70% Of Calfornia's Doctors Expected To Boycott Obamacare

We need some recognition that we’re doing a service to the community. But we can’t do it for free. And we can’t do it at a loss. No other business would do that,” exclaims the president of the California Medical Association, as The Washington Examiner reports, independent insurance brokers estimate 70% of California's 104,000 licensed doctors are boycotting the exchange. “The Covered California board says we have plenty of doctors, and they allege they have 85 percent of doctors participating, but they’ve shown no numbers," and if a large number of doctors either balk at participating in the exchange or retire, the state’s medical system could be overwhelmed. “Enrollment doesn’t mean access, because there aren’t enough doctors to take the low rates of Medicaid,” warns one health director. “There aren’t enough primary care physicians, period.”

Guest Post: Does the FDA Think You’re Stupid?

Does the FDA think you're too stupid to have access to your own genetic information? It sure seems so. On November 22, 2013, the FDA sent a warning letter to the well-known consumer genomics company 23andMe, ordering it to "immediately discontinue marketing" its only product. For those of you who are not familiar with 23andMe, the company provides a "DNA Spit Kit" and "Personal Genome Service" (PGS) that supposedly reports on 240+ health conditions and traits and helps clients track their ancestral lineage. 23andMe is information, not a medical device. This is really a first amendment issue, and the FDA should not be in the business of regulating freedom of speech and information.

Ex Greek FinMin Warns "Europe's North-South Divide Has Become A Time Bomb"

As the eurozone debt crisis has steadily widened the divide between Europe’s stronger northern economies and the weaker, more debt-laden economies in the south (with France a kind of no man’s land economy in between), one question is on everyone’s mind: Can Europe’s monetary union – indeed, the European Union itself – survive? Fiscal and financial measures aimed at strengthening eurozone governance have been inadequate to restore confidence in the euro. And Europe’s troubled economies have been slow to undertake structural reforms and by maintaining large trade surpluses, Germany is exporting unemployment and recession to its weaker neighbors. But how will Germany react when the north-south divide becomes large enough to threaten the euro’s survival? Two outcomes now seem possible. Europe’s north-south divide has become a time bomb lying at the foundations of the currency union.

Bitcoin Crashes, Loses Half Of Its Value In Two Days

It was inevitable that a few short days after Wall Street lovingly embraced Bitcoin as their own, with analysts from Bank of America, Citigroup and others, not to mention the peanut gallery vocally flipflopping on the currency after hating it at $200 only to love it at $1200 that Bitcoin... would promptly crash. And crash it did: overnight, following previously reported news that China's Baidu woild follow the PBOC in halting acceptance of Bitcoin payment, Bitcoin tumbled from a recent high of $1155 to an almost electronically destined "half-off" touching $576 hours ago, exactly 50% lower, on very heave volume, before a dead cat bounce levitated the currency back to the $800 range, where it may or may not stay much longer, especially if all those who jumped on the bandwagon at over $1000 on "get rich quick" hopes and dreams, only to see massive losses in their P&Ls. Which incidentally, like gold, is to be expected when one treats what is explicitly a currency, instead as an asset, with delusions of grandure that some greater fool will pay more for it tomorrow than it is worth today.

U.S. Military Changes Drone Rules To Make Targeting Of Civilians Easier

Despite President Obama's claims that drone strikes do little damage to civilian populations, in July we discovered that “of the 746 people killed in drone strikes in Pakistan from 2006-2009, an incredible 20% were civilians and 94 (13% of the total) were children.” We suppose that number just isn’t good enough, because, as The Washington Post reports, "The Pentagon has loosened its guidelines on avoiding civilian casualties during drone strikes, modifying instructions from requiring military personnel to “ensure” civilians are not targeted to encouraging service members to “avoid targeting” civilians." Can’t. Make. This. Stuff. Up.

Everything You Wanted To Know About Equity Market Valuations (And Didn't Know To Ask)

The stock market. Source of unknown riches - but not necessarily for investors. So-called "professional" investors offer to manage your money. However, their fees are based on the level of assets managed, not performance. Hence their goal is to maximize assets, not performance, and prey for markets to behave. You will never hear a bad word about stocks from a professional money manager. the by-laws of many mutual funds do not allow the manager to have cash levels above 5% of assets. He has to be invested at least 95% at all times. On one hand, it is probably right to force money managers to concentrate on stock picking, not market timing. On the other hand, this puts the onus of market timing onto the inidiviual investors. Lighthouse's Alex Gloy's excellent presentation below proves finance doesn't have to be complex (people make it complex). Gloy goes on to discuss the link between GDP and Profits, performance, valuation, inflation, and war and their effect on all markets.

