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Old Trader is a 63 year old private investor, managing a retirement portfolio constructed to a) generate a high current yield, b) preserve capital, and c) increase capital. His methodology involves taking a "top down" macro view to identify favorable trends, and then engage in... More
  • The Health Care Reform Bill, What Now? 28 comments
    Mar 22, 2010 9:02 PM | about stocks: ABT, PFE
    In what was hardly a terribly unexpected surprise, President Obama's "biggest wish" was, more or less, granted. I say "more or less", because in typical Congressional fashion, there was all sorts of horse trading, and arm twisting that needed to take place, in order for the legislation to move forward.

    Of course, things now move to the Senate, where things seem to move even more slowly, so it'll be interesting to see what items get added, changed, or transmuted during the bill's time in that august body.

    For the moment, it seems that big pharma is a "winner", under the legislation, given they've been given "safe harbor" from generic competition for 12 years (primarily in the area of bioengineered drugs). At least, that's what today's market action seemed to indicate, with the Dow moving up nicely, mainly on the back of firms such as Abbott and Pfizer.

    Insurers and managed care firms seemed to do well, too...probably because they will get new customers, although in the case of the insurance firms, at least, margins might suffer some compression, as rates are capped/cut.

    Of course, the jury's still out on what might lay ahead for smaller firms, in terms of what benefits/costs they may incurr. Until the completely modified/amended bill gets passed, look for small firms to avoid new hires, until its crystal clear what the costs associated with such hires might be.



    Disclosure: Long: JNJ
    Stocks: ABT, PFE
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  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Old Trader: Greetings. Should the Senate attempt any language changes to the House bill it would no longer be eligible for the reconciliation process and would be sent back to the House or filibustered out of existence. Thirteen states have filed a joint law suite challenging the new law on constitutional grounds while two others have filed separately. Two states are working on legislation which would exempt them from compliance and Florida is attempting to place an amendment to it's constitution for that purpose on the November ballot. Several groups and individuals have also filed in federal courts and I would expect injunctions and stays to be issued very soon preventing any of the new law's provisions from taking effect while it's fast tracked to the SCOTUS. As long and hard as this process was it's still just the first act of a multi act play. IMHO the only certainty about this new health care law is that it will be stirring up controversy for some time to come.
    23 Mar 2010, 07:08 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » robert,

     

    I think that you're on the mark when you say that this isn't done playing out, yet. As far as the suits filed, challenging the constitutionality of the legislation, I'm hearing/reading that law experts don't expect these to be successful. These same experts doubt that the SCOTUS will even issue a stay, until they rule on the suits.

     

    I guess that we'll see.
    23 Mar 2010, 07:42 PM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
     
    Old Trader: I agree that there are many miles ahead. However; the Constitutional Scholars I've been listening to feel this does exceed the boundaries of the commerce clause--and even if the SCOTUS finds otherwise--they believe there is merit to the additional argument that it IS unconstitutional to penalize someone for "harmless inaction." However; it is no accident that the IRS was delegated as enforcement--and they may have (to get around the "penalty" issue) inserted an arcane reference somewhere to allow the penalty to be designated as a tax--although punative taxation is also, at least in theory, unconstitutional. To force someone to buy a good or service from a private company is a slippery slope--what's next? This is not the United States that I know and love. If the Constitution is meaningless--we are nothing more than a Democracy--Plantation Politics at its worst...
    23 Mar 2010, 10:36 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » OldSusanna,

     

    I've heard more than expert caution exactly that....that to "force" someone to buy something from a private firm is unconstitutional, and I'd wholeheartedly agree.

     

    Given the makeup of the sitting court, I'm not exactly hopeful, though. Perhaps the market for designers is thriving in Central/South America...something to keep in mind ;-)
    23 Mar 2010, 11:43 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Old, Trader: Greetings. While the "Experts." on the left are saying that the court actions will fail. The "Experts." on the right are saying that at least some elements of the new law will be struck down rendering the entire mess unworkable. Meanwhile states are enacting laws to undermine the measure and that will be challenged by Uncle Sugar in the courts as well. More trampling on the constitutional rights of states and individuals. I'm with OldSusanna that once the constitution is rendered irrelevant we are no longer living in a democratic republic because all restraint on government is removed. We don't have the parliamentary protections that Europeans have such as the vote of no confidence. We rely on our representatives to actually do our bidding. When they (The representatives) ignore their constituents in favor of their self or party interests we are really in deep trouble. (goooh.com)
    24 Mar 2010, 09:27 AM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » Robert,

     

    Something that's sorely needed, is a source of unspun facts. I believe that it was yesterday that I read something posted to another board, that indicated that senior White House staffers (the folks that were basically the ones behind crafting the nuts and bolts of the bill) managed to sneak in a clause that excludes them for being bound by the bill, in terms of what sort of health care plan they must have, to be in "compliance". Grassley, and some others argued against it, but the Dems wouldn't even allow discussion, or a vote on it.

