Month: February 2014

That the bulk of Americans (especially those 4+ million whose insurance policies have recently been cancelled as a result of the ACA) have to pay more for healthcare as a result of Obamacare, is now largely accepted and well-known. But did you know that the cost of Obamacare is slowly metastasizing to other places? Such as your restaurant bill.

Presenting Exhibit A.

From CNN:

Several restaurants in a Florida chain are asking customers to help foot the bill for Obamacare. Diners at eight Gator’s Dockside casual eateries are finding a 1% Affordable Care Act surcharge on their tabs, which comes to 15 cents on a typical $15 lunch tab. Signs on the door and at tables alert diners to the fee, which is also listed separately on the bill.

 

The Gator Group’s full-time hourly employees won’t actually receive health insurance until December. But the company said it implemented the surcharge now because of the compliance costs it’s facing ahead of the Affordable Care Act’s employer mandate kicking in in 2015.

 

“The costs associated with ACA compliance could ultimately close our doors,” the sign reads. “Instead of raising prices on our products to generate the additional revenue needed to cover the costs of ACA compliance, certain Gator’s Dockside locations have implemented a 1% surcharge on all food and beverage purchases only.”

 

The company employs a total of 500 people, with about half working full-time. Currently only management receives health benefits, but the restaurant will have to offer coverage to all full-timers once the mandate takes effect. The fee will allow the company to continue offering full-time hours to many workers, according to Sandra Clark, the group’s director of operations.

 

“I’m just trying to keep the employees I have that I’ve worked hard to train,” Clark said. 

 

In addition to the costs of providing health care, the company hired one additional staffer and a consulting firm to make sure it is complying with the law and to assist in the additional tracking of workers’ hours and wages required by Obamacare, said Clark.

 

Clark is not sure how much the company is spending on compliance, but estimates that it will cost $500,000 a year to extend insurance to its full-time hourly restaurant workers. The surcharge may bring in about $160,000 a year, she hopes.

So more surcharges coming then.

The bottom line decision for businesses: fire your workers, or pass through the costs to other consumers. Many have done the fomer, or converted full-time workers to part-time status. Increasingly more are opting for the latter. How long until the popular outcry that this latest “freebie” by the government was anything but.

via Zero Hedge http://ift.tt/1eAK9vB Tyler Durden

Is the groundwork for the “transitioning out” of the US Attorney General being laid? From Reuters:

U.S. Attorney General Eric Holder was taken to a Washington, D.C., hospital as a precaution on Thursday after he felt faint and was short of breath during a morning meeting with his staff, his office said in a statement.

 

“He is currently resting comfortably and in good condition. He is alert and conversing with his doctors,” according to the statement.

Please get well soon Eric: how else will this nation sleep easy at night knowing there are still so many “Too Big To Prosecute” banks out there whose wrists you still have to slap?

via Zero Hedge http://ift.tt/1eAGD4m Tyler Durden

Yesterday’s “better than expected” New Home sales served as the “good news” pre-market boost to send futures ramping higher once again, if not enough to cause a fresh all time high.

Here is what really happened when one spreads the numbers, courtesy of Mark Hanson’s housing blog.

This New Home Sales data are virtually worthless due to what I call “the laws of small numbers”.
 
That is, unlike Existing Sales that averages about 400k a month, New Home Sales averages under 35k, with the off-season winter months when the seasonal adjustments are the greatest in the high 20k’s.  In fact, as a percentage of total US house sales they have never been lower at about 7%.
 
This presents a problem when the Census Bureau counts ‘sales’, as  it rounds up to the nearest thousand.
 
Bottom line, in the CB data below, last month it says a rounded-up 34k houses sold. Last Jan they say 32k sold.  With an 8% RSA, this is flat YoY at best.   Also note, the volatile South was responsible for all the 2k gain plus another 2k. 

Rounding up…  See data below.  If all of the 4 regions were in this morning’s New Home Sales print were rounded down to the nearest thousand by the Census Bureau vs up, it would subtract 4k sales, or about 12%.  Even with the massive January seasonal adjustments, this would result in a SAAR headline print of 428k, or flat YoY vs the up 10% reported.   If only the South was flat YoY like the other regions, the same thing would occur. 
 
This is a shame, because New Home Sales have always been a great way to track “end-user” demand, as this segment isn’t driven by investors like the Existing resale market.  This leaves the only real way to gauge the true, fundamental health of the “end-user” housing market NAR’s existing sales and the first-time buyer cohort.    
 
1)  Census Bureau New Home Sales NSA beat last year by 2k houses with ALL FOUR regions rounded up to the nearest thousand.

In other words, with an 8% RSA, there is no change YoY.  Moreover, if the volatile Southern region was flat or lower YoY like the other regions, the headline 10% YoY gain would have been flat YoY. 
 
2)  I am exiting my long builder trade reco before Existing Home Sales was released last week into this squeeze…that 10% was too easy, I am a chicken, and housing far too volatile in here to fall in love.  

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Maybe because, gasp, it wasn’t the weather?

From BofA’s Hans Mikkelsen, most humorously known for his insightful missive from December 26, 2013 titled, “Hello economy, goodbye QE.” We for one, can’t wait for the title of his December 26, 2014 thesis.

