As a physician you know better than anyone that the current fee for service system is the most dysfunctional, expensive, cruel system in the world. And, you know very well that this country already has "socialized medicine", known as TriCare, Medicare, Medicaid and hospital emergency rooms. Do you or any other physician think that it is ethical or fiscally responsible to deny basic standards of care for treatable diseases/conditions such as: high blood pressure, diabetes, mammography, annual physicals to detect disease? You know better than anyone the eventual cost of not detecting or controlling basic, common conditions, such as, high blood pressure and diabetes which will surely result in major medical events and astronomical cost the the health care system. I would guess one diabetic shock/comma would pay for quite a few doctors visits, one heart bypass or debilitating stroke would pay for a lot of hypertension therapies. Do you just ignore your health? If not, why should the rest of Americans be forced to??
How can the riches country on earth allow its workers to be abused by the health care industry for maximum profits?
I feel sorry for your employees, they must not have health insurance in your office. If they do, why are you complaining about Obama care compelling other companies from providing coverage?
IMHO I think the government should stop the nonsense of forcing employers to be the middle man and institute a VAT for the sole purpose of funding a national, comprehensive health system like almost every first world modern society. Our companies would compete better with other international companies without the cost of health care administration burdening them.
"I could go on and on. Obamacare suffers from the same problem that all statist, big government programs have. The pretense of knowledge, moral hazard, and mis-allocation of capital causing inefficient markets."
Yea, your'e right, we should disband our space efforts, military, satellite systems, air traffic control, and horrors, shut down the GPS system, it is rife with government dysfunction and waste. Or, more along your expertise, end research grants that made the modern medical world what "true capitalists" claim was done by the private sector. Almost every "breakthrough" technology was originated by some research grant; ie, robotic surgery (military), DNA sequencing (all government money), medical imaging machines (government funding/military), modern medical practices (battlefield, government trained doctors), you know all the stuff you learned in a government sponsored and supported medical school.
Sorry Bears, We're In A Secular Bull Market [View article]
Joseph;
Are you unread or just trying to antagonize? I'll bite.
"That $1.4 trillion is being spent in the economy for extended unemployment, SS disability, SS, food stamps, government employee paychecks, etc. In other words it is going to buy goods and services - that is GDP"
First read, then spout off. The budget is consumed by structural "entitlements" primarily, 100% by: SSI, Medicare/Medicade, military and debt service. Currently they consume 100% of all tax receipts. The "support mechanisms" that you deride are a small fraction of the spending issue. You see, the issue is YOU if you are on Medicare or if YOUR parents are. Please stop the hate mongering and relate factual information, not derisive lies. Yes, it is hate mongering saying the deficit is caused by "extended unemployment, food stamps, government workers, etc".
I like government workers like the FBI, CIA, air traffic controllers, ICE, FEMA, park service personnel, food inspectors, etc.
The fact is, we are overspending on OLD People's doctors, drugs, hospitals and the military and not enough on infrastructure, education, research and development and preventative health care. And more importantly, Obama's rate of spending growth is one of the lowest in history. We are living the Bush lies: off budget wars, unpaid for Medicare part D, unpaid for tax cuts- its not my opinion it is a fact and the CBO will verify them for you. Please read.
Additionally, Obama inherited Bush's deficit of 1.4 Trillion and his final tab has yet to be counted. You may not know this but the the budget is from October and Obama has not had 4 years of budgets yet but the ones he has presided over have been increasingly smaller. Read for yourself:
If you believe that the economy is shrinking then short the market but please don't disseminate nonfactual information.
btw, Corporate profits are generated almost 50% internationally and are at almost historic levels. So go ahead, short the market. Please stop the "tea party" rhetoric. Thanks.
Outlook For Equities: Time To Take The Foot Off The Accelerator [View article]
Great points Michael:
Obama is proposing raising the rates back to the previous tax rates before Bush lowered them. On the top earners the rate would rise by 4%. I would love to see someone making $500k stop working/income because he refuses to pay 20K more in taxes.
Sad thing is, people really believe that people are that selfish and/or stupid.
Thrill Ride Thursday: Data Hurts So Good [View article]
Great rant Phil, as always;
You did not mention the Medicare part D that Bush passed, bless his heart. He made it illegal for Medicare to negotiate the drug prices- they had too much buying power and it would not be fair. Big Pharma need profits and private jets after all, it's only fair since the bankers have them.
He almost got the money collected from SSI payroll deductions invested with the banksters, too. That was a bridge a little to far, even for the sycophant Republicans at the time. Imagine what if.
You mentioned the Gore lock box. Remember the argument during McCain's run: should we allow our seniors to buy drugs from Canada since their health system IS allowed to negotiate prices and they are 2/3's cheaper? It was almost surreal for the Republicans to say the drugs dispensed here are safe but drugs dispensed to Americans in Canada are dangerous. Then they flipped saying the elderly would not be prosecuted for illegal drug importation (which they were). They dropped the ruse and McCain finally relented and said he was for importation of drugs after all. So, we have a tiny population of about 12 million people doing the buying for 330 million and shipping the drugs to Canada and then back to America so Americans can actually buy the drugs that their universities, government research grants and regulatory agencies helped to develop. Worse, Canada did not want to get put in the middle and bitterly complained. Are we negotiating better prices today? HELL NO!
