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The One Eyed Guide ( is Bob Small who: solo traveled to 25 countries by age 21, has a degree in Economics, an MBA from Columbia University in Marketing and Finance, has been a brand manager, was a licensed stock and options broker during the 87 crash, ran a $450... More
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  • SEC Flash Trading Ban will probably stop the Market Rally
    The proposed ban on flash trading will probably eliminate any chance that the market will continue to rally. 
    As numerous commentators have mentioned, the market is technically overbought so it's ripe for a correction.  Combine this with the fact that it's technically overvalued at this point in time the risk of a sharp pullback is pretty large.  Even if earnings come in as forecasted and valuations become better in the next quarter, we live in today.
    Giving market volume a 2.8% haircut by eliminating flash trades is the type of event that could trigger a rush for the exits when people are concerned about valuations. 
    If approved by the SEC commissioners, the new rules would go in effect in 60 days. The likelihood of approval is pretty high as flash trading is small and is clearly an area where the playing field is not level.  This contrasts to high frequency trading which represents about half the trades on the marketplace and may simply be becoming the new trading norm.
    Once approved by the commissioners, any bad news on earnings could kick off a decline and it could get pretty ugly.

    Disclosure: RYDEX INVERSE NASDAQ 100 2X CL H
    Sep 18 12:04 PM | Link | Comment!
  • Jaws 2009

    The S&P 500 index has diverged from the earnings trend since the rally started in March.    We all know what happens next is the jaws close, the question is whether earnings come up to meet the index or the index comes down to meet earnings.Shiller S&P 500 Index and Earnings
    The chart uses Robert Shiller's data from his Irrationale Exuberance site.  More detailed information was in yesterday's post but it did not include this stand alone chart which makes the concern about profits clear.  Program trading can only push the market so far and eventually the market will have to reflect fundamentals. 

    We'll see what happens but personally I think that a slow slightly upward move in profits is the best we can expect until there is a boost in consumer demand. 

    Disclosure: RYDEX INVERSE NASDAQ 100 2X CL H

    Aug 20 9:47 AM | Link | 1 Comment
  • Imaginary Horrors in the Healthcare Bill

    The Macon County, Georgia Conservative Examiner ran the following exposé of the horrors of the new healthcare bill.  As a born Southerner who's actually read the bill, I felt qualified to translate any southernesse and determine if there was any validity to the concerns.

    I almost didn’t go through it because the first point was just wrong and the second point about how the bill rationed health care to the elderly was actually on the out-of-pocket limitations.  I thought this might be a complete bore if the guy wasn’t bright enough to know that this was the maximum out-of-pocket not the maximum payout.  However, the later points were better and showed real imagination, if not truth.

    For a business based review, here’s a blog I did recently on whiners and losers under the plan.

    My comments are in Italics after the claim.  If you want to check the accuracy, the bill is here.

    Horrors in the New Healthcare Bill. Compiled by Robert Moon, Macon County Conservative Examiner July 24, 2009.

    PG 22: Mandates that the federal government will audit books of all employers who self insure. This mandates a study of how effective self insurance is, not an audit.

    PG 29, Lines 4-16: Directly rations health care for the elderly. This section limits out-of-pocket expenses to $10,000 per year per family.

    PG 30, Sec 123: Establishes a government committee that decides what treatments/benefits you get. This is more power than this committee actually has.  However, this is the same thing that HMO’s are supposed to do.  All insurance companies have these committees.

    PG 42: The Health Choices Commissioner will choose your benefits for you.The commissioner does not specify benefits but sets standards.  Health insurance companies will be designing policies - somebody picks your benefits now in any case.

    PG 50, Section 152: Extends benefits and coverage to illegal immigrants. Does not mention immigrants – this is the standard non-discrimination clause:

    “all health care and related services (including insurance coverage and public health activitiescovered by this Act shall be provided without regard topersonal characteristics extraneous to the provision of high quality health care or related services.”

    PG 58: The creation of a national ID health card and a comprehensive federal database containing streaming data on every American's personal financial records. This exists now.  This just forces coordination of data to enable proper health care and eliminate duplicate tests.

    PG 59: The federal government accesses your bank accounts for mandatory funds transfersThey already do this but usually to put money in.

    PG 65, Sec 164: Creates special, federally-subsidized coverage for Unions and "Community Organizing" groupsThis is to help companies get help from the crushing cost of health care for retirees that are not yet eligible for Medicare.  Not sure where the community organizing groups comes from.

    PG 84, Sec 203 HC bill - Dictates the benefits packages of all private health insurance plans. Really strange.  This section classifies everything into basic, premium, and premium plus plans.  The benefits of the plans are not restricted. 

    PG 85, Line 7: Limits what private insurers can offer (rationed ca re)....See above.  This simply organizes the plans into basic, premium and premium plus.  Insurers can offer any benefits they want to in these plans.

    Pg 95, Lines 8-18: The mandatory use of ACORN and Americorps for signing up Americans to government insurance. Such imagination!  This simply states that there have to be active efforts to sign up hard-to-reach groups to insurance.  No mention of how this will be done and certainly no mention of acorn or AmeriCorps.