     

    Short of wading through roughly 2k pages of legalese, its truly hard to figure out how messed up this thing will end up being.
    24 Mar 2010, 06:18 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    All of the pundits are saying that crafting legislation is like making sausage and is a really ugly process that some how turns out a good end product. This process was more like making road kill as they ran over Americas constitution and individual liberties and the product which emerged was not good at all. In fact it's about as appealing as road killed armadillo in a can complete with sand, gravel, bone shards and fur. Yum! Yum! Stew any one?
    24 Mar 2010, 06:38 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » Geez, robert...I JUST finished dinner!....;-)
    24 Mar 2010, 07:09 PM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
     
    Is it stew, or devil's brew... (metaphorically speaking, of course)
    25 Mar 2010, 12:44 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    OldSusanna: Greetings. It certainly looks like the devils work to me! As it stands all children will be insured no matter what. When the main provisions kick in the fine for the first year will be $95. Think about that you will be insured for the year at a cost of $95 and you can't be denied for preexisting conditions meaning for any reason whatsoever. Why buy insurance at all until you are sick or injured? After all you can't be denied coverage. The penalty increases over the next two years culminating in a whopping $750 fine the third year of the phase in. Of course all of the health insurers will be bankrupt before then. This leaves no recourse but a public option run by the government with no competition or choice. PHARMA will suffer as well because the prices they can charge for their products will be regulated. This of course means that they will divert R&D dollars to their bottom line or their stock will suffer. We all know where that goes. We have seen this play in other venues and we know how it ends. If you thought health care was expensive before this new law improved it just look at the costs it imposes. Now it will cost you your money and your liberty. Do you think it's worth it?
    25 Mar 2010, 09:28 AM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
     
    Robert:
    I agree with you 100%! These progressive Dem's are ruinous enough in their actual, stated goals... But through their machiavellian governing--they excel at unleashing disastrous 'unintented' consequences upon their people!

     

    Our Constitution has been taking hits for 100 years; I hope it isn't now mortally wounded. If it is--we're doomed until there is a great shift in power--large enough to restore it...

     

    The only true promise in Democracy is tyranny for minorities.
    25 Mar 2010, 11:49 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    OldSusanna: Greetings. Actually the true promise of democracy is avoiding tyranny of the majority. We are seeing a minority that has gained a majority voice. Now They are ignoring the true majority to push their progressive agenda forward at the expense of all but those who stand to gain from destroying this democracy. Follow the money. This presidential election was purchased by a group of people with deep pockets who have been working on it for a decade.
    25 Mar 2010, 12:13 PM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
     
    Robert:
    Respectfully; I think for now we'll have to agree to disagree on this... While the minority DO now have control--it is only because they were able to install a majority in our governing bodies. In my view--you just made my point. Although the will of the people is critically important--it also extremely diverse and often, sharply divided. If we are ALL to be subject to the whims of a national governing majority, instead of being protected by Constitutional Soundness (as we should be--since we are a constitutional-based federal republic--and not a democracy) there will always be tyranny over those whose tenets are not well represented by the governing majority...

     

    In theory, you should be able to vote, not only at the polls, but with your feet as well. Our States have lost a great deal of their sovereignty -- under a Federal Republic; the States could (and should) be as different as night and day. If you don't like what your State has become--move somewhere eles that's more to your liking... If the Federal Government (whether they in fact represent the interests of the majority or the minority) IS the great controller--then why even have separate states? Without State Sovereignty and the protections offered through Constutional Soundness--all States will--ultimately--be the same (legally speaking)--even worse, EVERYONE will be subject to the whims of whomever happens to hold the (federal) reins. That was never the intent of our Founders; nor the impetus for our Constitution-- This type of "democracy" will result in even greater tyranny--that is, unless by some magical force, we all suddenly think, feel and act as one (think ant farm). If you can present an argument that proves my thinking wrong--I'm happy to hear it--in response or private message. I don't feel the need to conform--but I like to consider new ideas and always try to keep an open mind.
    25 Mar 2010, 12:56 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    OldSusanna: Greetings. I agree with the tenets of your argument completely and don't disagree with you at all. Perhaps I was not clear enough what I meant to say is that the promise of our democracy is the concept of majority rule while preserving the rights of the minorities in law and spirit. This has not always been the case but we have made much progress in that area. As little as sixty years ago the concept of a person of color ascending to the presidency was unimaginable. I also agree that the rights of the states are paramount because they represent the ability to experiment with ideas with out jeopardizing the entire republic. As you said citizens voting with their feet being the determining factor of what works and what does not. We are seeing that concept in action as wealthy individuals relocate to avoid high tax states like NY, NJ, CA ETC.... Now that entire system is under assault by liberal ideologues seeking to undermine and destroy our constitutional government with the giant centralized power structure that the founders feared above all else. We must act quickly at all levels of government to defeat this movement at the ballot box or things will become far worse.
    25 Mar 2010, 01:20 PM Reply Like
  • OldSusanna
    , contributor
    Comments (126) | Send Message
     
