The pushers of Obamacare had years to plan. Everything looked right on paper. No expense was spared. There were thousands of meetings, a foolproof plan, mountains of numbers to back it all up. Then finally you press the button. The whole thing explodes — and not just the website. The risk pools will not lower premiums. The mandates will not cause people to experience health-insurance bliss. The price controls will not control costs. The new tools for access will not lead to greater access. Science is glorious. But government is not science, and society cannot be managed scientifically from the center. Ludwig von Mises had a phrase he used to describe every attempt: “planned chaos.” There is a plan, and the experts are in charge with all resources and conviction. But the results are crazy, random, irrational, confusing, and chaotic. It would be the greatest legacy of the Affordable Care Act if the government finally understands this message.
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.
This past week saw the initial public offering of the single most anticipated IPO of 2013 - Twitter. If you tweeted about it then you are not alone as the news dominated the media headlines and the market. With Twitter already sporting a 11x price-to-sales ratio, and no earnings, what could possibly go wrong? However, it is that growing complacency among investors that should be the most concerning as the general sentiment has become that nothing can stop the markets as long as the Fed is in the game. This week's issue of things to ponder over the weekend provides some thoughts in this regard...
- Fed Anxiety Rises as QE Raises Risk of Loss With Political Cost (BBG)
- Iran Nuclear Deal Expected as Early as Friday (WSJ)
- Israel rejects mooted interim Iran nuclear deal, Kerry heads to talks (Reuters)
- JPMorgan Banker Backed $200 Million Madoff Loan in 2008 (BBG)
- Unleashing the food nazis - FDA Says Trans Fats Aren't Safe in Food (WSJ)
- Draghi Aggression Shows Pledges Backed by Rate Surprise (BBG)
- S&P Cuts France's Credit Rating by One Notch to Double-A (WSJ)
- S&P criticises France’s high tax rates for stifling growth (FT)
- Payroll Gains in U.S. Probably Cooled Amid Government Shutdown (BBG)
Has a second civil war been “gamed” by our government? And are Americans being swindled into fighting and killing each other while the banksters who created the mess observe at their leisure, waiting until the dust settles to return to the scene and collect their prize? Here are some examples of how both sides of the false left/right paradigm are being goaded into turning on each other.
When the U.S. economy dipped into an inflationary recession in 1969, the Keynesian paradigm could not explain that phenomenon. Given the fact that both the George W. Bush and Barack Obama administrations (not to mention Congress) have followed the Keynesian playbook, the sorry results should be enough to discredit Keynesianism, this time for good. Either a theory explains and predicts phenomena or it does not, and it should be clear that Keynesian theory has failed, but, alas, it seems that the Keynesian paradigm is more influential than ever. Here is a paradigm that claims there cannot be an inflationary recession, yet all of the recessions that have wracked the U.S. economy in recent decades have been inflationary. Alas, the academic “market test” really does not embrace the actual success or failure of a theory.
For the first time today, in addition to previous anecdotal evidence that the first several days of the Obamacare rollout (with 248 enrollees in the first two days) have been an abysmal failure, and the days since have fared no better, HHS Secretary Sebelius finally admitted to the Senate Finance Committee that over a month after the rollout of healthcare.gov, the enrollment figures have been "very low." Of course, being able to qualify the number didn't mean she could or would actually put it in numeric terms - it would have been simply too humiliating and may have forced her to finally do what so far nobody in the Obama administration has done: take responsibility for one after another failure (after all, for everything else, there's "Mr. Chairwoman getting to work") and resign. One thing, however, is certain, the "very low" number whatever it may be, is orders of magnitude below Obama's mission critical goal of enrolling 494,620 people in October, and another 706,600 for November.
Like Traders Already Manipulate Exchanges for Commodities, Carbon Credits, Derivatives, and Everything Else
Bit by bit, we’re learning more about President Obama’s broken promise that you can keep your health insurance if you like it, which was repeated at least two dozen times in recent years... Obama’s pledge was no different to, say, JPMorgan’s misrepresentations about the toxic mortgages it sold to unwitting investors. Fraudulent mortgage claims were surely discussed within JPM, just as Obama’s team debated the health insurance promise. Moreover, any internal concerns about the mortgage fraud were certainly squashed, just like the reservations expressed by Obama’s more truthful advisers. Simply put: Obama told a blatant lie, which he then continued to repeat. It’s not the first time he’s lied, but this was an absolute whopper.
