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Options and My Patience Expire Today

Well now we're officially cashed out!

As I always do before options expiration I reviewed our Buy List, which, this quarter, is a list of 37 stocks we've been playing since late December and, sadly, after reviewing 37 of our favorite investments very carefully this week – I could only conclude that cashing them out was the only decision I could be comfortable with this week.  Of 66 trades we had on our 37 stocks, 64 are winners with an average return since 2/8 of 28% – since most of the trades were designed to make 40% for the year – it just seems silly not to take the money and run now, on March 19th.

You are not supposed to have 64 out of 66 winners in 6 weeks, you are not supposed to make 3/4 of what you anticipate for the year in 6 weeks – that is NOT how the markets are supposed to work!  When the markets go against you in some ridiculous "black swan" fashion, it is easy to throw up your hands and walks away but when the markets go in your favor in some ridiculous, "white swan" fashion – maybe it's also a good idea to use those same hands to stuff your pockets with cash and walk away.

There's nothing wrong with cash – the Fed tells us there will be no inflation in the foreseeable future and, in fact, they are fighting deflation so our sideline dollars will gain more and more buying power while we wait.  Actually, despite my best efforts, there are still 15 positions that weren't worth getting rid of (too much reward, not enough risk), even in a worrying market.  Generally they are positions we expect to get at least another 20% from by January – still a pretty good return in this low-VIX market. 

Our plan is to take opportunistic trades between now and April earnings – we're still expecting a pullback and I'd be very motivated to go back into our old friends if they go back on sale but most of those picks were made for a defensive market posture that won't be necessary if we break over our levels from here and they certainly weren't worth riding back down after hitting 75% of our goal in 25% of the year! 

We have Health Care Reform passing this weekend and there should be some great opportunities to pick up stocks people panic out of once that goes though.  Money has been flying out of Money Market Funds at record levels as $73.7Bn (out of $3Tn) was withdrawn in a single week so it looks like we'll be fighting the tide as we put some in!  Our old pal, Greenspan, suggested that regulators should compel banks to raise capital levels by 40% to ensure stability which, in Greenspeak, sounds like this: "The most pressing reform that needs fixing in the aftermath of the crisis, in my judgment, is the level of regulatory risk-adjusted capital.  Adequate capital eliminates the need for an unachievable specificity in regulatory fine-tuning."

As to regulations, Greenspan clearly states: "The notion of an effective ‘systemic regulator’ as part of a regulatory reform package is ill-advised.  The current sad state of economic forecasting should give governments pause on the issueUnless there is a societal choice to abandon dynamic markets and leverage for some form of central planning, I fear that preventing bubbles will in the end turn out to be infeasible.  Assuaging their aftermath seems the best we can hope for."  Gosh I miss him! 

Another reason to keep some cash on the side is the new Health Care Bill will add a 3.8% tax on investment income.  Will that be before or after Wall Street bonuses?  So let's see, we made 28% in 3 months and the government wants us to take 1.064% and use that money to generate $210Bn to pay for overhauling the health care system and insuring 50M of our fellow citizens who otherwise cannot afford medical care.  Gosh, I think I can live with that…  Of course, it's not worth complaining if you made $28,000 on $100,000 and the government is taking $1,000 or even if you made $280,000 on $1,000,000 and the government wants $10,000 because you know you are going to be helping millions of people improve their quality of life.  But, if, like Goldman, you made $28Bn and the government wants $1Bn - well you can be damn sure you're going to go out and get some lobbyists to stop the government bloodsuckers from using your precious profits as a handout to the kind of people you step over on the way to work!   See – it's all a matter of perspective

That is where most of these things fall apart.  Billionaires and Corporations have all sorts of ways to avoid paying taxes and that shifts the burden down to us.  In fact, 57% of all US companies and 72% of all foreign corporations doing business in the US paid no taxes at all despite having, according to a GAO study, as a group $2,500,000,000,0000 in sales.  Anyway, that's an article for a different day. 

Speaking of guys who need a handout – our man, George Papandreou, is racking up the frequent-flier miles and knocking on everyone's door in an effort to secures some aid before his next $27Bn debt bill comes due on April 20th and May 19th.  Papandreou’s appeal to the European Union to help him steer interest rates lower is being stymied by a deepening split among the bloc’s leaders. While French President Nicolas Sarkozy said the euro region would rescue Greece if necessary, German Chancellor Angela Merkel’s government yesterday signaled it’s ready to turn its back and force Papandreou to seek International Monetary Fund assistance.  

This is all sending the Euro into it's biggest weekly decline since January, falling against all but one of its 16 major peers as Greece set a one-week deadline for an aid mechanism from the EU, while German officials said the International Monetary Fund is the preferred option. The Swiss franc rose against the euro for a sixth straight day, its longest run of gains since December 2008. The pound dropped against all 16 most-traded currencies after Bank of England policy maker Andrew Sentance said Britain may return to recession.  “The Greek story is far from over and will continue to haunt the euro,” Geoffrey Yu, a foreign-exchange strategist at UBS AG in London, wrote in a report today. “For the euro, weakness will persist, making us very comfortable with our three-month target of $1.30.”  Meanwhile BNP is lowering their forecast all the way down to $1.19 by June of next year (down 12%)!

None of this stopped Europe's markets from marching up half a point across the board this morning on no particular news while Asia was also up about the same despite a senior Chinese trade official warning that any further appreciation of their currency would wipe out the profits of exporters, many of whom are operating on margins below 2% already.  Mr. Zhong talked about a potential tipping-point effect to describe the fragile situation of many exporters. "Water doesn't boil if it is heated to 99 degree Celsius. But it will boil if it is heated by one more degree," he said. Likewise, "a further rise in the yuan by a very small magnitude might cause fundamental changes" to exporters in China, he said.

That is possibly the best description yet of what I think is happening in the World - We have so many things that are pushing right up against the edge of the cliff and now we've all tied ourselves together "for safety" and it's really just a matter of ONE MORE THING and we are all in very, very, BIG TROUBLE.  I have been saying for some time that SOMEBODY is losing money with a rising PPI and a declining or flat CPI and Mr. Zhong confirms that this is just another way China is subsidizing the global recession – their manufacturers can absorb losses in a way ours can't because idiot global investors (we talked about this in yesterday's post) can't read balance sheets anyway and invest in Chinese companies as if every one's a winner.  

Mr. Zhong said China is willing to purchase more American goods and take other steps to reduce its trade surplus with the U.S. But he urged the U.S. to find a solution at home rather than put pressure on China. He noted that China found ways to cope when tens of millions of workers were thrown into unemployment in the late 1990s when the government shuttered unprofitable state-run enterprises. "When we have a problem, we usually look for the causes internally. However, the U.S. tends to look for reasons from the outside. There's a cultural difference between our two nations," Mr. Zhong said.  This is a wise man! 

