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  • Exploding Healthcare Costs Are Out Of Control

    Today I want to address the soaring costs of healthcare, which are rising far more than the Obama administration and the Department of Health and Human Services will admit. While I personally don’t consider healthcare costs to be a political issue, many argue that it is indeed a political issue with regard to “Obamacare.”

    When talking to friends and colleagues, the most frequent comment I get is something like: Obamacare health insurance premiums are much higher than the government says they are – what gives? Today, I will answer that question with some new facts from an independent non-profit on healthcare premiums around the country. Prepare to be surprised.

    The Obama administration’s Health and Human Services Department (HHS) announced on January 21 that healthcare premiums on the Affordable Care Act exchanges rose an average of only 9% from 2015 to 2016. That was highly misleading since the HHS data covered less than half of all consumers buying healthcare on the federal exchanges in the last year.

    The real premium increases, almost across-the-board, are substantially higher in most states this year. A new, independent report from the Freedom Partners Chamber of Commerce includes the weighted-average premiums for all plans available on the Affordable Care Act’s exchanges.

    The findings will shock you, or maybe not, if you have recently renewed your healthcare coverage. In that case, you may already know, especially depending on where you live. In any event, that’s what we’ll talk about today.

    We will also talk about how healthcare costs are by far the fastest growing subset of the US economy. And that’s putting it lightly. The increase in healthcare cost almost doubled the next fastest growing sector’s cost growth last year.  Can you say, out-of-control?

    But before we get to that discussion, let’s take a look at last Friday’s unemployment report for January. The headline unemployment rate dropped to 4.9%, the lowest level since early 2008, but some of the internal numbers were mixed or disappointing.

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  • How High US Corporate Tax Rates Hurt the Economy

    The US corporate tax rate is the highest among developed nations at 35% at the federal level. Tack on state and local taxes, which can add 5-7%, and US corporations are looking at a 40%-42% income tax burden. But the US takes it even another step further, unlike any other country in the developed world.

    Uncle Sam demands that American companies with offshore operations pay US taxes on all income earned abroad – if those profits are repatriated to the US – even though taxes have already been paid to the countries where the income was actually generated. Think of it as double taxation on profits.

    No wonder then that more and more US corporations with offshore operations are keeping those profits outside the US in order to avoid this double taxation. It is estimated that up to $2 trillion of those foreign profits are parked outside the US. That is a ton of money which, if brought home, could result in lots of new projects that could create many new jobs.

    With an obligation to their shareholders to maximize profits, large US corporations are increasingly taking additional steps to minimize taxes owed to the Treasury in a process that has been coined “tax inversion” as I will explain below. This involves US firms moving their corporate headquarters overseas to countries where the tax burden is lower.

    Today, we’ll explore how the extraordinarily high US corporate tax rate hurts the economy and why more and more large American corporations are moving their headquarters offshore. And we’ll look at why the Obama administration is trying to stop it – when all it would take to fix it is the US lowering its tax burden to a more reasonable level. But no, Obama wants to raise corporate taxes even more. This should make for an interesting E-letter.

    But before we get into that discussion, let’s take a quick look at last Friday’s third and final report on 2Q Gross Domestic Product.

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  • The Real Obamacare Nightmare is Just Beginning

    Last Thursday, the Obama administration said that a total of eight million Americans had signed up for Obamacare. In a hastily called press event, President Obama spiked the football, took a victory lap around the White House and declared the healthcare law a smashing success – although they still haven’t told us how many enrollees have actually paid a premium.

    In any event, the millions of Americans who have purchased health insurance on the government exchanges are in for another round of shocks as they begin to try to actually use their new healthcare insurance. New nightmares are being reported almost daily and we’re only getting started.

    The problems that will create the next Obamacare headlines will come in three main areas: 1) lack of access to doctors, 2) failures of the system to verify coverage and pay claims, and 3) the incredibly high deductibles and copays on the exchange insurance policies. I have reprinted an excellent article on this growing nightmare below.

    Yet before we go there, let’s take a look at a few recent economic reports that are actually encouraging. Also, our webinar last Wednesday on the HWM Alpha Advantage investment opportunity was one of the most highly attended web events we have ever done. The presentation was excellent and the questions from attendees were spot on. To view the webinar, CLICK HERE.

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  • Are Americans Optimistic or Pessimistic About the Future?

    Today's letter will move fast as we touch on several pressing issues of the day, with lots of charts and graphs. We begin with some new polls which indicate that most Americans are pessimistic about the future, even though consumer confidence is up this year. Another major poll finds that only 29.4% of Americans feel the country is headed in the right direction, while 61.4% believe we are on the "wrong track" longer-term.

