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  • Obamacare And Its Ever-Flexible Deadlines

    In his end-of-year press conference, President Barack Obama affirmed that at least 1 million people had signed up for coverage under Obamacare, a landmark healthcare legislation that has been hamstrung by delays, website outages and political backlash.

    (click to enlarge)

    The main website for enrolment under the signature healthcare law has drawn nearly two million visitors, officials said, in a last-minute rush to meet an ever-flexible deadline for people to obtain insurance coverage starting January 1.

    The problematic rollout of Obamacare, which met several legal hurdles since its passage in 2010, lowered Obama's popularity ratings and stepped up Republican efforts to gut the law and use it against the Democrats in 2014 Congress Elections.

    The more recent changes, which the administration has said, are intended to show flexibility, have introduced a new element of confusion for consumers as well as the health insurance companies that have been pressured by the government to allow new members to pay, and even sign up after January 1 for retroactive coverage. So far, the health insurance companies have agreed to extend the first payment deadline to January 10.

    This was the Obama administration's latest change of plan to move goalposts as it tries to recover from technical failures and political missteps that dogged the enrolment drive for weeks after it opened on October 1. Trying to make up for lost time, the administration has announced a series of last-minute changes and delays to get as many people as possible covered under the Affordable Care Act, Obama's major domestic policy initiative.

    Still, the US Department of Health and Human Services is likely to fall short of its goal to have 3.3 million people signed up by the end of 2013. Administration officials have said they remain optimistic they'll reach their goal of seven million by the end of the second enrolment deadline on March 31.

    Changing deadlines

    The deadlines in the Obamacare enrolment process have been a moving target. For those seeking coverage for the start of the New Year, the deadline to sign up was originally December 15. Then it was moved to December23 and then again to December 24. Even after that deadline passed on Tuesday night, the administration announced that those who ran into technical problems on could still seek an exemption and get covered by 1 January2014.

    Then came the next set of deadlines. After appeals from the Obama administration, major health insurers announced earlier this month that they would give people time until January 10,as opposed to December 31,to pay their first month's premium and gain coverage from1 January 2014.

    Obamacare is the name given to the Patient Protection and Affordable Care Act of 2010.The name was created by critics of President Obama's efforts to reform health care and it has stuck since .


    If You Already Have Insurance -

    All insurance plans must provide services in 10 essential benefits categories. In addition, those with pre-existing conditions can no longer be excluded (children in 2010,adults in 2014). Health insurance companies can no longer drop those who get sick. Parents can put their children, up to age 26, on their plans.

    If You Can't Afford Insurance - Medicaid will be extended to those who earn up to 133% of the Federal poverty level. That comes around$15,281 for individual or $31,321.50 for a family of four in 2013. The poverty level usually increases each year to keep up with inflation.

    However, not all states have elected to expand Medicaid, even though the Federal government will subsidize it. If you live in a state where you are eligible for Medicaid, but the state won't give you coverage,you won't have to pay the tax if you can't get insurance.

    Those who earn too much for Medicaid will receive tax credits if their income is below 400% of the poverty level. In 2013, that's $45,960 for an individual or $94,200 for a family of four. The credit is applied monthly, rather than as an annual tax rebate.

    If You Don't Get Insurance - If you don't enroll in a health insurance plan by the end of open enrolment (March 31, 2014) you won't be able to get insurance through the exchanges. You must have coverage for at least nine months in 2014 to avoid the tax.

    If not, the IRS will tax you 1% of adjusted gross income, but no less than $95 per adult/$47.50 per child in 2013. These taxes increase in2015 and 2016.

    If You Make More than $200,000 a Year - Taxes increased in 2013 for wealthy Americans, some health care providers, and other health-related businesses.

    If You're a Business Owner - The mandate to provide health insurance for your employees has been postponed to January 1, 2015. If you have 50 or fewer employees, you are eligible to look for better employee coverage on theSHOP exchange starting October 1, 2013

    Some more Facts

    The Affordable Care Act has created the National Prevention Council that coordinates all Federal health efforts to promote active, drug-free lifestyles. It funds scholarships and loans to double the number ofhealth care providers in five years. It cuts down on fraudulent doctor/supplier relationships. It also requires background checks of all nursing home staff to prevent abuse of seniors.

    However, many states running their own exchanges have their own deadlines for first payments.

    California's and Rhode Island's deadline is fixed at January 6 and Vermont's is January 7.

    In Idaho, Blue Cross, Bridgespan, and Select Health have extended their deadline to January 10. But Pacific Source extended its deadline to January 15. The deadlines in Washington DC also depend on the insurer.

