As the New Year brings the actual implementation of Obamacare, it appears in reality things are not as great as many were promised. A recent Gallup survey found that only 7% called their Obamacare experience "very positive" with a stunning 29% seeing it "very negative." But as The Daily Mail found, from Northern Virginia hospitals turning away sick people because they can't determine whether their Obamacare insurance plans are in effect to high deductibles and long waits for authorizations; as many as one-third of the administration's claimed 2.1 million enrollees remain unsure of their coverage. The 'lie of the year' in 2013 may be even bigger in 2014.
In America today, there are close to 50 million people living in poverty and there are more than 100 million people that get money from the federal government every month. As the middle class disintegrates, poverty is climbing to unprecedented levels. Even though the stock market has been setting record high after record high, the amount of anger and frustration boiling just under the surface in our nation grows with each passing day. And now extended unemployment benefits have been cut off for 1.3 million unemployed Americans, and it is being projected that a total of 5 million unemployed Americans will lose their benefits by the end of 2014. In addition, 47 million Americans recently had their food stamp benefits reduced. The conditions for a "perfect storm" are certainly being created. So how much longer will it be until we see all of this anger and frustration boil over in the streets of our major cities? Is America about to reach a breaking point?
During 2013, America continued to steadily march down a self-destructive path toward oblivion. As a society, our debt levels are completely and totally out of control. Our financial system has been transformed into the largest casino on the entire planet and our big banks are behaving even more recklessly than they did just before the last financial crisis. We continue to see thousands of businesses and millions of jobs get shipped out of the United States, and the middle class is being absolutely eviscerated. Due to the lack of decent jobs, poverty is absolutely exploding. Government dependence is at an all-time high and crime is rising. Evidence of social and moral decay is seemingly everywhere, and our government appears to be going insane. If we are going to have any hope of solving these problems, the American people need to take a long, hard look in the mirror and finally admit how bad things have actually become.
Despite rumors of a 'deal', "The major issues that we think are necessary to jump-start the American economy continue to languish," reflects one lobbyist on what Bloomberg reports will be Congress's least productive year ever, with just 56 pieces of legislation signed into law so far. The former record low, reached in 1995, was 88 new laws. 2013 was supposed to be the year lawmakers, free of immediate election pressures, would revamp U.S. immigration policy, pass a debt-lowering budget and expedite a pair of trade deals. Instead, partisan rancor grew deeper; and to make matters worse, the politicians took plenty of time off - the House has been out 191 days, and the Senate 199 days.
The U.S. holiday shopping season traditionally begins on Black Friday, the day after Thanksgiving, with alluring sales and promotions. On the day the ultimate discounter, Wal-Mart's CEO resigns, as Bloomberg's Rich Yamarone notes, the most agreed-upon take so far is that sales will be difficult amid a deteriorating economy - every major retailer in the Bloomberg Orange Book has made mention of the competitive market for the consumer’s dwindling dollar. Target Corp. CEO Gregg Steinhafel said, “it’s clear that the holiday season will be highly promotional and that consumers will be laser-focused on value.”
As H.L. Mencken opined, 'The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, and intolerable.' It is no wonder that, according to a Gallup Poll conducted in early October, a record-low 14% of Americans thought that the country was headed in the right direction, down from 30% in September. That's the biggest single-month drop in the poll since the shutdown of 1990. Some 78% think the country is on the wrong track. Simply put, Faber explains, it is most unlikely that US economic growth will surprise on the upside in the next few years. It is more likely there will be negative surprises.
It seems, as Jim Quinn notes, the 99% are not cooperating with the 1% plan for economic recovery. As Gallup reports, average Americans plan on spending 10% less for Christmas gifts this year than last year. Not only that, but they are spending 19% less than they spent in 2007 and 18% less than they spent in 1999. The average American is spending less because they have less as the talking heads on CNBC and the rest of the MSM tell me that things are great. Opening stores on Thanksgiving will not save anyone and perhaps more critically, the last 2 times the November forecast for holiday spending slumped - the US entered recession!
When one steps back from all the frustration, all the confusion, all the failures both in the rollout and the mass behavioral experimentation, and the fact that the math just doesn't work, the primary stated purpose behind Obamacare was simple: to provide uniform, affordable (the A in ACA) healthcare for all Americans. But especially to those who are currently uninsured. At least such was the utopian, egalitarian vision behind its conception. Which is also why, stripping away the political posturing, the html coding errors, the funding issues, the biggest failing of Obamacare would be if it opened, and none of America's uninsured came. Sadly, this last nail in Obamacare's coffin, has just been confirmed with a just released Gallup poll which found that a tiny 18% of uninsured Americans - the primary target population for the exchanges - have so far attempted to even visit an exchange website.