Have a nice weekend,

- Phil


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  1. Ha; I love how you say things like "we have health care reform passing this weekend" as if its a given.    50/50 at best.  And reform it is not.  A suicide bomb for the US is a more appropriate description.   As of now the votes are not there (for good reason).
    I think it fails.

  2. Good morning, Phil.  Are you going to keep a "pin the price" list for later today?  Here are a couple of candidates, I think.  Crox finishing at $8.  VZ at $30. 

  3. judah – are you thinking TNA at the open?  Seems to be the winning play lately.

  4. SS, I am thinking they take a run at Dow 10,800, not that the RUT followed the Dow yesterday.  So, yes, until we get a break from these levels, I’m inclined to go TNA at the open until the first level of resistance.

  5. judah – the futures really jumped in the last hour.  Not sure why.  I guess just because they can.

  6. SS,  Oh, and I, uh, held a small number of IWM calls overnight.  So, I may skip TNA and just sell those at resistance.

  7. judah – good job.  So far it’s all pre-market.  Where’s that gold box.

  8. Judah, is your new and current strategy to buy IWM calls at support, selling them at resistance? Thks.

  9. Jburg, I’m just testing IWM calls/puts instead of TNA/TZA.  I may do it for a few more days, but I’m inclined to switch back to TNA/TZA or do a combination. 

  10. judah – IWM 68.08 is 5dma should provide some support.

  11.  BIDU – Phil I bought the April/Mar 540 put spread you recommended earlier.  I rolled the april up to 570 and sold a mar 560 and am now in for a net $20 on the spread.  After today I’ll be left with the April 570 naked.  Would you walk away with a small win, or adjust?  The google china news is supposed to be announced monday.

  12. Good morning Phil,
    Going through your buy list do I understand this correct the none green once (black) liquidate stk and option yes? tks

  13. Cap – Congress WILL pass the health bill this weekend. The nightmare for the right will be in the weeks and months to come…..

  14. Good morning! 

    Now we are pretty much over we’re going to be looking for failures at the old highs: Dow 10,767, S&P 1,153, Nasdaq 2,362, NYSE 7,471 and Russell 678 with 3 of 5 a bearish signal. 

    Make sure you go over the Buy List update, which has the self-explanatory title "Bye Bye Buy List"

    If you made money this Q – take some time to take a break, reconnect with your family, walk around town and look at how the economy is actually looking (we’ll be doing another shopping survey this weekend) and generally try to have some fun. 

    If you didn’t make money – take some time to review our last buy list and review strategies and your portfolio allocations and watch "The Man Who Planted Trees" and let’s get in the mood to start looking for bargains for next quarter – patiently. 

    Other than that, have a fantastic weekend and let’s just enjoy what is probably going to be a crazy day on the markets. 

  15. SS,  So used to up days, I’ve forgotten what a down day looks like.

  16. SPWRA / Phil – What do you think about their earnings? Is it a good time to get in long term on this recent drop?
    AGNC – Need your advice on how to adjust my position. I did a buy write on this with June 25 Call/Puts. Entry was 26.14/1.02/2.18 (long stock/short call/short put). Now it’s 28.07/3.075/.775. So, up about 5% I would say on a net basis. They are going ex-div on 3/29. How should I roll/close the short calls/puts so that I dont miss on the dividend?

  17. DIA Mattress:  Sure glad I didn’t sell the Q1 108s yesterday

  18. Phil
     I bot the April dia 105 callsand  sld the April dia 107 which was a rollout from March 105 and 106 and now the 105 has .53  premium and the 107 has 1.15 premium. Time to adjust?

  19. judah – old 67.82 line held. 

  20. SS, I noticed that while I was sitting on my hands.  68.50 (give or take a penny) has also been pretty solid for the past few days.

  21. Phil, When will you be taking that well deserved break with the family?

  22. judah – we have a line at every start, stop and pause.  The trick, obviously, is anticipating the next direction to get on the right train at the lines.  JRW is the master at this.

  23. Reform/Cap – I got the word yesterday, let’s save it for the weekend and just see what happens.

    Pinning/Judah – That’s a fun game for a dull market.  I’m just curious to see if we get back to 10,600 on volume or if we hold our levels.

    Futures/SS – Yep, they sure can – what a joke!  All reversed already with Dow volume 192M in first 20 mins so they slapped it up in the futures and then dumped the crap out of it at the open…

    BIDU/BG – That’s a tough call because I would think that it’s already baked in.  You have the $570 puts, now $22.40 so why not sell the $540 puts for $11 and spend that money to roll up to the $590 puts, which are now $33.70 and should hold $20 and, otherwise, you are in a $40 spread.

    Yodi – I have no idea what you said…"the none green once (black) liquidate stk and option yes?

    Maybe that should be today’s contest – what did Yodi mean?  8-)

    Ags getting hit this morning. 

    Copper testing $3.40 (as usual), silver blew $17.50 and gold at $1,123.  Oil is $82.30 and nat gas is down to $4.11.  $1.354 for a Euro and $1.51 for the Pound, 90.57 Yen to the buck.

    Volume in next 10 minutes after 192M in first 20 – now 5M so up we go!

  24. I have been with you for quite a while and this is the phase i always mess up on so this time i’ll try to do right. 
    one of the positions i hold is a 2011 C $2.5 call that has cost me 0.85. do i sell that too ? or sell a $3 call or sell $5 long call ? i just want to know if this is included in thhe get money and run catagory. i know at some point you sugested turning it into a 5-7.5 2012 spread so i can take out cash.
    let me know and thanks

  25. Phil  OK on your buy list you show plays with green commends and once which are just in black writing, what I am asking, are we liquidating ALL plays which are written in black and put the plays with the green commends in line with your recommendations thks

  26. Die USO Die

  27. dint yodi post something yesterday abt vodka?

  28. judah – thinking TNA if we test 67.82 and it holds.

  29. Phil
    what do you think about SPWRA? I have a position Jan11 call spread 15/20 with short Jan11 15s puts and short Mar&Apr calls. what is your advice? May be buy back half of Jan11 calls ( short part of the spread)

  30. judah – 67.62, 67.52 next down.  I have been waiting for a pullback for sooooo looooong that I cannot believe I am not on TZA.  I have tried it sooo many times and it didn’t work and now…….

  31. SS,  Oh, do I know that feeling.  Your point earlier was exactly the right one (regarding lines and direction). 

  32. Phil, We are two hours behind here
    I like that commend specially coming from you the riddle man him self
    Maybe that should be today’s contest – what did Yodi mean? 

