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John Lounsbury  

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  • The Disaster Of GDP Analysis [View instapost]
    Dig Deep - - -

    Not sure where you got $4.25 T Q2 GDP. The current GDP of the U.S. is close to $18 trillion. Or am I misreading what you meant?
    Aug 29, 2015. 11:30 PM | Likes Like |Link to Comment
  • The Disaster Of GDP Analysis [View instapost]
    Angel - - -

    bbro said GDP was up 4.7% w/o the lower energy price losses which held it down to 3.7%. Aren't both numbers better?
    Aug 29, 2015. 07:19 PM | Likes Like |Link to Comment
  • Looking For Signs Of Life In The Economy [View article]
    Andrew - - -

    Are you trying to say that shipping traffic is not a good coincident indicator of U.S. economic activity? If so please supply some data. It would help in my education.
    Aug 23, 2015. 06:56 PM | 2 Likes Like |Link to Comment
  • Looking For Signs Of Life In The Economy [View article]
    Moon - - -

    I think the author addresses this concern:

    "There is reasonable correlation between the container counts and the US Census trade data also being analyzed by Econintersect. But trade data lags several months after the more timely container counts."
    Aug 23, 2015. 06:52 PM | 1 Like Like |Link to Comment
  • Looking For Signs Of Life In The Economy [View article]
    James - - -

    I think the strike last winter is very evident in the data displayed by the author. The way I read this discussion he is talking about shipping traffic currently.
    Aug 23, 2015. 06:49 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: The Start Of Something Big? [View article]
    <<<Money grows on trees in Academia, State Houses and the Federal Government.>>>

    2/3 sarcasm and 1/3 factual. :-)
    Aug 23, 2015. 02:05 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: The Start Of Something Big? [View article]
    You are smarter than me (at least as of today): I bought DIS for $115.39 on July 8 and sold for $102.66 Thursday. :-(
    But I did make money doing something I almost never do: Held put options until expiration day. Sold them with more than enough profit to cover my DIS loss. Holding out-of-the-money options into the last week is a fools errand. I don't even like to hold past the first of expiration month. This time being a fool was a lucky gamble, but I won't do it again soon. :-)
    Aug 23, 2015. 02:00 PM | 5 Likes Like |Link to Comment
  • 3 Things I Think I Think - Weekend Edition [View article]
    Dialectical Materialist - - -

    You wrote:

    <<<Senators with a minimal understanding of banking would be "educated" by not only the banking lobby but by nearly every wealthy and business savvy person they came into contact with. Very few capitalists are going to accept the wisdom of partial nationalization of the banking system.>>>

    I agree. The last thing that a capitalist wants is unencumbered free enterprise markets. The capitalist mind is all about gaining control of markets to the diminishment of competition. The capitalist mindset might better be call "monopolist". The system we have might, in some regards, be called "monopolism". (Although from time to time government "rules" are imposed to inhibit extreme levels of monopoly.)

    By what authority do I suggest this? I am a capitalist. And I strongly object to any rule imposed which could reduce my opportunity to "gain market share" - or otherwise establish dominance in any endeavor. So the strong opposition of private banking to public banks is very understandable to me. :-)
    Aug 17, 2015. 04:01 PM | 1 Like Like |Link to Comment
  • 3 Things I Think I Think - Weekend Edition [View article]
    EK1949 ---

    Agree with your observation about the political nature of public finance bottlenecks. The benefit of a public bank is that private profit is no longer extracted from public finance. That is both a benefit and a problem. The benefits I discussed in my original comment. The problem is that interest paid to the private sector by the government is a form of support for the overall economy. One observation about the Treasuries and MBS added to the Fed balance sheet is that they serve to depress growth of the economy because the better part of $100 billion in interest that would otherwise have been paid into the economy was returned by the Fed to the U.S. Treasury each year.

    So separation of public and private banking would "save the government money" and would "cost the overall economy money" to the extent that the government reduced its Treasury securities issuance to the public.

    I will repeat my suggestion that the banking "divorce" would serve to end the existence of TBTF; private banks would no longer live by nursing on the public teat. Free private enterprise would again become competitive on merit of performance.
    Aug 17, 2015. 03:48 PM | 1 Like Like |Link to Comment
  • 3 Things I Think I Think - Weekend Edition [View article]
    Cullen - - -

    I have this on the 'What We Read Today' reading/discussion list at GEI to be posted later this afternoon in a section with articles about shorting stocks. But I actually think your discussion of QE for the people is the most interesting part of your "thoughts". Your discussion of banking balance sheets gives rise to the question of public banking. Why should 'public business' federal expenditures be financed for private profit? Why not separate private and public banking?

    Ken Rogoff gave a generally ignored presentation in the fall of 2013 the same day that Larry Summers presented his much ballyhooed secular stagnation talk. Rogoff inspired a blog by Rajiv Sethi about reformation of the U.S. banking system. I tried to summarize what came out of this sequence: http://bit.ly/1HQ0Z85

    Ellen Brown, President of the Public Banking Institute, had a follow-on article after mine: http://bit.ly/1HQ0XNB

    Yes, the private sector does require low risk (zero risk?) treasury securities for efficient operations but such could be created as needed in a split banking system. Government "debt" not held by the government would exist only as needed for private sector savings. Otherwise the assets and liabilities of the federal public bank would government assets and liabilities.

