Obamacare

• BOE Leaves Policy Unchanged as Carney’s Guidance Assessed (BBG)
• Surprise or not, U.S. strikes can still hurt Assad (Reuters)
• Samsung Gear: A Smartwatch in Search of a Purpose (BusinessWeek)
• 'Jumbo' Mortgage Rates Fall Below Traditional Ones  (WSJ)
• Capital Unease Again Bites Deutsche Bank  (WSJ)
• Technical snafus confuse charges for Obamacare plans (Reuters)
• JPMorgan subject of obstruction probe in energy case (Reuters)
• U.S. Car Sales Soar to Pre-Slump Level (WSJ) - i.e., to just when the market crashed
• BoJ lifts assessment of Japan’s economic health (FT)
• Dead Dog in Reservoir Helps Drive Venezuelans to Bottled Water (BBG)
• Russia Boosts Mediterranean Force as U.S. Mulls Syria Strike (BBG)

The president gave a speech on August 22 in Buffalo outlining his proposal to “reform” the student loan program. He acknowledged that the program has some problems, but assured the audience they are easily fixed. Just take the principles behind Obamacare and apply them to education. The president personally “guaranteed” that his proposals would make college more affordable. Here’s the plan..

Americans are taught that "effortless" is the path to happiness, when really it is the path to diabetes, hip and knee replacements, bankruptcy, no sex life, and MOAR DEBT! 

There has been much confusion in the past several months relating to the US debt ceiling, and specifically the fact that total debt subject to the limit has been at just $25 million away from the full limit since late May. As we explained first in January 2011, there is nothing sinister about this. Any time the Treasury hits its physical debt cap, it activates its available "emergency measures" which include such money releasing options as disinvesting the Civil Service Fund, Suspending reinvestment in the G-Fund, Selling securities from the Exchange Stabilization Fund, and others, which cumulatively free up around $300-$350 billion. In essence the "emergency measures" act like a revolving credit facility that is slowly but surely being drawn down. Add to that sporadic cash creation over the past few months from cash inflows from the GSEs and one can see why the US has been able to be in breach of the debt ceiling for as long as it has. And why it still has just under two months of capacity.

With president Obama taking his role as Warmonger-In-Chief ever more seriously, it is easy to forget that the only important function before the greatest presidential teleprompter reader in history, is that of Socialized Healthcare Provider-in-Comrade. And so today, in the fog of pre-war, the Obama administration released the final rules on the "Individual Mandate" component of Obamacare, which requires most Americans to buy health insurance starting in 2014 or be fined. Specifically, the rules list lay out the amount of penalties that Americans will face if they opt out of socialized healthcare. The WSJ was kind enough to read the Treasury Department release and summarize it as follows.

The ever-expanding role of government in healthcare provides an excellent example of Ludwig Von Mises’ warning that “The Middle of the Road Leads to Socialism.” Beginning in the 1940s, government policies distorted the health care market, causing prices to rise and denying many Americans access to quality care. Congress reacted to the problems caused by their prior interventions with new interventions, such as the HMO Act, ERISA, EMTLA, and various federal entitlement programs. Each new federal intervention not only failed to fix the problems it was supposedly created to solve, it created new problems, leading to calls for even more new federal interventions. This process culminated in 2010, when Congress passed Obamacare.

11 of the 15 sub-indices for the Dallas Fed manufacturing outlook fell month-over-month with new orders, production, and finished goods notably weak. Of course, the modest headline beat will be all we hear about as the US economy makes 'progress'; but under the surface there is an even more concerning factor. While the number of employees rose modestly, the average employee workweek collapsed at its fastest pace in 2 years (and the last 2 months have dropped the most in 3 years) as it seems the Obamacare-effect smashes the workweek back to its lowest since October 2009.