  33. Oops, spoke to soon, volume came back and down we go again! 

    SPWRA/Trad – Now there’s one we want but let’s wait for them to be dragged into a dark ally an beaten by analysts first. 

    AGNC/Trad – You are in for net $22.94 with a call away at $25 so $2.06 (8.9%) is the most you were going to get anyway.  You can take 5% off the table now, very early, or you can risk those profits by either screwing around and moving to riskier positions or simply waiting until July to hopefully make another 3.9% while risking 105%.  Of course the dividend is a facor, another 5% – so I would say stick with your conservative position and be happy it’s working.  There is a good possibility, however, that you can be called away just ahead of dividends as the June caller has just .20 in premium – there’s not much you can do about that unless you want to take a pretty big risk and roll the March caller to 2x the Sept $27.50s, now $1.10.

    DIA/Daveo – It’s so hard to stick with those things, especially on blow-off tops like we may be having here.

    DIA/Phlit – Well I’d take the $105s off the table at $3.40 as you can always cover the $107s with May $108s, now $2.35 and that gives you a path to roll the Apr $107s ($1.93) up to the May $109s ($1.82) but are you really that bullish?

    Break/1020 – Taking a long weekend early April.

  34. Well, further down I have 67.33 and the old 67.18.

  35. Cap, MrM – HK dropping like a rock again today. Have you guys stopped buying HK? ;)  

  36.  Wow! This must be how all of the bulls have been feeling for the past couple of months. I can breath again, I’ve got my life back!

  37. SS, Watching this pause carefully.

  38. judah – just thinking out loud here.  I am watching the volume to see when the selling stops, if it does.  If it slows I may buy TNA at every line down to avg. in for the eventual spike up.

  39. SPWRA – Citi maintains a sell rating and a price target of $15…..

  40. SS,  Good thought. I think 67.50 might be it.  Watching the volume.

  41. PALM – Gets a sell rating and a $0, yes a $0 price target at Canaccord……

  42. judah – I just can’t believe I am trying to catch the damn knife instead of the one throwing it. They have turned me into Pavlov’s dog.

  43. SS, Juda – How  are you guys calculating these levels for IWM? Can you please provide some detailed instructions for ToS?

  44. C/Micro – Take the $1.62 off the table (why do I even have to tell you to take a double off the table – shame on you!!!) and, if you want to play bullish, the $4/5 spread is .30 (or the 2012 $5/7.50 spread) and you can offset that by selling the $2.50 puts for .15 on a dip which is a nice low-risk way to stick with C without risking more than .15 of your .80 profits.   See how that works – risk 25% of your profits and you keep 75% plus you get to put your 100% principle back to work rather than risking 200% on something that’s already doubled….

    Buy List/Yodi – Ah, much better!  The green ones are ones I don’t mind sticking with as they still have plenty to gain and look pretty safe.  None are picks for new plays and the key is to get back to at least 75% cash so even if your 25% drops to 12%, at least you’ll be happy to DD. 

    Oil at $81 – Ka Ching! 

    Gold $1,105 – Ka Ching!

    SPWRA/Tcha – There will be downgrades into next week so plan on taking hits if you hold on.  A little late to buy back the putters though as most of the damage is done.  I’m fairly sure they will recover $20 by Jan in the very least. Don’t forget this isn’t about them, this is about problems with government subsidies making thier business uncertain at the moment. 

    LOL Yodi!

  45. Phil- what’s your sense on trading activity today? Feels like Europeans are exercising their options and selling whatever’s been put/called before going home for the weekend, and market will pick up again into the end of the day. Thoughts?

  46. tradansh – I will be happy to explain how I do it a little later.  Trying to pick a trade at the moment. :)

  47. SS, Volume’s back down.  Are you testing your plan?

  48. Cwan,
    For the 1256 section tax, I’m not the tax expert, but my 2c is that it’s only applied to the open positions at year end.  So the savings, if any, is a small percentage of the portfolio.  I don’t get it why we would have this tax rule to complicate the matters.  You can google additional information and read the Publication 550, particularly pages 57-60.

  49. judah – very small nibble on TNA at 67.50. 

  50.  Peter,
    Your expertise in Strangle strategy constantly amazes me!
    I assume you’re taking advantage of PM to wiggle out of a tough situation? 

  51. judah- what are you looking at to track volume? Thanks

  52. judah – volume has slowed down, but NYSE Tick has been below 0 all day so far.  The first time in a loooong time.  I don’t think we have the all clear yet.

  53.  Phil,
    Have some C Jan11 4 call @ cost of .34, now .62. Take the money and run? 

  54. Bought 1/2 back my double down on GBP (Ka Ching)
    Bought back my double down on Copper futures (Ka Ching)

  55. SNS,  That’s a good question for JRW, since he follows volume assiduously to make his entry decisions.  I just look at 1 min and 5 min volume on the TOS charts.

  56. Phil ,
    Pleased you like my comment !
    Wish to refer on AGNC/Trad – You are in for net $22.94 with a call away at $25 so $2.06 (8.9%) 
    We discussed as well the other day my question on WMT here is always a situation where the short caller passes the stk price like in the above, as well as in WMT the stk has always a delta of 1 as the caller passing the stk price starting with a delta of .60 slowly going up to 1delta but loosing time value as it goes closer to liquidation. So if get called away you always have a profit in your pocket and if you sold the putter you looking even better. You can always buy the stk back on a dip if you in love with it.
    Hope this was not a riddle

  57. "We have so many things that are pushing right up against the edge of the cliff and now we’ve all tied ourselves together "for safety" and it’s really just a matter of ONE MORE THING and we are all in very, very, BIG TROUBLE."
    Well put Phil, and a currency-induced decline in China’s export could easily be the big trigger.
    Anyway the /DX is right back over support on the ongoing Greece issue, and I’m starting to think about what may happen if it doesn’t break down. On the one hand, U.S. equities and bonds may outperform nicely relative to almost everyone else, but does this mean we stay this high/go higher? Ongoing strength in the dollar = ongoing pressure on Chinese exporters = higher likelihood of the China bubble popping in spec-fricken-tacular fashion.
    I personally would not make big bets against U.S. Treasuries in the months ahead, FWIW.

  58. Judah- Txs

  59. Phil, please recommend adjustments to the June 10 17.50/22.50 bull-call spread on SPWRA originally bought for $3.30.

  60. Eric L- How is ongoing strength in dollar = ongoing pressure on Chinese exporters? Would seem that stronger dollar can buy more chinese/foreign goods, and that’s bad for US exporters, no?

