an energy policy that pushes for more renewable energy like solar and wind is good and responsible as the world works to reduce greenhouse gas emissions as well as pollution. We simply must do our part regardless of cost, and cost over the long run is expected to go down as technology for renewables advance. Oil independence is another benefit, but I won't get into it. In regards to a National Health Care system that hopes to lower cost and increase the likelihood that every American will be insured, this is a good thing even if it has to compete against current health insurance providers. Left to continue as it is, health care costs in America will balloon to astronomical levels if not controlled. When the average American family can finally be safe from going bankrupt because a member of their family comes down with a deadly or debilitating disease will be the day every family can have some peace of mind.
These proposed changes in American policy is made with Main Street in mind, maybe not so much Wall Street. The benefits are for everybody, rich and poor, for our generation now and that of our children and our children's children. Those who don't see it and are voting against it because they see it as more government spending and waste are simply continuing the selfish policy of refusing to deal with problems today and leaving them for future generations where the price of dealing with them will be far, far higher. Those in our government have to advocate for the benefits of the common citizen and help the United States be a better "citizen of the world" instead of segments of Wall Street that have their own interests at heart.
Since wW2 our collective guilt as expressed through various POTUS have decided to not win wars
GWB actually achieved victory in Iraq and I am no fan of GWB, he didnt veto a spending bill
Obama has only extended gWB spending policies and the left has used a "Gotcha" moment to throw the gop off with, Hey, GWB spent and you didnt say anything.
So the GOP has turned into lame duck butt kissers putting on a show occasionly for the conservatives BECAUSE NO ONE ELSE HAS RISEN TO TAKE OVER
Its not Obama, ITS THE PHILOSOPHY AND THAT IS THE KEY OTHERWISE WE GET RINO'S IN OFFICE and they proclaim the left wants 30% tax increase and we got it down to 20%
Well the people are speaking AND WE ONLY WANT THE MILITARY AND THE COURT SYSTEM AT THE FEDERAL LEVEL SPENDING
WElfare/ transportation etc is a states issue w/o bailouts from the feds
The climate change bill will not change the climate. In fact, it was only passed because they threw a 300page amendment in the 11th hour with sweeteners for certain congresspeople that have nothing to do with climate change.
As far as health care goes, there is a way for a family to avoid bankruptcy due to medical bills: don't get treatment you can't afford. Healthcare has out-paced inflation because it requires capital-intensive research that has to be paid for somehow. Government funding isn't free - it comes out of our pockets through taxes or inflation. It's so easy to promise the latest treatment to everyone; much more difficult to practically provide it. The worst thing Obama is doing is setting expectations that can't be met.
On Jul 02 12:17 PM Bob55 wrote:
> Those calling Obama's policies socialist should look at a trend over
> the past decade. So much of government spending was devoted to the
> war in Iraq and Afghanistan that most other areas were neglected.
> What came to pass, and this is not purely a result of the market
> meltdown, is a middle- and lower class that is much worse off than
> it has been for decades. People are working longer and harder but
> receiving less for the fruits of their labor. Their health insurance
> premiums keeps going up. The price of food, rent, gas and practically
> everything else they buy keeps soaring while pay raises for the vast
> majority of Americans have been miniscule at best even during the
> "upbeat" years when corporations posted bigger and bigger profits
> and the stock market soared to an all-time high under Bush. Environmental
> issues including Climate Change are left on the back-burner as it
> is argue, under Bush, the cost to American industry would be too
> overbearing regardless of what the world community thinks. Then the
> economy came crashing down and the average American are left in an
> even bigger lurch than before. Those who lost their job, lost their
> health insurance. Many are asked to make sacrifices in the name of
> company survival, taking paycuts, working fewer hours, maybe losing
> contributions to a pension fund already dwindling in value as companies
> discontinue them to cut costs. The average American is left with
> a bleak and insecure future indeed.
>
> Now let's get back to what Obama is doing. He is channeling resources
> into programs that every American man, woman and child can benefit
> from, not only the well-to-do. And yes, this will take money especially
> in the beginning but the benefits will outweigh the costs in the
> long run. Infrastructure spending will generate jobs and help make
> sure our schools, roads and bridges don't fall into disrepair during
> these bad economic times and well into the future to come. Advocating
> for an energy policy that pushes for more renewable energy like solar
> and wind is good and responsible as the world works to reduce greenhouse
> gas emissions as well as pollution. We simply must do our part regardless
> of cost, and cost over the long run is expected to go down as technology
> for renewables advance. Oil independence is another benefit, but
> I won't get into it. In regards to a National Health Care system
> that hopes to lower cost and increase the likelihood that every American
> will be insured, this is a good thing even if it has to compete against
> current health insurance providers. Left to continue as it is, health
> care costs in America will balloon to astronomical levels if not
> controlled. When the average American family can finally be safe
> from going bankrupt because a member of their family comes down with
> a deadly or debilitating disease will be the day every family can
> have some peace of mind.