    While Colorado, Connecticut, Hawaii, Massachusetts, Minnesota, and New York have stuck to the January 10 deadline, Maryland, Oregon, and Washington State have 15 January as their deadline for enrolling into Obamacare.

    There is a danger that people will misunderstand and think that their state or their exchange has extended it to January 10 when in fact, a lot of the state exchanges haven't done that.

    After the first set of deadlines, would-be enrollees still have until the end of March to get insurance, after which the federal government will begin to fine those without coverage.

    New exemptions out of Political Pressure

    The administration has carved out exemptions for certain people and businesses, including those whose plans were recently cancelled. The Healthcare Insurance industry has raised concerns about these changes, warning that these could cause confusion among the people.

    The Obama administration has made major last-minute policy shift on Thursday, stating that this changes would help people meet the fast coming deadline, to replace insurance plans cancelled due to new standards undertaken under Obamacare reforms.

    The Health and Human Services Secretary, Kathleen Sebelius, said that this group of people, estimated by the administration to be fewer than 500,000,will be allowed to claim a "hardship exemption" from the requirement in the 2010 Affordable Care Act to buy insurance.

    have the option to buy "catastrophic" insurance plans that are cheaper insurance with a minimal coverage level. Under the law, such insurance plans are normally available only to people under the age of 30.

    Changes galore!

    In July 2013, the White House announced a one-year delay in the "employer mandate" that requires businesses with more than 50 employees to provide coverage or pay a fine. Then, in November, it also offered a reprieve to small businesses, saying that these employers do not need to offer their workers online enrolment until 2015.

    The rollout of the signature policy has been embarrassing and politically damaging for President Obama, and has pushed Obama's approval ratings to the lowest point of his presidential term.

    The policy and Obama faced severe backlash when millions of people received notices for policy cancellation, Obama was forced to apologize on the promise he has made earlier, as per which people who liked their insurance policies could retain them under the Affordable Care Act reforms.

    More Facts-

    #1 - Where will you get health insurance?

    Insurance will be purchased through large employers, small employers,individual coverage, or public programs.

    #2 - If the Employer not offering coverage?

    Insurance can be purchased on the health insurance exchange. Policies will be standardized, so they will be easy to compare.

    #3 - Pricing

    Health issues will not be factored into health insurance premium. The price of insurance will be based on four factors:

    1. Age - older people are required to pay up to three times more premium than younger people.
    2. Rating area - people who live in high-cost health areas (Boston,Miami, Los Angeles) will pay more than people who live in low cost health areas ( suburban towns).
    3. Number of people in the family
    4. Tobacco use - tobacco users will pay up to 1.5 times more than non-tobacco users.

    #4 - Cost of Health Insure cost will increase?

    It will depend on your income, the state you live in, and if you currently have group or individual coverage.

    However, the exemption comes after a series of other delays in enforcing or implementing various parts of Obamacare, which instantly sparked more political criticism that the government was unevenly and unfairly applying the law.

    The Obama administration has been gearing up for the next phase of the rollout , where new challenges can be anticipated with coverage while newly insured Americans seek care at pharmacies and doctors' offices.

    Fire-fighting too late

    The White House has designed series of events to broadcast good things and figures achieved as they feel the feel - good factor has been lost amidst stories about the botched rollout.

    The administration released state- wise report showing how many Americans have already gained new protection from reforms, such as the numbers now prevented from being denied coverage because of pre-existing medical conditions. The information provides a "counter-narrative" for Congressional Democrats, who are anxious that a backlash against the law could hurt them in the 2014 elections.

    The Republicans have been vocal in their criticism about the law and have repeatedly voted against the law, shutting down the government for 16 days in October over the issue. They have vowed to continue to protest against the law. The only certain thing for the program has been its continued politicization, with Republicans and even some Democrats decrying it, and the administration working to improve and defend it.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Dec 30 6:54 AM | Link | Comment!
  • Bitcoin On Roller Coaster Ride!!

    Bitcoin on Roller Coaster Ride

    What a ride!

    Bitcoin's value fell sharply after the People's Bank of China decided to ban third-party payments of Bitcoin or any other cryptocurrency. But what has sounded the death knell for Bitcoin is when BTC China, the largest Bitcoin exchange, said that it would no longer accept deposits in Bitcoins.

    In recent times, Bitcoin has always found a way to remain in the news; it is seen to go through the usual ups and downs just as the protagonist changes.