Marc Faber: "Financial Crisis Don't Happen Accidentally, They Are Inevitable"

As a distant but interested observer of history and investment markets, Marc Faber is fascinated how major events that arose from longer-term trends are often explained by short-term causes.; and more often than not, bailouts (short-term fixes) create larger problems down the road, and that the authorities should use them only very rarely and with great caution. Faber sides with J.R. Hicks, who maintained that “really catastrophic depression” is likely to occur “when there is profound monetary instability — when the rot in the monetary system goes very deep”. Simply put, a financial crisis doesn’t happen accidentally, but follows after a prolonged period of excesses (expansionary monetary policies and/or fiscal policies leading to excessive credit growth and excessive speculation). The problem lies in timing the onset of the crisis.

Just Two Charts

"Earnings" matter... until they don't. What's wrong with these two charts?

Hugh Hendry Throws In The Bearish Towel: His Full Must-Read Letter

"Just be long. Pretty much anything. So here’s how I understand things now that I am no longer the last bear standing. You should buy equities if you believe many European banks and their sovereign paymasters are insolvent. You should buy shares if you put a higher probability than your peers on the odds of a European democracy rejecting the euro over the course of the next few years. You should be long risk assets if you believe China will have lowered its growth rate from 7% to nearer 5% over the course of the next two years. You should be long US equities if you are worried about the failure of Washington to address its fiscal deficits. And you should buy Japanese assets if you fear that Abenomics will fail to restore the fortunes of Japan (which it probably won’t). Hey this is easy… And then it crashed"

- Hugh Hendry

The Dark-Side Psychology Behind Holiday Madness

The winter holidays are traditionally supposed to embody a certain ideal of that which is best in the hearts of human beings. Unfortunately, this process has all but vanished today, twisted and mutilated into something sinister and poisonous. Those of us who pay attention are well aware of a trend of cultural decline within our nation, and this problem is disturbingly visible from Thanksgiving to Christmas. The idiocy and barbarism seems to span all economic “classes” - The dark side truly knows no social or financial bounds.

Guest Post: There Is Too Little Gold In The West

Western central banks have tried to shake off the constraints of gold for a long time, which have created enormous difficulties for them. They have generally succeeded in managing opinion in the developed nations but been demonstrably unsuccessful in the lesser-developed world, particularly in Asia. It is the growing wealth earned by these nations that has fuelled demand for gold since the late 1960s. There is precious little bullion left in the West today to supply rapidly increasing Asian demand, and it is important to understand how little there is and the dangers this poses for financial stability.

700 Years of Government Bond Yields

With the world almost in total agreement that rates can only go up, that the 30-year bull market in rates is over and a return to "normal" rates is timely, perhaps a glance at the following chart of 700 years of government bond yields will enlighten a little as to where the anomalies and what the "normal" is. All too often investors are caught up in their cognitive dissonance-driving recency bias when a bigger picture may just help those who always proclaim to invest for the long-term.

Shanghai's Record Pollution Is Creeping Inside Buildings

As we noted earlier, pollution in Shanghai has reached record levels causing the government to ban cars and cut production across factories. The images below are not photoshopped or edited... this is the day--to-day life in that bustling city looks like... and in case you thought moving inside was 'safe', "the fog" is creeping into the buildings too now... All we are waiting for now is the rotting corpses of over-capacity Chinese industries to come out of the dark...

6 Things To Ponder: Bulls, Bears, Valuations & Stupidity

With just a tad more than three weeks left in the year it is time to start focusing on what 2014 will likely bring.  Of course, what really happens over the next twelve months is likely to be far different than what is currently expected but issuing prognostications, making conjectures and telling fortunes has always kept business brisk on Wall Street.

Last Ditch Buying Frenzy Fails To Make It 9 Weeks In A Row Of Gains

Despite every effort to sell as much JPY as possible to lift stocks and create the best run for the S&P since 2004, the algos failed (by pennies) but with solid gains nevertheless just to disprove all the good news is bad news believers - for now. While the NASDAQ managed a green close on the week (though underperformed today), stocks couldn't quite make it all back today but broke the 5-day losing streak. Treasuries ended the day unchanged and 10-13bps higher on the week. The USD dollar lost considerable ground this week (-0.5%) but it was safe-haven Swissy that stood out as the last 4 days are the best run in 5 months. Gold and Silver ended the week -2% or so and despite the intraday swings relatively flat today. All-in-all, stocks and JPY carry were in charge today as bonds and commodities were not playing at all. VIX dropped the most in 2 months back under 14% as the front-end drop removed the inversion.


Hindenburg Omen Spotted

While not the end-of-the-world that its name indicates, the confusion (highs, lows, advancers, decliners, and momentum) required to create a "Hindenburg Omen" means markets are not as gung-ho as the headlines might suggest. The last 2 Hindenburg Omens this year saw notable corrections (of course only to be un-corrected higher on the waves of liquidity).