>
> These proposed changes in American policy is made with Main Street
> in mind, maybe not so much Wall Street. The benefits are for everybody,
> rich and poor, for our generation now and that of our children and
> our children's children. Those who don't see it and are voting against
> it because they see it as more government spending and waste are
> simply continuing the selfish policy of refusing to deal with problems
> today and leaving them for future generations where the price of
> dealing with them will be far, far higher. Those in our government
> have to advocate for the benefits of the common citizen and help
> the United States be a better "citizen of the world" instead of segments
> of Wall Street that have their own interests at heart.
On Jul 02 11:53 AM MinAkkar20 wrote:
> It's sad that everyone has to benchmark Obama's administration to
> Bush's. What do you say to those who disagreed with Bush's administration
> as well? Why can't you say they both promote(d) horrible agendas?
>
>
> "Stimulus" is a synonym for "government mandated spending". It is
> the ultimate nanny-syndrome policy. It implies that the government
> knows how to spend its citizens' money better than they do. Look
> at Japan's infrastructure stimulus - there are sterling steel bridges
> that lead to small towns with no traffic. If you want to upgrade
> infrastructure, provide tax credits to the utility companies for
> upgrades. Putting it in the hands of Congress means its directed
> based on political pull, not need. Stop repeating the garbage you
> read in Krugman's op-ed and think for yourself.
>
> On Jul 02 11:32 AM Victor84 wrote:
For those who are interested in the siren-song of of good intentions that have disastrous unintended consequences, there is the University of California at Santa Barbara's presentation of JFK's special message to Congress regarding legislation for the mentally ill that became law in October of 1963. It is at:
www.presidency.ucsb.ed...
This is the presidential outline for the act of Congress known officially as the "Community Mental Health Centers act of 1963". It will both enlighten AND frighten one at its naiveté. A cautionary tale, indeed. We must be careful what we wish for.
I would love to go back to my camp and be left alone, but unfortunately people like you always come around sticking your hands in my pockets and telling me what to do. True liberalism is letting each person decide their own fate, so therefore I'm actually quite liberal.
Sorry to inform you that the free market hasn't been allowed to operate in this country in a long time. The government (both sides) induced the housing bubble by forcing lending standards and artificially lowering interest rates. It's so sad to see people argue that it was this or that party's fault because it distracts us from the real issue. It's not a Republican/Democrat issue. It's the government creating malinvestment by telling people where to spend rather than letting the citizens do it according to their individual needs.
I read Krugman even though I disagree with him because I like to make informed judgments. You should read him because his arguments are behind every policy put in place by this administration. Perhaps you might understand how monetary economics intrudes on individual liberties.
Also, last I checked, there are no national sewage or water systems, so I don't know why we would use federal tax dollars to pay for it. And we have a government-run high-speed train near me. Its called Acela and its horrible and lives off of subsidies.
On Jul 02 01:33 PM Victor84 wrote:
> Repeating the garbage as opposed to the two sentence garbage that
> you just espoused? Do you even know what's in this stimulus before
> blinding comparing it to Japan's infamous stimuli? This isn't some
> benchmark comparison between Bush/Obama, it's the reality of the
> fiscal position he was left with combined with the legacy obligations
> and crisis he has to deal with. There are already tax credits to
> both individuals and utility companies when it comes to renewable
> energy investment. When it comes to replacing our water/sewage/roads,
> the government isn't going to give itself a tax credit. High speed
> rail between select metropolitan areas should've been given more
> funding. I don't read Krugman's columns, but apparently you do. Go
> back to your little conservative camp and whine and moan without
> coming up with real solutions other than the tired mantra of since
> the free market is always more efficient we should therefore privatize
> health care even more so we can add to our $54 trillion future liabilities.
>
On Jul 02 09:28 AM stocknerd wrote:
> ....Any person shorting in this market rally....well,
> he or she gets what they deserve. The climate for investing is changing
> and you can scream socialism or try to make a buck.
As for health care, you must be fortunate to never have had someone become seriously sick. Bankruptcy is happening even to middle-class families who have health insurance and did everything right to protect their family. Can you say to someone who has cancer to skip their treatments so your family will not have to go into bankruptcy? This issue is very much a life-and-death issue for so many families. In the past, while we spent trillions upon trillions on the war, we have neglected everything else that protects our American way of life. Perhaps you're one of the very fortunate in society's elite, but for the majority of America, things have gone from bad to worse and people need a "helping hand". If government has to step in to provide that support, so be it.
