Donald Johnson

Health Care Stocks Anticipate Weak Reform Bill, If Any

www.intrade.com shows speculators think there is a 30% chance that health care reform will be enacted before midnight Dec. 31, 2009, down from 46% about three days ago.

Link is here: www.intrade.com/

Health insurers' and hospital companies' stocks are soaring in anticipation of a watered down health deform bill or, even better, no bill.

Link is here:

www.businessword.com/

The consensus that's emerging, in other words, is that Obama's press conference last week hurt the drive to Canadianize health insurance markets in the U.S.

Significant minorities of Dems in the House and Senate are showing the common sense to oppose putting the politicians who created the failed Medicare and Medicaid and VA Health Systems in charge of fixing our health insurance markets. Ted Kennedy's old single-payer plan, which has failed to provide quality and affordable care in every country in which it's been tried, won't work in the U.S. either.

Health Care Stocks Anticipate Weak Reform Bill, If Any

As I've blogged many times, most of the problems with the health insurance markets could be resolved with some changes in state and federal insurance regulations that wouldn't cost taxpayers a dime.

If ObamaCare goes down the drain, maybe the hard left members of Congress who've been blocking real reforms because they wanted to force Americans into a Government HMO (Fannie Med) will start listening to Sen. Jim DeMint and others who have better ideas than Teddy Kennedy and Henry Waxman.

Merck / SGP: Will the Pharma Megamergers Continue?

Large drug companies are fat, juicy targets for demonizing politicians and government contractors who want to become heroes by smaking the monsters down.

To think there is any political advantage for the big guys in political fights and in contract negotiations strikes me as naive.

There too many companies that are too big to fail and just to big to serve customers and shareholders well. The Phizer, Roche and Merck deals not only should be stopped on anti-trust grounds, but the big pharmas need to be broken up along with the big insurers and hospital companies.

Breakup local ologopolies of physician group practices and surgery centers as well as local hospital groups, as I've blogged here:

www.businessword.com/i.../

Integrated health systems and big insurers drive up health costs. Break them up and make them compete.

Barron's Calls a Bottom

Tomorrow's WSJ says 5000 is possible on the Dow, corporate bonds are coming down while interest rates are rising and 13% unemployment is in the cards, if not already here.

Investors are calling this the Obama Bear Market and have been since summer because the president thinks "profit ratios and earnings ratios" are different.

We have a president who doesn't listen to the markets any more than the professional money managers who helped create this mess.

The prospects of higher taxes, soaring deficits and Obama's clueless clique blowing it has smart investors scared out of their skins.

That GM, GE, Citi, BAC and other institutions are in so much trouble is feeding the panic peddlers. We're all panic peddlers. The market is a panic peddler. And everybody in the world but the Obama clique are listening.

Until Obama and his team get it, we're going to continue losing it.