    Well said!!! (I concede I'm a rambler (:-^) --may I quote you on twitter?) I agree, too, that we must act quickly and win this at the ballot box! What has me immensely worried is that we (constitutionally minded folks) are up against a well-oiled machine. As you pointed out, they are extremely well-funded and quite honestly, cunning in the extreme. It's going to be a tough fight--and I don't know if the opposition is up to it. We're going to have to be savvy--delivering new and convincing arguments. The progressive machine is already in tactical mode (did it ever leave?), positioning their complicit incumbents and newcomers to exploit economic and social fractures to their advantage--they are without conscience as to the cost of their agenda--whether in dollars, liberty, or social unity...
    25 Mar 2010, 01:42 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    OldSusanna: Greetings. Of course you may quote me and I'm flattered that you would (As head swells). Have you looked into (goooh.com) they want to replace all incumbents. They seem a little bit over the top but not nearly in the league of the progressives. Your assertion that the progressive machine is already moving to cement this victory and launch new assaults is on the money as Nancy Pelosi and Harry read have already said as much. I just hope that the American awakening is not too late. IMHO our best bet is to run conservative candidates against moderate republicans in the republican primaries to get the GOP back on the tracks. As it stands now they appear to be Democrat lite. LOL.
    25 Mar 2010, 02:06 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9584) | Send Message
     
    OT: What's next you ask? I just got off the phone with my Wells broker. He, with great reluctance, called the Health Care Bill passing as far back as last year. His next belief is that Cap'n Trade is going to get pushed through. This should have a negative impact on coal companies, and quell rumors of the Chinese buying out any American coal company.

     

    Also, if Cap'n Trade goes through, this should finally be the trigger the Natural Gas sector needs, as well as our country's dependence on foriegn oil.

     

    This comes in mind with the thought that Cramer made a $100 bet with Pickens that no NG legislation would pass before Memorial Day. My thinking is that Pickens knows a whole lot more of the behind the scenes senarios on Capital Hill than does Cramer.

     

    As a result, I sold off all of my shares of Patriot Coal (seekingalpha.com/symbo...) in my e-gamer account, and will discuss with my broker about selling off the shares I have with Well Fargo Advisors next time we speak.

     

    Thought you should know, OT.
    25 Mar 2010, 02:36 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » Mayascribe,

     

    Thanks for the heads up! Your Wells broker sounds like he's a pretty sharp guy. I think you may well be right, in your assessment of the chances of Cap and Trade regs, which makes me glad that I never got around to diversifying my energy holdings into coal/ electrical utilities.

     

    I owned SO a few years back, and had gotten out, and had been toying with the idea of getting back in. Of course, they've also got exposure in the area of nuclear power generation, so maybe it might still be a good move (at the right price, of course).
    25 Mar 2010, 05:32 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » What a bunch of great comments! I must say that it makes me happy to see such an outpouring of thoughtful and insightful dialog!
    25 Mar 2010, 05:50 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Old Trader: Greetings. Come on down! Stew's on. LOL.
    25 Mar 2010, 06:03 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » "Road kill au jus"? LOL.
    25 Mar 2010, 06:21 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Finest kind.LOL.
    25 Mar 2010, 06:50 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9584) | Send Message
     
    I should qualify my broker's comments about Cap'n Trade in that he believes there will be a "movement" of sorts to bring Cap'n Trade to the DC front lines. This "movement" will have stifling effects toward coal companies moving further up than they are now.

     

    All I know is that I'm selling the Patriot Coal shares tomorrow. Up around 100% anyway. I'm going to cash out.
    25 Mar 2010, 06:58 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » Mayascribe,

     

    Congrats! I'd say up 100% is a good time to be taking something off of the table.