1) "real calm" -- Are you on a massive prescription of anti-depressants?!?! There is a group of people who love Obama, but whether or not you agree with them, there are nearly as many who despise and fear him. Some people are fearful that Obama is taking the US straight into the arms of Stalinesque socialism. There have been record sales of firearms and ammo. A lot of people are freaked out. This is not real calm, for many it is outright PANIC.
2) "He has been wildly successful" -- Are you also writing history books after 6 months of his presidency? Many people are drawing on the parallels of the current administration with the Carter administration. Obama is wildly successful only in the same circles where Carter was wildly successful (oh, and Chavez and Castro).
I think you judgement is seriously flawed. This article is only beneficial in as much as it shows how an ardent Obama fan thinks.
Perhaps you have good intentions but you are quite naive. All of the things that you mentioned happening to the middle class are true. But the solutions you espouse make absolutely no sense. American workers are underpaid because they now must compete globally with better educated workers in other counties who will work for much less money. Entire industries are moveing to nations where operating costs are much lower. More and more money is being invested abroad where capital is treated better. The policies of Obama will only drive more jobs out of the U.S. A tax on carbon will not make the U.S. more competetive, only more expensive for industry. If green energy, which is at least 3 times as expensive as "dirty" coal-based energy, will create jobs, it will at best only offset the ones lost in the coal, oil, and natural gas industries. Many scientists world wide are questioning the premise of man-made global warming. Perhaps China will support this new opinion, turn it's back on global warming, burn cheap coal and dominate world manufacturing while we bankrupt ourselves subsidizing clean energy. In fact who will benefit most from "clean energy"? China produces the cheapest solar cells and India the cheapest wind turbines. Unless utilities are forced to buy american, they will purchase the most cost effective green solutions meaning Chinese and Indian products. If taxes are raised on capital gains, investors will simply invest more in other countries. We are already seeing resistance from buyers of our gigantic debt. As to health care, today the use of healthcare resources is limited by the ability to pay, however no one is capping your salary or earings potential. With government health care resources will be limited by politics. Those with political connections will get the best health care, the rest will suffer. I have relatives in Germany and firsthand experience with thier nationalized health care systems. Once you retire and leave the workforce, services are routinely denied. My Uncle was even denied a perscription to an H-blocker like Prilosec to treat his acid reflux because he was over 65. The verdict was final and no second opinion was allowed, as seeking other medical opinions is considered a "waste" of resources. Ten years later he was diagnosed with stomach cancer. At that time he was denied surgery because it was decided that he was now too old. Three months later he died. That is the reality of socialized health care in Germany and other countries. It would be foolish to think that it would be any different here.
But why should Obama not take over the American health care industry? He already has taken over or plans to take over automobile manufacturing, banking, insurance and energy.
King Obama has the "calm" confidence of an elitist who has never failed at anything because he has never actually accomplished anything in the real world. But I agree he is "masterful" at spending other people's money ... plus earnings of their unborn children.
Maybe Libs will not like it when he takes over their own business and snuffs out their liberty, but by then it will be too late.
I agree, short anything to do with U.S. health care. But also short all U.S. companies which are subject to the whims of King Obama and his Marxist minions. Short the U.S. dollar and Treasuries.
Buy China and India which will leave the U.S. in the dust as Obama shackles us with his job-killing Crap-and-Tax and various intentional wealth destruction policies. Buy commodities and gold because your currency will be worthless soon.
What were you dems thinking? This guy is taking away our freedom, and you sit here and argue with us on this. Open your eyes, your taxes are going up, he wants to take our guns away, he is bowing to other foreign leaders and apologizing on behalf of me you and the whole US MILITARY that I was in for so many years. NO FREAKIN THANKS, dont apologize for me. Doesnt that tick you off? I honestly dont believe that his whole administration has any idea what they are doing.
I personally know of a couple of companies moving!!!to another country because it will be cheaper to do business there. Valero Refining didnt take shipment on some 165 MILLION dollars worth of equipment, they decided to send it to their other refinery over seas because of this cap and trade tax. WAKE THE HELL UP!!!!
While it can be argued wages have been kept low in order for U.S. companies to compete internationally, one must bring up the subject of executive compensation. Is executive compensation set too high especially among companies who have underperformed, and why are workers being layed off left and right while the individuals that run these companies barely have to make sacrifices? If cutting executive compensation can save a company from cutting jobs, would they make that sacrifice? I know I speak in theoretically terms and coming at this from a tangent here, the answer most likely would be 'No'. People are reluctant to give up anything even if it's for the good of the company, for the good of those that work for you, even good for the world we live in.