    A big dividend of the dual banking structure: Too Big To Fail should vanish at the moment of creation of separate systems. Private banking and finance would become competitive enterprise again. The parasites now living off taxpayer funding would be free to prosper or fail according to their private enterprise function and successes (failures).

    I am curious if you think the federal public bank idea has any merit.
    Aug 16, 2015. 04:20 PM | 2 Likes Like |Link to Comment
  • Stepping Back From GDP [View article]
    Good comment! There are two ways to measure GDP: (1) Real GDP for a country which is related to the "wealth of the nation"; and (2) Real GDP per capita which is related to standard of living or "wealth of the individual" (although it does not address the efficiency of distribution - a key element of your comment - without further analysis).
    Aug 8, 2015. 11:05 AM | 2 Likes Like |Link to Comment
  • The Accuracy Of The Monthly Economic Releases Is Not Good [View article]
    I need a little help, Andrew. I cannot find the statement (question) you refer to in the article.
    Jul 25, 2015. 01:53 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Greek Ripples Or Economic Fireworks? [View article]
    Yes, I did mistake the status of the two policies. The non-compliant policy you have applied for would save around $8,000 a year for maximum medical costs compared to the two compliant policies. I expect the major savings are as a result of the underwriting (not accepting pre-existing conditions) rather than the other coverages you itemize. But that is just a guess.

    If you had $5,000 in medical expenses as discussed in previous comment, your out-of-pocket costs with the non-compliant policy would be $9,740, about $3,500 less than the ACA compliant policies.

    So this is a good option because you have the back-up of going to ACA in the year following a major medical expense when underwriting would exclude you from renewing the non-compliant policy or replacing it with another non-compliant policy. This option may become more expensive in the future because I can envision a first year (or multiple-year) surcharge under ACA for anyone who had non-complaint coverage when they were healthy and then used ACA later when they ran into a pre-existing condition problem. ACA costs can only be minimized by avoiding adverse selection conditions. That means that if the healthy are avoiding a higher cost until they get sick they will have to pay a higher cost when they can no longer get the lower cost non-compliant policy.

    So, to be certain of success with your strategy will mean you need to maintain your current good health at least until you get on Medicare. That can be done - millions have managed to do that up to this point.
    Jul 11, 2015. 03:53 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Greek Ripples Or Economic Fireworks? [View article]
    @dunnhaupt I am hoping to see a good analysis of what losses would likely have been had a sustainable plan for Greece been put in place in 2010 instead of the incompetent "cut everything to the bone" to "restore the confidence fairy" to good health. I am going to look up the official 2010 plan document and compare the projections there with the actuals to date and post at GEI. If anyone reading this knows if that has been done somewhere I have not located yet, I can link to that and save redoing what I expect has been already done. Please reply with a link, Thanks.
    Jul 11, 2015. 03:16 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Greek Ripples Or Economic Fireworks? [View article]
    @mpmassey

    Thanks for the reply. Your numbers make sense to me. From what you say you never use a significant portion of your deductible? If so then the difference in cost for the two policies is only the difference in premiums ($177.96, ACA policy cheaper). And if you have a major illness the non-HSA policy is maxed at $21,400 (which you indicated) while the non-compliant policy is $8,970 for premiums plus $12,700 deductible or $21,670 max. This slightly favors ACA cost. Below the max expense there are expense regions which narrowly favor the non-ACA policy. But there are no regions of major difference in cost.

    Now a very good point you make: In your current situation you would be best served by a policy that raised the deductible and lowered the premium. If you average $5,000 in health care expenses each year and could get a $25,000 deductible policy for about half the premium (say $370) then your annual medical expenses would average $9,440 vs. the $13,240 you would be averaging with the ACA-compliant policy you have.
    This would be an annual savings of $3,800 traded off against a risk of paying up to an extra $12,400 (difference in deductibles) + $7,400 (balance of current deductible) or $19,400 in the first year of a major illness. Which coverage/risk assumption appropriate for you is an entirely personal decision (if the choice where available to you).

    Finally, you make a good point about paying for coverage you do not use (maternity and child healthcare (although if there are no children on your policy I am not clear how you pay for that). However, a similar complaint is made by the younger people who do use those coverages about people in the 55-65 age cohort not paying premiums that fully cover medical expenditures for the entire group. Of course you are in a much better situation than the average for your age group (pardon if I have mis-assigned your age) so they are not thinking of you personally, simply your demographic group.

    And the young, single, healthy individual is likely also overpaying for coverage so someone else can under pay. That is the nature of insurance for large groups. But it is also the quality of insurance that the cost shared across large groups is also generally less than coverage for a very small group. Risk to the insurer skyrockets for small groups because the laws of normal distributions no longer apply.

    So your point about not having a policy plan available to you that suits your individual situation is very valid. And I think that very high deductible policies not now available are appropriate for some individuals. But I would suggest that there would have to be some sort of income qualification to make the system work, like max deductible allowed would be limited to 25% or 30% of gross income. Otherwise someone with $100,000 gross income could elect a $200,000 deductible and possibly not be able to cover the cost of an emergency without decimating savings or going bankrupt. That is called "gaming the system" rather than prudently using it.

    Bottom line, there are many wrinkles in the health care insurance system and we need some ironing to get them out.

    PS: As far as costs of ACA vs. non-ACA policies as you presented them, the costs are very similar. I see your issue as simply the lack of a wide-enough range of policy options.
    Jul 3, 2015. 01:45 PM | Likes Like |Link to Comment
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