    PG 85, Line 7: Imposes more limits on coverage (rationing). This is a repeat.

    PG 102, Lines 12-18: Mandates Medicare for all who fit criteria (removes all choice).This is automatic enrollment of people who are eligible for Medicare into Medicare if they don't choose an alternative plan.

    PG 124, Lines 24-25: Bans companies from suing the federal government, bans the entire judicial system from hearing any cases on the legitimacy of this blatantly unconstitutional socialist health care takeover (no judicial review allowed whatsoever). This eliminates judicial review of how rates are set.  Judicial review is still allowed on other aspects.  Besides, if you’ve ever read the Constitution you'd know that Congress can’t eliminate the ability of judicial review.

    PG 127, Lines 1-16: Instructs doctors/AMA on what salaries they are allowed to make.Does not talk about salaries.  Defines participating physicians.

    PG 145, Line 15-17: Requires all employers to enroll all new employees in the government system (no choice whatsoever).This is a lie. The plan requires all employees to be enrolled in health care insurance but not in the government system.  The company can probably find private insurance that is better than the government plan.

    PG 126, Lines 22-25: Requires employers to independently provide insurance for part-time workers, whether they can afford it or not (no choice).This page number is 146. I thought you understood that this was universal coverage.

    PG 149, Lines 16-24: Imposes an 8% payroll tax penalty for any employer (making over $400k) who fails to force his employees onto government insurance. No, this is if an employer decides not to offer any health care insurance. This is a real deal for employers who have minimum wage employees as the cost is far below that of actual health insurance.

    PG 167, Lines 18-23: Imposes 2.5% income tax penalty on any privately-insured individual who fails to get "adequate" private insurance.Of course. This is a penalty so that everyone will get health insurance. Do you want to pay for their health insurance costs?

    PG 170, Lines 1-3: Stipulates that all non-resident aliens pay nothing (we foot the bill). This states that nonresident aliens (most of whom are called tourists) are not subject to the 2 ½ percent income tax penalty.

    PG 195: Federal officers will have full access to every citizen's most private records....This is only for citizens who want to get freebies under the program.

    Pg 241, Line 6-8: Mandates that all doctors be paid the same, regardless of specialty.This guy obviously cannot read. This states that doctors can be paid at the higher specialized rate when they perform a special service even if they do not specialize in that area.

    PG 253, Line 10-18: Imposes federally-determined price tag for the worth of every doctor's time and services. This is what insurance does.

    PG 265, Sec 1131: Imposes controls on productivity for private health care companies....This does try to implement productivity improvements.  Is there a problem with this?

    PG 272, SeC. 1145: Cancer treatment rationing.This allows higher payments to hospitals that do cancer treatment, the exact opposite of rationing.

    PG 280, Sec 1151: Imposes penalties and fines on private hospitals for "preventable" visits.This is a market-based initiative to reduce preventable infections and errors. It covers all hospitals, not just private hospitals.

    PG 298, Lines 9-11: Imposes penalties and fines on private hospitals for readmissions after initial treatment (fix it on the first try or suffer the consequences).... Same market based initiative as above to reduce preventable errors.

    PG 321, Line 2-13: Pretends to give hospitals the choice to go fully-federal, but only if local "community" groups (ACORN)approve. Actually this allows the expansion of hospital facilities, which would otherwise be prohibited, provided there is community support.   Not sure what “fully-federal” means but it’s not mentioned in the legislation.

    PG 335, Line 16-25, Pg 336-339: Imposes more rationing of services. This is a requirement that outcome based services be evaluated.  This is how the Cleveland Clinic operates.

    PG 341, Lines 3-9: Creates the federal power to arbitrarily disqualify HMOs, forcing people onto government care at random.These are Medicare Advantage plans, not HMOs and the writer should know the difference.  Medicare Advantage programs are paid 13% more than regular Medicare and should have a higher standard of care.

    PG 354, Sec 1177 - Rationing of care for special needs people.This is an extension of an existing law and gives the right to refuse patients to the plans, not the government.

    PG 379 , Sec 1191: Creates new Telehealth bureaucracy (nanny state health care by phone).This expands an existing program designed to reach rural areas that have poor Internet but good phone service.

    PG 425, Lines 4-12: Creates mandatory end of life consultation. Nothing is mandatory about this and it is limited to once every five years.  This guarantees the right of the elderly to get paid for end-of-life consultations. The elderly do not have to participate in this consultation. 

    PG 425, Lines 17-19: Mandatory government instruction and consultation on living wills, durable power of attorney, etc. same as above

    PG 429, Lines 10-12: Empowers the federal government to order end-of-life plans through something called, "advanced care consultation."... same as above

    PG 430, Lines 11-15: Puts the federal government in complete control of what care you receive at the end of your life.The opposite again. This specifies that complete control of all aspects to end-of-life treatment are the individuals, not the government’s.

    Aug 04 1:46 PM | Link | Comment!
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