Don't you love "real capitalism".
We spend 3x more on health care but have about the worst result compared to almost all other industrialized nations. We spend about 80% of our healthcare dollars on the last 6 months of life which is the least productive or satisfactory and yet we don't spend on preventative care, pre-natal care or comprehensive health care which is the most productive and economically beneficial target for health care spending for a country.
We won't spend any money on health insurance or preventative care but will will spend an unlimited amount if the patient has a stroke (due to high blood pressure) and ends up in a hospital.
Their favorite rant is "STOP THE SPENDING" but don't cut Medicare or SSI; AARP is viscous, don't cut the military, the contractors love passing out money to us, finally- of course we have to pay the interest on our debt, SO, THAT LEAVES EXACTLY NO MONEY FOR ANYTHING ELSE WITH CURRENT INCOME; PARKS, FBI, CIA, EPA, DEA, NASA, FEMA, EDUCATION, NOTHING!
Tax receipts are at a historical low as a % of GDP but we don't have an income problem, we have a spending problem according to the Republican mantra.
Truth is, we have both a spending problem and a tax problem. The spending is generally on the elderly and the military so we really have an elderly/military problem. The tax problem is called special interest groups getting special deals cut directly off the top of the tax code. Most of all we have a crony capitalism problem, where the money flows directly to the top.
Keep up the great work Phil, it is useful and appreciated.
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
Excellent article, Mr. Wagner.
I cannot believe the "gold bugs", FED haters have not ripped you yet. I have tried to explain the very same arguments over the years but they believe what they want to believe and shut out, or shout over, all information presented to them. Fox gets 1/2 its advertising revenue from gold scammers and reverse mortgages to scam the elderly out of their homes and play into the conspiracy anger.
'After Obama has won another 4, I may consider folding up shop, firing everyone and going on unemployment, followed up with food stamp issuance, a disability claim or two at another unlucky employer in the future and lifetime SSI after that. "
With a boss like you I am sure your employees will be better off with your competitors. Unfortunately, even people who disparage the program are still eligible for SSI.
You remind me of the guy who sent an email to his employees and said if Obama is re-elected and they voted for him he was going to close his business. He was interviewed on CNBC, similar to Romney, he said I did not say that and they had his email. In the end, his business is the most profitable ever and he gave his employees a raise. I suppose to try and keep them.
Can't wait for your retirement party. Am I invited since I helped make it happen? Didn't LEH have 50,000+ employees?
Fairy Tale Friday: EU Leaders 'Wish' Greece Can Stay [View article]
eabyrd;
I know you long for the final days of the Bush "death spiral";
Negative GDP ~9%
Layoffs averaging 600,000/month vs. today payrolls are GROWING 160,000/month
Record bankruptcies, frozen capital markets, loss of 15 trillion in wealth, record foreclosures, massive deleveraging, unprecedented spike in mortgage delinquencies.
Ya; I agree let's bring back the good ol' days- Bush left this country in great shape and that "brother Obama" screwed up the country.
You guys are very sick to think things have not improved. Maybe you should just look at the UE claims, S&P, GDP to look for a clue. Compare the end of the good Bush days with today.
Mythbusting: How Presidential Elections Affect Markets [View article]
Iron:
The Affordable Housing Act had nothing to do with the financial collapse. I will outline the cause.
First we eliminated Glass, Steagall, which did not in itself cause the problem. It allowed the risk to build within the system by allowing banks to "diversify" into new novel financial instruments; CDO's, MBS, credit default swaps, and other synthetic products that were not regulated, traded on exchanges, had no price discovery or standardization, had no history of price discovery or risk and were many times not tied to any real or tangible assets. What could possible go wrong when you have trillions $ of these contracts and no one knows who the counter parties are or even which institution has them or how much and what position, long/short?
This was the necessary invention to package loans underwritten by mortgage brokers, banks, and even internet based mortgage brokers to make loans to people with no real underwriting standards, no equity investment by the buyers/borrowers and only the ability to sign the documents. You see, it does not matter to a mortgage broker if the loan blows up because he is paid to make loans, not service or hold loans- same for the banks. The risk was transferred to the buyers of the CDO/bonds and the banksters made the profit at origination not performance of the asset.
Wall Street could not buy loans fast enough and they did not care if they were any good either because they securitized them into bonds and sold them to suckers/buyers all around the world, with no recourse. They actually bankrupted Iceland, makes you proud doesn't it. Sometimes they even knew they were so likely to fail they would buy insurance on the bond that they just sold and profit when it did blow up. Kind of like selling a defective car and insuring it with you as the loss payee because you KNOW it will blow up. Fortunately, that is illegal with cars- unfortunately, it was not with bonds. Dodd/Frank fixed that.
It did not have to happen. The Federal Reserve, OTS, HUD, Comptroller of the Currency and many other governmental agencies have supervisory authority over banks and realestate contracts. We were in the good times with a Republican president, House and Senate. Bush did not veto a bill for 6 years- he had his way and that was to leave businesses alone, de-regulate and let the free market do its magic. There were warnings that risk was building in the system but they were ignored. Everyone was making money and there was 2 wars to focus on. So, since the president is in charge of all of the regulatory agencies Bush is responsible along with Greenspan. Greenspan admitted his mistake in congressional hearings, Treasury Secretary Paulson did, too. I don't recall President Bush doing so. What a disgrace.