This can be applied to changes to be made regarding the Energy Policy. Yes, it makes things more expensive, for now. Are we willing to make that sacrifice for the good of the planet or are we going to say some of the world's scientists say there's no proof global warming is man-made even if the vast majority of them say it is? Are we going to say we're perfectly willing to take that chance? Got beachfront property, maybe you shouldn't. Bringing up the subject of China, have you been there lately? They are experiencing the same devastating effects of industrialization that we in the U.S. faced way back when and while they are taking steps to shift more into renewable energy and for the sake of their people, they can't do so fast enough. They would be wise to take full advantage of their solar industry if indeed they are so cost-effective.
For Healthcare, can those that have it ever put themselves in someone else's shoes where life is choosing whether you eat dinner or forego medicine or a much-needed medical treatment? That is the reality so many American families face now. You are arguing then that it is better so many have no coverage then?
I know I am an idealist and have a tendency to always be looking out for my fellow man but if that can be equated with being naive in these trying times, perhaps more people should share my affliction.
On Jul 02 05:05 PM kertch wrote:
> Bob55,
> Perhaps you have good intentions but you are quite naive. All of
> the things that you mentioned happening to the middle class are true.
> But the solutions you espouse make absolutely no sense. American
> workers are underpaid because they now must compete globally with
> better educated workers in other counties who will work for much
> less money. Entire industries are moveing to nations where operating
> costs are much lower. More and more money is being invested abroad
> where capital is treated better. The policies of Obama will only
> drive more jobs out of the U.S. A tax on carbon will not make the
> U.S. more competetive, only more expensive for industry. If green
> energy, which is at least 3 times as expensive as "dirty" coal-based
> energy, will create jobs, it will at best only offset the ones lost
> in the coal, oil, and natural gas industries. Many scientists world
> wide are questioning the premise of man-made global warming. Perhaps
> China will support this new opinion, turn it's back on global warming,
> burn cheap coal and dominate world manufacturing while we bankrupt
> ourselves subsidizing clean energy. In fact who will benefit most
> from "clean energy"? China produces the cheapest solar cells and
> India the cheapest wind turbines. Unless utilities are forced to
> buy american, they will purchase the most cost effective green solutions
> meaning Chinese and Indian products. If taxes are raised on capital
> gains, investors will simply invest more in other countries. We
> are already seeing resistance from buyers of our gigantic debt.
> As to health care, today the use of healthcare resources is limited
> by the ability to pay, however no one is capping your salary or earings
> potential. With government health care resources will be limited
> by politics. Those with political connections will get the best
> health care, the rest will suffer. I have relatives in Germany and
> firsthand experience with thier nationalized health care systems.
> Once you retire and leave the workforce, services are routinely denied.
> My Uncle was even denied a perscription to an H-blocker like Prilosec
> to treat his acid reflux because he was over 65. The verdict was
> final and no second opinion was allowed, as seeking other medical
> opinions is considered a "waste" of resources. Ten years later he
> was diagnosed with stomach cancer. At that time he was denied surgery
> because it was decided that he was now too old. Three months later
> he died. That is the reality of socialized health care in Germany
> and other countries. It would be foolish to think that it would
> be any different here.
Then this business about "the calm".....I'm thinking maybe this is something lifted from a Steven King novel.
At least I was getting warmer-- it was a horror story.
Here is the way to short the "masterful president", keeper of "the calm", if the health care bill he is pushing goes through...
Short all the markets. Bigtime. (Same for the idiotic Crap & Trade, the biggest tax in the history of the world)
Unfortunately his main target for extinction is the American economy.
We need to stop his destructive policies before it is TOO LATE!
I desperately hope that someday there will be a tunnel out of this black hole our president is leading us into.
control of healthcare is a giant step toward total control.
But the ones who are watching reality TV shows and those playing computer games incessantly and who know nothing beyond their small lives think he's doing a great job.
DUH!
Kinda like telling the kid who's dog has just been run over by the 18-wheeler that "everything is gonna be OK".
Obama is finding out it's much easier to campaign than govern.
On Jul 03 11:55 AM RW Cook wrote:
> Sorry, can't get beyond the first paragraph...Obama masterfully creating
> calm. Are you kidding?
1. Tell the doctors they will get paid less
2. Tell the drug companies they will get less and
3. Tell the consumer they will get less.
Telling an 80 year old that needs a hip replacement that he will go on a list for 3 years before he gets the procedure is scary. The govt will hope he dies before his procedure is done. Perhaps Obama can send a Dr. Kavorkian type to anyone over 59. That would cut costs and fix Medicare and Social Security.
Commercial Real Estate moguls get free depreciation against an appreciating asset, oil and gas get spec tax treatment and Disney gets special patent consideration and nonprofit get to invest off of their charter in speculative ventures.
But when the serious scientists that are trying to provide important cures well then everyone should tax
On Jul 02 12:17 PM Bob55 wrote:
> Those calling Obama's policies socialist should look at a trend over
> the past decade. So much of government spending was devoted to the
> war in Iraq and Afghanistan that most other areas were neglected.
