The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
“It is difficult to make predictions, especially about the future,” says a proverb often attributed to Yogi Berra. Imagine the world of freedom, or lack of it. Who could foresee the technologies that make our lives so rewarding and convenient? The same technologies have us all under the government’s giant microscope. Thankfully, the brave have turned the microscope around.
In the months since Edward Snowden revealed the nature and extent of the spying that the National Security Agency (NSA) has been perpetrating upon Americans and foreigners, some of the NSA's most troublesome behavior has not been a part of the public debate.
National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The problem for NSA apologist is that when guys like Snowden disclose that the government conducts comprehensive surveillance in ways that would have made 1984’s O’Brien drool, it puts the entire progressive agenda in jeopardy.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
In times of war and national emergency, it’s sometimes necessary to sacrifice civil liberties to secure vital gains in public safety. In those cases, we may have to accept a loss of privacy or freedom rather than invite mass slaughter of Americans.The National Security Agency’s domestic phone records collection is not one of those.Never have […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
Do you trust your doctor? Most patients assume their doctor is working in their best medical interests whenever he or she orders a diagnostic test or recommends a particular treatment. Customers might wonder whether an unscrupulous auto mechanic is being truthful when he recommends a brake job or a new transmission. But most patients trust […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”As the inequality gap grows, there is an ideological battle unfolding in the West.On the one hand, there are those who think government can fix things. It must do more, tax more, […]
On Feb. 7 the United States will once again reach its statutory debt limit, meaning it cannot legally borrow any more money. Since the obvious option of cutting spending to match the amount of revenue that the government collects is off the table for some inexplicable reason, Congress will have to pass a new, higher […]
The New York Times published an interminable article on health care recently. Plenty of facts — how scrupulous are these journalists! — but the article displayed absolutely no comprehension of the basics of cause and effect. I was left wondering about the whole point.The article details how the health care system rewards specialists to an […]
For critics of the surveillance state, it is tempting to see President Obama’s speech a few weeks ago as a partial victory: Prompted by Edward Snowden’s leaks and the public pressure for National Security Agency reforms, he announced significant changes to the program that collects and stores information about all telephone calls. And he promised […]
We put in a good-citizen call to the SEC the other day.
“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.
“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.
“Oh, don’t worry about that. The NSA is tapping our call anyway.”
“Are you talking about a specific stock?”
“Oh, no… I’m talking about all of them.”
“You mean a Madoff-style scandal?”
“No… no… This is much, much bigger than the Madoff scandal. We’re talking major manipulation. Intentional. Knowledge aforethought. Pumping up all stock prices. Trillions of dollars.”
“Who is doing this?” the agent asked… a certain tone creeping into his voice. He was starting to suspect he had a lunatic on the line.
“The Fed, of course.”
“Uh… thank you…”
“You gotta go after those bastards.”
“Uh… yes… we’ll look into it.”
“OK, thanks. I just thought you should know.”
Wall Street shook the sleep from its head and rubbed its eyes last week. Investors shrugged off the bad news from Japan and Europe.
As for the bad news from the U.S. itself… it hardly mattered. Yes, the economy was weaker than had been thought — with the worst jobs report in two years. No, there was not much good news coming from corporate earnings, either.
But hey — asset values no longer depend on the performance of the Main Street economy. This is a manipulated market. The Dow rose more than 100 points, reversing a worrying trend.
Since the start of the year, U.S. stocks have been selling off. But last Tuesday, investors found their footings… and recovered their delusions…
Yes! The only thing that matters is that the Fed is on the case. Stocks are being manipulated to the upside. Willfully. Knowingly. Intentionally.
Janet Yellen can talk about tapering quantitative easing (QE). But she can’t do it. The economy needs more support from the Fed. But the Fed doesn’t put more money into ordinary household budgets. You can see that just by looking at jobs, wages, or consumer prices. The U.S. CPI is barely going up at all.
That’s because the Fed’s intervention stays in the financial economy — where the EZ money and credit as a result of ZIRP and QE feeds directly into stock, bond and real estate markets.
Jimmying and Jiving
Look at a stock chart… identify the episodes of QE… and you will see that the Fed’s QE = U.S. stock market gains. Liquidity mainly drives asset prices, not the real economy.
Asset prices do not reflect the genuine “facts on the ground” for businesses or consumers. They are jimmied and jived by the authorities.
Last week, we noted that stocks, bonds and real estate have added $21 trillion to the nation’s balance sheets since 2009. But at the rate the economy is adding real wealth, it will take 70 years to catch up with those asset prices. Stocks, bonds, and real estate are all counting on growth that will never happen. Or at least it won’t happen soon enough to justify such high prices.
What made stocks go up so much last year was that the Fed made a lot of liquidity available — while the federal government used less of it than it had the year before. This left a lot of excess liquidity wandering around looking for a home.
What did it find? Stocks and housing!
Most likely, this will continue. Stick with me now…
1. The feds think they can manage the economy
2. They see recessions and/or falling asset prices as problems to be fixed
3. They think they can prevent these things with more QE
On the evidence… they’re right!
Without Fed support, the economy would probably be in recession. U.S. GDP went up about $350 billion last year. The Fed offset it with $1.2 trillion worth of QE. Even so, the economy only limps along. Without it, the economy slumps. The Fed can’t tolerate a slump. So, it has to continue with QE.
Meanwhile, the federal government is absorbing $400 billion less capital this year than last as a result of lower budget deficits. This leaves a lot of excess stray kittens in need of adoption. Who will take them in?
Stocks! Real estate! Yes, dear reader, we will most likely see more gains in 2014.
This is blatant manipulation of the markets. The Fed is open about it. Even proud of it.
C’mon, SEC, you put the petty, two-bit manipulators in jail. A few million here and there. BFD! How about the big boys? How about a trillion-dollar conspiracy to raise stock prices?
Arrest Janet Yellen! We want to see her do the perp walk.
– Bill Bonner
This article originally appeared here.