Pox on both parties for not doing anything before it destroyed our financial system and economy. The Republicans wanted banksters to make as much money as possible and Democrats wanted to have as many homeowners as possible, even those not financially qualified. I guess they all just assumed somehow it would all work out ok.
In the end, the middle class got stuck with underwater homes, the poor got a lesson in foreclosure and homelessness, the bankers got filthy rich, the taxpayers got the bill.
The Dodd/Frank act is attempting to stop another episode but Romney wants nothing to do with regulating anything and the cycle continues.
My best guess with regard to the election is, if Obama wins there may be a good possibility that there will be no resolution for the fiscal cliff until January because the Republicans refuse to do anything and have no problem holding the country hostage for the 2% they are bound and determined to help so the market will be extremely volatile. If Romney wins the fiscal cliff be a non-issue. The military will not get cut they will get MORE MONEY and the Bush tax cuts will be extended so the market will have much less volatility but the future of the country will come into question.
How America could possibly vote for someone that proposes that 100% of the middle class will get a 4% tax increase (under Romney's plan) and the billionaires will get a tax cut- that is some kind of spin. And, we will super duper, duper, really, really safer with the military getting MORE money, even though we pay more than the next 17 highest spending countries, COMBINED! Even the military wants to cut back but what do they know, Romney has the answers.
You cannot make this up, we are doomed with that moronic thinking.
The End Result Of The Fed's Cancerous Policies [View article]
Kevin;
You are entirely too deep to argue to ultra bears. The FED's balance sheet is equal to the U.S- full taxing authority and all assets in the U.S. Being that we are over a 18T economy, the reserve currency of the world, the most efficient economy in the world- to state that the U.S. economy/FED is doomed to failure in the next:
"I cannot say when this will happen. But it will happen. It might be next week, next month, or several years from now."
Is perhaps, the dumbest and most irresponsible thing I have seen posted by an author on SA. He should be banished from the site. Totally irresponsible.
Graham Summers is not an economist, PHD in anything, never worked in an governmental capacity- from a quick look at his credentials. Yet, he is telling SA that a PHD in economics and the world authority on the depression, the thousands of PHD professionals on his staff, the other bank governors, and most of the professional community have it all wrong and only Graham Summers is qualified to render an opinion and compile a "real" conclusion. In short, everyone else is wrong and only he is correct with no credentials. He would not be allowed to render an opinion in court and should not be taken seriously by anyone.
I hope he does not tell his doctor that he knows it all and is the only one that has the answers to issues upon which he seems to have very little, if any, education or experience- certain misery awaits.
I am not really sure why someone would embarrass themselves in public like this but there must be a reason. Scary.
Who Just Took $83.3 Billion From The Federal Reserve And Why? [View article]
I have never read such a bunch of balderdash. Avery, have you ever taken a econ class, finance class?
"Big commercial banks, on both sides of the Atlantic, needed those dollars to provide the illusion of solvency, but the Federal Reserve didn't want that money to enter the real economy for fear of hyperinflation."
I don't think I have read a dumber statement on a financial blog in my life. The FED buys assets from the banks, typically U.S. debt and agency debt to inject liquidity into the system. Accounting is a wonderful thing for those that understand it. How does the FED buying liquid, marked to market, assets- the most liquid assets in the word- prop up the banks' balance sheets? I will keep it simple for you, if a gold coin can be sold anywhere in the world for $10, and your dad gives you $10 and takes your coin- are you richer? Or, are you so ignorant of how the system works that you actually think the FED GIVES the banks money to prop up their balance sheets?
The truth is, the FED inconveniences the banks by buying an income producing asset, treasuries, and giving the banks cash to re-invest, which they cannot do without taking market risk so they re-deposit it back at the FED and that is why the M1 has not grown commensurate with the FED's open market operations. Not one note was printed in the whole transaction cycle.
"In short, the excretion of huge sums of newly printed money from the Federal Reserve"
The FED does not "print" money- it invents or creates it, the Treasure "prints" money at the Bureau of engraving and all notes are signed by the Treasury Secretary, not the FED president. The Treasury buys assets in open market operations- almost always bonds.
"It may also have something to do with a quid pro quo, where, in exchange for free cash to improve their books, they promised not to induce hyperinflation by using the funny-money cash."
Again, a total lie. The FED does not give banks "free cash", they buy assets from the member banks to support open market operations.
"From this, we conclude that the operations were carried out with foreign central banks"
Yes, in case you have not read the news lately, there is a liquidity crisis in Europe and the FED is supplying US dollars because the money markets in Europe are strained. The EU banks rely heavily on "hot" money much more than the US banks do. They sell US treasuries to the FED and the FED gives them money- no not in $100 dollar bills- just electronic money, kind of like you do with on line banking. You do not send bills to pay your car loan- right?
"Over the past three years, the Federal Reserve has printed money, but been very careful in keep as much of it as possible in reserve deposits, which means it is sequestered out of the real economy"
What in the world are you talking about? The FED is doing quantitative easing to make it painful for the banks/investors to hold "riskless" assets so they will lend money out to grow the economy. Again, the FED does not print money. The whole goal of the FED is for the banks to lend it out, that is how they transmit monetary policy.
