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Playing The Massachusetts Special Senate Election
With all eyes glued on Massachusetts' special Senate election, whose outcome will have direct and indirect repercussions on both narrow and broad economic policy, the one most immediate impact will likely be on healthcare stocks, due to the potential gridlock that would result in healthcare reform. Goldman notes that should the surprise Republican win occur, as is now broadly expected, the sectors that benefit the most in the short-term will be managed-care and large-cap pharma, hospital stocks would be "under pressure" while general volatility would increase in the healthcare sector.
From Goldman:
Implications from Massachusetts for Healthcare Investors
Our research team notes that a Republican Senate win would increase the odds that healthcare reform efforts are thwarted, with managed care stocks likely to rally the most, followed by large-cap pharma. Within managed care, HUM, HS and UAM would likely see the strongest potential upside. By contrast, hospital stocks might come under pressure, as these companies have been broadly viewed as “net winners” under reform.
And a broader comment from Goldman's Asad Haider:
Today, healthcare investors will be paying close attention to the Senate vote in Massachusetts, into which there has been some building expectation over the weekend that a Republican victory would serve as a positive catalyst for healthcare stocks. Some are drawing a comparison to the gubernatorial elections in New Jersey last November, which were an important (positive) inflection point for healthcare sentiment. The set-up however, is different this time. Since early November, the HMO Index has rallied about 35% (vs. an 8% move in the broader market), and the group leads in 2010 year-to-date outperformance. Additionally, on a three-month basis—going back to roughly around the time of the NJ election—healthcare has become the best-performing sector in the S&P, up 10% vs. a 4% move in the S&P 500. In fact, some hedge-funds seem to acting on a belief that subsectors within healthcare—HMO’s in particular— have moved too far too fast. The latest short interest data released by NASDAQ last week shows an uptick in short interest for managed care stocks in the second half of December, with AET, WLP and UNH showing the greatest sequential increases (although the selloff in WLP last week on disappointing 2010 guidance was likely met by some covering.) Even so, our sense is that generalists are partly waiting for the final reform headlines to get out of the way before wading further into managed care and pharma. Moreover, as near-term uncertainty builds in other sectors such as financials post JPM’s 4Q results last week, bulls argue that the removal of more reform uncertainty from healthcare with a Republican upset today could unleash incremental long-only buying—and potentially more covering in HMOs—leading to continued upside in the group, despite the recent rally. On the flip side, some say that areas where sentiment is deteriorating, such as the PBMs, where generalists have been hiding, and parts of large-cap medtech, where we continue to field questions, could get sold on strength.
The broader implications of Senatorial gridlock for U.S. finance and economics will be digested in due course.
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The election in MA is over...Obama lost
"BOSTON --With 24 hours to go before Massachusetts' special election for a U.S. Senate seat, an Irish bookie already has paid off bettors who wagered that state Sen. Scott Brown, a conservative Republican, would win the seat held for nearly 50 years by liberal Democratic icon Edward M. Kennedy.
'Enough is enough. It seems that Senator Brown just has to get out of bed tomorrow to win convincingly. As far as were concerned, this race is well and truly over,' said Paddy Power, Irelands largest bookmaker.
Before shutting down the betting, Mr. Brown had gone from 5-4 odds to 1-5 (meaning if a bettors put down $5, they only stood to make $1 if Mr. Brown wins). The odds against his opponent -- Democrat Martha Coakley, the state's attorney general -- soared, from 4-7 to win to 3-1 to lose."
http://www.washingtontimes.com/news/2010/jan/18/irish-bookie-pays-brown-...
Paddy probably never heard of Dewey and the
Big D machine. Jim Cramer and Goldman Sachs
think a Brown win is bullish for drug and
healthcare stocks. That's all we need to know
to fade the trade...
http://www.jubileeprosperity.com/
It is very naive to believe that a Brown victory will "kill" healthcare. The democrats have a number of alternative measures procedurally to shove this down the throat of Americans.