    On one hand, it is the VC capital funding, sometimes the Winklevoss brothers who predicted that the price of one Bitcoin will reach $40,000, or financial institutions who are speculating on the regulatory implications if the currency goes mainstream, and most of all China, which is where the latest action is happening.

    The price for one Bitcoin on 19 November 2013 was $541 and it crossed $1,200 by end of November. It was hailed as a revolutionary financial and monetary tool and drew conclusion to be an alternative to gold (gosh!). After those heady days, Bitcoin's value is back to $522 on 18 December 2013. In its month-long rollercoaster ride, Bitcoin has fallen by 19 points or -3.85%, compared to the reliable S&P's gain of 0.62%. But that's not all; for the same period, S&P's annual volatility comes close to 9% while that of Bitcoin is more than 202%. You are free to choose your poison; however, a circular ride of more than 180% is not for the weak- hearted!

    Taking an example of how the volatility impacts the things you buy from it, to buy a Tesla car worth $100,000 in Bitcoins trading at 100 per dollar means that one needs 1,000 Bitcoins to buy the car. In just half an hour, while we convert dollars to Bitcoins, the price decreases to 80 per dollar. This means that one now needs 1,250 Bitcoins to buy the car. In the meantime, after a person purchases the car, the Bitcoin price increases to 110 per dollar. Hence, if the car would have been purchased an hour earlier, it would have required only 909 Bitcoins. As a result, the person loses 341 precious Bitcoins in an hour's time due to unfortunate timing. Time lottery sounds exciting?

    Who benefitted the most during this time?

    Was it China, which tried to show the world that it has the Midas touch? And after the move seemingly backfired when investors raised concerns on the legitimacy of its own currency?

    Or was it the speculators or the hoarders who fuelled the publicity of the digital currency to lure the common investor and make a killing out of it?

    And who was at the receiving end? We all know better.

    What's in store for the future?

    As we've earlier mentioned, Bitcoin seems more like an experiment rather than an alternative currency. Moreover, there are critical lessons to be learnt by banks, countries, speculators, consumers, regulators, governments, and believers in virtual currencies. Tomorrow, how hard those lessons would be, remains to be still seen. The ride is in full motion with some nasty bumps coming up ahead. Over to you Bitcoin!

    Tags: COIN, China bank
    Dec 21 11:25 PM | Link | Comment!
  • Is Bitcoin The Next Step Towards International Monetary System Evolution?

    Bitcoin's path to stability uncertain due to regulatory hurdles and speculation

    (click to enlarge)

    Bitcoin is perceived as a revolutionizing idea to the way digital currency works. The virtual money has gained public endorsements from the likes of Federal Reserve Chairman Ben Bernanke and Wall Street-listed banks. It also garnered speculative interest from China. The digital currency reached its crescendo when it crossed $1,200 on in late November , fuelled assumptions that Bitcoin could soon surpass the price of an ounce of gold. After the meteoric rise, came the great fall. Bitcoin has moved into a downward spiral since last week, shedding more than 50% of its value in a single day following a surprise move from China. The trend has continued with the price of Bitcoin taking another beating after rumors regarding China's ban on third party payments .Bitcoin was trading at $493.20 down by more than 31% at the time of reporting.

    Virtual currency decrypted

    Bitcoin is nothing but a decentralized virtual currency that uses a peer-to-peer consensus system to confirm and verify transactions. In January 2009, Satoshi Nakomoto (possibly a real person or a pseudonym for one or a group of programmers) invented Bitcoin, based on the concept of open-source cryptocurrency described by cryptographer Wei Dai in 1998. Nakomoto's innovation used math-heavy cryptography techniques to create a medium of exchange that doesn't require a central authority or physical tangibility (like gold) to deter counterfeiters and regulate the money supply.

    The process of obtaining new bitcoins is called mining, and those who devote their computing resources to the process are called miners. The rate at which the supply of bitcoins grows is hard-wired into the system. The total number of bitcoins is programmed to approach 21 million over time. The money supply is programmed to grow as a geometric series every 210,000 blocks roughly every four years; by 2013, 50% of the total Bitcoin supply will have been generated, and by 2017, 3/4 would be generated.

    Why the dollar when you have Bitcoin

    Bitcoins can serve as payment mode for products or services for a growing number of businesses. Firstly,one needs to convert US dollars into Bitcoins, Mt.Gox being the most commonly used one. With Bitcoins,one can anonymously purchase anything on the internet. The seller, the recipient of those Bitcoins, can anonymously sell anything, and then convert those Bitcoins back to US dollars. Buyers and sellers can only be tracked byconverting dollars into Bitcoins and vice versa. However, the actual transaction is theoretically impossible to track.