"Perturbations in the Federal Reserve balance sheet have been the key to understanding upward and downward movements in stock, bond and commodities markets since March, 2009."
Exactly. The FED did QE2 to make investors buy risk assets which almost always results in asset inflation. That was their stated goal, to tamp down the deflation in 2010- it worked. Quick primmer, when buyers buy more bonds the price goes up and the yield goes down so it transmits the FED's goal of lower interest rates into the market. "perturbations"? Really!? What trouble are you referring to?
"The Federal Reserve is in no danger of collapse, although the US dollar may be"
Pry tell, when? Relative to what? You did get one thing correct- the FED will not collapse- unless Ron Paul or Perry become elected.
"But, at the moment, equity markets are being driven mostly by liquidity manipulation, not fundamentals."
Have you seen the earnings reports lately- S&P is projected to earn $105 in FY12, forward 12 PE. What would the PE be without the "liquidity manipulation"? I think the market is pricing fundamentals myself. Please explain your theory of "liquidity manipulation." Are you suggesting that the banks that have the money "sequestered" are buying stocks? Why?
"Understanding changes in the Fed balance sheet is the key to determining what and when to invest."
Ok, I give up what should the market invest in? Certainly not equities- right? They are being manipulate by "liquidity manipulation". RIMM announces lousy earnings and gets cut in 1/2 and MC announces good earnings and goes up 6% to an all time high. I guess liquidity only applies to some companies.
Not even a token mention of Ashley Keller joining the board/team. Perhaps one of the most impressive lawyers/businessman in the country today. He is not a loser and certainly not interested in joining a losing team and he most certainly has a lot more insight and confidential information than the public. No mention of RR's or possible percentages? Totally incompetent.
He should read Redangus above and do a rewrite/correction to his screed.
He states:
"Without this skew, let's say that one would multiply the winnings by 5 to arrive at an enterprise valuation. So, for example, if Vringo won $500 million, Vringo might be worth $2.5 billion."
Perhaps the dumbest sentence written on SA.
Modernist does not even have the most basic understanding of how the market values a company. He states that the market will apply a multiple to a one time event, judgment award. The market will apply a multiple to a reoccurring cash flow stream and NOT a one time event.
He doesn't have anything useful insight and should be ignored.
I suppose you like spending hours evaluating insurance company payment schedules so you can decide which carrier you are approved by and what your fee schedule will be. You like your staff calling insurance companies to get prior approval for a medically necessary procedure- especially when it is denied. You must love having to hound the insurance companies to get payment'; if ever. You must love having to spend $30-50 sq/ft to store paper files and have your back office process the information overload in paper form.
If you don't like that Obama care is attempting to standardize all that and your patients can walk into your office with a encrypted card with their total health record at your disposal. No paper billing necessary, no forms, all procedures standardized, all efficacy of treatments in a central data center for best practices. That is the way in many modern societies; just not ours.
We have universal health care called emergency rooms. Our system is broken and someone is trying to improve it. You can attack the change or try to be productive and profit from it.
You know, kind of like people attacked Medicare, seat belts, pollution regulation until they were fully functional and appreciated.
But if you fell better attacking me that's ok too. Strange?
Please read a dictionary, my views are far from fascist; you might see yourself in the definition. Have fun with that.
"Do you or any other human being think it is ethically or fiscally responsible to deny basic housing care when our country can afford housing for everyone?
Uh... wait, we just tried that didn't we? "
No we did not. We had a housing bubble caused from investment banks creating CDO's and selling them around the world without a care in the world for credit risk. I have seen muli-millionairs go BK, the financial collapse had nothing to do with housing. Housing was just the proxy, financial engineering and Wall Street greed created the bubble: no credit = no bubble.
"If it is moral to have mandatory, nationalized healthcare, then it is also moral to have mandatory, nationalized EVERYTHING. Because there are more pressing needs than getting a tongue depressor rammed into your mouth. Like eating. Like shelter. Like breathing"
Actually, we do have a governmental support mechanism for food support: in the streets for the homeless it is called shelters and soup kitchens, for heal care it is called hospitals/ER, and for disabled it is called SS disability. I guess they should be abandoned.
" Like breathing."
Special. I like breathing and especially when the air is clean. Tell the parents of an asthmatic child their child should not have clean air. Tell the Canadians that we want acid rain back like in the good ol days when we spewed raw smoke/pollution into the air and coated nearby cities in soot, ruined lakes and streams and defoliated hectacres of trees. Those were the fun times-especially for the Canadians loosing their forests to our soot.
"Cap-n-trade is gonna be a great new money raiser"
Yes, that was a Republican idea and John McCain was the biggest supporter. It is a free market concept for polluters paying for the pollution they create; kind of like you paying for someone to haul your trash. Wait, maybe you are like some and just throw you trash over the fence and let someone else pay to deal with it. Got it.
". Oh, but don't worry about grandma, her utility bill will skyrocket. She'll freeze to death, but hey, at least she'll breathe that nice, clean arctic air first."
Actually, no. Unless you change the law we have support mechanisms for the poor and elderly to help with heating and utilities support.
Sir, just tell the world you like dirty air, filthy water, unsafe drugs, no critical health support for the poor or elderly, no food support for families with kids; we will understand.