     

    I'd expect the debate on a revival of cap and trade to be somewhat less acrimonious than the one over health care. Not because its less important, but its harder for the average person to figure out pros and cons. It doesn't have the "personal" effect that health care does.
    25 Mar 2010, 07:13 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Maya: Greetings. IMHO the Democrats will employ a two track strategy going forward. They will implement stifelling regulations and their new power to break up institutions which they deem pose systemic risk to effectively nationalize the banks and large financial institution. They will simultaneously implement cap and trade regulations through the Environmental Protection Agency to controll the utilities and manufacturing base effectvely taking control of the entire economy. Using the EPA circumvents the legislature letting the administration control industrials directly without debate or any pesky voting.
    25 Mar 2010, 07:25 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9584) | Send Message
     
    Old Trader: My broker has known me, as I like to say, since before I was born. He's an ex-marine, Upenn and Wharton grad, who manages over $1B in client assets, spread amongst, the last count I heard, just 276 clients; I'm probably one of his lowest two or three asset holders. Maybe if my novel hits big, I'll move up a little!

     

    But yes, he is an extremely sharp, quite personable, knowledgeable, humorous, accessible man who gives forth his time freely.

     

    Bottom line: He's my conservative side, as opposed to my e-gamer account, which somedays, like today, is highly nimble, and, at times, very high risk.
    26 Mar 2010, 01:00 AM Reply Like
  • Bob Beamer
    , contributor
    Comments (41) | Send Message
     
    OT: I've enjoyed your posts and comments, so I'd like to offer a few thoughts to solicit your opinion.

     

    I was recently asked what I thought of this legislation and realized that, although the legislation is going to push the boundaries of our democratic system and my willingness to give up more of my wages for insurance I may not be able to afford, it was not the legislation itself that was the greater risk to me and my welfare, it was the way opposing parties will use the leverage it can create to divide us and promote other constituent agenda.

     

    So let's be realistic about this. In the beginning, this new health care legislation will have all kinds of holes that greedy men will undoubtedly exploit ...and anyone opposed to the legislation, or for whatever reasons the idea of such legislation, will use as ways to blame someone else for our mutual bad judgments.

     

    Looking at historical record, the first few round of "fixes" will make it worse for a few years...including a few elected-party turn-overs with more failed self-interest remedies...then over time, the flaws and holes will get worked out and - unless we allow greedy corporations to create new exploits they can profit from...or party politics moves us from one extreme to the other like a perpetual grandfather clock of voter emotion - the US will probably end up with a system alot more like Canada than like France or Great Britain or the Scandinavians.

     

    I'm one of the 60% of Americans who are Independents and don't vote according to party-ticket mentality...so we are free to agree or disagree with portions of both sides of a reasonable and valid argument...not take permanent and mandatory positions in an attempt to prove someone else is wrong or to blame.

     

    As an Independent, I often feel like I'm standing outside the coliseum of group-think enthusiasm and can see that in reality, the idea of someone or some group of people being right or wrong is only an illusion - to be directed and redirected based on where we are looking at any given moment - because the power brokers provide financial support for both candidates...for both parties...just like professional bookies take bets on both fighters...or the casino covers all bets. It's not an indictment against our system, or a corruption in action, it's just the way our American government of the people has evolved, and we should all observe it for what it is and work with it as it is, not as our junior high school government teachers taught us to wishfully believe it could be.

     

    Instead of smack talking about the European countries that, once offered Liberty and Democracy and given the chance to actually work with it, have already struggled through the start-up costs of providing national health care...we should seriously gather all the positive and negative attempts and failures and successes other nations have endured over the past 50+ years -- while we've been patriotically squatting on anti-commie and anti-socialist rhetoric and living off our parents and grandparents accomplishments during WWII...and actually do something productive for America.

     

    Who knows...we may actually use American ingenuity and inventiveness to pick and improve all the little bits of wisdom acquired by other nations - at great expense and hardship - and come up with something the rest of world admires and respects and wants to adopt...in much the same way they have adopted our crazy ideas about democracy, liberty, food production, public water and waste, worker rights, and human rights....and all that other socialist stuff we tend to forget is socialist stuff once we've grown accustomed to the benefits.
    30 Mar 2010, 03:37 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Political parties come and go. We have had Tories, Whigs Republicans, Democrats, Bull Moose and now Tea Party among others. Our anchor through war, political and economic turmoil has been our founding documents and first principles. Where do they fit in your philosophy?
    30 Mar 2010, 09:33 AM Reply Like
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