The Dems have spent too much time this past year not to pass something.
Any rally tomorrow in drug or HMO stocks after a Brown victory tonight is a shorting opportunity.
i think you are absolutely correct pbmatthews.
i see the riverboaters are all over the health stocks this a.m. ought to be interesting to see those positions get vaporized later today into the close.
I'm so not amazed anymore that the representatives would actually consider a ping-pong on that Senate bill. They don't give a rip about the electorate anyway. In this case, they would be pissing all over their REAL constituency - the Unions and their opposition to getting their so-called "Cadillac Plans" taxed heavily. That will be what costs them 2010.
Nothing like a thug Union payback!
Obama already agreed to take care of the unions on the "cadillac plan tax".
Kleptocracy at its finest.
The claim that the Health Care Bill is dead if Scott Brown wins is another scare tactic from the "climate alarmist crowd" to get the democrats to vote for Coakley
The French Constitutional Council ruled that the carbon tax was illegal because of the exemptions.
Maybe HR 3962 sould be challenged on the same basis..
I agree about the other measures that can be taken on the healthcare bill. Though if they do it will be quite the shock to system I think. There seems to be no care by politicians on what the people they are supposed to represent think.
It seems you're right, even the banker megaphone (CNBC) mentioned that there's a possibility that congress can then vote to approve the senate version. I'm not sure on the accuracy of whether that's possible since I'm no legal expert, but that's crazy interesting.
Honestly, I don't see the complaint other than the bill is a waste of money, right now as I understand it, there's no public option and even if I'm unemployed I'm legally required to get healthcare insurance..... what's up with that? I'll be reading this board quite a bit as this topic is #1 imho.
why bother with a bicameral legislature? why not appoint Hopey as our fuhrer (he seems to have appointed himself).
We force democracy at gunpoint all over the world, but set example after example that democracy does not guarantee that the will of the people (other than unions and bankers) will be considered.
I've been around Mass politics for years, and if this thing is close, you'll see many votes for Brown floating down the Charles River, never to be seen again..
Victory Dems,,,,again
Just another opportunity for THC to be my little whore. In and out hard and fast.
Yes ... but do the Democrats have the ball to go against the electorate?
Surely they know that if they push this through that they are indeed through.
BTW: This isn't a Republicans' win ... it's the rising of the Independent
You are correct about the independent's swing..they gave O the win and now are experiencing buyers remorse...
O's base of leftist progressives are small potatoes..to survive the next election he has already thrown them overboard...
+Don't Tread On Me
Nothing will change--they all swap spit.
well said
or worse.
If Brown wins the earthquake wins.
I agree Arkansas !! Massachusetts is 53 % Independent (smart folks) indeed !! Its time for all of America to go independent as the Dem / Rep paradigm is a failing.....
Watch out for vote-fraud. That nine point lead can be made to disappear.
Remember that if the Democrats do it in a Liberal cause, its not fraud [/sarcasm]
Bingo! Diebold will make sure the correct party wins.
And to the other commenters - what makes you think a politician on one side or the other would actually keep his/her word once elected? The odds against that are tremendous.
Agreed. If they make it a democrat victory and quickly vote Healthcare in before the recount - they would *never* reverse the healthcare bill when the vote is resolved. Let's see if it comes to that.
Bingo.
Health care stocks rallied the day after the cloture motion passed. Just sayin'.
How does Brown winning, which ostensibly kills a plan to force everyone to buy private healthcare kill negative affect the stocks of those private companies?
Because the bill is a payoff in its current form to big Pharma but if they can't pass it... Pharma doesn't get the current payoff and all that stock rallying based on the bill is in essence lost. Mind you, it will be salvaged but it just won't be as juicy as it once was.
but health stocks are rallying today with consensus building that it will be a Brown victory as in no health care. I have heard that big pharma, health care, ins etc secretly support health care - so shouldn't they be declining today?