Effects Of Obamacare On Employment [View article]
As a physician you know better than anyone that the current fee for service system is the most dysfunctional, expensive, cruel system in the world. And, you know very well that this country already has "socialized medicine", known as TriCare, Medicare, Medicaid and hospital emergency rooms. Do you or any other physician think that it is ethical or fiscally responsible to deny basic standards of care for treatable diseases/conditions such as: high blood pressure, diabetes, mammography, annual physicals to detect disease? You know better than anyone the eventual cost of not detecting or controlling basic, common conditions, such as, high blood pressure and diabetes which will surely result in major medical events and astronomical cost the the health care system. I would guess one diabetic shock/comma would pay for quite a few doctors visits, one heart bypass or debilitating stroke would pay for a lot of hypertension therapies. Do you just ignore your health? If not, why should the rest of Americans be forced to??
How can the riches country on earth allow its workers to be abused by the health care industry for maximum profits?
I feel sorry for your employees, they must not have health insurance in your office. If they do, why are you complaining about Obama care compelling other companies from providing coverage?
IMHO I think the government should stop the nonsense of forcing employers to be the middle man and institute a VAT for the sole purpose of funding a national, comprehensive health system like almost every first world modern society. Our companies would compete better with other international companies without the cost of health care administration burdening them.
"I could go on and on. Obamacare suffers from the same problem that all statist, big government programs have. The pretense of knowledge, moral hazard, and mis-allocation of capital causing inefficient markets."
Yea, your'e right, we should disband our space efforts, military, satellite systems, air traffic control, and horrors, shut down the GPS system, it is rife with government dysfunction and waste. Or, more along your expertise, end research grants that made the modern medical world what "true capitalists" claim was done by the private sector. Almost every "breakthrough" technology was originated by some research grant; ie, robotic surgery (military), DNA sequencing (all government money), medical imaging machines (government funding/military), modern medical practices (battlefield, government trained doctors), you know all the stuff you learned in a government sponsored and supported medical school.
Sorry Bears, We're In A Secular Bull Market [View article]
Are you unread or just trying to antagonize? I'll bite.
"That $1.4 trillion is being spent in the economy for extended unemployment, SS disability, SS, food stamps, government employee paychecks, etc. In other words it is going to buy goods and services - that is GDP"
First read, then spout off. The budget is consumed by structural "entitlements" primarily, 100% by: SSI, Medicare/Medicade, military and debt service. Currently they consume 100% of all tax receipts. The "support mechanisms" that you deride are a small fraction of the spending issue. You see, the issue is YOU if you are on Medicare or if YOUR parents are. Please stop the hate mongering and relate factual information, not derisive lies. Yes, it is hate mongering saying the deficit is caused by "extended unemployment, food stamps, government workers, etc".
I like government workers like the FBI, CIA, air traffic controllers, ICE, FEMA, park service personnel, food inspectors, etc.
The fact is, we are overspending on OLD People's doctors, drugs, hospitals and the military and not enough on infrastructure, education, research and development and preventative health care. And more importantly, Obama's rate of spending growth is one of the lowest in history. We are living the Bush lies: off budget wars, unpaid for Medicare part D, unpaid for tax cuts- its not my opinion it is a fact and the CBO will verify them for you. Please read.
Additionally, Obama inherited Bush's deficit of 1.4 Trillion and his final tab has yet to be counted. You may not know this but the the budget is from October and Obama has not had 4 years of budgets yet but the ones he has presided over have been increasingly smaller. Read for yourself:
http://on.mktw.net/K2OxXd
If you believe that the economy is shrinking then short the market but please don't disseminate nonfactual information.
btw, Corporate profits are generated almost 50% internationally and are at almost historic levels. So go ahead, short the market. Please stop the "tea party" rhetoric. Thanks.
Outlook For Equities: Time To Take The Foot Off The Accelerator [View article]
Obama is proposing raising the rates back to the previous tax rates before Bush lowered them. On the top earners the rate would rise by 4%. I would love to see someone making $500k stop working/income because he refuses to pay 20K more in taxes.
Sad thing is, people really believe that people are that selfish and/or stupid.
Thrill Ride Thursday: Data Hurts So Good [View article]
You did not mention the Medicare part D that Bush passed, bless his heart. He made it illegal for Medicare to negotiate the drug prices- they had too much buying power and it would not be fair. Big Pharma need profits and private jets after all, it's only fair since the bankers have them.
He almost got the money collected from SSI payroll deductions invested with the banksters, too. That was a bridge a little to far, even for the sycophant Republicans at the time. Imagine what if.
You mentioned the Gore lock box. Remember the argument during McCain's run: should we allow our seniors to buy drugs from Canada since their health system IS allowed to negotiate prices and they are 2/3's cheaper? It was almost surreal for the Republicans to say the drugs dispensed here are safe but drugs dispensed to Americans in Canada are dangerous. Then they flipped saying the elderly would not be prosecuted for illegal drug importation (which they were). They dropped the ruse and McCain finally relented and said he was for importation of drugs after all. So, we have a tiny population of about 12 million people doing the buying for 330 million and shipping the drugs to Canada and then back to America so Americans can actually buy the drugs that their universities, government research grants and regulatory agencies helped to develop. Worse, Canada did not want to get put in the middle and bitterly complained. Are we negotiating better prices today? HELL NO!
Don't you love "real capitalism".
