Obama Caves, Delays Obamacare As Momentum Fizzles; Customer Pool "Smaller And Sicker"

Late last night, with just 4 days left until the December 23 deadline to choose plans that will begin Jan. 1, Washington Post reported that the Obama administration finally caved and “significantly relaxed the rules of the federal health-care law for millions of consumers whose individual insurance policies have been canceled, saying they can buy bare-bones plans or entirely avoid a requirement that most Americans have health coverage.”

The ability to get an exemption means that the administration is freeing these people from one of the central features of the law: a requirement that most Americans have health insurance as of Jan. 1 or risk a fine. The exemption gives them the choice of having no insurance or of buying skimpy “catastrophic” coverage. 

As was to be expected, the announcement which made the healthcare ponzi scheme far less powerful triggered an immediate backlash from the health insurance industry and “raised fairness questions about a law intended to promote affordable and comprehensive coverage on a widespread basis.”

This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” said Karen Ignagni, president of America’s Health Insurance Plans, the industry’s main trade group.

Another health insurance official, who spoke on the condition of anonymity because he lacked authorization to discuss the matter publicly, pointed out that the hardship exemption also gives one group the ability to buy coverage whenever they want, rather than during annual open-enrollment periods. As a result, he said, more people might not buy insurance unless they get sick.

Well, Karen: welcome to central-planning, where whatever can go wrong, ultimately does, and as for your profit margins which you had modelled as surging in the coming years: feel free to model them lower.

How did the latest humiliation for the administration come about? WaPo explains:

At a news conference in mid-November, an apologetic Obama relented to the criticism, announcing that the federal government would let insurance companies continue for another year to offer individuals and small businesses health plans that do not meet the new requirements. The decision, however , is up to each state’s insurance regulator, and not all have gone along.

 

This second change, prompted by a group of Democratic senators — most of whom face tough reelection campaigns next year — goes substantially further in accommodating people upset about losing their policies. The latest rule will allow consumers with a canceled health plan to claim a “hardship exemption” if they think the plans sold through new federal and state marketplaces are too expensive.

To be sure, the 2014 elections played a key role: As The Hill reported, the policy shift was laid out in a letter to Sens. Mark Warner (D-Va.), Jeanne Shaheen (D-N.H.), Mary Landrieu (D-La.), Heidi Heitkamp (D-N.D.), and Tim Kaine (D-Va.), who asked the administration on Wednesday to clarify whether those who had their plans cancelled could qualify for the exemption. The Washington Post pointed out the lawmakers faced tough reelection campaigns next year, or were from states that President Obama lost in last year’s election. Could it be that Obamacare is actually… unpopular with the broader population? Say it isn’t so!

WaPo also notes that “it is unclear how many people facing canceled policies will choose no insurance, bare-bones coverage or a plan through the insurance exchanges that meet new federal standards.”

Actually, it is clear: according to the WSJ the answer is “very few”, especially when one adds the healthcare law’s rolloug problems. The WSJ adds that “insurers pressing for last-minute enrollees under the health-care law say they are running into a worrisome trend: Customers who were put off by the insurance marketplaces’ early troubles are proving hard sells. Many people thwarted by the technical problems of HealthCare.gov are reluctant to try again, citing frustration with the federal site, web-security concerns and the pressure of the holidays, several insurers say.”

Geisinger Health Plan, a central Pennsylvania insurer, has tracked down more than 4,000 people who expressed interest earlier this fall, urging them to attend sign-up events this week.

 

So far, few have responded: About a dozen have shown up at each event, said Lisa D. Hartman, the insurer’s director of commercial marketing.

 

“It might be getting too late for people to make a move,” Ms. Hartman said. “We’ve had some people telling us it’s too close to the holidays.”

 

Call-center workers at Arches Health Plan, a new Utah plan, have been working through a list of about 4,000 people who unsuccessfully sought coverage in October and November. Insurers have identified about 2,000 people who are still interested and have managed to enroll about 90% of them.

 

We definitely have lost a lot of momentum, where people said, ‘You know what, I’m going to come back in January,'” said Shaun Greene, Arches’ chief operating officer.