    Another major advantage is that users can create unlimitedBitcoin accounts without having to validate their true identity. Bitcoin account information is stored in digital wallets that can be downloaded as software on computers or smartphones; the wallets can be encrypted to keep their contents secure. Thewalletcontains private keys (or cryptographic signatures)and islinked to other Bitcoin account addresses of the users.

    The meteoric rise

    At the start of November 2013, one Bitcoin was worth about $213 on Japan-based Mt. Gox, the world's second-largest Bitcoin exchange. The Bitcoin value reached to the high of $1,242 on 29November 2013, making the overall value at more than $12 billion;this phenomenal rise was mostly triggered by gestures from financial authorities in the form of quasi endorsements.For instance, Bank of America Merrill Lynch started covering Bitcoin, stating in a research report that it could be useful in e-commerce and money transfers. One can buy anything with Bitcoin, even a Tesla Model S worth $103,000!

    And soon enough the bubble bursts

    The inevitable crash happened on 7 December, a few days after Wall Street embraced Bitcoin, with analysts from the Bank of America, Citigroup, and others showing the thumbs up. And what a crash that was! Overnight, following news that China's Baidu would follow the People's Bank ofChina (PBOC) diktat to halt acceptance of Bitcoin payment, Bitcoin's value tumbled from $1,155 to $576, a whopping 50% fall, before a dead cat bounce levitated the currency back to the $800 range. As for Bitcoin, all it would take is for another vocal institutional rejection to lower its value. The chart below shows the fall from $1,155 to $576 in hours.

    (click to enlarge)


    Role of China

    China's role in the rise and decline of Bitcoin is anything but clear, but it all started in October 2013 when Baidu,China's Google, started accepting Bitcoin as alternative mode of payment.The move was crucial as would not have come without the approval from the Beijing authorities.

    A year ago, China had nothing to do with Bitcoin. However, the situation changed with Chinese transactions in Bitcoin far out stripping euro transactions, with more than $60million in daily transaction as of November 2013.China now accounts for 62% of the global Bitcoin transaction volumes. The surge in demand recently led China-basedBTC China to overtake Mt. Gox as the world's the largest Bitcoin exchange by volume.

    Things changed dramatically in a matter of days. Just before Baidu banned music service payments, China's central bank brought the hammer down on Bitcoin. This news in combination of speculation sent Bitcoin's value falling below $900. There were reports coming from China that it has stopped third party payment for Bitcoin which added fuel to the fire.

    Why the sudden change in China's stance towards Bitcoin after taking it to dizzying heights and dropping it back like a hot potato?

    Security threats

    Since there are no limits on who can buy Bitcoins, the value of existing Bitcoins is now more than $12 billion, after a volatile surge increased the value by more than 1,000% over the last month. This rapid surge in demand has led to security threats for investors. In the recent past, more than 30 incidents have come to light where at least 1,000 Bitcoins or $1 million at the current rate of exchange, were stolen or transferred illegally. Bitcoin Internet Payment System (BIPS), the largest Bitcoin payment processor in Europe, said last month that its website was hacked. As a result, BIPS lost about $1 million worth of Bitcoins, includingthe ones that were in the personal online wallets of customers.

    Currency of the future?

    Bitcoin's recent meteoric rise in value and profile has put the spotlight on alternative currencies like AnonCoin to Zeuscoin, with around 44 being publicly traded. Like Bitcoins, most of these currencies are mined by computers solving hard mathematical problems. The "coins" do not exist physically, of course, as the currencies are virtual existing only as computer files.

    The fundamental question is whether the digital currency will eventually become a widely accepted means of exchange.Will businesses and individuals routinely be able to use Bitcoins to purchase goods and services? Can they store their savings in Bitcoins, not because they are betting on gains versus the dollar, but because they regard it as a safe and?

    On a final note, I can only opine that Bitcoin is more of an experiment than an alternative.It would, however,be an exaggeration to say that many people have gravitated toward this virtual currency. Bitcoin will have to overcome major hurdles before it goes mainstream.

    As earlier mentioned,digital currency alternatives are essentially based on the same technology.A time may come where a nation declares its own version of Bitcoin as a legal tender. Hence, even if the currency of the future looks like Bitcoin, it might end up being a distant successor of the pioneer. Bitcoin provides a window in tomorrow's world of finance, would it be Bitcoin itself? I don't think so.

    Dec 18 1:12 PM | Link | Comment!
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