The White House's announcement yesterday that it will schedule its State of the Union address for next Wednesday, January 27th, an earlier date than most insiders expected, is surely not coincidental and reflects a desire to pressure the House into voting for the Senate's version of the health care bill almost immediately, assuming that Scott Brown defeats Martha Coakley in Massachusetts tonight.
http://www.fivethirtyeight.com/2010/01/white-house-to-gamble-on-high-speed.html
Is it possible, sure. Is it probable given the Union objections, the Blue Dog objections, the abortion funding objections, not to mention the writing on the wall with Brown for what happens in a state (blue no less) where the electorate are sick of the crap. Did I mention that Pelosi had a hard enough time keeping the margin to single digits last time.
Probability of them pulling it off is as low as the probability of us seeing the US becoming deficit neutral in less than a year.
Pelosi has lots of votes. Those "close" votes in the House are closely calculated to let moderates and Blue Dogs vote against so that they can claim to be with their constituents. Kabuki.
They'll delay his swearing if he wins. Welcome to the USSA
Moot point - the seat is considered vacant / lame duck by tomorrow. They'll sit at 59.
I posted this on another thread, but it may pertain here as well. There's only one thing we need to know: when will the money printing end? Actually, an even more critical point in time is that first incipient movement which eventually concludes with termination of QE.
What is the tell? IMHO, it's the election taking place today in NE. Forget health care. While certainty a significant issue, the much bigger element is the budding resistance to illegal Treserve actions. This will only grow and likely become the one overriding issue in Nov '10.
The antics of the last 9 mos have been like one, long interminable intermission. Until March '09, the market was doing its thang engaging in price discovery, risk discounting, etc. And then the Treserv had to get involved. Yawn. Wake me when it's over.
We have a rendezvous with history; she is getting impatient. The debt-deflation tsunami is yearning to break free from its political bounds. Let it run free! Because when it is finally freed, it will sweep clean the entire state apparatus that has enslaved us, the children of the original revolution.
This issue is big in how it reflects on the big picture. Obama is feeling the heat and it's nice to see the electorate reminding him who he's supposed to be representing.
That is so poetic! And to think, I only get pissed off about the cops enforcing 35mph speed limits on 4-lane roads that should be 55mph. The whole mess the Boomers have created needs to get torn down, right along with all the old wallpaper in the former homes.
Or a better question to ask is what does this do to the impending debt ceiling debate. Inquiring minds want to know...
http://www.zerohedge.com/article/democrats-pass-temporary-debt-ceiling-extension-no-vote-error-margin
and you can put a fork in cap and trade too.
Is there any representative that has actually submitted a plan that will tackle the issues with health care so that it doesn't consume more and more of our GDP? The Democrat plan sucks, but the Republican plan seems to be non existent. Where is the plan to increase competition? Let me buy insurance across state lines? Let us get drugs from Canada? Cap malpractice lawsuits? Limit Medicare payouts for the extremely infirm? Sorry but 3 more months of keeping you alive is not worth $500,000 in tax dollars.
At this point non-existent is better than existing ANYTHING.
Just do three things and wait three years to see what happens:
1. Revoke insurance company anti-trust exemption
2. Allow competition across state lines
3. Tort reform
Won't cost the government anything to do such. Except potentially lose an opportunity to be more in control of our economy and personal lives -- which is what they really crave (and to show they are "doing something bold" and elevate their stature) to dimwit voters.
Also, cititzens can voluntarily limit their health care spending, but it seems everyone desires not only healthcare, but state-of-the-art healthcare which, fortunately or unfortunately, keeps improving which translates into costs going up to pay for medical advances.
If you would not use CAT scans or MRIs and just use xrays and avoid any drugs that were developed in say the last ten years, costs drop dramatically. If you agreed to older technology and drugs, medical cost would likely show little cost increase. But you can not insist on receiving increasing quality medical care and technology and then complain about costs. When talking about today's cost of healthcare and 2000's cost of healthcare you are comparing apples and oranges to a degree. But the sheeple and their government just want to rant against Big Insurance, Big Pharma, etc because they want their cake and eat it too.