And the punchline: With only days before the Monday deadline to sign up for coverage that starts Jan. 1, insurers are facing a much smaller, and sicker, pool of customers than hoped for.

Like we said: anything that can go wrong… oh look, over there, the Stalingrad & Propaganda 500 just hit a new all time high!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Eoz1BRAW5UI/story01.htm Tyler Durden

Obama Caves, Delays Obamacare As Momentum Fizzles; Customer Pool “Smaller And Sicker”

Late last night, with just 4 days left until the December 23 deadline to choose plans that will begin Jan. 1, Washington Post reported that the Obama administration finally caved and “significantly relaxed the rules of the federal health-care law for millions of consumers whose individual insurance policies have been canceled, saying they can buy bare-bones plans or entirely avoid a requirement that most Americans have health coverage.”

The ability to get an exemption means that the administration is freeing these people from one of the central features of the law: a requirement that most Americans have health insurance as of Jan. 1 or risk a fine. The exemption gives them the choice of having no insurance or of buying skimpy “catastrophic” coverage. 

As was to be expected, the announcement which made the healthcare ponzi scheme far less powerful triggered an immediate backlash from the health insurance industry and “raised fairness questions about a law intended to promote affordable and comprehensive coverage on a widespread basis.”

This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” said Karen Ignagni, president of America’s Health Insurance Plans, the industry’s main trade group.

Another health insurance official, who spoke on the condition of anonymity because he lacked authorization to discuss the matter publicly, pointed out that the hardship exemption also gives one group the ability to buy coverage whenever they want, rather than during annual open-enrollment periods. As a result, he said, more people might not buy insurance unless they get sick.

Well, Karen: welcome to central-planning, where whatever can go wrong, ultimately does, and as for your profit margins which you had modelled as surging in the coming years: feel free to model them lower.

How did the latest humiliation for the administration come about? WaPo explains:

At a news conference in mid-November, an apologetic Obama relented to the criticism, announcing that the federal government would let insurance companies continue for another year to offer individuals and small businesses health plans that do not meet the new requirements. The decision, however , is up to each state’s insurance regulator, and not all have gone along.

 

This second change, prompted by a group of Democratic senators — most of whom face tough reelection campaigns next year — goes substantially further in accommodating people upset about losing their policies. The latest rule will allow consumers with a canceled health plan to claim a “hardship exemption” if they think the plans sold through new federal and state marketplaces are too expensive.

To be sure, the 2014 elections played a key role: As The Hill reported, the policy shift was laid out in a letter to Sens. Mark Warner (D-Va.), Jeanne Shaheen (D-N.H.), Mary Landrieu (D-La.), Heidi Heitkamp (D-N.D.), and Tim Kaine (D-Va.), who asked the administration on Wednesday to clarify whether those who had their plans cancelled could qualify for the exemption. The Washington Post pointed out the lawmakers faced tough reelection campaigns next year, or were from states that President Obama lost in last year’s election. Could it be that Obamacare is actually… unpopular with the broader population? Say it isn’t so!

WaPo also notes that “it is unclear how many people facing canceled policies will choose no insurance, bare-bones coverage or a plan through the insurance exchanges that meet new federal standards.”

Actually, it is clear: according to the WSJ the answer is “very few”, especially when one adds the healthcare law’s rolloug problems. The WSJ adds that “insurers pressing for last-minute enrollees under the health-care law say they are running into a worrisome trend: Customers who were put off by the insurance marketplaces’ early troubles are proving hard sells. Many people thwarted by the technical problems of HealthCare.gov are reluctant to try again, citing frustration with the federal site, web-security concerns and the pressure of the holidays, several insurers say.”

Geisinger Health Plan, a central Pennsylvania insurer, has tracked down more than 4,000 people who expressed interest earlier this fall, urging them to attend sign-up events this week.

 

So far, few have responded: About a dozen have shown up at each event, said Lisa D. Hartman, the insurer’s director of commercial marketing.

 

“It might be getting too late for people to make a move,” Ms. Hartman said. “We’ve had some people telling us it’s too close to the holidays.”