  61. SS/Volume.  Yeah, it has calmed down, but still not at low levels.   I betcha if JRW had been around this morning, we would all be riding TZA and giving each other high fives, instead of trying to catch this knife.  Take away his gold box!  ;)

  62. judah – LOL!!!  He must have broken into that Scotch in celebration.

  63. We’ll see if Europe closing (11:30) brings an end to the selling pressure.

    Hey SNS – GMTA!  It’s very possible this is a pessimistic Europe getting out of the markets but they are getting out for good reasons as they can see the totally explosive mess Greece is turning into (and it’s not just Greece, they are just domino #1, which is why it’s not easy to fix, as they set a precedent) and they also don’t have the "sunshine and lollipop" shows on TV 24 hours a day telling them how great everything is. 

    C/Balance – Oh no, you are not up 100% yet, why would you take profits?   Just kidding - OF COURSE TAKE IT OFF THE TABLE FOR GOODNESS SAKES! 

    AGNC/Yodi – You are always a riddle, one that is wrapped in an enigma at that!  The slight difference with AGNC is the huge 20% dividend, which means your caller may be highly motivated to exercise the option to capture the dividend, plus the fact that paying a $1+ dividend on a $27 stock is sure to knock it down, plus the fact that AGNC is NOT a stock we can be 99% confident we’ll be happy to own for 20 years like WMT.  Other than that, sure it’s the same…

  64. Phil/ SPWRA
    I didn’t plan to buy back puts now, I planned to buy back half of my calls ( short part of call spread) do you think it is time now or you think it will go lower?

  65. weeeeee

  66.  ’they’ must have long MAR SPX calls, once it’s settled (1172.95!!) then start driving it down.. I bet ‘they’ also bought APR puts while cheap. 

  67. PhiL; with this unpleasant surprise on SPWRA, is there an adjustment needed ?
    have stock, 29 to 18$, 1x putters march20, 1.03 to 1.10$, 1x callers april 22, 1.19 to 0.25$.

  68. 1020 – talk is cheap, my friend.

  69. sns,
    China is under serious political pressure from the U.S. not to let the yuan depreciate sharply against the dollar. And the CNY has been tracking the dollar closely in recent years.

  70. tradnash; HK;  weakness accross the sector; I haven’t been buying in a while; still have some w/ covered calls;  diversified into some other names; all of which are down also !

  71. Phil,
    I see you’re suggesting getting out of some google spreads, does this include the Jan 11 bull call 420/480 spread with selling monthly calls against?  It seems on target to perform as projected?

  72. Peter D or anyone else who follows this.  How does the SPX settlement number get to be as high as 1172.95?  If I look at the high of the day today, I see 1169.20.  SPY’s high is 117.293.  Is SPY a more accurate indicator of the settlement number and I should therefore be paying more attention to that than SPX in the future?  (I’m just curious, as I didn’t have any callers at that level or lower.)

  73. Cap - Agreed!  :)

  74. Eric- txs for feedback

  75. Juda
    they wait till all 500 stock will open and get open price of all of them and calculate settlement price ( it is always different from open index itself)
    for RUT it is even worse because 2000 stock and mach less liquide

  76. Phil – Today is as good as any to talk a little H-E-A-L-T-H-C-A-R-E  :)

  77. Judah:
    They take the opening price today of each of the 500 components and add the whole thing up.

  78. Tchay, Chaps,  Thanks.  Good to know for planning purposes to keep some extra cushion in the strangles that we are letting expire.

  79. Nice to see the health insurance companies are having a solid up day. I wonder why……

  80. Why is O still out selling if it was a done deal ?  He would be flying to Indonesia.
    This goes to the wire.

  81. Hi, Fellow Stranglers,
    If you haven’t read it, Peter had a very enlightening comment on his strategy of flipping RUT callers to putters in yesterday’s post, near the end, 10:07 pm.  A must read!  To save your time of searching, here is the link:

  82. SPWRA/Tcha – I think it’s better to wait until next week, just in case they get knocked down further.  Worst case is your stock goes up and you are back in good shape for the spread.

    Will Obama once again save the market?   11:30 on the dot.  You can tell from his attitude the vote is in the bag. 

    SPWRA/RMM – Well clearly you need to roll the putters out to Apr and it’s even roll to the $19 puts so that’s great.  No real point in buying back the callers just yet as they are so far out but, if things get worse, you may want to sell 1/2 Apr $18s, now $1.55. 

    GOOG/Humvee – I’m not bearish on GOOG but expecting a market pullback they won’t be exempt from.  Maybe be a little more aggressive with call sales but $480 is pretty damn low!   On the other hand, you have $50 out of $60 so you could flip it for the $460/520 spread at $40ish and take $10 off the table and add $10 more upside.  It’s very good if you can see yourself gutting out a dip, rolling yourself down and taking out the caller on the way back up.

    No politics 1020 – certainly not on expiration day!

    Good spot for a turn up here as the Pound is hitting $1.50 even, which should have some support.  Euro was $1.35 too so good place for the dollar to move back down and commodities to move up and all those sectors to recover a bit. 

    DIA $107s have very little premium at .33 (about .10) and are good for a quick move up, using 10,720 as a stop.

  83. Phil,
    Do you suggest rolling down the TBT sept 43/50 bull call spread or leave as is?

  84. Phil
    SPWRA,  getting hammered today my long jan11 17.5 callers are 50% under water bought my putters back the other day thank God still hold short Sep callers but they do not cover the loss on the long callers.
    You recomment waiting it out a bit?

  85. Phil, Great call about selling pressure dropping off at 11:30.  I’ve got to remember that one.  A pause, or do sense a push back up in the afternoon?

  86. Phil – It’s too bad healthcare needed to be "political"  :(

  87. Phil – Last Sept FXP "free trade" expires today: FXP index (cost 9.30 now 8.38) together with long MAR 20 Put ( Cost 11.41 now 11.50). Suggest anything other than closing this out for scratch?

  88. "Political" Like abolishing slavery and a Womans right to vote…… Can’t trade today. Have a good weekend all!

  89. More trash-talking rhetoric from Obama toward the health insurance carriers. He says he has a plan – That is clear and it is as follows; drive the insurers out of business and VOILA !!! you now have a "single payer insurance program" and it is the government – very clever ! At this moment I would rather invest in PALM, than any health insurer, as they have just been given a colonoscopy. A very sad day in America IMO.

  90. tradansh, I’m still in HK since 21 but yes am not accumulating; it’s always covered so not too much hurt.  HK wobbles around so much that it makes a great anchor to trade covers against in rapid fire.

  91. You know if health insurance is so damn profitable, then why isn’t GEICO in it??

  92. CAT
    Sales were down 23 percent in February, compared to February 2009, the company reported. Sales were down 18 percent and 29 percent respectively in January and December when compared to the same months in the previous year, the report shows.

