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  • State's Rights At Risk in White House Plan By: Charles Payne 6 comments
    Feb 23, 2010 9:49 AM | about stocks: HUM, AET, UNH, ANTM, HD, TM

    You know there is one voting bloc that will show up for the President in the next election and you couldn't blame them. Unions continue to rake in the goodies at the expense of other workers in the nation. The White House has unveiled its healthcare reform package and Christmas came early for union workers. The plan has a few new wrinkles that get to the heart of why so many people are afraid of this Administration. Usurping states rights and attacking investors. The so-called "Cadillac" health tax parameters were nudged higher and are to be implemented in 2018 instead of 2013. In order to pay for this and other adjustments to healthcare reform, President Obama is going to take it from people that invest by taxing capital gains, rents, and royalties through a 2.9% tax on those families earning (they must feel like they're stealing it for all the grief coming their way) $250,000 or single person earning $200,000.

    I know the White House has little love for stockholders and bondholders but it is investors taking risk that has been the hallmark of our economic success. In this meltdown people should be encouraged to invest not be taxed more if those investments yield results. The parameters for the so-called "Cadillac Plans" have been stretched again and as we said, it kicks in 2018 not 2013. Card Check is looking sweeter and sweeter.

    * Households making between $66,000 and $88,000 a year would see their costs capped at 9.5% of income.
    * There will be a $40.0 billion tax credit set aside for small businesses.
    * Businesses with 50+ employees will pay penalties for employees not covered.

    Other sources to pay the $950.0 billion healthcare cost:

    Red States Lose Again

    I will admit it is transparent, however. And the President is paying back people that voted for him at the expense of those that didn't. I guess that's the way it goes but it doesn't feel like unity or shared sacrifices are being made by all Americans. I continue to believe this sort of approach will further divide the nation at a time when all oars should be pulling in the same direction. From a political point of view, locking up 27% of would-be voters in New York is huge; just add in those receiving welfare and other government financial assistance and you could see the Electoral College tally mount. The top-ten union states average an unemployment rate of 10.4% and the top-15 states 10.2%. The top-ten states with the fewest union workers have an average unemployment rate of 9.07% and the top-15 states 8.9%

    Then there are the states that didn't vote for the President or are typically what would be called red states. These states are fierce defenders of individual state's rights, and that will be an issue as the White House wants the power to squash insurance premiums it feels are too high. Several states already have laws on what percentage of insurance premiums must be spent on medical costs; the idea of the White House stepping on those rights should frighten everyone. Big brother is too big and too intrusive. I realize big business needs boundaries, but what we are seeing is the economic recession being used to create the kind of powers a monarchy would enjoy.

    There is no truth to the rumor these states will be able to pay in confederate money.
    Sources: The Public Policy Institute of NY State Inc, BLS

    I like the idea of fixing the doughnut hole in Medicare where
    recipients get financial assistance with the first $2,830 in prescription drug payments but are on their own up to $4,550. The problem is this isn't going to be patched up until 2020.

    I like the idea of children staying on their parents plan until the age of 26; when I was that age and just starting out as a stockbroker I opted out of our company's plan because it was costing me $300 a month. That was a tough nut for a guy working on 100% commission.

    On Varney & Co. (I'm part of the company) yesterday someone sent an email saying insuring people with preexisting conditions was the same as insuring someone after they had a car crash. That is a clever analogy, but I'm on board with the President on this one. If they pay for insurance they should get insurance.

    The Market

    Yesterday showed lackadaisical action to say the very least, the market lacked passion and direction. There was compelling action in auto parts stocks, restaurants, banks (regional and investment banking), rails, and health insurance stocks. Humana (NYSE:HUM) +5.56%, Aetna (NYSE:AET) +1.45%, UnitedHealth Group (NYSE:UNH) +3.57%, and WellPoint (WLP) were up because the public option wasn't part of the President's healthcare reform plan. (This is sure to anger those that think these companies are part of the public domain and should be punished for trying to make profits.)

