Numbahs 10/1/13

R=

1681.10, 1688.00

Line in the Sand:

1674.10

S=

1667.20, 1660.20

Open enrolment starts today for Obamacare coverage effective January 1, regardless of what shenanigans are playing out in DC. Individual penalty for no coverage in 2014: $95 per year per individual or 1% of income whichever is greater, capped at $285 per household. But those fines increase apace so that they will look like this going forward: 2016: $695 per person or 2.5% income, capped at $2085 per household. Heres the problem with this whole load of baloney: How many healthy, young people do you think are gonna sign up to pay not-negligible premiums in order to get themselves coverage? Right. Back when our healthcare contribution amounted to a pittance deducted from our paycheck, more than one young punk opted not to make even that tiny contribution, choosing to live on the edge! Because when you are 22 and fit as a fiddle, you never think about getting hit by a bus. Or worse. As an aside, have you looked at the various plans offered by Obamacare? Theyre a joke. The out of pocket numbers are astonishingly steep. (Example: the bronze plan has $6350 individual and $12, 700 family; no typos here, gang.) And once the public ... even those who will have these premiums subsidized by the rest of us ... figure out that they cost a whole lotta money for sparse coverage ... hello?

How do the subsidies work? All persons with up to 400% above the poverty line receive a government subsidy to help cover the premiums. 400% above? What does that mean in dollars and cents? About $46 grand a year in annual income for an individual. And about $92k for a household of 4. I think I am about to pass out. You? This means that a single person making, say, $30k a year will get a check from the taxpayer for $143 each month to put towards the Silver Plan if he choses that one. NB: the average for a mid-tier plan across the country is $328 premium per month FOR AN INDIVIDUAL. Mississippi though which is rural and dirt poor? The premium there is up at $448. Are they serious or delirious? Right. Thats just subsidies for the premiums. There are other subsidies available to help with co-pays and out of pocket as well. The line in the sand here is 250% of the poverty line. SOS. Meanwhile, subsidies aside, if you pick the Silver plan, in California, you have to pay the doctor $45 for the visit and $65 if the doctor is a specialist. While many of us do not think that $45 is a lotta do-re-mi, there are many others who absolutely would balk at these numbers. (Did you know that if a Medicaid beneficiary is asked for the $2 co-pay by the medical provider ... yeah a stinkin two bucks ... and the beneficiary simply says I have no money, then the provider must cease and desist immediately? Thats how it currently works. And by dammit, there is nobody on Medicaid who doesnt know about this loophole. So now I wanna see these goobers get $45 bucks up front from the next group of folks ridin on taxpayer shirttails. Right. A major hallucination.) The upshot here is that in order for the Obamacare math to work, they are gonna have to attract a lot of healthy, young blood into the insurance pool. And that aint gonna happen. Whats most infuriating is the call from the media, jackasses that they are, about the damage the shutdown of the government will mete out on the economy. With not a single peep about the ongoing damage to the economy meted out by central bank policy, compounded by an overt move by the Administration towards a strictly, centrally-planned economy. In the footsteps of the failed European model, natch. And given the punk growth we have experienced and which we will be lucky to continue to experience ... is right on track for the new mode. Saints preserve us. I did not think that Boehner would let it go this far, no sir, though acknowledged the possibility of a brief closure. And was hopeful that the one-week extension the House requested would have done the trick. But Reid nixed that one, mensch that he is. Historically, the impact of these actions has had little impact on anything, least of all the stock market. Which generally goes sideways for the duration and then puts in about a pop once the wheels start turning again. Last one we endured as a reminder was 28 days at the end of 95 into 96 when Gingrich was battling with Clinton.

... In the past, the effects have been limited: Bank of America-Merrill Lynch research showed that the median change for the S&P 500 is a gain of 0.1 percent in the last 11 cases of a federal shutdown. That is followed by a median increase of 2.8 percent in the following month. ... http://www.cbsnews.com/8301-250_162-57605387/government-shutdown-whats-the-cost-tothe-taxpayers/ So here we are on the first of October, a Mexican standoff underway. Because nobody is willing to negotiate. Whether thats right or wrong is not the issue, no sir. So how about this tack instead: Let the House write up a resolution that raises the debt ceiling limit immediately. Right. Let Obama pick a freakin number. Double the current levels. Who cares? But attach a single contingency thereon. As follows: You can jack our debt to kingdom come. Just as soon as you rescind every last exemption ... bar none ... from your bag of political favors. So that big business, unions, members of Congress and their staff will be bound as immediately as the individual ... to comply with the Affordable Care Act. I dont think theres anything left to lose in this mess, so why the heck not throw it back in Obamas lap thusly? I am fit to be tied, having missed the excitement yesterday. As I was sequestered, taking that continuing education examination ... so that I can keep up my registration. Let me just say this and be done with it: I thought that the metal detector and the request that I turn my pockets inside out (I kid you not) before being admitted to the test area ... were a bit over the top. As was the temperature which I made at about 45 degrees, noting that jackets/sweaters of any kind were strictly verboten as well. Whatever. Its over. For another 3 years. Carry on! We have data today. But please note: The Obama Administration has stated that if the government is in shutdown mode, there will be no NFP on Friday as scheduled. No details as to how extensive or deep the shutdown would have to be to trigger this omission. I am chalking this up to the usual childish tactics which are the hallmark of this Administration. Among the releases: Vehicle sales over the course of the day.

Chain Store Sales, Construction Spending, ISM Manufacturing and one from the Dallas FED: Texas Service Sector Outlook Survey. Get crackin! Later.

Joan McCullough, East Shore Partners, 1-212-226-1223 Trading: 1-800-222-8723 joanmccullough@eastshorepartners.com

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