    From there, we take an in-depth look at last Friday's unemployment report. While the headline unemployment rate unexpectedly fell to 7.4%, there was a lot of troubling data in the report that the mainstream media simply ignored. Not only were new jobs less than expected, they were dominated by low paying and part-time jobs.

    Next, we take a closer look at last Wednesday's 2Q GDP report, which came in a little higher than expected (1.7% vs. the consensus of 1.1%). The media gushed over this number and assured us that the recovery is gaining momentum. But how can you get excited over a report showing growth is still less than 2%? This is still the weakest economic recovery in most of our lifetimes, despite what the media says.

    Last but not least, Congress has figured out that ObamaCare is going to be a "train wreck," this according to one lawmaker who helped write the massive healthcare law. As a result, Congress is trying to find a way to exempt itself from ObamaCare - surprise, surprise! That will be very difficult, so President Obama appears ready to give members of Congress subsidies up to 75-80% to buy health insurance on the exchanges, even though they make $174,000 a year, plus benefits and lifetime pensions. This is outrageous!

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  • Fed’s Gobbledygook - What Do They Really Mean?

    Recent communications from the Fed and comments by Chairman Bernanke cast a great deal of uncertainty on the equity and bond markets in late June. Specifically, Bernanke's remarks in his press conference on June 19 - where he discussed ending its program of quantitative easing - prompted a huge global selloff in the stock and bond markets.

    In response, various Fed officials tried to "walk back" the idea that the Fed was ready to begin scaling back its $85 billion a month in bond and mortgage purchases as early as September and end the program by mid-2014. Based on those reassurances, stock prices recovered, but rumors of the Fed scaling back its stimulus later this year continued to circulate.

    Last Wednesday, the Fed released the actual minutes from the June 18-19 Fed Open Market Committee meeting. Those minutes revealed that the Committee did indeed discuss the possibility of scaling back its QE purchases, and even ending them at some point. However, in the end, all but one member of the Committee voted to continue the $85 billion a month in purchases indefinitely.

    With that news, the Dow Jones and the S&P 500 indexes surged to new record highs last Thursday. It is obvious that the equity markets are addicted to the Fed's stimulus. It remains to be seen, however, what this latest Fed decision will mean for the sagging bond market. So far, not much.

    Finally, there is something REALLY BIG brewing with regard to ObamaCare. President Obama's recent decision to postpone the "employer mandate" by one year to 2015 may have been unconstitutional.

    If you oppose ObamaCare, you absolutely must read the final section of this E-Letter. You won't hear about this in the mainstream media. If you don't read anything else, scroll down to: Delay of ObamaCare May Backfire on the President. You need to know about this.

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  • Roberts, Obamacare & Our "Stall-Speed" Economy

    I thought long and hard about whether I would write about the Supreme Court's historic and surprising decision to uphold Obamacare last Thursday in today's E-Letter. Initially, I decided to keep my mouth shut and pick another topic for today. But that was before some so-called "conservative columnists" morphed into apologists for the Supreme Court and Chief Justice John Roberts. That made my blood boil!

    So today, I will give you my thoughts on the Supreme Court's ruling on Obamacare. The Supreme Court apologists, including George Will (ABC News), would have us believe that the High Court ruling on Obamacare was a "victory" for conservatives. Say what? They argue that we should be happy that the Commerce Clause was shot down in this case, and because the Court ruled that the federal government can't deny Medicaid funds to states that elect to opt out of Obamacare. What I will point out today is that both of these rulings can be circumvented in the future.

    The other point I will make is that Obamacare should have been ruled unconstitutional on the basis of fraud. President Obama and congressional Democrats promised the American people that Obamacare was NOT a tax. They knew it would never pass if Americans believed it was a tax. The Supreme Court ruled that Obamacare is not a "mandate" and that it is indeed a "tax." The point is, the American people were intentionally misled. In my business and most others, we call that FRAUD!

    Following that discussion, we will review the latest economic reports, and I will tell you about our upcoming WEBINAR on July 12.

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  • Fed Extends Operation Twist – Europe at the Brink

    For the last several months I have argued that the most likely time for the Fed to enact another round of stimulus would be at the June 19-20 FOMC meeting. I first suggested this in my March 13 E-Letter. My main reasoning was that Bernanke would not want to do it after June 19-20 for fear that it would be seen as a political move ahead of the November elections.