It will be interesting to see how the 4th district (Barney Franks's) votes today.
Maybe there's hope that the good people of Massachusetts will wise up, and send Barney packing in November.
If only...
oh uncle barney (scrooge) almost forgot bout im
You Americans are all so damned STUPID ! Rather than adopting universal health care (with a strong public option), something that all modern Western countries have had for decades, you prefer to let 30 Million people uncovered and profit making corporations get even richer and more powerful. Keep on spending your damned money in weapons, that's all you deserve.
Right now, the Health Industry Execs make their bonuses by insuring that people die. How else do you expect them to get paid?
When Medicare was being debated back in the 60s, its proponents said that its passage would lower the overall cost of healthcare for everyone else. That's obviously been shown false, yet the "universal health care" advocates are claiming the same damn thing.
And the "30 million uncovered" amount changes constantly depending on who has a point to make, so that can't even be trusted.
It's easy to be compassionate with other people's money. Just ask the banksters.
I stopped reading at "profit making corporations." Corporations are supposed to make a profit, dumbass. The problem with healthcare is all the "one less pickle in the jar" MBAs.
Wow - "modern."
Please do not call us (or any other country) when you get attacked. Nor use any of our medical facilities or technologies when you are sick. Hate for you to support our "profit making" corporations (presumably vs money losing government??).
Thanks.
I don't understand why a company like GS does research when they manipulate the market on an nano-second basis.
Exactly. Sadistic bastards.
+1
It's like taxes in a system with a monetary priniting press; voting under an authortarian form of government: you have to maintain apprearances, or the proles start to get restless.
So logically you support larger bonuses at GS because then they would have less capital to manipulate the market??
Well, here's my completely unscientific sample. I stood-out for Brown this morning from 7-8. In the snow. Not a Coakley supporter to be found at my polling station (odd, very odd). Now, the last time I did that was 2004 - and the ratio of getting flipped-off to thumbs-up ran about 10:1.
Today it ran about 5:1, only opposite (thumbs-up to flipped-off) - and yes, it's entirely Indie voters tossing Obama and the MA Dems under the bus (I guess the indictment of the 3rd straight speaker of the house on fraud-type charges was finally too much).
Like I said, just an on-the-ground anecdote. Oh, and the weather is wicked crappy today. Factor that into your vote turnout calculations.
The margin-of-cheating is probably a whole lot less than people think as this is a special election, the only game in town, and the MA Dems haven't had a real race in about 8-years and are probably rusty at covering their tracks. Any margin for Brown larger than, say, 2.5% is probably completely beyond them even trying it. That would be something like 50k-60k votes - I'm as cynical as the next guy but I think it would be tough to make that many votes appear like magic somewhere without someone noticing it.
Thanks for the "boots on the ground" report!
Considering our country's track record in holding elections, I think not! Who else remembers the 2000 George Bush fiasco? Remember we are talking about the biggest criminal enterprise in human history - the US Govt.
Al Franken, 'nuff said.
Like you said totally unscientific. And which town? Makes a big difference. Also factor in that there is lot of woman support for Coakley and they usually are not the first thing in the morning to vote. They have the whole day and take their time to go to the polling booth.
Dem machine did a great job past few days in getting lots of lazy asses out there to vote. I know couple of people who didn't plan on voting, did go out and vote for Martha.
Media still haven't learned their lesson regarding NE. Mark my words Coakley will win handsomely.
Words marked. From now on Anonymous, your name is mud.
"send Barney packing in November"
November? Odds are good he was "packing" just last night. Or, he was getting packed. Not that there's anything wrong with that.
While I am happy to see the Democrat "We are change," crowd getting egg on their face; I'm disappointed to see a Republican taking office.
(If that's the way it works out of course.)