 

Call-center workers at Arches Health Plan, a new Utah plan, have been working through a list of about 4,000 people who unsuccessfully sought coverage in October and November. Insurers have identified about 2,000 people who are still interested and have managed to enroll about 90% of them.

 

We definitely have lost a lot of momentum, where people said, ‘You know what, I’m going to come back in January,'” said Shaun Greene, Arches’ chief operating officer.

And the punchline: With only days before the Monday deadline to sign up for coverage that starts Jan. 1, insurers are facing a much smaller, and sicker, pool of customers than hoped for.

Like we said: anything that can go wrong… oh look, over there, the Stalingrad & Propaganda 500 just hit a new all time high!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Eoz1BRAW5UI/story01.htm Tyler Durden

BofAML Closes USDJPY, Warns "Bulls Beware"

“USDJPY bulls must use caution going forward,” is the ominous warning BofAML’s MacNeil Curry sends as the firm closes its long position on reaching their upside objective of 104.60. A closer look at the uptrend from early October says that this is a maturing advance and is growing increasingly prone to a reversal. From an Elliott Wave perspective, Triangle breakouts represent the terminal move of a trend, meaning that the potential for a top and medium-term reversal lower is growing quickly; one that could ultimately take prices back to the 97/96 area. While this is likely a story for 2014, Curry warns – USDJPY bulls should beware.

 

 

Of course, crucially, if USDJPY rolls over, so does the house of cards equity market with it at the margin… but fundamentals still matter right?


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kSC40jQ8f04/story01.htm Tyler Durden

BofAML Closes USDJPY, Warns “Bulls Beware”

“USDJPY bulls must use caution going forward,” is the ominous warning BofAML’s MacNeil Curry sends as the firm closes its long position on reaching their upside objective of 104.60. A closer look at the uptrend from early October says that this is a maturing advance and is growing increasingly prone to a reversal. From an Elliott Wave perspective, Triangle breakouts represent the terminal move of a trend, meaning that the potential for a top and medium-term reversal lower is growing quickly; one that could ultimately take prices back to the 97/96 area. While this is likely a story for 2014, Curry warns – USDJPY bulls should beware.

 

 

Of course, crucially, if USDJPY rolls over, so does the house of cards equity market with it at the margin… but fundamentals still matter right?


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kSC40jQ8f04/story01.htm Tyler Durden

Main Reasons For "Upward Revised" Q3 Personal Spending: Healthcare And Gasoline

Earlier today, the Bureau of Economic Analysis surprised everyone by announcing a final Q3 GDP growth of 4.1% compared to 3.6% in the first revision (and 2.8% originally), driven almost entirely by the bounce in Personal Consumption which rose 2.0% compared to estimates of 1.4%. As a result many are wondering just where this “revised” consumption came from. The answer is below: of the $15 billion revised increase in annualized spending, 60% was for healthcare, and another 27% was due to purchases of gasoline. The third largest upward revision: recreation services.

In other words, the BEA thought long and hard what it could revise and decided on the following: in Q3 the US economy was revised to the strongest since 2011 because Americans, it would appear, were gassing up more to visit (and pay) their doctor, and then going to the movies.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/D5myD_lSDoE/story01.htm Tyler Durden

Main Reasons For “Upward Revised” Q3 Personal Spending: Healthcare And Gasoline

Earlier today, the Bureau of Economic Analysis surprised everyone by announcing a final Q3 GDP growth of 4.1% compared to 3.6% in the first revision (and 2.8% originally), driven almost entirely by the bounce in Personal Consumption which rose 2.0% compared to estimates of 1.4%. As a result many are wondering just where this “revised” consumption came from. The answer is below: of the $15 billion revised increase in annualized spending, 60% was for healthcare, and another 27% was due to purchases of gasoline. The third largest upward revision: recreation services.

In other words, the BEA thought long and hard what it could revise and decided on the following: in Q3 the US economy was revised to the strongest since 2011 because Americans, it would appear, were gassing up more to visit (and pay) their doctor, and then going to the movies.