    As I’m sure you know by now, the Fed elected to extend “Operation Twist” last Wednesday, June 20. Operation Twist is the action whereby the Fed uses cash from the sale or maturity of short-dated Treasuries to buy longer-dated securities, in an effort to bring down long-term rates. The Fed says it will make $267 billion in such purchases and the Twist will continue until the end of this year.

    The Fed also revised its economic forecasts downward, suggesting even slower GDP growth in 2012 and 2013 than they predicted back in April. They estimate that the unemployment rate will remain at or above 8% all this year, and then be 7.8% - 8% in 2013. Not a very rosy outlook.

    The financial crisis in Europe is back on the front pages. Moody's downgraded 28 Spanish banks on Monday, and stocks cratered around the world. There is a major European summit this Thursday and Friday in Brussels, and this may be the last chance for a solution to the crisis before the Eurozone begins to break apart.

    Finally, I end with some thoughts regarding the Thursday's Supreme Court decision on ObamaCare. If the healthcare law is struck down by the High Court, I expect all hell to break loose! The mainstream media and those on the left will have a conniption. No doubt the Obama administration will weigh in on the bashing of the Supreme Court. If the healthcare law or the individual mandate are struck down, it will get very ugly!

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  • The "Fiscal Cliff," ObamaCare & the Supreme Court

    Today we revisit the subject of the so-called “fiscal cliff” that our country faces at the end of this year if a Lame Duck Congress fails to pass a number of new laws by December 31. Some analysts are arguing that nothing really bad will happen if the Lame Duck Congress fails to get the job done. I disagree and I will tell you why below.

    As you may have already seen, I have been alerting clients that we could see a significant uptrend in the stock markets if the Supreme Court overturns ObamaCare as is expected by many on June 25. There are others, however, that do not believe the High Court will overturn ObamaCare, or at least not all of it. I will discuss this line of thinking as we go along.

    You may have read the two preceding paragraphs and assumed that this will be one of my weeks to go “political.” I beg to differ. With regard to the fiscal cliff, we are very likely facing a recession next year if the issues discussed below are not addressed by the end of this year. As to the fate of ObamaCare, it could have serious implications for the stock markets (and your 401-k/IRA), however the Supreme Court rules. Actually, all of this is much more than political.

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  • ObamaCare Kicks In - Taxes Sure to Rise

    IN THIS ISSUE:

    1.   Rasmussen: 61% Favor Repeal of Healthcare Law

    2.   ObamaCare Officially Kicked-off on September 23

    3.   ObamaCare is Even Worse Than Critics Thought

    4.   Will Government Put Insurers Out of Business?

    5.  Income Tax on “Rich” Headed Higher Than in Clinton-era

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  • Keep Your Healthcare Plan? Probably Not!

    During the 2008 presidential campaign, candidate Barack Obama promised that, if elected, he would press for some form of nationalized healthcare. Time after time, he assured Americans: 'If you like your healthcare plan, you can keep it; if you like your doctor, you can keep your doctor.' Many in Congress promised the same thing as they crafted the sweeping healthcare legislation that ultimately passed in March.

    Yet on June 14 the Obama administration released an 83-page document which indicates that over half of all employer-provided health insurance plans will be effectively eliminated between now and 2014 because of the new healthcare law. For small businesses, it's even worse. The Obama administration's own estimates indicate that 66% or more of small businesses will abandon their healthcare insurance plans by the time ObamaCare kicks in on January 1, 2014.

    This week, we will look into the many new and onerous rules, regulations and restrictions in the latest 83-page report from the Obama administration. The bottom line: If you get your health insurance through your employer, or if you are (like me) the owner of a business that provides health insurance to its employees, you need to read what follows very carefully. We've all been lied to!

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  • Can the GOP Take Back Congress in November?

    A week ago today, we had several key House and Senate primary elections, and now we know most of the match-ups for the November 2 mid-term elections. We have analyzed the latest poll results since last week's primaries, and we are surprised to see just how many Democrats are likely to lose their seats this November, or are in the 'toss-up' category, and how few Republican seats are likely to be lost.

    The main reason for the Democrats' dilemma is the 'anti-incumbent' fervor that is sweeping the country. And with the Dems holding large majorities in the House and Senate, they are squarely in the crosshairs of American voters who are still mad about them ramming ObamaCare down our throats. Some Republicans incumbents are in trouble too, but as the minority party, and with zero votes for ObamaCare, their losses look to be much smaller.

    This week, we will summarize the latest poll results for the mid-term congressional elections using data from the independent RealClearPolitics.com to help you get a clear picture of the election trends as they stand now. This week's E-Letter should be insightful no matter which political party you support.

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