> What came to pass, and this is not purely a result of the market
> meltdown, is a middle- and lower class that is much worse off than
> it has been for decades. People are working longer and harder but
> receiving less for the fruits of their labor. Their health insurance
> premiums keeps going up. The price of food, rent, gas and practically
> everything else they buy keeps soaring while pay raises for the vast
> majority of Americans have been miniscule at best even during the
> "upbeat" years when corporations posted bigger and bigger profits
> and the stock market soared to an all-time high under Bush. Environmental
> issues including Climate Change are left on the back-burner as it
> is argue, under Bush, the cost to American industry would be too
> overbearing regardless of what the world community thinks. Then
> the economy came crashing down and the average American are left
> in an even bigger lurch than before. Those who lost their job, lost
> their health insurance. Many are asked to make sacrifices in the
> name of company survival, taking paycuts, working fewer hours, maybe
> losing contributions to a pension fund already dwindling in value
> as companies discontinue them to cut costs. The average American
> is left with a bleak and insecure future indeed.
>
> Now let's get back to what Obama is doing. He is channeling resources
> into programs that every American man, woman and child can benefit
> from, not only the well-to-do. And yes, this will take money especially
> in the beginning but the benefits will outweigh the costs in the
> long run. Infrastructure spending will generate jobs and help make
> sure our schools, roads and bridges don't fall into disrepair during
> these bad economic times and well into the future to come. Advocating
> for an energy policy that pushes for more renewable energy like solar
> and wind is good and responsible as the world works to reduce greenhouse
> gas emissions as well as pollution. We simply must do our part regardless
> of cost, and cost over the long run is expected to go down as technology
> for renewables advance. Oil independence is another benefit, but
> I won't get into it. In regards to a National Health Care system
> that hopes to lower cost and increase the likelihood that every American
> will be insured, this is a good thing even if it has to compete against
> current health insurance providers. Left to continue as it is, health
> care costs in America will balloon to astronomical levels if not
> controlled. When the average American family can finally be safe
> from going bankrupt because a member of their family comes down with
> a deadly or debilitating disease will be the day every family can
> have some peace of mind.
>
> These proposed changes in American policy is made with Main Street
> in mind, maybe not so much Wall Street. The benefits are for everybody,
> rich and poor, for our generation now and that of our children and
> our children's children. Those who don't see it and are voting against
> it because they see it as more government spending and waste are
> simply continuing the selfish policy of refusing to deal with problems
> today and leaving them for future generations where the price of
> dealing with them will be far, far higher. Those in our government
> have to advocate for the benefits of the common citizen and help
> the United States be a better "citizen of the world" instead of segments
> of Wall Street that have their own interests at heart.
Procrit isn't a pill, it's given by shot. Sorry about your husband.
On Jul 03 04:11 PM Foosie wrote:
> My husband prescribed 3 pills of Procrit before he died....and nine
> months after, I have a bill for $3,000. No one in nursing home told
> me how expensive this was. The bills keep coming in.
I wondered about that too. Do you think they now have second thoughts about their votes for him?
On Jul 03 01:22 PM Dubious Brother wrote:
> For the life of me I cannot figure out how Obama received 77% of
> the Jewish vote.
On Jul 02 11:56 AM User 305589 wrote:
> your shorting of big pharma will most likely backfire. There are
> a lot of targets out there for shorting, but big pharma certainly
> won't be my premier choice. Quite to the contrary, even though some
> of your fundamental arguments make sense, big pharma is still a healthy,
> cash-flow rich, pretty defensive sector and it might be exactly the
> one stock market sector which will attract more money down the road.
>
> As for PFE and lipitor, just look at the company, its current cash
> flow, its cost cutting measures and its clear path towards much improved
> profitability. While Liptor has been discounted by the market long,
> long ago, the positive factors have not. And I am not even talking
> about PFE's future move into generics - which will scare the living
> daylights out of smaller generic producers. PFE might be one of the
> few large cap stocks that may actually make investors money over
> the next 3-5 years - after lagging badly over the past 5 years.
It shows,Michael ,that you certainly struck a nerve with the general public over this topic. ..........and,um, what was the topic again....oh yeah, the idea of shorting the beaurocratic ineptitude of the ever corrupt government as it bungles its way thru inventing the emerging fascist health care metamorphosis....
My immediate thoughts as I read your fine article was....yes,I think you have a good idea here.... there must be some kinda way to bet against a fumbling government'smessing around with greater fumbling...I would call that a safe bet. whether shorting the lipitor idea in 2010 would be a good play would remain to be seen and studied...but I appreciate the idea. kind of like the idea of shorting american car makers.... or if they had,around 1959, an inverse ETF that shorted.... route 66 businesses.
its worth cultivating. good article.
