Wednesday, April 14, 2010

The data is in on the Healthcare Bill approved by Congress and it's good!

I though an appropriate amount of time has passed since the Healthcare reform Bill passed and President Obama had signed it into law. There has been a lot of hype about it. Remember when on Dec. 5th they dropped the Public Option and the Healthcare stocks Wellpoint and United Healthcare started their march up. See the charts above. Well now that weeks have passed since the signing into law, interestingly enough the stocks of both of these Healthcare Insurance companies has dropped. I also said that when the stocks were going up, that the language in the Bill was good for Insurance companies and if the price of the stock dropped it was bad for the insurance companies. Well, as you can see the stock prices have come down and are now approaching where they were before the Public Option was announced dead.

For all the hype about the Bill as negative for average Americans, I think the real data is in and it isn't the polls taken by Republicans. It's the stock price and it is speaking loud and clear that the Bill in its final form is good for Average Americans.

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Monday, February 22, 2010

President Obama has a "Not losing" strategy on healthcare, not a winning strategy.

Today President Obama unveiled his proposal for Healthcare (insurance) reform, which closely mirrors the Senate approved Health care bill, with a few minor tweaks. He took this most conservative approach, while at the same time 20 Senators have signed a letter wanting the Public Option included in any Healthcare Bill signed into law. If President Obama had a "winning strategy", he would have put that into his proposal as well. But his strategy is clearly in a "not losing strategy". It is very difficult, if not impossible, to put up a "win" in healthcare reform, if he isn't trying to win. Let me give you an example using the Olympics as the metaphor.

In the contest yesterday between the US and Canada's hockey teams, the US had a winning strategy, not a not losing strategy. The US took the game to Canada by continually bringing the puck to Canada's Goal Keeper in almost all 3 periods. This lead to more scores than Canada going into the 3rd period. If they were playing defense and surrounding their own Goal keeper to prevent Canada from ever scoring, they would have lost the game. Defensive postures rarely result in wins. I must admit in the last few minutes of the 3rd period, the US did start playing defensive and that was when Canada scored on them and I was thinking they might lose their advantage and the game. But they came through in the end. Just for once I would like to see President Obama put it on the line and go for victory on something, anything, and let it all hang out. Healthcare reform is as good a cause as anything. But I am afraid he is still playing a "not losing" game with his latest proposal, which ha nothing of his own mark on it. It is merely the Senate version of the healthcare plan. Where's the backbone Mr. President?

By the way, CONGRATS to the US Hockey team and Coaches. And Canada, you were good too and have nothing to be ashamed of. You gave us all an entertaining evening. Good luck to all in the rest of the Games.

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Saturday, January 23, 2010

Is bad Healthcare reform dead? Does good health insurance reform have a chance now? Look for answers in healthcare stock prices.

With all that has happened this past week, I thought an update on the Healthcare stocks was in order. If you have been reading here for a while, I have said countless times, that if you wanted to know if the proposed Legislation by the Democrats was good for average Americans, just watch the price of the stocks of United Healthcare and Wellpoint.

As you can see from the chart above, back on Dec, 5th, the Democrats conceded that the Public Option appeared dead. On Monday, Dec. 7th both stocks started to rise and gained almost 30% at the peak of each chart. On Tuesday, in Massachusetts voted in a Republican Senator to fill former Ted Kennedy's seat, a significant upset which continues to reverberate throughout the Democratic Party and the News media, this weekend. Again, as you can see from the charts, this election of a Republican, which denies the Democrats of their super majority of 60 votes, also appears to deny the Health Insurance companies the benefits they were hoping to get with the proposed legislation. This is signified by the drop after the market close on Tuesday, Jan. 19th and the market close of Jan. 20th and had continued through the day yesterday.

If you assume for a minute that what is good for Health Insurance companies is bad for average Americans, then this move is good and hopefully will continue. The Healthcare legislation needs to be bipartisan.

My suggestions for this are as follows:
1. What is needed is simplicity, not a 2008 page Bill.
2. Insurance companies must not deny coverage for pre-existing conditions any longer.
3. People should be able to buy Insurance across State lines, as they can do for car insurance.
4. Tort reform is also important and should be included in any proposed legislation.
5. Everyone should be required from age 25 and over to purchase Health Insurance.

This would be a good start for bipartisanship and would still allow an unprecedented victory for the Obama Administration and the Democratic Party.

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Sunday, December 20, 2009

United Healthcare & Wellpoint win delay on healthcare tax

You read that headline correctly. They had it planned all along and that may be at the core of why United Healthcare, symbol UNH, stock moved up almost 18% in just 8 trading days. Here's some excerpts from the news out this morning from

Health Insurers Win Delay on Start of $70 Billion in Added Fees

By Alex Nussbaum

Dec. 20 (Bloomberg) -- UnitedHealth Group Inc., WellPoint Inc. and smaller U.S. insurers gained a year under Senate Democrats’ proposed health-care legislation before the start of a tax that industry lobbyists say will drive up premiums.

The measure proposed yesterday by Senate Majority Leader Harry Reid would also exempt some nonprofit insurers from the tax, shifting more of the burden to the for-profit companies, said Elizabeth Hall, a vice president at Indianapolis-based WellPoint.