We spend 3x more on health care but have about the worst result compared to almost all other industrialized nations. We spend about 80% of our healthcare dollars on the last 6 months of life which is the least productive or satisfactory and yet we don't spend on preventative care, pre-natal care or comprehensive health care which is the most productive and economically beneficial target for health care spending for a country.
We won't spend any money on health insurance or preventative care but will will spend an unlimited amount if the patient has a stroke (due to high blood pressure) and ends up in a hospital.
Their favorite rant is "STOP THE SPENDING" but don't cut Medicare or SSI; AARP is viscous, don't cut the military, the contractors love passing out money to us, finally- of course we have to pay the interest on our debt, SO, THAT LEAVES EXACTLY NO MONEY FOR ANYTHING ELSE WITH CURRENT INCOME; PARKS, FBI, CIA, EPA, DEA, NASA, FEMA, EDUCATION, NOTHING!
Tax receipts are at a historical low as a % of GDP but we don't have an income problem, we have a spending problem according to the Republican mantra.
Truth is, we have both a spending problem and a tax problem. The spending is generally on the elderly and the military so we really have an elderly/military problem. The tax problem is called special interest groups getting special deals cut directly off the top of the tax code. Most of all we have a crony capitalism problem, where the money flows directly to the top.
Keep up the great work Phil, it is useful and appreciated.
Has CNBC Lost Its Mojo? [View article]
Maria and Santelli would have nothing to talk about. Their head would explode...........that would be good tv.
Thank god for Bloomberg.
The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
I cannot believe the "gold bugs", FED haters have not ripped you yet. I have tried to explain the very same arguments over the years but they believe what they want to believe and shut out, or shout over, all information presented to them. Fox gets 1/2 its advertising revenue from gold scammers and reverse mortgages to scam the elderly out of their homes and play into the conspiracy anger.
Effects Of Obamacare On Employment [View article]
'After Obama has won another 4, I may consider folding up shop, firing everyone and going on unemployment, followed up with food stamp issuance, a disability claim or two at another unlucky employer in the future and lifetime SSI after that. "
With a boss like you I am sure your employees will be better off with your competitors. Unfortunately, even people who disparage the program are still eligible for SSI.
You remind me of the guy who sent an email to his employees and said if Obama is re-elected and they voted for him he was going to close his business. He was interviewed on CNBC, similar to Romney, he said I did not say that and they had his email. In the end, his business is the most profitable ever and he gave his employees a raise. I suppose to try and keep them.
Can't wait for your retirement party. Am I invited since I helped make it happen? Didn't LEH have 50,000+ employees?
Fairy Tale Friday: EU Leaders 'Wish' Greece Can Stay [View article]
I know you long for the final days of the Bush "death spiral";
Negative GDP ~9%
Layoffs averaging 600,000/month vs. today payrolls are GROWING 160,000/month
Record bankruptcies, frozen capital markets, loss of 15 trillion in wealth, record foreclosures, massive deleveraging, unprecedented spike in mortgage delinquencies.
Ya; I agree let's bring back the good ol' days- Bush left this country in great shape and that "brother Obama" screwed up the country.
You guys are very sick to think things have not improved. Maybe you should just look at the UE claims, S&P, GDP to look for a clue. Compare the end of the good Bush days with today.
Mythbusting: How Presidential Elections Affect Markets [View article]
The Affordable Housing Act had nothing to do with the financial collapse. I will outline the cause.
First we eliminated Glass, Steagall, which did not in itself cause the problem. It allowed the risk to build within the system by allowing banks to "diversify" into new novel financial instruments; CDO's, MBS, credit default swaps, and other synthetic products that were not regulated, traded on exchanges, had no price discovery or standardization, had no history of price discovery or risk and were many times not tied to any real or tangible assets. What could possible go wrong when you have trillions $ of these contracts and no one knows who the counter parties are or even which institution has them or how much and what position, long/short?
This was the necessary invention to package loans underwritten by mortgage brokers, banks, and even internet based mortgage brokers to make loans to people with no real underwriting standards, no equity investment by the buyers/borrowers and only the ability to sign the documents. You see, it does not matter to a mortgage broker if the loan blows up because he is paid to make loans, not service or hold loans- same for the banks. The risk was transferred to the buyers of the CDO/bonds and the banksters made the profit at origination not performance of the asset.
Wall Street could not buy loans fast enough and they did not care if they were any good either because they securitized them into bonds and sold them to suckers/buyers all around the world, with no recourse. They actually bankrupted Iceland, makes you proud doesn't it. Sometimes they even knew they were so likely to fail they would buy insurance on the bond that they just sold and profit when it did blow up. Kind of like selling a defective car and insuring it with you as the loss payee because you KNOW it will blow up. Fortunately, that is illegal with cars- unfortunately, it was not with bonds. Dodd/Frank fixed that.
It did not have to happen. The Federal Reserve, OTS, HUD, Comptroller of the Currency and many other governmental agencies have supervisory authority over banks and realestate contracts. We were in the good times with a Republican president, House and Senate. Bush did not veto a bill for 6 years- he had his way and that was to leave businesses alone, de-regulate and let the free market do its magic. There were warnings that risk was building in the system but they were ignored. Everyone was making money and there was 2 wars to focus on. So, since the president is in charge of all of the regulatory agencies Bush is responsible along with Greenspan. Greenspan admitted his mistake in congressional hearings, Treasury Secretary Paulson did, too. I don't recall President Bush doing so. What a disgrace.