  93. Phil,  thanks for the insight into a change in Google trade; I can see myself gutting out a dip, at least until it really does dip; i think i’ll be more aggressive with call sales and if goog does totally crash at least i’ve lessened the hurt.

  94. Man, what a bad few days FCX has been having! 

    I meant to get to this this morning, maybe on the weekend!  Internal Energy Department documents raise some serious questions as to the accuracy of U.S. oil-inventory data. There have been several errors in the EIA’s weekly oil report, one of which was large enough to make oil prices jump in September, and outdated data collection methods make errors difficult to detect.

    China is sending an envoy to the U.S. to discuss "Sino-U.S. trade balance and trade frictions" and to ease tensions caused by disagreement over the yuan. But Chinese officials warn U.S. pressure will only complicate matters and a yuan appreciation risks driving exporters out of business.

    Former Merrill Lynch officials reportedly contacted the Fed and SEC about Lehman Brothers’ (LEHMQ.PK) financial health months before it collapsed in 2008. The Merrill officials suggested Lehman was incorrectly calculating a key measure of its liquidity.

    Lehman Brothers (LEHMQ.PK) files new allegations against Barclays (BCS), saying the bank received a $13B windfall profit when it bought Lehman’s U.S. operations in 2008. Lehman claims Barclays unfairly got a $5B discount on Lehman’s $70B book of securities and paid less than the promised $2B in bonuses to former Lehman employees.

    Lloyds (LYG) surprises investors by saying it expects to return to profit this year as its trading performance improves, impairments ease and costs remain tightly controlled. The news boosts U.K. banking stocks: LYG +9.1%, RBS +5.2%, BCS +0.7%.

    This is why I’m sticking with those long FAZ in the $100KP!  Goldman lowers its Q1 profit forecasts for peers JPMorgan (JPM), Bank of America (BAC), Morgan Stanley (MS), Jefferies (JEF) and Piper Jaffray (PJC) by an average of 15%, and by 3% for the year, noting capital markets have gotten off to a "choppy start" in 2010. PJC -2.5% premarket. JEF -0.7%.

    FDIC’s Bair warns the Senate’s draft regulatory reform bill seems to allow for backdoor bailouts of the largest financial firms through the Fed’s emergency lending facility. "If Congress accomplishes anything this year, it should be to clearly and completely end ‘too big to fail,’" she says (prepared remarks).

    The number of foreclosed homes that banks are trying to sell is on the rise again, suggesting some U.S. markets will face further downward pressure on home prices. Mortgage analysts estimate banks held 645,800 foreclosed homes in January, a 4.6% increase from the 617,286 held in December.

    BofE Deputy Governor for Financial Stability Paul Tucker says regulators need to get their heads out of the sand and figure out how to deal with cross-border bank insolvencies. "This issue needs to be elevated above the level of middle-ranking technocrats where, through no great fault of their own, it has wallowed for too long."

    Meanwhile, IMF’s Strauss-Kahn is worried the chance to make significant global regulatory reforms will be wasted as heads of state return to their domestic agendas. "I am a bit concerned the momentum isn’t as strong as it was at the climax of the crisis," he said this morning at a conference on developing systems to deal with cross-border bank failure.

    French president Sarkozy is said to oppose Germany’s call for an IMF loan to Greece, pitting the eurozone’s biggest members against one another over a rescue plan. Greek bonds tumble as EU divisions widen.

    Bad company:  On Palm’s (PALM) Q4 earnings call, CFO Doug Jeffries calls the "disappointing" quarter an "exceptional situation," noting Palm shipped 960K smartphones, but sold only 408K of those, leaving an overhang of 552K phones. "At the end of the day, the results are still poor," Kaufman’s Shaw Wu says, echoing Street sentiment. "Knowing that they had too much inventory, why did they ship even more units?" PALM -18% premarket.

    Canaccord Adams drops its price target on Palm (PALM -18.4%) to $0 from $4. "We believe Palm’s troubles will only accelerate as carriers and suppliers increasingly question the company’s solvency and withdraw their support." Ouch. (earlier)

    Good company:  Boeing (BA) boosts its production rate on both the 777 and 747 programs to meet "increasing customer demand in the recovering airplane market." Boeing will boost 777 output to seven/month (from five) and 747 output to two/month (from 1.5). BA +2.9% premarket.

    JPMorgan says volume trends for North American railroads (CNI, CP, CSX, NSC, UNP) are picking up. Firm boosts its profit outlook for the group, saying, "Our sense is that there is room for the railroads to sustain stronger price-to-earnings ratio valuation."

    A surge in U.S. car sales during the first half of March lifts expectations that the auto industry recovery is picking up speed. J.D. Power forecasts March vehicle sales will reach an annualized pace of 12M, best in 18 months except for last August when "cash for clunkers" rebates spurred sales: "We are looking for strong sales to continue throughout the year as access to credit and leasing continue to grow." (PR)

    Google (GOOG -0.8%) may make an announcement Monday about whether it will pull out from China, according to a report quoting an unnamed Google employee. "I have received information saying that Google will leave China on April 10…"

    Apple (AAPL) keeps iPads tied down in rooms with blacked-out windows when it lets in select partners who can develop and test games and other apps. Perhaps the level of secrecy is understandable for a product that may generate $4.6B in sales next year, but the iPad debut is unlikely to outdo iPhone’s big start.

    Aetna raises its Q1 profit outlook, but quietly ahead of the impending health reform vote "when the slightest positive comment shows up in a political speech hours later." Managed care company shares are higher today, as the cloud of uncertainty begins to dissipate. In fact, BlackRock’s Bob Doll foresees a rally on ObamaCare passage. (ETF: IHF)

  95. Good morning, and thank you all very much.
    Sorry I’m late, next week should be better. Lines at 68.08 67.70 and     67.18, plus a lesser formed line at 67.48.
    In TNA at $52.96

  96. Phil, As I am always looking for times of the day pivots, in your experience, when Europe sells off at the end of the day, do you often see a pause in the selling off in US markets at 11:30, and conversely, if Europe is rallying into the close, do you see a pause in the buying here?

  97. From a top-level source in the House comes the news that the Democrats are still short of the 216 votes they need to pass Obamacare.
    They have decided, however, to go for broke on Sunday and attempt to pass it whether or not they have enough support. They feel that only by forcing a vote can they force members off the fence.
    Time will tell

  98. "Apple keeps iPads tied down in rooms with blacked-out windows" More than that Phil, they ship it to developers in a case that bolts down the iPad using a cover that only shows the screen, so that nobody can see buttons, ports, camera, anything…

  99. TBT/Humvee – I think I’m happy with the target so no reason to move it around really.   If you want to take advantage of the dip, look to sell $43 puts for $1.50 (now $1.25). 