The insurer tax, amounting to about $70 billion over 10 years, was to start next year under a previous version of the Senate measure. That would have forced insurers to take $6.7 billion out of profit, since they’ve already signed contracts setting rates for 2010, said Matthew Borsch, a New York-based analyst for Goldman Sachs Group Inc., in a Dec. 16 interview. The new version also postpones more of the tax until after other parts of the health overhaul kick in.

“We made some pretty salient arguments that people are going to be paying for something before they see any benefit,” Hall said in a telephone interview today. “There’s a policy logic behind it and also a political logic: Who wants to tax their constituents before they see any benefits?”

Without the change, Borsch said, 2010 earnings per share at UnitedHealth, based in Minnetonka, Minnesota, would have been cut 25 percent, while those at WellPoint would have been diminished 28 percent.

I have said in previous posts to watch the stock prices of these healthcare stocks to see if these changes are good for average Americans. If the stock prices keep going up, it is good for their shareholders but bad for average Americans. If their stock price drops, it will be bad for shareholders and good for average Americans. Let's see where the price of the stocks go when the trading day closes on Monday.

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Monday, September 28, 2009

Concerns about the National Debt

It seems that the Republicans have gotten the public attention in ensuring the National Debt does not grow under President Obama. The outrage has manifested itself in "Town Hall" meetings this past August and continues in any public gatherings with politicians in well organized attacks on proposed healthcare reform or should I say health insurance reform. I thought I would once again set the record straight by posting today's chart. You will need to click to enlarge it, but it is clear which Presidents have increased the National Debt over the past. Oh, and the chart does not show all the debt under George W. Bush. He actually added over $4 Trillion to the national debt so make sure you extend the chart up to $10 Trillion, as the chart only goes to $7 Trillion for President George Bush (source). Under President Clinton, you will notice he turned the trajectory of the curve only to have it turn up again under Bush. I ask you, where were the Republicans worrying about the National Debt under Reagan or under the past 8 years of George W. Bush when the Republican controlled Congress passed huge tax cuts for the wealthiest Americans? Or spent money on the Iraq war "off budget" never accounting for the hit on our debt as we borrowed money we didn't have for a war we should never have fought.

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Saturday, September 05, 2009

Dear Mr. President: Stand tall on Healthcare and against Republican attempts to derail the Public Option

I thought the Civil War was settled back in the 1800's. It seems today, with the minority Republican party of the South, they are fighting it again today. Their hate speech has made me wonder what country I live in, as it doesn't seem like the country I grew up in, and then again, it does. I remember the prejudice against blacks in the 50's living in Boston. It was in Boston as well as the South, but it looked different even though it didn't feel different for many Black's living there.

Well, I am getting sick and tired of the return of those feelings as the Republican Party of the South seems to be against almost anything associated with Barack Obama. I do distinguish those Republicans of the North as different than those in the South. The latest "outrage" is the planned address to students in schools across the country by President Obama on Tuesday. Their outrage is based they say on the fact they don't want President Obama pushing his "socialist" agenda on their children. They say they haven't seen the speech and want to review it before it is delivered. They say he is going to push his policy on the right to abortions. Are these people mentally competent? Of course they aren't. They pass for what was wrong with their education when they grew up intolerant of others and they want that agenda front and center today. These supposed well educated people don't believe in Global Warming, Evolution, the law, the Constitution (only the part about the right to bear arms and carry guns to a Presidential speech), that President Obama was born in the United States, that President Obama's healthcare plan is not going to kill seniors using death panels and other things to name a few.

I am afraid this country has headed, and we have arrived, at an Un-Civil War, where words are used to smear and defame good people and a President, duly elected by a majority of its people, and take down tis President in any way they can. Talk of secession in Texas is just one sign where these people's heads are at. I say let them go secede, as we would all be better of without them. Let them be a part of Mexico, if Mexico will have them.

The Republicans of the South use bullying tactics against non-violent Democrats and Independents. They are proud to use weapons to settle their arguments. They are very dangerous, but we should not cower from their challenge to what we believe in, either. That is why President Obama needs to endorse the Public Option for Healthcare next week, in his speech. The Republicans will give him no quarter on anything they believe they can stop him. This appeasement will do nothing but encourage them to continue even harder to destroy his agenda and him. The best way to deal with them is to stand tall and strong even if we lose this fight as the American people do want reform and change we can believe in and we will be stronger in the midterm election and the next Presidential election and defeat them and ensure that many more people will be helped and healthcare costs will have been managed down. Mr. President don't cave in to the crazy ones. We will stand with you if you stand tall. But it is first up to you to lead by example.

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Wednesday, August 12, 2009

The 2 Party system is soon to be made up of Democrats and Progressives and not Republicans

That's right, the Republicans have gone off the deep end on scaring people about Healthcare reform. The Republican Party is relegating itself to obscurity, albeit a loud obscurity, by all the fear mongering, lies, and threats of violence against any Democrat in favor of Healthcare reform. You will see more Republicans becoming Independents and some changing to Democrats, but you will also see more people willing to join the Progressive movement. The Progressive movement is firmly in place in several States. It is solid here in the San Francisco Bay area and believe it or not, it is solidly established in my former State of Vermont, with Senator Bernie Sanders leading the movement.