Pox on both parties for not doing anything before it destroyed our financial system and economy. The Republicans wanted banksters to make as much money as possible and Democrats wanted to have as many homeowners as possible, even those not financially qualified. I guess they all just assumed somehow it would all work out ok.
In the end, the middle class got stuck with underwater homes, the poor got a lesson in foreclosure and homelessness, the bankers got filthy rich, the taxpayers got the bill.
The Dodd/Frank act is attempting to stop another episode but Romney wants nothing to do with regulating anything and the cycle continues.
My best guess with regard to the election is, if Obama wins there may be a good possibility that there will be no resolution for the fiscal cliff until January because the Republicans refuse to do anything and have no problem holding the country hostage for the 2% they are bound and determined to help so the market will be extremely volatile. If Romney wins the fiscal cliff be a non-issue. The military will not get cut they will get MORE MONEY and the Bush tax cuts will be extended so the market will have much less volatility but the future of the country will come into question.
How America could possibly vote for someone that proposes that 100% of the middle class will get a 4% tax increase (under Romney's plan) and the billionaires will get a tax cut- that is some kind of spin. And, we will super duper, duper, really, really safer with the military getting MORE money, even though we pay more than the next 17 highest spending countries, COMBINED! Even the military wants to cut back but what do they know, Romney has the answers.
You cannot make this up, we are doomed with that moronic thinking.
The End Result Of The Fed's Cancerous Policies [View article]
You are entirely too deep to argue to ultra bears. The FED's balance sheet is equal to the U.S- full taxing authority and all assets in the U.S. Being that we are over a 18T economy, the reserve currency of the world, the most efficient economy in the world-
to state that the U.S. economy/FED is doomed to failure in the next:
"I cannot say when this will happen. But it will happen. It might be next week, next month, or several years from now."
Is perhaps, the dumbest and most irresponsible thing I have seen posted by an author on SA. He should be banished from the site. Totally irresponsible.
Graham Summers is not an economist, PHD in anything, never worked in an governmental capacity- from a quick look at his credentials. Yet, he is telling SA that a PHD in economics and the world authority on the depression, the thousands of PHD professionals on his staff, the other bank governors, and most of the professional community have it all wrong and only Graham Summers is qualified to render an opinion and compile a "real" conclusion. In short, everyone else is wrong and only he is correct with no credentials. He would not be allowed to render an opinion in court and should not be taken seriously by anyone.
I hope he does not tell his doctor that he knows it all and is the only one that has the answers to issues upon which he seems to have very little, if any, education or experience- certain misery awaits.
I am not really sure why someone would embarrass themselves in public like this but there must be a reason. Scary.
Who Just Took $83.3 Billion From The Federal Reserve And Why? [View article]
"Big commercial banks, on both sides of the Atlantic, needed those dollars to provide the illusion of solvency, but the Federal Reserve didn't want that money to enter the real economy for fear of hyperinflation."
I don't think I have read a dumber statement on a financial blog in my life. The FED buys assets from the banks, typically U.S. debt and agency debt to inject liquidity into the system. Accounting is a wonderful thing for those that understand it. How does the FED buying liquid, marked to market, assets- the most liquid assets in the word- prop up the banks' balance sheets? I will keep it simple for you, if a gold coin can be sold anywhere in the world for $10, and your dad gives you $10 and takes your coin- are you richer? Or, are you so ignorant of how the system works that you actually think the FED GIVES the banks money to prop up their balance sheets?
The truth is, the FED inconveniences the banks by buying an income producing asset, treasuries, and giving the banks cash to re-invest, which they cannot do without taking market risk so they re-deposit it back at the FED and that is why the M1 has not grown commensurate with the FED's open market operations. Not one note was printed in the whole transaction cycle.
"In short, the excretion of huge sums of newly printed money from the Federal Reserve"
The FED does not "print" money- it invents or creates it, the Treasure "prints" money at the Bureau of engraving and all notes are signed by the Treasury Secretary, not the FED president. The Treasury buys assets in open market operations- almost always bonds.
"It may also have something to do with a quid pro quo, where, in exchange for free cash to improve their books, they promised not to induce hyperinflation by using the funny-money cash."
Again, a total lie. The FED does not give banks "free cash", they buy assets from the member banks to support open market operations.
"From this, we conclude that the operations were carried out with foreign central banks"
Yes, in case you have not read the news lately, there is a liquidity crisis in Europe and the FED is supplying US dollars because the money markets in Europe are strained. The EU banks rely heavily on "hot" money much more than the US banks do. They sell US treasuries to the FED and the FED gives them money- no not in $100 dollar bills- just electronic money, kind of like you do with on line banking. You do not send bills to pay your car loan- right?
"Over the past three years, the Federal Reserve has printed money, but been very careful in keep as much of it as possible in reserve deposits, which means it is sequestered out of the real economy"
What in the world are you talking about? The FED is doing quantitative easing to make it painful for the banks/investors to hold "riskless" assets so they will lend money out to grow the economy. Again, the FED does not print money. The whole goal of the FED is for the banks to lend it out, that is how they transmit monetary policy.
"Perturbations in the Federal Reserve balance sheet have been the key to understanding upward and downward movements in stock, bond and commodities markets since March, 2009."
