This week, Bruce, Michael and Dale discuss Obamacare and the end of antibiotics.
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Durable goods order rose 3.7% in September—all of it on aircraft orders. Ex-transportation orders fell -0.1%. On a year-over-year basis, orders are up 7.4% overall, and up 5.6% ex-transportation.
The Reuter’s/University of Michigan’s consumer sentiment index slipped -2 points in the final October reading to 73.2.
Wholesale inventories rose 0.5% in August, while sales rose 0.6%. The wholesale stock-to-sales ratio was unchanged at 1.17.
The US trade deficit widened a bit from an unexpectedly low July deficit to $-38.8 billion in August.
The PMI Manufacturing Index Flash fell -1.7 points to 51.1 in October.
Initial jobless claims fell 8,000 last week, to 350,000. The 4-week moving average rose 11,750 to 348,250, Continuing claims rose 35,000 to 2.847 million.
The Bloomberg Consumer Comfort Index fell -2 points to -36.1 last week.
The Fed’s balance sheet rose $25.4 billion last week, with total assets of $3.839 trillion. Reserve Bank credit increased $20.4 billion.
The Fed reports that M2 Money Supply increased by $28.8 billion last week.
As a designed program it is a disaster. Why? Because it does few if any of the things it was supposed to do (remember: “if you like your insurance and want to keep it?”). Now the New York Times – a rah, rah supporter of the law – has found another “design flaw”:
As technical failures bedevil the rollout of President Obama’s health care law, evidence is emerging that one of the program’s loftiest goals — to encourage competition among insurers in an effort to keep costs low — is falling short for many rural Americans.
While competition is intense in many populous regions, rural areas and small towns have far fewer carriers offering plans in the law’s online exchanges. Those places, many of them poor, are being asked to choose from some of the highest-priced plans in the 34 states where the federal government is running the health insurance marketplaces, a review by The New York Times has found.
You have to chuckle a bit at the abject ignorance the Times often displays as evidenced by the fact that they don’t seem to understand that price controls/setting isn’t going to foster much competition among anyone. And, when government decides what each policy must contain, they’re not going to be cheap. Oh they may seem relatively cheap, but then there are those damnable deductibles, aren’t there?
Of the roughly 2,500 counties served by the federal exchanges, more than half, or 58 percent, have plans offered by just one or two insurance carriers, according to an analysis by The Times of county-level data provided by the Department of Health and Human Services. In about 530 counties, only a single insurer is participating.
The analysis suggests that the ambitions of the Affordable Care Act to increase competition have unfolded unevenly, at least in the early going, and have not addressed many of the factors that contribute to high prices. Insurance companies are reluctant to enter challenging new markets, experts say, because medical costs are high, dominant insurers are difficult to unseat, and powerful hospital systems resist efforts to lower rates.
“There’s nothing in the structure of the Affordable Care Act which really deals with that problem,” said John Holahan, a fellow at the Urban Institute, who noted that many factors determine costs in a given market. “I think that all else being equal, premiums will clearly be higher when there’s not that competition.”
The Obama administration has said 95 percent of Americans live in areas where there are at least two insurers in the exchanges. But many experts say two might not be enough to create competition that would help lower prices.
What was that word again? Oh yeah, “incentive”. What “incentive” is there for an insurer to enter a market simply to lower prices so no one can survive? Yeah, probably not much. And in rural areas where population is thin in comparison to urban areas, the cost of doing business may preclude the entrance of a third carrier because there’s no positive incentive to do so. I.e. they don’t see profit being higher than the cost of doing business. Imagine that?
But hey, it’s the law and law is magic, you know. It declares something will be so and it must be so. Right?
Well, that’s the “thinking” behind this law, such that it is … the law of the underwear gnomes come to life.
The MBA reports that mortgage applications fell -0.6% last week, with purchases up 1.0% and refinancings down -1.0%.
Import and export prices both rose in September, by 0.2% and 0.3%, respectively. Both were down on a year-over year basis, with import prices down -1.0% and export prices down -1.6%.
The FHFA House Price Index rose 0.3% in August, putting it up 8.5% year-over-year.
The kingdom is citing how badly this administration has botched events with both Syria and Iran as the reason:
Upset at President Barack Obama’s policies on Iran and Syria, members of Saudi Arabia’s ruling family are threatening a rift with the United States that could take the alliance between Washington and the kingdom to its lowest point in years.