The U.S. House just passed a bill called H.R. 992 - the Swaps Regulatory Improvement Act - that was literally written by mega-bank lobbyists. It repeals the laws passed in 2010 to prevent another meltdown like the one that crashed our economy in 2008. The repeal was co-sponsored by a former Goldman Sachs executive and passed with bipartisan support from some of the House’s largest recipients of Wall Street cash. It’s so appalling... so unbelievable... so blatantly corrupt... that you’ve got to see it to believe it...
- Investors are stampeding into initial public offerings at the fastest clip since the financial crisis (WSJ)
- Kerry hails disgruntled Saudi Arabia as important U.S. ally (Reuters)
- SAC Capital prepares for a second life (FT)
- BlackBerry's Fate Goes Down to the Wire (WSJ)
- Dutch Gamble on U.S. Housing Debt After Patience Wins (BBG)
- U.S. Wants Broad Divestitures From AMR, US Airways (WSJ)
- Tensions with allies rise, but U.S. sees improved China ties (Reuters)
- China berates foreign media for Tiananmen attack doubts (Reuters)
- China manufacturers squeezed as costs rise (FT)
- European Borders Tested as Money Is Moved to Shield Wealth (NYT)
- Zurich Probe Finds No ‘Undue Pressure’ Put on Late CFO (BBG)
“If you like your health care plan, you can keep your health care plan.”
These words, spoken by U.S. President Barack Obama in various forms and iterations, have become a running joke amidst the rollout of the Affordable Care Act. All across the country, hundreds of thousands of citizens are receiving cancellation notices in the mail. The stringent requirements for insurance plans under the new edict are curtailing many individual policies. A simpleton can grasp the economics: you prohibit something, it goes away. And yet, for years prior, the White House ignored the oncoming train and is now slowly inching away from the wreckage.
This was not the unforeseen consequence of good-intentioned legislation.
It is now clear why according to the Obama administration there were no glitches plaguing the Healthcare.gov website administering Obamacare: because a whopping six people managed to sign up on the first day it was launched - the same day the government proudly reported previously it had received 4.7 million unique visitors - a conversion factor of, well, Div/0. By the end of the second day: 248 happy participants in a socialized healthcare ponzi scheme. It is also clear why there was nobody happier than the president when the republican party decided to shut down government on the same day as Obamacare was rolled out: because if public attention had focused on the absolute and now confirmed, disaster that the healthcare law's rollout had been, then everyone, not just the Tea Party, would be demanding a substantial delay in Obamacare.
After a blistering October for stocks, drunk on yet another month of record liquidity by the cental planners, November's first overnight trading session has been quiet so far, with the highlight being the release of both official and HSBC China PMI data. The official manufacturing PMI rose to 51.4 in October from 51.1 in September. It managed to beat expectations of 51.2 and was also the highest reading in 18 months - since April 2012. October’s PMIs are historically lower than those for September, so the MoM uptick is considered a bit more impressive. The uptrend in October was also confirmed by the final HSBC manufacturing PMI which printed at 50.9 which is higher than the preliminary reading of 50.7 and September’s reading of 50.9. The Chinese data has helped put a floor on Asian equities overnight and S&P 500 futures are nudging higher (+0.15%). The key laggard are Japanese equities where the TOPIX (-1.1%) is weaker pressured by a number of industrials, ahead of a three day weekend. Electronics-maker Sony is down 12% after surprising the market with a profit downgrade with this impacting sentiment in Japanese equities.
Power, or perceived power, is a viciously addictive narcotic. It doesn't matter what political or philosophical background a person hails from, very few have the self discipline or the self awareness necessary to relinquish the trappings of power once they have tasted it. This truth applies to conservatives as much as it applies to liberals. The bottom line is, whether Obamacare is successfully implemented or not, whether the debt ceiling is raised again or not, whether the Left passes every agenda on its list or not, our system is broken and it is going to collapse. There is no way around it. More debt and more fiat printing means stagflationary collapse. Default and austerity means stagflationary collapse. If liberals want to place blame for this conundrum, then they should focus on the people who actually set the original fire – international and central bankers. Constitutional conservatives have been the only people attempting to inform the American public of the facts surrounding our current fiscal crisis.