    



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Meet Wall Street. Your New Landlord

Blackstone Group appears to be trying to oligopolize the business of renting single-family homes in the U.S.. As Bloomberg reports, after the housing crash left more than 7 million foreclosed homes in its wake, the investment firm has spent more than $7.8 billion purchasing about 41,000 single-family homes for rental conversion. The world’s largest private equity firm has quickly become the largest landlord (of rental homes) in the U.S. and in October, Blackstone offered the first-ever “rental-home-backed” security on Wall Street. One has to wonder if this was the plan all along?

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/54kv7nP43EU/story01.htm Tyler Durden

Final Q3 GDP Revision Smashes Expectations, Prints Nearly 50% Higher Than Initial Estimate

When a month ago, the BEA released its first revision to Q3 GDP, the lament from even the biggest sycophants of data manipulation was that the bounce in estimated Q3 economic output from 2.84% to 3.61% was driven entirely by inventory accumulation, while personal consumption as a % of the final GDP number actually declined from 1.04% to 0.96%.Sequentially, the ever missing personal consumption was revised up 2% vs the estimated up 1.4%, far above the highest estimate of 1.6%, and also the prior 1.4% print.

Which is why absolutely nobody was surprised to see the BEA mysteriously keep virtually every other GDP component unchanged but boost Personal Consumption Expenditures from 0.96% of GDP to 1.36%. The end result is that the GDP reported in the first revision number has been boosted once again to a simply ludicrous 4.1%, smashing expectations of a 3.6% print. Putting this “revision” in perspective, the final GDP is now 45% higher than the first GDP estimate of 2.84%, and there is a whopping 1.5% delta between the first and final revision, which in our record books is the biggest revision on record.

What can one say: close enough for government data-fudging work.

Some additional data in the GDP release:

Corporate Profits 

 

Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $39.2 billion in the third quarter, compared with an increase of $66.8 billion in the second.  Taxes on corporate income decreased $0.4 billion, in contrast to an increase of $10.0 billion.  Profits after tax with IVA and CC Adj increased $39.5 billion, compared with an increase of $56.9 billion.

 

Dividends decreased $179.0 billion in the third quarter, in contrast to an increase of $273.5 billion in the second.  The large third-quarter decrease primarily reflected dividends paid by Fannie Mae to the federal government in the second quarter.  Undistributed profits increased $218.6 billion, in contrast to a decrease of $216.6 billion.  Net cash flow with IVA — the internal funds available tocorporations for investment — increased $231.1 billion, in contrast to a decrease of $205.3 billion. 

 

Corporate profits by industry

 

Domestic profits of financial corporations increased $9.7 billion in the third quarter, compared with an increase of $24.5 billion in the second.  Domestic profits of nonfinancial corporations increased $12.7 billion, compared with an increase of $37.8 billion.  The increase in profits of financial corporations reflected increases in both Federal Reserve banks and “other” financial industries.  The increase in nonfinancial corporations primarily reflected increases in manufacturing and in “other” nonfinancial corporations that were partly offset by a decrease in information.  Within manufacturing, the largest increases were in “other” durable goods and in food and beverage and tobacco products. These increases were partly offset by decreases in petroleum and coal products and in chemical products. 

 

The rest-of-the-world component of profits increased $16.7 billion in the third quarter, compared with an increase of $4.6 billion in the second.  This measure is calculated as the difference between receipts from the rest of the world and payments to the rest of the world.


    



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China Bails Out Money Markets For Second Day In A Row, Following Repo Rate Blow Out

As reported yesterday, following a surge in various short-term and money market rates in the aftermath of the Fed’s taper announcement, the PBOC admitted after the close that it used Short-term Liquidity Obligations (SLO) to add funding to the market, and in doing so, bailing out money markets – the same product that nearly collapsed the financial system in the aftermath of Lehman.

The bank didn’t specify when it added the funds but, in another direct echo of the June panic, the PBOC said it is prepared to add more. However, it seems the market was less the convinced, and despite an early plunge in the seven day repo rate by over 2%, it suddenly and rapidly reversed direction and instead blew out hitting a whopping 9%, the highest since the June near-crash of the Chinese banking sector.