    SPWRA/Yodi – Yes, waiting.  For $2.50 you can roll to the 2012 $15s if you are so inclined, maybe offer $2.30 and see if it fills as 1 year plus $2.50 intrinsic is nice to buy for a discount.  You can also sell the 2012 $12.50 puts for $2.40 to pay for it (or overpay) but we may get more of a dip next week so maybe wait and see on that part. 

    Selling/Judah – looking like a pause now.  We were heading up but India (in the middle of the night for them) just announced rate hikes and people are now starting to freak out that China may match over the weekend

  100.  SCO – Phil we setup the artificial in sco buying april 12/14 vertical and selling the 12 put.  If we can buy the 12 put back at .3 or 50% after less than a week is this a case where you’d take profits there, or does it put more risk on the entire spread by putting money back in?

  101. Can’t resist playing for nickels on OpEx, so I got some HK 20 calls.  Max Pain shows that 20 and 21 work about the same for HK today so They could drive it up to 21 and be no worse for wear…

  102. Out of TNNA at $53.23

  103. SPWRA – That was fast. Already down to 19. People didnt really love their results.

  104. SPWRA / Phil – Do you think it will break $18, its LOY?

  105. MrM – Do you think HK will break below 20?

  106.  Phil – would you please check the logic of this Diagonal spread.  You are bullish on AAPL on the long term.
    Buy a July 200 call .75 delta (theta =-.06) for $29.65 and sell a ATM front month 220 call .57 delta (theta = .12) for $7.95. Overall net delta .18 and theta =.06 for a net of $21.70. This trade is designed to primarily take advantage of the premium decay.
    a)     (stock going down)   If we beat the caller by 50% with more than 2 weeks, 75% with 1 week and 85% in the last week we roll down the short leg. 
    b)      (stock going down)  If you roll the short leg down, you need to check and see if you need to roll down the long side as well. You are wanting to stay above .60 delta on the long side. You are trying to buy $5 of intrinsic value for $3. .
    c)      (Stock is going up)  If the premium portion of the short leg is less than 25% of option, we roll up the short leg (you are trying to buy $10 of intrinsic value for $6.) You also need to watch that the delta of the short leg doesn’t overtake the delta of the long option. 
    On the stock going up scenario, I am unclear how to use the covers to your advantage. IE. Buying 1/4 back if it goes up 25%, buying another 1/4 cover back if it goes up to 50% up. Then, somehow you move from ½ cover to full cover at roughly even. 
    Thanks for the guidance Phil.

  107. FXP/Concreata – Wow, that’s been a while!  I still prefer the EDZ disaster hedges and playing China to drop at the moment to sticking with that combo.

    Political/1020 – Well it would be a business concern if workers weren’t disposable.  If you get a sick one, you just drop them and replace them with a healthier one so why should the care and feeding of the cattle, er workers, be a market concern?  The funny thing is they buy warranties on the equipment because THAT they care about…

    Insurers/Gel – Wait, now cutting out the middle-man is bad for capitalism?  I’m sorry, it’s hard to keep track – getting fat, lazy, union workers out because they increase labor costs to the company is a good thing but getting wealthy, profitable insurance companies out because they increase the medical costs to the people is a bad thing – is that right?  Getting rid of big government bureaucracy = GOOG, getting rid of big insurance bureaucracy = BAD.  Gosh this is hard but I think I’m learning!

    Geico/Humvee – Because Warren sees the writing on the wall.  Of course, after viewing the "viral" video where he plays guitar and sings for Geico – I now question his judgment…

    CAT/Kustomz – So much for pinning $60 today.

    GOOG/Humvee – Worst case is always a retreat to 2012!  The joy of being a long-term investor, there is always another year (at least so far).

  108. Phil, now that’s a great Freudian slip – "Getting rid of big government bureaucracy = GOOG", because with socialism the govt knows everything about me and without it, GOOG does!

  109. Well guys, I”m signing off early again.  We’re still on the road, been in Cajun country for the last few days, near Layfette.  Had "gator fingers" yesterday; basically pure white meat (that tastes better than chicken) cut into strips, breaded with a cajun mix and deep fried.  I would never have buffalo wings again, if I could get these in California. 

  110. Hi, Peter,
    Thanks for the comment on tax treatments on SPX/RUT options.

  111. Bouncing on 67.31; from here we get direction, I think up, but we’ll see.
    Sorry about this morning, I’ve got construction chaos at my house, but I would have said TZA when it couldn’t get back over 67.21. ss is right about Pavlov !!

  112. Good morning, Phil, do you see shorting fcx back down to the $77.50 levels or below?

  113. Phil,  resending.

    March 19th, 2010 at 11:09 am 
    Phil, please recommend adjustments to the June 10 17.50/22.50 bull-call spread on SPWRA originally bought for $3.30.

  114. tradansh – I’m not a chartist, I lean on Pharm and others for that. I thought HK would hold 21 so the chart looks pretty bad to me below that point; you should probably either wait it out, or nibble here with tight stops.  I’ll stop out at 19.80 and come back later so you could use that for a stop (I avoid round numbers like 20 because things pin and spin on the round numbers).

  115. JRW – good to have you back.  Construction in your existing house can be a pain.  I am having to type with bandages on my hands from the falling knife.

  116. JRW:
    RE: I would have said TZA when it couldn’t get back over 67.21.
    Did you mean 67.21, or is that a typo?

  117. I bought BIDU calls for next month. No more day trades left
    What should I do to make sure if CHINA drops over the weekend, I make some money as hedge?

  118. chaps
    Sorry, you are right of course; I meant 68.21

  119. Europe/Judah – I don’t think any of it is absolute but it’s good to keep an eye on Europe and think about what they think about our market – keeping in mind that they are much more affected by what goes on in Asia in the morning than we are so if they think we’re selling off (as they did from this mornings big drop) then they worry that, after they close, we’ll head lower and spark a sell-off in Asia which spills into their open and can gap them down so they may look to get to cash quickly because, the next time they get a whack at our market (don’t forget US futures shut Friday at 6pm until Sunday 6pm) is going to be midnight on Sunday and that’s after Asia opens.  If you really want to improve your international outlook – I would suggest going on vacation to the continent and bringing a trading set-up and trade a few days over there.  Then go to Japan and trade from that time zone for a few days – you will really get a much better handle on the frame of mind people are in at the open and close of their days. 

    Fence/Humvee – Sorry but it’s a Republican fantasy now that health care won’t pass.  Now they will have to run in November against "Don’t let them come and take away your health care" so let the games really begin! 