    Enough to Keep the Crowd in the Trade?
    By: Brian Sozzi, Research Analyst

    This morning, Home Depot Inc. (NYSE:HD) released its 4Q09 earnings results and its preliminary outlook for FY10. On both accounts, it's our view that Home Depot delivered. Barring any materially negative call outs in the 9:00 am conference call, at present valuation (17.5x FY10 consensus EPS, a projection base that is likely to rise post FY10 guidance) shares of Home Depot remain attractively valued (we have had buy rating on stock since March 24, 2009).

    Please visit www.wstreet.com to read the remainder of the piece.

    Toyota's Troubles Could Be Only the Beginning
    By: David Silver, Research Analyst

    The Toyota saga continues this week as President Akio Toyoda is set to testify before Congress about what he knew and when regarding the latest recalls.  Over the past year, the Company has recalled more than 8.5 million vehicles for defects ranging from floor mats to brakes to accelerators that stick.  The Company is also mulling a recall of Corollas after complaints about the vehicles' steering began to surface.

    Please visit www.wstreet.com to read the remainder of the piece.

    Disclosure: None
    Stocks: HUM, AET, UNH, ANTM, HD, TM
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  • Hot Richard
    , contributor
    Comments (705) | Send Message
    Unless you're turning a wrench or swinging a hammer, it really appears the White House hates you. I guess I made a mistake when I studied hard, put off major expenses, and decided to use my brain to earn a living. I'm such an elitist bastard!


    It is nice of Obama and the Democrats to put into law their war against the non-union workers. Wake me when they tax law firms at a higher rate.


    "what we are seeing is the economic recession being used to create the kind of powers a monarchy would enjoy. "


    Never waste a crisis.
    23 Feb 2010, 10:02 AM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
    Amen, brother! I feel like I'm stuck in a not-ready-for-prime-time soap opera--I wish more people could see the absolute sinister nature of collectivism (which naturally feeds elitism). Everyone must be equal under the law--or we are all, every single one of us, at the mercy of current whim and fancy. The Constitution was designed to protect us from that... But the progressives-- whose power lies not in equality for individuals, but in their ability to manipulate groups--have chipped away at these founding principles in order to allow their power grab. As you point out, it's only getting worse. I'm becoming more and more receptive to the whole 'Constitutional convention' idea...
    23 Feb 2010, 11:28 AM Reply Like
  • Hot Richard
    , contributor
    Comments (705) | Send Message
    "Progressives"! I'm going to call my group "The big hearted people who like puppies and rationally discuss topics and hope to improve the lives of all humans". Who crowned them them progressive?!
    25 Feb 2010, 12:41 PM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
    See, Hot Richard--that kind of talk, right there is what drives the biggest wedge between people of opposing views. Ideological and political differences are one thing... But to insinuate that only people who love big government are the caring, rational ones--and that those who believe in small government are irrational, puppy-haters with no interest in the wellbeing of humanity is not only absurd but literally steeped in the progressive's foundational, but faulty, premise that everyone who disagrees with them is a heartless nincompoop. I look for you and I to be equal in all ways--despite our opposing political/social tenets, and regardless of who is smarter or more loveable. Even further, equal regardless of which party might currently hold the political reins--in other words, equal under law, not equal as defined by current whim... Who "crowned" progressives, progressive? --they, themselves.
    25 Feb 2010, 01:26 PM Reply Like
  • Hot Richard
    , contributor
    Comments (705) | Send Message
    Hopefully you know I agree with you, OldSusanna.


    It is one thing to take a name like "Progressives". It is dishonest to then say "as our name states everything we support leads to progress thru change and reform and all criticism against us is anti-progress". I'm looking at you Jon Stewart.
    25 Feb 2010, 02:07 PM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
    Exactly! Sorry I didn't recognize the clever reference in your earlier post...
    Though I may be brilliant (ha!), I'm not necessarily quick :-^ ...thank God I have certain inalienable rights... Enjoy your two-banana-leaf-hat day! I'm having a tee + sweatshirt day (which is not too bad for this time of year!).
    25 Feb 2010, 02:28 PM Reply Like
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