The outcome: China said it injected another $50 billion to bailout and stabilize its money markets in what is increasingly looking like a replay of this summer’s liquidity lock up. Perhaps the PBOC hinting at tapering at a time when the Fed is actually doing so is not the smart choice…

From the WSJ:

China’s central bank said it had injected over 300 billion yuan ($49.2 billion) into the nation’s money markets over a three-day period as interbank interest rates surged to their highest levels since June.

 

The People’s Bank of China said on its official Twitter-like weibo account that the banking system had current excess reserves of over CNY1.5 trillion and it called that level “relatively high.”

 

The central bank said that it had injected the funds through its “short-term liquidity operations” and this was in response to the year-end market factors.

 

The interest rates banks charge each other for short-term loans jumped to 8.2%, the highest level since the June cash squeeze. 

 

The stress in the banking system is starting to spread elsewhere, with stocks in Shanghai falling for a ninth straight day to the weakest level in four months while government bonds dropped, pushing the 10-yield up to near the highest in eight years.

 

The turmoil has been sparked by a scramble for funds by banks as they near the end of the year when they typically need extra cash to meet regulatory requirements as well as the demand for funds from companies.

 

The central bank also said reminded banks that they need to manage liquidity better.

As to what drove the rapid mood reversal, the Chinese market was hit early on with talk of a missed payment at a local Chinese bank. For now it has not been confirmed, and even if it was the PBOC is expected to never allow any government-backstopped bank to fail. Still, a few more days like the last two and the world may just find out how prepared for a bank failure a credit-stretched China really is.


    



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HSBC Gets Slap On The Wrist For Helping To Finance Terrorists

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The “Too Big Too Jail” nonsense that surrounds large U.S. banks and their above the law employees has been glaringly obvious and thoroughly documented for quite some time now. Yet what represents an even larger slap in the face to millions of hard-working, law-abiding citizens, is how relentlessly the “justice” system goes after small time criminals, while merely fining oligarch thieves for far worse crimes. I first covered this theme earlier this year in my piece Some Money Launderers are “More Equal” than Others, which discussed how HSBC was caught laundering billions of dollars for Mexican drug cartels.

Well HSBC is back in the news. This time it relates to their transferring funds on the behalf of financiers for the militant group Hezbollah. If transactions such as these had even the slightest link to Bitcoin, there would be endless uproar, calls for countless Congressional hearings and demands to stop the currency at all costs. But when HSBC is caught doing it, what happens? A $32,400 settlement.

More from The Huffington Post:

A major U.S. bank has agreed to a settlement for transferring funds on the behalf of financiers for the militant group Hezbollah, the Treasury Department announced on Tuesday.

 

Concluding that HSBC’s actions “were not the result of willful or reckless conduct,” Treasury’s Office of Foreign Assets Control accepted a $32,400 settlement from the bank. Treasury noted, as did HSBC in a statement to HuffPost, that the violations were voluntarily reported.

 

Everett Stern, a former HSBC compliance officer who complained to his supervisors about the Hezbollah-linked transactions, told HuffPost he was “ecstatic and depressed at the same time.”

 

“Those are my transactions, I reported them,” he said, satisfied that the government was taking action. But, he added, “Where I am upset was those were a handful of transactions, and I saw hundreds of millions of dollars” being transferred.

 

Stern said he hopes the government’s enforcement actions against HSBC have not come to an end with the latest settlement. “They admit to financing terrorism and they get fined $32,000. Where if I were to do that, I would go to jail for life,” he said.

 

And the government watchdog’s claim that HSBC committed no “substantially similar apparent violations” in the past five years is likely to raise some eyebrows. In December 2012, the bank agreed to pay a $1.9 billion settlement for moving money that a 2012 Senate report found had likely helped drug cartels and a Saudi Arabian bank the CIA has linked to al Qaeda.

 

No one at HSBC was criminally charged for what U.S. Assistant Attorney General Lanny Breuer called at the time ”stunning failures of oversight.” The Senate report faulted the Office of the Comptroller of the Currency, an independent bureau with the Treasury Department, for weak oversight of HSBC.

You know you are a Banana Republic if…

Full article here.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/NWrLRevbwpA/story01.htm Tyler Durden