Our internal BAC card (debit+credit) retail ex. gas spend data for the third week of February showed a very modest 1.1% increase over the same week last year, in line with the 1.2% increase from the prior week. Thus we see no evidence of a strong rebound in spending as the weather improved significantly during the third week of February – post Valentine’s Day (Feb 14th). This contrasts with comments made by Macy’s CFO Karen Hoguet during yesterday’s earnings conference call, where she noted improving sales across the board starting on Valentine’s Day (Situation Room: Valentine’s Day brings warmth 25 February 2014). Obviously company specific observations are very imprecise predictors for aggregate activity.

 

Shocking stuff.

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Yellen’s a spider from space
Our fiat she wants to debase
With laser-beam eyes
Our dollar she fries
And soon she will pick up the pace
The Limerick King

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The following remarks by John Kerry, borne out of his humiliation over the complete fiasco that was the US intervention in Syria last year and the even greater fiasco that was this year’s attempt to get all feuding parties on the table in Geneva, only to see that outcome obliterated as well, appear to be borne out of his disgust at the defunding of the US defense budget, which for Kerry, more than his gross incompetence, is the reason why the US now finds itself in a “new isolationism” leading him to conclude that the US is “beginning to act like a poor nation.” One wonders what tipped him off: the fact that the US debt just hit a record high $17,419,220,117,766.69 or that the biggest monetizers of US deficit spending are the Fed, China and just as insolvent Japan?

From Reuters:

Speaking to reporters, Kerry inveighed against what he sees as a tendency within the United States to retreat from the world even as he defended the Obama administration’s diplomatic efforts from Syria to the Israeli-Palestinian conflict. In comments tied to the budget that U.S. President Barack Obama is expected to present on Tuesday, Kerry suggested that tighter spending, in part at the behest of congressional Republicans, may limit U.S. clout around the world.

 

“There’s a new isolationism,” Kerry said during a nearly one-hour discussion with a small group of reporters.

 

“We are beginning to behave like a poor nation,” he added, saying some Americans do not perceive the connection between U.S. engagement abroad and the U.S. economy, their own jobs and wider U.S. interests.

Perhaps some other Americans are tired of America acting as Globocop, and as the world’s hypocritical superpower dispensing “justice” when it fits its national interests, and ignoring all other conflicts, specifically when Mid-East oil, or the growing Russian sphere of influence is not concerned?

Kerry made the case as Obama prepares to release a budget that will adhere to spending levels agreed to in a two-year bipartisan budget deal struck late last year, entailing some spending cuts the administration would have preferred to avoid.

 

The U.S. State Department budget will decline slightly in the president’s budget submission, Kerry said, saying this was a direct result of the bipartisan budget deal that cut funding further than Obama wanted.

 

“This is not a budget we want. It’s not a budget that does what we need,” he said, saying the budget deal entailed cuts demanded by the Republican-led House of Representatives. “It was the best the president could get. It’s not what he wanted.”

But hold on: wasn’t it Kerry’s own party that has been urging the defunding of the US defense budget at the expense of overfunding welfare and benefits? The people are confused.

Next, Kerry deflects his own personal failings as SecState, having had to be pulled from his yacht last summer, just as the Syrian conflict was reaching its climax:

In speaking of what he called the “new isolationism,” Kerry cited the limited support in the U.S. Congress to back Obama’s plan to launch an air strike against Syria last year because of its suspected use of chemical weapons against civilians.

 

Obama, in a decision criticized by some U.S. allies in the Gulf and elsewhere, asked Congress to vote on a strike. With limited congressional backing, he ultimately abandoned a strike and pursued a deal to get Syria to give up its chemical weapons.

 

“Look at our budget. Look at our efforts to get the president’s military force decision on Syria backed up on (Capitol Hill). Look at the House of Representatives with respect to the military and the budget,” Kerry said.

 

“All of those things diminish our ability to do things,” he added.

Those… and the people who are in charge. Hence: defensive mode – activate:

Kerry took particular aim at critics of his efforts to get the Syrian government and the opposition that has sought to oust Syrian President Bashar al-Assad for nearly a year to reach a peace agreement that would entail Assad’s departure.

 

A second round of peace talks in Geneva broke up on Saturday, with chief mediator Lakhdar Brahimi lamenting a failure to achieve much beyond agreement on an agenda for a third round.

 

“These people who say that it’s failed or that it’s a waste of time … Where is their sense of history?” Kerry said.

 

“How many years did the Vietnam talks take? How many years did Dayton take in Bosnia-Herzegovina?” he added. “These things don’t happen in one month. I mean it’s just asinine, frankly, to be making an argument that after three weeks it’s failed.”

What is most ironic about all of the above, is that hypocrisy aside, Kerry is absolutely correct: the US is starting to act like a poor nation…  because it is, and Americans indeed “do not perceive the connection between U.S. engagement abroad and the U.S. economy, their own jobs and wider U.S. interests” because all US foreign policy reflects is the interest of a select group of uber-wealthy oligrachs whose sole interests the US congress represents… and nobody else’s. As for everything else, we can’t wait to see how Kerry handles the current Ukrainian crisis. The popcorn is prepared.

via Zero Hedge http://ift.tt/1ftGi9H Tyler Durden