Obama may know how to use computers. But other than that, he is technologically iliterate and an economic fool.
On Jul 02 01:58 PM Buckoux wrote:
> If I had been in the stock market, instead of grammar school, when
> President Kennedy launched his mental health care bill, I would have
> gone long on psych-pharma. But, as things turned out, there was really
> no there, there. The shorts do have the edge on good intent policy
> and investment. We chronically suffer from the effects of this good
> intention legislation on our society and economy some 46 years later.
>
>
> For those who are interested in the siren-song of of good intentions
> that have disastrous unintended consequences, there is the University
> of California at Santa Barbara's presentation of JFK's special message
> to Congress regarding legislation for the mentally ill that became
> law in October of 1963. It is at:
>
> www.presidency.ucsb.ed...
>
> This is the presidential outline for the act of Congress known officially
> as the "Community Mental Health Centers act of 1963". It will both
> enlighten AND frighten one at its naiveté. A cautionary tale, indeed.
> We must be careful what we wish for.
>
I wish someone would explain just once what 'short' and 'long' mean. I deduce, peraps incorrectly, that 'to short' something means to abandon it as a viable whatever--plan, or person, or stock,, or whatever. And 'to long' it would be to marry it. (Yes I do get an image: him on his knees with the ring elevated like a sacred host: Will you long me?)
Is that right?
On Jul 03 04:08 PM curley55 wrote:
> Obama is a lot like Hugo Chavez. He is willing to sell out Isreal,
> say it is OK for Iran to have a nuke. Trying to take over the health
> care system is a very bad idea. I only see 3 ways to cus healthcare
> costs.
> 1. Tell the doctors they will get paid less
> 2. Tell the drug companies they will get less and
> 3. Tell the consumer they will get less.
>
> Telling an 80 year old that needs a hip replacement that he will
> go on a list for 3 years before he gets the procedure is scary. The
> govt will hope he dies before his procedure is done. Perhaps Obama
> can send a Dr. Kavorkian type to anyone over 59. That would cut costs
> and fix Medicare and Social Security.
Old Wizard presents a well thought out argument, but natural gas, while cleaner than oil, will not help us reduce carbon emissions in a substantial enough way. This problem will remain a long-term problem and one we urgently need to attack now. Like I said, it's far too easy to say if the problem is not solvable now, or even 5-7 years as you say, it's not worth doing. Sometimes we have to step back and stop looking at everything purely by the numbers. The world goes well beyond Wall Street and company profitability. Same goes for issues regarding Health Care. There are real people's lives being affected here, both here in the U.S. and around the world.
On Jul 04 07:39 AM John Bowman wrote:
> Old Wizard...your comments are totally accurate. Cap and trade is
> a monster, solar is a joke which is extremely inefficient and costly
> and natural gas powered cars could answer some of our energy needs.
>
>
> Obama may know how to use computers. But other than that, he is technologically
> iliterate and an economic fool.
We all know we are at a crossroads right now both in terms of energy policy and healthcare. Every citizen in our nation should voice their opinions on these matters. Some will be for and some will be against. That's what makes this country so great.
If you think the country was doing poorly before the Obama election, wait until you see what happens after !
Hmmm, I wonder who is playing the part of Robespierre ?
How do you figure that is going to help "climate change"?
One iota?
It will lower your child's standard of living and raise China's.
Great plan. Can't wait to see the "shock" on the faces when this recession never ends.
Keep asking for our government to gift our jobs to China and find out how great and clean it all is.
On Jul 02 03:07 PM Bob55 wrote:
> For so many, if results don't come quick enough, it's not worth doing.
> Yes, the energy bill won't have any effect regarding Climate Change
> unless implemented over a long enough period of time but we have
> to recognize that we need to start. Opponents to the bill would
> like business to go on as usual regardless of any environmental consequences.
> What we have to recognize is that the United States is a part of
> the world community and what we do as a country affects not only
> our future but the future of those around the world.
>
> As for health care, you must be fortunate to never have had someone
> become seriously sick. Bankruptcy is happening even to middle-class
> families who have health insurance and did everything right to protect
> their family. Can you say to someone who has cancer to skip their
> treatments so your family will not have to go into bankruptcy? This
> issue is very much a life-and-death issue for so many families.
> In the past, while we spent trillions upon trillions on the war,
> we have neglected everything else that protects our American way
> of life. Perhaps you're one of the very fortunate in society's elite,
> but for the majority of America, things have gone from bad to worse
> and people need a "helping hand". If government has to step in to
> provide that support, so be it.
He only wants to destroy the non-union, working class American.
Apparently trying to live without the government sending you checks and food stamps is the new evil.