    IPad/Mr. M – That’s cool!  I’m still waiting for the model that includes the phone and camera for video calls.  My daughters found an app that turns my IPhone into a reasonable video camera though – that was very surprising.

    SCO/BG – It’s really a question of is there any point to paying .30 to buy a putter that’s $1.15 out of the money?  Do you think SCO is going to drop 10% in a month?  If so, shouldn’t you cash out the whole trade?  If you are into day trading, then I think yes, take the .30 and look to sell again if there’s another dip but, overall, the play was "no way do they make $85 oil" and, so far, we’re on target. 

    SPWRA – OK, now I have to like selling the June $17.50 puts for $1.35 – go ahead and sell me SPWRA for net $16.15 – I dare ya! 

    SPWRA/Trad – Maybe on a spike if GS conviction sells them or not but it’s all opportunity down there. 

  120. Although 67.21 seems to be another line in the sand.

  121. Thanks SS. That will be great.
    March 19th, 2010 at 10:46 am |
    tradansh – I will be happy to explain how I do it a little later.  Trying to pick a trade at the moment.

  122. Phil/Health Insurers
    I may get a black box with black lettering for saying this, but I believe you are totally off base. The health insurers are part of the free enterprise system that has built this country. They are no different than any insurance company – they assume a risk for a fee. The health insurers are in business to make a profit, albeit minimal in comparison to other enterprises. Do they provide a service and are they entitled to make a profit? I am confident their operation is far more efficient than a government " not for profit " operation, as I believe you are suggesting. An insurance company operates to reduce risk wherever possible as that is their business. Try to get fire insurance on your home if you consistently have fire losses – you are a bad risk. So following this same premise for profitability, why should an insurance company that markets health insurance, try to lose money by insuring people that consistently have losses or are poor risks? If the government is concerned about these folks, it would be very easy to set up a high risk government controlled fund, as is done in the case of high risk casualty insurance situations. I owned a home in Santa Barbara that was in a "high risk fire area" and was forced to get insurance through the state government fire fund. This same concept would work for health insurance, but having the President attempt to totally destroy an industry for Socialistic purposes, is hard to accept.

  123. In TZA at $7.44

  124. CNBC Gang Banging Palm — as if this were really such a big story … who cares ?   Short party on expiration day.

  125. tradansh
    I think similar to JRW, 1) pivot points 2) historical charts (daily, weekly) looking for past hard resistance and support lines 3) daily charts (1 min, 15 min) for past 2 months also looking for past hard resistance and support lines 4) I also use 5, 10, 20, 50, 100 and 200 moving avg.s

  126. Guys, due to my stake in Bidu, I would like to make sure CHina doesn’t crash – at least for couple of days. If it did what would be the best move for protection I should do today?

  127.  Phil,
    Are you cashing out of USO puts or holding over the weekend?

  128. Switch ing, $.01 loss on TZA; TNA at $53.15

  129. Dilbert, FXP and EDZ are how you bet on a drop in China.

  130. I don’t mine pay 3.8% extra tax to help poors, but I don’t think it will stay at that rate after few years… Remember the
    social secrity tax??  Just my 2c. 
    Have a nice weekend. All.

  131. Have to go, out at $53.23 will try to check back, GOOD LUCK to all and also watch IWM 67.66

  132. judah – are you tza/tna at the moment? 

  133. SS: He went in and out of TNA quickly. Said he had to go. So he’s not in anything.

  134. AAPL/Robert – Good summary.  There’s 2 ways to deal with a rise like this and it’s different when you are early in the cycle as your spread is $20 and your net is more than $20.  If you had your basis down to $15 and you were up 33% on the spread, then a more conservative stance would make sense.  This is a self-regulating system if you follow rules too because, if your net is more than your spread, then you are early in the scale and have plenty of cash to adjust, right?  Once you beat the caller, then your next sale will put your net below the spread and the upside should no longer concern you (other than the greedy instinct to make more money than you originally planned). 

    So, with AAPL – the question is A) Do we believe that a move up will follow through higher than the $7 we sold the calls for?  B) Is there a clear path to rolling the caller higher?  C) Do we want more longs?  D) Are we willing to risk more downside exposure by taking our good money and buying back the short calls?  All these questions must be answered so there can’t be "rules" for what to do since it’s situationally dependent.  With SPWRA, you may have beaten the caller by 50% today but we don’t think it will bounce very fast and we don’t want to sell lower calls so we just leave them.  With AAPL – you should ALWAYS trade that stock knowing that you could wake up any morning with the stock down 25% because Jobs is in the hospital so your considerations need to take that into account.  

    That’s why you don’t see me setting up diagonals like that on AAPL – there is no way to cover for that and July is not enough time to recover from a $60 drop overnight.   If I want to play AAPL that way, I’d rather go with Oct $230s at $17.80 which will lose $10 if AAPL drops $30 (the $260s are $8) and I’m willing to take that chance selling the Apr $220s for $7.70 BECAUSE I know that if AAPL drops harshly, I’ll be happy to sell Oct whatever puts for $10, which will get me off the hook on the long side and risk a cheap entry on AAPL based on whatever it is that takes them down short-term.  To the upside, I’m in for net $10 with $7.80 of caller cash in my pocket and if AAPL heads higher I can DD and roll the caller to 2x the July $260s (now $5) which is a $30 spread or maybe just roll them even to the July $240s and spend $10 to roll down to the Oct $210s. 

    It’s all about having a plan – generally I like to have a plan for down 20%, up 20% or flat. 

    LOL Mr. M – You are so right! 

    Gators/Humvee – Hmm, maybe a Buffalo Wild Gator franchise?

    Cool, JRW is doing so well he’s adding a wing to the mansion! 

    FCX/Iprosper – Heck I didn’t see them going over it in the first place!  It’s all up to China next week but India taking moves to cool down should keep a small lid on commodities but China can absolutely kill them if they do the same.

    SPWRA/Leon - Sorry Leon, I missed that one.  I’d sell the $17.50 puts for $1.35, that takes your net down to $1.95 and I’d offer $1.50 to roll to the $15s but no more than that.  No reason to give the caller .75 even though it is tempting but what are the odds we get over $22.50?  You can offer to roll them down to the $20s for $1 (now .75) as that would pay for most of your $2.50 roll down. 