Saudi Arabia’s intelligence chief is vowing that the kingdom will make a ‘major shift’ in relations with the United States to protest perceived American inaction over Syria’s civil war as well as recent U.S. overtures to Iran, a source close to Saudi policy said on Tuesday.
Prince Bandar bin Sultan told European diplomats that the United States had failed to act effectively against Syrian President Bashar al-Assad and the Israeli-Palestinian conflict, was growing closer to Tehran, and had failed to back Saudi support for Bahrain when it crushed an anti-government revolt in 2011, the source said.
Guess all that bowing and scraping by Obama didn’t impress them much. So let’s review. Libya … destabilized and in a virtual state of anarchy. Egypt … gone. Totally mishandled and now looking at other possible alliances. Saudi Arabia … going. Syria and Iran … well into Russia’s orbit. Oh, yeah, that’s much better than when Bush was prez.
Meanwhile our Secretary of State is telling everyone relations with Saudi Arabia are both good and normal.
In unusually blunt public remarks, Prince Turki al-Faisal called Obama’s policies in Syria ‘lamentable’ and ridiculed a U.S.-Russian deal to eliminate Assad’s chemical weapons. He suggested it was a ruse to let Obama avoid military action in Syria.
‘The current charade of international control over Bashar’s chemical arsenal would be funny if it were not so blatantly perfidious. And designed not only to give Mr. Obama an opportunity to back down (from military strikes), but also to help Assad to butcher his people,’ said Prince Turki, a member of the Saudi royal family and former director of Saudi intelligence.
Now there’s respect, wouldn’t you say? You can tell that Saudi Arabia has all the respect in the world for this administration /sarc.
You know it is bad when they drop the diplo-speak and resort to “real-speak”.
No respect and certainly no fear of anything the US might do. In fact, it is because of what it hasn’t done or perhaps how badly it has done what it has done, that they are deciding to look elsewhere for an ally.
And who is waiting in the wings?
I imagine somewhere Hillary is pounding on the “reset” button.
Hey, Hill – what difference does it make now?
The shutdown-delayed Employment Situation for September was another bad one. The notional unemployment rate fell a notional -0.1% to a notional 7.2%. That’s all faeries and unicorns. In actuality, only 148,000 net new jobs were created. Average Earnings rose 0.1%, and the average workweek was unchanged at 34.5 hours. An additional 136,000 people left the labor force during the month, helping the labor force participation rate to stay unchanged at a historical low of 63.2%. One slightly more positive note is that the civilian labor force grew by 73,000 persons, while 133,000 more persons were reported as employed in September as compared to August. When the numbers all shake out, nothing much has changed, as my estimate of the real rate of unemployment is 11.45% in September, compared to 11.46% in August.
ICSC-Goldman is reporting some retail sales improvement, with weekly sales growth at 1.4%, and year-over-year growth of 3.2%. Redbook, conversely, is reporting a weaker 2.9% year-over-year growth rate.
Foreign demand for US securities is again showing softness, with the 6th net outflow in 7 months of $-8.9 billion for August. Who is it that finances our deficits by buying US securities again? Oh, right. Foreigners.
Construction spending rose 0.6% in August, with a year-on-year increase of 7.1%. Gains were led by residential outlays, with both multi- and single-family sectors showing strength.
The Richmond Fed Manufacturing Index rose from 0 to 1 in October, as district activity remained flat.
Everything I read about this debacle that is ObamaCare’s launch is summed up pretty well in this paragraph:
In an era where Google is making self-driving cars and Amazon offers next-day delivery for just about anything, the White House plunged ahead with a system it knew to be defective and is relying on the technology of the 19th century as the fall-back. Five days before the exchanges launched, the Health and Human Services Department increased the Virginia information technology company Serco’s $114 million contract by $87 million—to help process paper applications. Are contingency plans in place to sign up via telegraph?
Pitiful doesn’t begin to describe the effort. Incompetent is too tame to encompass the leadership. Inept would be a compliment if describing the launch.
And yet we think these people, the people who designed and put this monstrosity together and thought it good enough to launch, can be trusted with our health care.
It makes one wonder about the collective intelligence of the citizenry.
P.S. Thought you’d like to know that in the new liberal conventional wisdom, “death panels” are now a “good thing”, especially if the state has final say.
Gee, never saw that coming.
BTW, can anyone guess the greatest lie of the 21st Century to date?
“If you like your insurance and want to keep it, you can.”