The "rich" will be fine. The poor will still be poor and the non-union middle class will be gone.
Just the way the government (red AND blue) want it.
On Jul 03 08:22 AM U Dontknow Jack wrote:
> Comrade Obama is the most dangerous man on the planet.
>
> Unfortunately his main target for extinction is the American economy.
>
> We need to stop his destructive policies before it is TOO LATE!
Output on a sunny summer day...enough to power a small computer and lcd monitor. Payback with 15 cent per killowatt hour electric rates in my area...30 years (60 years). With tax credits, it could be reduced slightly.
However, solar panels last 20-25 years. So it will never pay for itself. This is true regardless of the number of panels.
Obviously, the results would be a little better in areas like Florida, Texas and Arizona, but nothing to brag about. But if you wanted a whoe house system with central air, a large fridge and a couple of TVs and computers running, I can't even imagine the number of panels and electrical components required in those areas.
So I guess if you're a masochist with a lot of money to burn, you could brag to your friends that your carbon footprint was reduced slightly (as they look at you like you've lost your mind)
I agree that there has to be a concerted and unified effort by all industrialized nations to combat climate change, but if I'm not mistaken, many of the other industrialized nations have asked the U.S. to address the issue for years, and it is we who have been refusing to do so. I truly believe the U.S. can lead by example and other nations will surely follow.
On Jul 05 10:12 PM TeresaE wrote:
> When the factories close here and move to China, and then follow
> China's EPA (virtually free rein to do anything they want, pollute
> as much as they want) or even move to Mexico, Brazil or India, <br/>
>
> How do you figure that is going to help "climate change"?
>
> One iota?
>
> It will lower your child's standard of living and raise China's.
>
>
> Great plan. Can't wait to see the "shock" on the faces when this
> recession never ends.
>
> Keep asking for our government to gift our jobs to China and find
> out how great and clean it all is.
On Jul 06 01:26 PM Bob55 wrote:
> If we are going to use China as an example, as its economy continues
> to grow and mature and a solid middle and upper class emerges, do
> you not think there will be protests among its citizens demanding
> a "clean" and "livable" environment just like what occurred here
> in the U.S. and in Europe. It might not happen immediately, but
> it will happen.
>
> I agree that there has to be a concerted and unified effort by all
> industrialized nations to combat climate change, but if I'm not mistaken,
> many of the other industrialized nations have asked the U.S. to address
> the issue for years, and it is we who have been refusing to do so.
> I truly believe the U.S. can lead by example and other nations will
> surely follow.
Even now, we are seeing the ill effects of China building out a coal plant every week, as you say, with smog and polluted rivers affecting the very `health of its citizens. Their government knows this can't go on indefinitely. Those who don't learn from history are doomed to repeat it, so they say so they have at least made a start of addressing the problem pushing for more renewables in their latest stimulus package. It's a start and that's what we need here in the U.S. too- a start. Whether we are using renewables to combat Climate Change (since some don't believe this exists) or pollution (that no one can refute is a world problem), it just makes sense. This is not a problem that we can just stick our head in the sand and wish it just goes away. The earlier you tackle the problem, while it's at least manageable, the lower the cost.
In the end, there's no "free lunch" when it comes to industrialization. You might think that other countries like China, Mexico, or Brazil will never have the "even the playing field" when it comes to carbon emissions and pollution, but I think you're wrong. When it's your land, the lives of your people, maybe even your way of life, that's a high price to pay. I just want to put this in a more sociological perspective instead of financial, which is something Wall-Streeters almost never focus on. It's not always about the numbers. There's so much more at stake.
"Leser and Bob55, You guys sound like you are dedicating your lives to make a really meaningfull difference to us lesser mortals. Please give me a honest list of your accomplishments in this area. I find that people such as yourselves pontificate about what should be done but don't get it on. How much of your own energy do you generate by solar panels? How often do you take public transportation when you don't have to, etc., etc., etc.? While you are floating up above us narrow minded and greedy basthads please do us some good and check the ozone layer." --
Suncatcher,
Sorry that I sounded to be "pontificating." To be sure, if I had done it to make myself seem superior to anyone, it would prove that I am less than one should be. Where I live I can't much use public transportation, but I conscientiously make a mental list before I run errands, using less gas and not doing errands until there is a reasonable need to do perhaps ten at a time. I bought a house very close to my work so as not to need to use as much gas to get to work. I use the heat and air conditioning as sparingly as possible. Sometimes I have special uses for grey water. The recent appliances I've purchased all have the Engergy Star symbol of conservation and save some resources, be it water or electricity. My replacement light bulbs all have the energy star. When I leave a room I shut off lights I am not using almost all of the time. I wouldn't necessarily have to for financial reasons. It's just the right thing to do. I really do recycle everything feasible in my region and believe in the "reduce, reuse, recycle, repair" motto. But you are right, I need to consider more ways to use natural low-carbon or no-carbon energy sources. When the Boone Picken's natural gas cars become a practicality and can be refuled in my area, I'll need to avail myself of that means of transportation. I've influenced my family and many others through teaching to think of the result of recycling, etc. and I know some lives have been changed. If you hadn't asked for an inventory, I'd never think of talking about myself, but your question is fair. When I write this I still think about how little that is relatively I am doing for the environment. I believe in investing more in companies involved in lower carbon emissions like natural gas and a no-carbon energy source like wind. So, sorry if I came off sounding superior, but I think everyone, myself included, can still do more to make the world a better place. I need to think less about my personal benefit and think more about society's. Doesn't everyone? We're all in this together.
