Thursday, May 28, 2015
Video: Who Owns the Federal Reserve
(Truthstream Media) It’s not like we don’t have half a clue who actually “owns” the Federal Reserve, but we just wanted to know, superficially, who the Fed itself claims it is owned by (and, additionally, how the agency justifies its unchecked power).
Apparently the agency never officially answers that question. See for yourself in the video above.
Sticker Shock for Some Obamacare Customers: "51 percent in New Mexico, 36 percent in Tennessee, 30 percent in Maryland, 25 percent in Oregon."
EXCUSE ME, DID YOU SAY 51 PERCENT? PHOTOGRAPHER: NICHOLAS KAMM/AFP/GETTY IMAGES
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HEALTH-CARE REFORM
Sticker Shock for Some Obamacare Customers
1274 MAY 25, 2015 8:00 AM EDT
By Megan McArdle
So the proposed 2016 Obamacare rates have been filed in many states, and in many states, the numbers are eye-popping. Market leaders are requesting double-digit increases in a lot of places. Some of the biggest are really double-digit: 51 percent in New Mexico, 36 percent in Tennessee, 30 percent in Maryland, 25 percent in Oregon. The reason? They say that with a full year of claims data under their belt for the first time since Obamacare went into effect, they're finding the insurance pool was considerably older and sicker than expected.
Don't panic, says Kevin Drum. This is just the opening bid in a regulatory dance that will end up somewhere very different: "A few months from now, the real rate increases — the ones approved by state and federal authorities — will begin to trickle out. They'll mostly be in single digits, with a few in the low teens. The average for the entire country will end up being something like 4-8 percent."
He's right, of course, that the proposed rates will not end up being the final rate. Regulators are going to push back on these rates as hard as they can, with some success.
But in the case of the companies cited by the Wall Street Journal, I'd bet they're not going to go down to 4-8 percent. As it turns out, the insurer filings are public information, available on state websites. And in the three cases where I could see supporting data about premium revenue and losses, those losses appear to be large. Moda of Oregon says that its claims were 139 percent of revenue, making for a margin of -61 percent. If I am reading their somewhat confusing table right, Health Service Corporation of New Mexico says it lost $23 million on revenue of $121 million. CareFirst of Maryland says that claims were 120 percent of revenue, which if we add in some money to pay for overhead, amounts to ... less than or equal to what they're asking from regulators. I can't find claims experience data for Tennessee, but that state told the Wall Street Journal that it lost $141 million on exchange plans last year.
Now, this is not the whole story. These are only the biggest insurers in some states. Smaller insurers may price lower in an attempt to grow their business (though if their claims experience matches the biggest insurers, that's going to be a recipe for a quick bankruptcy). And the median request on a list of the biggest insurers in 12 states was more on the order of 10-15 percent, and three states -- Maine, Connecticut and Indiana -- had insurers ask for increases in the low single digits.
That's only 12 states, of course, and none of the biggest-population ones. But even if we assume that the regulators cut the increases in half, that's a median increase of 5-6 percent, with a mean considerably higher than that. Even if you weight by population -- well, actually population-weighting makes that worse, not better, because the states with the lowest rate requests are disproportionately sparse.
Read more: http://www.bloombergview.com/articles/2015-05-25/sticker-shock-for-some-...
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HEALTH-CARE REFORM
Sticker Shock for Some Obamacare Customers
1274 MAY 25, 2015 8:00 AM EDT
By Megan McArdle
So the proposed 2016 Obamacare rates have been filed in many states, and in many states, the numbers are eye-popping. Market leaders are requesting double-digit increases in a lot of places. Some of the biggest are really double-digit: 51 percent in New Mexico, 36 percent in Tennessee, 30 percent in Maryland, 25 percent in Oregon. The reason? They say that with a full year of claims data under their belt for the first time since Obamacare went into effect, they're finding the insurance pool was considerably older and sicker than expected.
Don't panic, says Kevin Drum. This is just the opening bid in a regulatory dance that will end up somewhere very different: "A few months from now, the real rate increases — the ones approved by state and federal authorities — will begin to trickle out. They'll mostly be in single digits, with a few in the low teens. The average for the entire country will end up being something like 4-8 percent."
He's right, of course, that the proposed rates will not end up being the final rate. Regulators are going to push back on these rates as hard as they can, with some success.
But in the case of the companies cited by the Wall Street Journal, I'd bet they're not going to go down to 4-8 percent. As it turns out, the insurer filings are public information, available on state websites. And in the three cases where I could see supporting data about premium revenue and losses, those losses appear to be large. Moda of Oregon says that its claims were 139 percent of revenue, making for a margin of -61 percent. If I am reading their somewhat confusing table right, Health Service Corporation of New Mexico says it lost $23 million on revenue of $121 million. CareFirst of Maryland says that claims were 120 percent of revenue, which if we add in some money to pay for overhead, amounts to ... less than or equal to what they're asking from regulators. I can't find claims experience data for Tennessee, but that state told the Wall Street Journal that it lost $141 million on exchange plans last year.
Now, this is not the whole story. These are only the biggest insurers in some states. Smaller insurers may price lower in an attempt to grow their business (though if their claims experience matches the biggest insurers, that's going to be a recipe for a quick bankruptcy). And the median request on a list of the biggest insurers in 12 states was more on the order of 10-15 percent, and three states -- Maine, Connecticut and Indiana -- had insurers ask for increases in the low single digits.