As someone noted above, none of this matters to us the US people.
Neither the Republicans nor the Democrats represent, or care about, the good, or the will, of the electorate. Nope our beloved two party system has been purchased.
No more Democrats. No more Republicans. Legalized corruption cannot be tolerated any longer.
Move your money? Yeah that's good, but how about, "Move your vote."
There are good third parties out there no matter which way your politics lean.
I'm a conservative on some issues, and liberal on others, but mostly I'm for an open, honest, accountable, and functioning Republic.
This is me being postive btw, our country is doomed. We are right now in our death throes. The best case scenario is something akin to the Soviet meltdown.
Mysterious Death of Mike Connell—Karl Rove’s Election Thief
*Look it up. Do some research for yourself.
Democracy, voting... lol
Welcome to the other side.
-Enough Said
Brown could be worked out like Coleman. Recount until you find all the votes for your candidate, then when the nation isn't looking anymore, send in the clown.
Of they could refuse to confirm him.
incumbents out...even if there not in.... the political pandemic stops with the people taking back their country.
The Health care industry has purchased congress to give us a watered down, weak health care bill. Their stocks are up +5% today on the hope there won't even be a bill with the election of Brown.
Who has allowed this purchase of congress? The U.S. Supreme Court! By giving corporations "personhood" in a fraudulent decision regarding Santa Clara county vs. Southern Pacific RR and the decision to equate money to free speech has allowed corporations to subvert the political process for their own gain.
Now Scalia and his fellow scallawags on the court are set to take all the limits off of political spending by corporations and let the corporate money shower rain down on politicians which will lead the country to pure and unfettered Fascism!
The Supreme court has ruined this country. Why do they get a free pass? Why doesn't the media go after them? Where is the check on their power? Remember who gave you Dubya?
Good points ,,all
I remember just before Irwin Schiff was thrown in the hoosegow he was writing a book about the farce that is the SJC
Has nobody else noticed that HMO stocks have been rallying for months, just as Obamacare has gained momentum? They have in fact very much outperformed the overall market since House passage and spiked right before, during and after Senate passage. Pharma stocks are near all time highs.
How did this like that healthcare companies were somehow hurting over this become consensus? A simple stock chart shows the exact opposite.
All day today I read in the news that a Brown victory would be good for healthcare stocks because Obamacare was bad. Does nobody look at stock charts or prices anymore before spewing this nonsense?
With Brown's election tonight, I now give Obamacare a 40 percent chance of passage. The people of the United States have signaled this is not what they wanted; this isn't why Obama was elected. This vote should restore some confidence in the power of the people.
The people of have been signaling they do not want Obamacare bill for MONTHS. Tonight was the first time they took a poll they changed a seat in Congress. Democrats are tone deaf on this. They just want to control a bigger part of the economy and our lives -- power baby.
Would it be overly paranoid of me to wonder if the Democrats didn't just realize (from internal polling and the recent races in Virginia / New Jersey) that they were going to get a nuclear-sized boot out the door as a result of their current legislation plans, and that they could not reverse course and save face / appease their grass-roots support? Quite the tough spot. But isn't it convenient that Coakley ran such a poor campaign (according to the media) and lost? Now they can blame failure to pass health care / cap&trade etc. on the opposition, and hope everyone forgets about it by November (maybe with the help of a manufactured crisis or two...).
Or maybe the powers-that-be realized that the masses were getting a bit twitchy and threw them a bone to settle them down a bit. There, see, you DO have a voice in what is happening. As if there really WAS a difference between the two parties. Much better to have a small delay in the master plan than let the unwashed get any ideas...
Ok, maybe I DO need to step away from the hookah...
I have the same theory percolating in the back of my brain...
It's possible that the Democrats know they can't pass this piece of "Bloatware" and need an excuse for the failure. With Scott Brown winning they can now blame the failure to pass "Healthcare" on the Republicans.
I think there is something here that needs to be watched closely...