Leser
The American people (well at least 51%) must come to understand what type of person Obama really is… especially in today's media driven culture where sound bites and a musical genius-pedophile are revered by the media while soldiers die (sacrifice) with absolutely no fan-fare by that same media. Obama is a pathological narcissist. There is one person Obama truly cares about, and that is his ego. Liberalism, health care, green energy, blah blah, is simply a means to get and keep him in power. Furthermore, he has a mega-huge emotional axe to grind against those he perceives to be the “haves” of this country and those institutions that he feels have wronged him (health care is one) . ALL, and I do mean all, of the world’s most infamous leaders (dictators) have been pathological narcissists and have come into power in the very set of circumstances we see today. The winds and the stars and McCain’s impotency aligned to get him into office He appeals to the disenfranchisd masses by telling them what they want to hear but his motives are 100% self-serving in all regards and facets of his life. Fellow Americans, please wake up.
--->-EXACTLY, you won;t have to make tat decsion, the governemnet will be doign this for you. As you wait weeks or months for specialized service (like cancer treatment) because the supply of quailifed doctors will dwindle under a national health care- not to menion the beauracrcy inherent in govt programs
" In the past, while we spent trillions upon trillions on the war,
we have neglected everything else that protects our American way of life."
--> --> And how much is Obama planning to spend by expanding US presence in Afghanistan? If we had no business being in Iraq, then we have no business being in Afghanistan either.
On Jul 03 11:09 PM John Bowman wrote:
>
> I wondered about that too. Do you think they now have second thoughts
> about their votes for him?
>
> On Jul 03 01:22 PM Dubious Brother wrote:
With Afghanistan being the source for the 9/11 attacks, our presence should have been focused there and not Iraq.
"EXACTLY, you won;t have to make tat decsion, the governemnet
will be doign this for you. As you wait weeks or months for specialized service (like cancer treatment) because the supply of quailifed doctors will dwindle under a national health care- not to menion the beauracrcy inherent in govt programs"
I don't believe national health care will be taken as far as most people believe it will. I believe there is a misconception that people will lose their ability to choose from among health plans. That will never be acceptable in American society. You can correct me if I'm wrong but my understanding is that health care companies will compete against a national health plan. With that competition, the benefit may be finally seeing health care costs steadying maybe even lowering instead of ballooning every year. With concessions made by hospitals and drug companies today should a national health plan come into being, it's a major step towards doing that. Also, being that this is America, if the day ever came that scores of Americans are dying waiting for cancer treatments, imagine the litigation. I hope it never reaches that point, or I will be protesting right alongside you.
One other thing you brought up about the dwindling number of doctors is also valid. They really have to increase the number of doctors and soon should this national health plan be approved. With this bad economy and enough incentives (ex. scholarships), it may not that hard getting more people in the medical field.
Thanks for voting to destroy what's left of this country, you moron. I would forgive those who by now have realized they made a mistake, but if you are still committed to supporting this socialist charlatan still, it shows you really lack the judgment to be trusted to foresee the market.
And while countries from the world over (including the European union, Japan, and even Russia) believe CO2 reduction is something we have to address immediately, we believe we know better than everybody else. Are we so much smarter or are we unwilling to face reality? What are these countries willing to give up to address the issue that we simply refuse to? Are these countries doing this to screw us over for the benefit of countries like Brazil or could there possibly be something more to it? 50 years from now, I would hope the world made more progress than the 0.1C or it will be a far grimmer world we'll be leaving our children and grandchildren.
On Jul 12 10:28 PM Freedoms Truth wrote:
> "For purposes of full disclosure, I voted for Obama"
>
> Thanks for voting to destroy what's left of this country, you moron.
> I would forgive those who by now have realized they made a mistake,
> but if you are still committed to supporting this socialist charlatan
> still, it shows you really lack the judgment to be trusted to foresee
> the market.
Not since the Depression have I have seen a middle-class and the poor put in such dire straits and that was even before the whole economy tanked.