Exactly. The FED did QE2 to make investors buy risk assets which almost always results in asset inflation. That was their stated goal, to tamp down the deflation in 2010- it worked. Quick primmer, when
buyers buy more bonds the price goes up and the yield goes down so it transmits the FED's goal of lower interest rates into the market. "perturbations"? Really!? What trouble are you referring to?
"The Federal Reserve is in no danger of collapse, although the US dollar may be"
Pry tell, when? Relative to what? You did get one thing correct- the FED will not collapse- unless Ron Paul or Perry become elected.
"But, at the moment, equity markets are being driven mostly by liquidity manipulation, not fundamentals."
Have you seen the earnings reports lately- S&P is projected to earn $105 in FY12, forward 12 PE. What would the PE be without the "liquidity manipulation"? I think the market is pricing fundamentals myself. Please explain your theory of "liquidity manipulation." Are you suggesting that the banks that have the money "sequestered" are buying stocks? Why?
"Understanding changes in the Fed balance sheet is the key to determining what and when to invest."
Ok, I give up what should the market invest in? Certainly not equities- right? They are being manipulate by "liquidity manipulation". RIMM announces lousy earnings and gets cut in 1/2 and MC announces good earnings and goes up 6% to an all time high. I guess liquidity only applies to some companies.
Please, write about law not economics.
Herbalife KPMG Affair Compelling Opportunity For Shareholders [View article]
Icahn has Ackman in checkmate. Just a matter of time before he squeezes him. Very long hlf.
Trade Vringo Profitably [View article]
He should read Redangus above and do a rewrite/correction to his screed.
He states:
"Without this skew, let's say that one would multiply the winnings by 5 to arrive at an enterprise valuation. So, for example, if Vringo won $500 million, Vringo might be worth $2.5 billion."
Perhaps the dumbest sentence written on SA.
Modernist does not even have the most basic understanding of how the market values a company. He states that the market will apply a multiple to a one time event, judgment award. The market will apply a multiple to a reoccurring cash flow stream and NOT a one time event.
He doesn't have anything useful insight and should be ignored.
Effects Of Obamacare On Employment [View article]
I am glad you feel better insulting me. Strange?
I suppose you like spending hours evaluating insurance company payment schedules so you can decide which carrier you are approved by and what your fee schedule will be. You like your staff calling insurance companies to get prior approval for a medically necessary procedure- especially when it is denied. You must love having to hound the insurance companies to get payment'; if ever. You must love having to spend $30-50 sq/ft to store paper files and have your back office process the information overload in paper form.
If you don't like that Obama care is attempting to standardize all that and your patients can walk into your office with a encrypted card with their total health record at your disposal. No paper billing necessary, no forms, all procedures standardized, all efficacy of treatments in a central data center for best practices. That is the way in many modern societies; just not ours.
We have universal health care called emergency rooms. Our system is broken and someone is trying to improve it. You can attack the change or try to be productive and profit from it.
You know, kind of like people attacked Medicare, seat belts, pollution regulation until they were fully functional and appreciated.
But if you fell better attacking me that's ok too. Strange?
ps. some of my best friends are physicians
Effects Of Obamacare On Employment [View article]
Please read a dictionary, my views are far from fascist; you might see yourself in the definition. Have fun with that.
"Do you or any other human being think it is ethically or fiscally responsible to deny basic housing care when our country can afford housing for everyone?
Uh... wait, we just tried that didn't we? "
No we did not. We had a housing bubble caused from investment banks creating CDO's and selling them around the world without a care in the world for credit risk. I have seen muli-millionairs go BK, the financial collapse had nothing to do with housing. Housing was just the proxy, financial engineering and Wall Street greed created the bubble: no credit = no bubble.
"If it is moral to have mandatory, nationalized healthcare, then it is also moral to have mandatory, nationalized EVERYTHING. Because there are more pressing needs than getting a tongue depressor rammed into your mouth. Like eating. Like shelter. Like breathing"
Actually, we do have a governmental support mechanism for food support: in the streets for the homeless it is called shelters and soup kitchens, for heal care it is called hospitals/ER, and for disabled it is called SS disability. I guess they should be abandoned.
" Like breathing."
Special. I like breathing and especially when the air is clean. Tell the parents of an asthmatic child their child should not have clean air. Tell the Canadians that we want acid rain back like in the good ol days when we spewed raw smoke/pollution into the air and coated nearby cities in soot, ruined lakes and streams and defoliated hectacres of trees. Those were the fun times-especially for the Canadians loosing their forests to our soot.
"Cap-n-trade is gonna be a great new money raiser"
Yes, that was a Republican idea and John McCain was the biggest supporter. It is a free market concept for polluters paying for the pollution they create; kind of like you paying for someone to haul your trash. Wait, maybe you are like some and just throw you trash over the fence and let someone else pay to deal with it. Got it.
". Oh, but don't worry about grandma, her utility bill will skyrocket. She'll freeze to death, but hey, at least she'll breathe that nice, clean arctic air first."
Actually, no. Unless you change the law we have support mechanisms for the poor and elderly to help with heating and utilities support.
Sir, just tell the world you like dirty air, filthy water, unsafe drugs, no critical health support for the poor or elderly, no food support for families with kids; we will understand.