That's only 12 states, of course, and none of the biggest-population ones. But even if we assume that the regulators cut the increases in half, that's a median increase of 5-6 percent, with a mean considerably higher than that. Even if you weight by population -- well, actually population-weighting makes that worse, not better, because the states with the lowest rate requests are disproportionately sparse.
Read more: http://www.bloombergview.com/articles/2015-05-25/sticker-shock-for-some-...
Axel Merk: Will Gold Zoom Higher with Greece on the Brink of Default? “The dollar is overvalued relative to the Euro.”
Jay Taylor, Turning Hard Times Into Good Times, Released on 5/27/15
Axel Merk explains why the dollar is overvalued relative to the Euro, the likely outcome of a Greek default and the function gold may play as a result.
Axel Merk explains why the dollar is overvalued relative to the Euro, the likely outcome of a Greek default and the function gold may play as a result.
Kiyosaki: Pension tension & the eroding of American capitalism. “It’s not just bad for tax payers, it’s bad for pensioners.”
Robert Kiyosaki & Kim Kiyosaki, Rich Dad Radio, Release on 5/27/15
This is a very emotional subject: pensions. Politicians and unions promised pensions they had no way to fund for the last 40 years and the bill has come due. It’s not just bad for tax payers, it’s bad for pensioners. If you think local governments won’t take away the pensions they promised, you clearly aren’t paying attention. This week we have Sal Diciccio (Phoenix City Council) and Dan DiSalvo (City College of NY) to talk about the consequences of pensions gone wild and how a communist mindset by labor is eroding capitalism in America.
http://marketsanity.com/kiyosaki-pension-tension-how-the-communist-mindset-is-eroding-american-capitalism/
This is a very emotional subject: pensions. Politicians and unions promised pensions they had no way to fund for the last 40 years and the bill has come due. It’s not just bad for tax payers, it’s bad for pensioners. If you think local governments won’t take away the pensions they promised, you clearly aren’t paying attention. This week we have Sal Diciccio (Phoenix City Council) and Dan DiSalvo (City College of NY) to talk about the consequences of pensions gone wild and how a communist mindset by labor is eroding capitalism in America.
http://marketsanity.com/kiyosaki-pension-tension-how-the-communist-mindset-is-eroding-american-capitalism/
The Six Too Big To Fail Banks In The U.S. Have 278 TRILLION Dollars Of Exposure To Derivatives
The very same people that caused the last economic crisis have created a 278 TRILLION
dollar derivatives time bomb that could go off at any moment. When
this absolutely colossal bubble does implode, we are going to be faced
with the worst economic crash in the history of the United States.
During the last financial crisis, our politicians promised us that they
would make sure that “too big to fail” would never be a problem again.
Instead, as you will see below, those banks have actually gotten far
larger since then. So now we really can’t afford for
them to fail. The six banks that I am talking about are JPMorgan Chase,
Citibank, Goldman Sachs, Bank of America, Morgan Stanley and Wells
Fargo. When you add up all of their exposure to derivatives, it comes
to a grand total of more than 278 trillion dollars. But when you add up
all of the assets of all six banks combined, it only comes to a grand
total of about 9.8 trillion dollars. In other words, these “too big to
fail” banks have exposure to derivatives that is more than 28 times greater than their total assets.
This is complete and utter insanity, and yet nobody seems too alarmed
about it. For the moment, those banks are still making lots of money
and funding the campaigns of our most prominent politicians. Right now
there is no incentive for them to stop their incredibly reckless
gambling so they are just going to keep on doing it.
https://www.thesleuthjournal.com/the-six-too-big-to-fail-banks-in-the-u-s-have-278-trillion-dollars-of-exposure-to-derivatives/
So precisely what are “derivatives”? Well, they
can be immensely complicated, but I like to simplify things. On a very
basic level, a “derivative” is not an investment in anything. When you
buy a stock, you are purchasing an ownership interest in a company.
When you buy a bond, you are purchasing the debt of a company. But a
derivative is quite different. In essence, most derivatives are simply
bets about what will or will not happen in the future. The big banks
have transformed Wall Street into the biggest casino in the history of
the planet, and when things are running smoothly they usually make a
whole lot of money.
But there is a fundamental flaw in the system, and I described this in a previous article…The big banks use very sophisticated algorithms that are supposed to help them be on the winning side of these bets the vast majority of the time, but these algorithms are not perfect. The reason these algorithms are not perfect is because they are based on assumptions, and those assumptions come from people. They might be really smart people, but they are still just people.Today, the “too big to fail” banks are being even more reckless than they were just prior to the financial crash of 2008.
https://www.thesleuthjournal.com/the-six-too-big-to-fail-banks-in-the-u-s-have-278-trillion-dollars-of-exposure-to-derivatives/
Two CEOs in one day…. Snapchat and Red Hat: Tech bubble will end badly
Jim Whitehurst, Red Hat CEO, and "Open Organization" author, discusses
why he thinks cheap money is producing a tech bubble; the transition
into the cloud, and how to inspire passion and performance in the
workplace.
CNBC's Julia Boorstin provides highlights from an interview with Snapchat CEO Evan Spiegel at Re/code's annual conference.
http://investmentwatchblog.com/two-ceos-in-one-day-snapchat-and-red-hat-tech-bubble-will-end-badly/
CNBC's Julia Boorstin provides highlights from an interview with Snapchat CEO Evan Spiegel at Re/code's annual conference.
http://investmentwatchblog.com/two-ceos-in-one-day-snapchat-and-red-hat-tech-bubble-will-end-badly/
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