Obamacare

Now that Q2 is not shaping up to be much better than Q1, other, mostly climatic, excuses have arisen: such as El Nino, the California drought, and even suggestions that, gasp, as a result of the Fed's endless meddling in the economy, the terminal growth rate of the world has been permanently lowered to 2% or lower. What is sadder for economists, even formerly respectable ones, is that overnight it was none other than Tyler Cowen who, writing in the New York Times, came up with yet another theory to explain the "continuing slowness of economic growth in high-income economies." In his own words: "An additional explanation of slow growth is now receiving attention, however. It is the persistence and expectation of peace." That's right - blame it on the lack of war!

Remember when we reported that if it wasn't for Obamacare, the US economy would have contracted not by 1% as per the revised GDP estimate but by 2%. Guess what: according to the latest spending data, the BEA massively overestimated spending on medical care services, which it had pegged at a whopping +9.7% SAAR, while according to the latest Quarterly Services Survey, the increase was actually a decrease of 5.8% SAAR! End result: one after another bank today has sprung to revise their GDP data downward, by about half a percentage point, and here is JPM, cutting its Q1 GDP from -1.1% to -1.6%, which if realized will be the worst collapse in US economic growth since the recession.

In President Obama's speeches this year, a steady theme has been creating jobs and economic opportunity for Americans. Yet during the more than five years Mr. Obama has been in office, young people have been especially hard-hit by the slow and virtually jobless recovery. On a deeply human level, it's profoundly sad. The message to Obama - "The bottom line on labor: Make something less expensive and businesses will use more of it. Make something more expensive and businesses will use less of it."

Yes, the nonfarm payroll clocked in at 138.5 million jobs and thereby retraced for the first time the point at which it stood 77 months ago in December 2007. This predictably elicited another “milestone of progress” squeal from the mainstream media. So you have to wonder. Did these people skip history class? Do they understand the vital idea of “context”? So if you want to try a little “context” absurdity recall this. So far we have created a trifling 100k “new” jobs since the last cyclical peak. During the equivalent 77 months in the Reagan era the US economy actually generated 150 times more jobs!

While the administration unabashedly argued that they would not hand out taxpayer cash subsidies to anyone who didn't verify income on... it seems once again, they lied. 9 months later and AP reports that 2 million of the Obamacare sign-ups have data discrepancies that could jeopardize coverage for some, a government document shows. Direct from the HHS itself, AP adds that several congressional committees are actively investigating the discrepancies, most of which involve important details on income, citizenship and immigration status. The farce is complete as no resolution looks likely anytime soon - "Current system access and functionality...limits the ability to resolve outstanding inconsistencies." Of course, this is the first that Obama would have heard about it (from AP) and a probe of this SNAFU will begin immediately...

Last week Americans were shocked and saddened by another mass killing, this one near a college campus in California. We all feel deep sympathy for the families of the victims. As usual, many people responded to this shooting by calling for new federal gun control laws, including the mental health screening of anyone attempting to purchase a firearm. There are a number of problems with this proposal. Instead of focusing on passing more laws, our focus should be replacing the entitlement culture with a culture of self-responsibility and respect for the rights of others.

Pause and think about what linoleum means to you. If flooring isn’t your thing, go ahead and think about Formica cabinets or anything else that fits the genre. To me, it is something functional, which looks okay from a distance, but doesn’t stand up well to closer inspection. It conveys the disappointment of something that looked good, but turns out only to be a thin veneer covering cheap particle board. That is how we see the economy right now.

Four years after its passage, Obamacare has now been largely implemented, and millions have had their coverage disrupted. For years, the administration has propagated a number of myths about Obamacare. Some have already crumbled, and others will fall as Obamacare continues to change the American health system.

Bottom line: someone is dead wrong on the economy, but we are glad that the weathermen formerly known as economists are putting all these timestamps out there in the public domain. Because we eagerly look forward to seeing just what the scapegoat will be when Q2 GDP mysteriously fails to soar to 4%. And judging by what the bond market is doing, the only place that may see 4% growth in Q2 is China (net of all the fabricated data of course).

As if the official news that the US economy is just one quarter away from an official recession (and with just one month left in the second quarter that inventory restocking better be progressing at an epic pace) but don't worry - supposedly harsh weather somehow managed to wipe out $100 billion in economic growth from the initial forecast for Q1 GDP - here is some even worse news: if one excludes the artificial stimulus to the US economy generated from the Obamacare Q1 taxpayer-subsidized scramble, which resulted in a record surge in Healthcare services spending of $40 billion in the quarter, Q1 GDP would have contracted not by 1% but by 2%!

The teleprompter is still hot from all the Obama spit unleashed in his latest sincerely passionate denial that his administration knew anything, anything at all, about what is merely the latest scandal to rock the president, this time surrounding the Veterans Affairs fiasco, and already a brand new scandal is taking shape, this one Obama however will not be able to sweep as easily under the rug. The LA Times reports that the "Obama administration has quietly adjusted key provisions of its signature healthcare law to potentially make billions of additional taxpayer dollars available to the insurance industry if companies providing coverage through the Affordable Care Act lose money." In other words, yet another taxpayer funded bailout.

To compare Japanese and European bond yields in order to justify an argument for US bond yields staying historically low once the Federal Reserve is completely out of bond buying is a failed comparison. 

For those curious how much further into banana status the "developed" world may further drop, look no further than Turkey which is rapidly becoming the case study of banana governance par excellence.

Have you ever given food to a homeless person? Well, if you do it again in the future it might be a criminal act depending on where you live. Right now, there are dozens of major U.S. cities that have already passed laws against feeding the homeless.