Whether it is the conference board, Gallup, Bloomberg, or pretty much any other measure of the economic confidence or consumer comfort in the US, the numbers have been falling (or plunging) despite the incessant rise of US equities. The reason this is of particular note, as we have discussed previously, is that this pattern of exuberant highs in stocks with fading confidence-inspiration has ominous overtones for future performance... (especially for those hoping for moar multiple expansion). The UMich data this morning merely confirms the trend with the lowest print since Dec 2011 (3 misses in a row). This is the biggest miss since Feb 2006!
Obesity rates have increased at least slightly so far in 2013 across almost all major demographic and socioeconomic groups, according to Gallup's latest study. The largest upticks between 2012 and 2013 were among those aged 45 to 64 and those who earn between $30,000 and $74,999 annually - which 'coincidentally' is perfectly in the cohort that is 'disincentized' to work by the growing shadow of bought votes and entitlements. So, the question then becomes, is the considerable spike in 2013 that is so evident below the "peak" in obesity rates as the government is forced to introduce more haircuts on its foodstamp program? Time will tell...
Recent surveys and research studies by sources from the UN to streetRx.com put the size of the illegal drug market in the U.S. at anywhere from $200 to $750 billion. The market is notoriously hard to track by design, and it is constantly evolving as prices and usage fluctuates; but as ConvergEx's Nick Colas notes, there’s a plethora of data on the topic: formal surveys by the CDC and user-submitted blog posted on websites like Hightimes.com trace price, usage, and traffic stats for marijuana, powder and crack cocaine, d-methamphetamine, and heroin. Legalized dispensaries now allow us to estimate potential tax revenue from marijuana sales, while incarceration rates for drug offenders reveal the economic impact of the illegal drug trade. In short, while the illegal drug market might be hard to track – if only by virtue of its illegality – Colas points out that we can learn a lot about its size and scope by aggregating these formal and informal data. Most surprising of them all: illicit drug use is no longer the realm of just the youth.
Following the lowest UMich confidence print in 2013, Gallup's economic confidence collapse, and Bloomberg's index of consumer comfort signaling major concerns among rich and poor in this country (in spite of record highs in stocks), today's Conference Board Consumer Confidence data continues to confirm a problem for all those 'hoping' for moar multiple expansion. From 80.2 in September, confidence collapsed to 71.2 (the largest MoM drop in 2 years) to its lowest in six months, and notably below expectations. As we have noted in the past a 10 point drop in confidence has historically led to a 2x multiple compression in stocks (which suggests the Fed will need to un-Taper some more to keep the dream alive). Hope for the future dropped to 7-month lows but what is perhaps most intriguiging, just as with the Bloomberg surveys, we are seeing the wealthiest cohorts confidence plunging (even as stocks soar to new highs). It would appear the Fed has lost its wealth effect inpiration.
Did you know that the number of Americans on welfare is higher than the number of Americans that have full-time jobs? Did you know that 1.2 million public school students in the U.S. are currently homeless? Anyone that uses the term "economic recovery" to describe what is happening in the United States today is being deeply insulting to the nearly 150 million Americans that are considered to be either "poor" or "low income" at this point. Yes, things are great in New York City, Washington D.C. and San Francisco, but almost everywhere else economic conditions continue to steadily get worse. The gap between the wealthy and the poor is at a level that America has never seen before, and this is beginning to create a "Robin Hood mentality" that could cause a tremendous amount of social chaos in the years ahead. Despite unprecedented borrowing by the federal government in recent years, and despite unprecedented money printing by the Federal Reserve, poverty in the United States keeps getting worse with each passing year. The following are 29 incredible facts which prove that poverty in America is absolutely exploding
All bets are off.
Following record UMich misses, Gallup's economic confidence collapse, the slump in the conference board's measure of confidence, and Bloomberg's index of consumer comfort signaling major concerns among rich and poor in this country (in spite of record highs in stocks), today's Consumer Confidence data from UMich continues to confirm a problem for all those 'hoping' for moar multiple expansion. Falling for the 3rd month in a row, and missing expectations for the 2nd month in a row, this is the lowest confidence print in 2013. Perhaps even more worrisome for the 'hope and change' crowd is that the 12-month economic outlook has collapsed to its lowest since Nov 2011. It would seem that all that free money flooding our 'markets' has reached peak efficacy in terms of confidence inspiration, and as Citi notes, when this cycle has played out in the past, equity market corrections are often quick to follow...