Fixing Healthcare
Stocks crumbled again today hitting new recent lows. The Dow went down 281 points today.
Bonds were a safe haven play, so interest rates fell significantly.
The Dollar gained a small amount as England and Europe (ECB) dropped their interest rates, making the dollar more favorable as an investment. In addition, the dollar is currently a safe haven play during meltdowns.
Oil and gasoline fell slightly as worries about the economy crept into those markets.
Gold gained, and this was the signal I have been awaiting to recommend another “buy” for gold. Gold went up $21 today, and it also is a safe haven play during market meltdowns.
In the news today…..
US Factory Orders were down 1.9% in January. While this was better than expected, it is still negative, and six negatives in a row. As long as this number is falling, the layoff from factories will continue.
Mortgages – 12% of mortgage payers are one month or greater behind; that’s 5,400,000 mortgages. Startlingly, 48% of subprime mortgages or adjustable rate mortgages fall in this category. Foreclosure are being driven by the job market – as people get laid off, many of them go into foreclosure.
Unemployment Claims were 639,000 last week. While this is a drop from the previous week, it is still way too high, and will continue to increase the unemployment rate. Remember that anything over 400,000 is a negative for the economy.
The FED announced today that it won’t release information on which banks have taken loans from its various loan facilities. Bloomberg asked for the info from the Freedom of Information Act, and this was rejected by the FED. The FED says that the release of the information would be damaging to those institutions as they would have a negative stigma. In my opinion, the FED has a point. However, if I had my money in one of those institutions, I would like to know about it. From the readership’s viewpoint, know that Citigroup and Bank of America are on the intensive care list.
AIG – Did you ever wonder how we ended up lending $180B to AIG as a big surprise??? Probably more coming in the future. Well, there were some regulators who failed to notice that AIG was acting like a huge Hedge Fund, and over-committing its resources. They were writing a bunch of Credit Default Swaps – a type of insurance guaranteeing they will pay if the original bond writer fails to pay. Just another example of a massive regulatory loop-hole in the financial system.
Tonight’s Dinner Conversation…..
President Obama said today that we must solve the healthcare problem now. I agree with him. Are you surprised???? Here is what I think we need to solve:
- the massive % cost increases of healthcare each year.
- the stranglehold that pharmaceutical and healthcare companies have.
- the complacency in Congress – taking of PAC money and other “perks” from pharmaceutical and healthcare companies.
- the 48 million Americans who don’t have healthcare insurance.
I simply don’t agree with the President’s solution to the healthcare system – Nationalized Health Care – starting with the seemingly innocuous computerization of YOUR health records. Technology can be used for good or evil. Obama’s team has already stated the good (reduced medical costs) and the evil (government dictating what procedures you are eligible for.) Given they are already stating the evil – I am totally against it. In addition, I lived in the UK and I can state that the UK National Healthcare System is broken. But, you know as well as I know that ANY government run system (with its uncaring bureaucrats) can’t possibly run as effectively as a privately run one.
President Obama is using the “economic catastrophe” as a pretense to get his nationalized healthcare off the ground. “Don’t you know what a stimulus is???” The President’s party (in general – there are exceptions) doesn’t care an iota about YOUR health. It simply wants you dependent upon them, so you don’t have any choice but to be “beholding.” This is a clear cut choice between “big government – think welfare” and the “free enterprise system.” The problem is that the “free enterprise system” is broken when it comes to healthcare (and other areas too, like Wall St.)
So, the conversation for you tonight is to debate what you could do, or would do if you were in power, to fix the “free enterprise system” with respect to healthcare. I’ve delineated some (but definitely not all) of the problems with today’s healthcare system. So, why don’t we see our political leaders asking these type of questions??
Here are the last numbers:
Dow Jones 30 Industrial – 6594 (down 281 points)
10 Year Treasury Bond – 2.82% (down 0.19%)
Euro – $1.2553
Gold – $928 (up $21)
Oil – $43.61 (down $1.31)
Gasoline – $1.31 (down $0.07)