As long as Republicans continue to use scare tactics and threats of assassination of Democrats, they will drive their members away from the Party. "Free Speech" is protected up to a point. Threatening lynching or assassination of any leader is beyond Free Speech. It's like yelling "Fire" in a movie theater. It's not allowed or you will be arrested. The idea that the Gov't is going to cause the death of seniors is absurd, but they continue this line of protesting. The issue of Healthcare Reform will determine if we as a Nation have evolved from the fear used by the Bush Administration to get us to invade Iraq. If we haven't, God help us. If we have, then these fringe Republicans will remain a minority. I certainly hope they fade away. They may be noisy, but they show the worst of America. I have many terrific Republican friends. They must be shrieking from all the bull being spread around. All of my Republican friends can discuss the issues, agree on certain points, disagree on other points, but we both walk away educated by each other's point of view. That's what's missing from this debate. It is going to force Democrats to ignore the Republican's ideas, some of which are good, because the Bill won't be passed without some changes in the Rules of Congress or the Senate. It may take just 50 votes to pass this as Republicans are generally dismissed, and serves them right.

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Saturday, February 28, 2009

The Stock Market: Should we abandon ship?

This must be on many minds this weekend as we broke through support levels which defined 25 year uptrend lines on the Dow. While we broke below support so gently the past week, nevertheless, we did break through the support levels and that is not a good sign. I took another look at the next level of support and while I can do this on a 25 year chart, I can't do it with the precision you deserve. So check with your professional stock advisor or other certified professional expert. It is my best guess we might go down to 6,300-6,500 on The Dow and 700 on the S&P. That means possibly another 10% drop of the total value of your portfolio of stocks. Ugh.

But there is also the possibility we can still have a strong Bear Market rally and go back up to 9,000 or over. That would be a 28% gain from where we are now. I personally am willing to take the risk of a 10% loss for a nearly 30% gain at this point. I can't speak for you here so you need to watch yourself and your assets. I believe this though, there is pent up demand and an oversold feeling with this market and the move up could happen very quickly. If any indicators aren't as bad as was expected in the coming week and show any possibility of no worse than last month, that could be enough for many to jump into the market.

I ventured in yesterday to buy Citi, symbol C, and so did many others as over 1.7 Billion shares were traded on Citi giving the Dow index a spike in volume for the day.

My recent purchases are underwater for my ETF's as well as the stocks I had purchased. TNA, the 3x Ultra Pro ETF of the Small Caps, closed yesterday at $15.53, after hitting a 52 week low of $15.02/share. I had recommended and purchased this at $23.36/share. SSO, the Ultra Pro shares of the ETF for the S&P 500 closed yesterday at $17.31/share after it hitting a 52 week low of $17.24/share. I had recommended and purchased it at $21.57/share. Ford Motor has pulled back after getting back up to as high as $2.20/share but now closed at $2.00/share. I had recommended and purchased this at $1.90/share. Apple, symbol AAPL closed yesterday down at $89.31/share. I had recommended and purchased the stock at $86.50 and $78/share. So there is the summary of my purchases.

Putting everything into context in a summary here, I think it's a crap shoot for this coming week as to whether we actually test new lows at the 6,300-6,500 level. If the SEC instituted back the Uptick Rule, we might not go lower but there is no certainty they will. It has been only discussed by Bernanke and others in the Administration. And further complicating matters is that Wall Street does not like what President Obama has been proposing on a host of topics like Healthcare reform, Medicaid reform, tax rate changes, stemming foreclosures and the bailout of banks. They speak with their money in the markets and that hurts us all. But change isn't coming, change is here and they had better get used to it. The good old boys network and the good old days, are gone forever or at least during this Administration. So I am not selling here and will hold and possibly add more shares of these investments as long as the cash holds out. So to answer the question asked in the title of this Blog, "Should we abandon ship?", the answer is No!

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Wednesday, February 25, 2009

The Republican effect and why it will take longer to get out of this recession.

The Republican party has taken on the mantle of being the loyal opposition since the election of President Barack Obama. The affect of this is to continue divided government and this in turn plays out amplifying the continued fears of most informed citizens. This in turn keeps confidence low and ensures the lack of a recovery. The best way to monitor this is to watch the stock market.

Yesterday President Obama appealed to Republicans to enjoin him where there can be agreement and offer solutions rather than just finding fault with proposals before him, referring to upcoming challenges such as Healthcare reform and Social Security reform.

But the effect on markets today is again a slip in major indexes. Wall Street controls the money and the markets as they are the market makers. They can drive markets up or down at will and the small investor gets whipped around. I predict the result of this will be fewer traders in the coming years and that will not benefit them. They are playing Russian Roulette and are not being too strategic. In fact they are being quite short sighted in my view.

The game is rigged but for now they don't want anyone winning a thing. We are still at the edge and looking into the abyss. The Dow continues to test the 7,200 level.

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