Moments ago, Syria relented to the main gating condition that would prevent an all out escalation, and as Russia urged it to, has permitted an inspection of last Wednesday's alleged chemical weapons attack by UN inspectors. The WSJ reports that "Syria would allow United Nations inspectors currently present in Damascus immediate access to areas around the capital where the opposition accused the regime of using chemical weapons against fighters and civilians five days ago. A presenter on Syrian state television reading a statement attributed to an unnamed official at the Syrian Ministry of Foreign Affairs said the agreement was reached after a meeting between Foreign Minister Walid al-Moallem and Angela Kane, the U.N. disarmament chief, who arrived in Damascus on Saturday." Of course, since demand for said inspection was just a strawman as the last time the UN inspected a "certain" chemical weapons attack by Assad it found "rebels may have used sarin" instead, and the US was absolutely certain Syria would not relent to an inspection thus allowing a full scale military attack, the US is now downplaying compliance with this key demand, by saying it is too little too late.

Barack Obama has been running around the country taking credit for an "economic recovery", but the truth is that things have not gotten better under Obama.  Compared to when he first took office, a smaller percentage of the working age population is employed, the quality of our jobs has declined substantially and the middle class has been absolutely shredded.  If we are really in the middle of an "economic recovery", why is the homeownership rate the lowest that it has been in 18 years?  Why has the number of Americans on food stamps increased by nearly 50 percent while Obama has been in the White House?  Why has the national debt gotten more than 6 trillion dollars larger during the Obama era?  Obama should not be "taking credit" for anything when it comes to the economy.  In fact, he should be deeply apologizing to the American people.

The unintended consequences of Obamacare are coming thick and fast (and not just from tin-foil-hat-wearing blogs, mainstream media, or political party ignorance). This time it is UPS, who announced that due to the higher costs under Obamacare will drop 15,000 spouses from its health insurance plan. As CNN reports, an internal document obtained by Kaiser Health News said the policy will apply to non-union US workers (saving what is expected to be a $60 million rise in costs). More 'anecdotal evidence'... UPS justified its move by saying that 35% of companies intend to do the same thing...

• Obamacare, tepid U.S. growth fuel part-time hiring (Reuters)
• Cameron was behind UK attempt to halt Snowden reports (Reuters), Britain defends detention of journalist's partner (Reuters)
• Goldman Options Error Shows Peril Persists One Year After Knight (BBG)
• China expresses 'shock' as Japan's nuclear crisis deepens  (Reuters)
• Inquiry into China insurance firm rattles industry (Caixin)
• Cheaper rivals eat into Apple’s China tablet share (FT)
• Exporting fast food: Subway Targets Europe With as Many as 1,000 New Outlets in 2014 (BBG)
• Reserve Bank of India boosts liquidity to ease pressure on banks (FT)
• Justice Department Plans New Crisis-Related Cases (WSJ) - Holder doing his cutest attempt to pretend the TBTProsecute aren't
• Syrian Opposition Alleges Gas Attack, Which Government Denies (WSJ)

During the NBC Nightly News segment last week about one of the unintended consequences of the Affordable Care Act (ACA), Lisa Myers reported speaking with "almost 20 small businesses and other entities around the country" and that "almost all said that because of the new law, they’d be cutting back hours for some employees." But the Obama administration doesn’t see why there’s such a fuss.  According to Myers: The White House dismisses these examples as “anecdotal.” The president’s top economic advisor [CEA Chair Jason Furman] told us “he sees no systematic evidence the health care law is having an adverse impact on the number of hours employees are working.” So, should we take our government’s word and dismiss the examples as anecdotal?

So let's pretend for the moment that the Federal Reserve gets everything it has stated it wants.  And even further: that Washington, D.C. gets everything it wants, too. The credit markets are repaired, and massive new loan growth flows out the door.  Loans are made to businesses that hire gobs of new people.  Consumers borrow and borrow some more to go to school and buy homes, cars, and gadgets. Inflation remains low and job growth explodes.  Tax receipts climb and the deficit falls.  The stock market goes higher and higher, gold falls and then falls some more, as confidence in the system, its masters, and its institutions grows. The Fed wins and D.C. wins. But in reality, we all lose. It's all just a matter of timing (and un-sustainability).

Earlier today we learned that while some executives at Forever 21 were previously confused by Obamacare, subsequently they appear to have rectified their confusion... and full-time staffing levels. Of course, there would have been no confusion had Forever 21 known what it was getting with Obamacare. So for the benefit of all their executives, and for all others who may still be confused by America's new healthcare system, here, once again, is the chart that should explain everything.