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.

Markets confirm we are in for a further drop

The stock market today dropped to a low of 8616 on the Dow or off 412 points in morning trading. This while Congress has been getting an earful from Ratings firms such as Moody's and the S&P. Testifying for Moody's was a former Credit officer who said the system was corrupt and that the reason was that firms like Moody's saw their customers as the Investment community rather than the public, as many firms paid Moody's and other firms so it was a conflict of interest fro them to raise issues. One line of questioning from Chairman Henry Waxman of CA, was particularly enlightening. He asked, when sub Prime loans were made, did they know buyers would not be able to pay for the loans over the life of the loans? Those testifying said they knew that the Homeowners would not be able to pay for the loans. He asked again, then you are telling me that lenders knew this? Again he heard, yes. How do you explain that the ratings of those companies doing the lending were not affected? He was told that there was an assumption built into the model that showed appreciation every year on the value of the home and that, "THEY NEVER CONSIDERED YEARS WHERE PRICES MIGHT DROP OR EVEN STAY EVEN"

And so my friends, this economy has been built like a House of Cards and the wind has been blowing and will continue to blow, as many unwind from bad positions, driving prices lower and the cycle will continue, until faith is once again restored. How long will it take? It will take a new President who can lead and command respect by his actions and his deeds. That means at least until mid 2009 before we all have a sense even with Barack Obama winning the Presidency. I fear a McCain win will keep the spiral going on for much longer than with an Obama presidency.

Therefore, the Dow most certainly in my view will go as low as 7,200-7,400 range and the Nasdaq the same percentage wise.

UPDATE 3:30PM PST

The Dow did drop 700 points near the close but managed to close losing 512 points to 8,519 which was above Dow 8,500. The volume increased in the last 20 minutes and today's volume was significantly higher than Monday or Tuesday's volume.