    China/Dilbert – I prefer the EDZ hedge to China as China can be so crazy that FXP is like a roulette wheel.  EDZ is way up (almost 10%) from where we jumped on them Wednesday but not so bad and you can go for the July $43/49 bull call spread at $2 and you can sell the Apr $40 puts for $1.10 and those can be rolled even to July $31 puts (now $1.20) but, obviously, when the May and June contracts are published there should be better opportunities.  EDZ is an ultra so a drop to $30 is 33% which means it would take more or less and 11% gain in emerging markets to knock you down that far by July.  As long as that doesn’t happen – you are spending $1 to buy $6 in insurance

  135.  Phil
    i am short 10 PSA march 90 calls for 4.7$. 
    should i roll or should i get assigned and write puts? 

  136. gel
    "The health insurers are part of the free enterprise system that has built this country."
    Believing something that’s not true is called an illusion.
    What made this country great was a strong middle class that didn’t have to have working moms and credit cards to keep business consumption rising and a growing economy.  The only way we can realistically chip away at the mountain of debt is by reducing the cost of living for the middle class, beginning with the heathcare industry since we pay 100% more than other industrial countries.  
    Then expand the list:  Education, defense
      You can call it "Socialist" all day long, what it really is is fairness.

  137. Insurance/Gel – I understand your point but your health is not an optional asset you choose to protect (or it shouldn’t be).  Insurance companies add 33% to the cost of health care.  If I insured that your next breath of oxygen would not harm you, then I could make the same argument you are making – I’m conducting my free enterprise business and I’m going to charge you a fair rate to cover my costs and make a fair profit.  Your only defense is the pathetic – "Why do I need you to insure my oxygen" to which I reply "would you rather have the government do it – they’ll only screw it up!"  Not all decisions are business decisions – this is a Human Family decision – we humans NEED to have health care.  Not some of us, ALL of us.  If we pool our risk properly and fairly then we can directly work with care providers with a minimum of overhead and provide the best possible care that we can afford for the least possible costs.  This is not a fantasy because 19 of 20 OECD countries have been doing it for decades.  If you are too good for the standard care that all humans are afforded the right to through our insurance pool, you will – like 2Bn other people in OECD nations – be able to purchase luxury insurance from private providers that will give you world-class care.   I have friends who buy this insurance – it’s about $100 a month and they mainly buy it because they are terrified that they’ll be in America and get sick and they will fall victim to the US health care system.  Feel free to disagree – some may object to chipping in the millions of dollars it costs to pay for Santa Barbara’s fire department to protect your hill when they live in the treeless downtown area…

    USO/JcEd – When in doubt, sell half!

    Later JRW!

    PSA/Oncmed – Unles you have a great reaon to be short the stock, why not just roll them along to Apr $90 calls and put $2 in your pocket?

  138.  Didn’t the "free enterprise system" provide the breeding ground for mortgage backed securities that created a bubble that is now killing the entire global economy? I suppose GS made our country great with that little turd!

  139. My 2c again…
    "fairness"?? so phil and a lot of us up at 5,6am reading all the headlines, watching asia and european stock markets doing try to make few more dollars to pay for "some" poor people doing nothing and drink beers all day?  THAT’s NOT FAIRNESS for me. 

  140. Phil,
    I know this is vague but I can’t calculate everything right now. I sold TZA Mar 8p now about 80% loss and I don’t think I need all the contracts as hedge since I have cashed out so many of my longs (mostly naked puts and being called away on a few positions). Should I take assignment on half and roll out half to Apr 7.5p? Roll all and wait to see if we add many more longs before next expiration? Or any other suggestions?

  141. SS, I haven’t done anything today except sell my calls on the first pop of the morning at that 68.41 resistance level (seems so long ago).  I’ve been beset with indecisiveness today. And, probably due to the Pavlovian training you mentioned, I keep thinking TNA instead of TZA.  Sure enough, I’m thinking of an end of the day move up, but I think they’ll re-test first closer to 67.  If you look back 10 days, 67 provided a pretty good jumping off point after it broke through.  If, on the other hand, it doesn’t hold 67 (and the Dow doesn’t hold 107), I am hopeful we finally get that sell-off we’ve been waiting for. 

  142. Between the health care plan, Sarkozy and Merkel bickering, India’s rate hike, and seeing red on my screen for the first time in weeks (that is red, right… I’m not just delusional?), I’m completely confused.  Should we be long U.S indices going into the weekend, short, or in cash?  Or in something else entirely like that July EDZ bull call spread in case China implodes?  Any insight would be appreciated.

  143. Thanks SS.
    Do you how did JRW arrive at the specific levels above in his 12.03 post? I have been trying to use Pivots on IWM 5 min chart in ToS to get the same levels, but have not been successful.
    Lines at 68.08 67.70 and 67.18, plus a lesser formed line at 67.48. Is it based on Pivot points?

  144. Phil,
    AET is shining today  I am still in the April PLay where we have the same situation as discussed this morning with AGNC and WMT.  Even that the caller is well up I am 50% ahead with the long JAN 11 caller so no complains.
    you set up a new play below.  I am thinking of upping up the play as follows as stk is trading at 34.33
    Jan 12 bull call 30/40 at cost of 4.55 and sell Jul 35 caller for 2.46 possible even throwing a putter in to the game
    your thought pls
    2012 $25/35 bull call spread at $5, now $5.40 – Keeper if we sell July $34 calls to cover at $2.35

  145. tradansh – I am not sure how he got those.  Sorry.

  146. Fairness/Bobhu – It’s fair that you make 100x more than the fry guy at McDonald’s but you do need that fry guy to be there so the cost of his health, education (such that it is) and retirement care should be priced into the cost of those fries.  That’s the problem with our system, we pretend those costs don’t exist for everyone and that allows us to discard 15% of the population as if they no only don’t necessarily have the right to food and shelter but that their life itself isn’t important enough to preserve.  It’s very possible that the guy making $8 and hour working at McDonalds had parents who were poor too and they couldn’t feed him as well as your parents or spend as much time with him as your parents or save up for college like your parents and maybe his neighborhood’s schools didn’t attract the best teachers like yours did or perhaps he excelled in school but had to drop out of high school because his mom got sick and he had to get a job and help take care of the family.  You don’t have to feel bad for him – you’re better than him and that would never be you because you would have made different choices and fought your way up so you don’t owe him crap and, if he dies – he dies –  and there will be another useless body to fill his place.  As long as some semi-competent boob hands over your value meal without forgetting the ketchup – what do you care?

    TZA/Ac – I’d roll, what are you going to do with the full stock?  If the VIX were better I’d like the stock but it’s hardly worth selling puts and calls and tying up $7 more so may as well just roll the putters until/unless you HAVE to take the stock.

    LOL Wassellc!   CASH!!! Cash is the answer but I do like our disaster hedges over the weekend as the smell of disaster is in the air.

    Oil floating just above $80.50 into NYMEX close (2:35).  Gold $1,107, copper $3.37, silver $17.02!   Nat gas, of course, it UP 1.2% because this market is just insane…

    Three lunchtime reads:
    1) Ignore the market’s low volume at your peril
    2) Lehman’s demise, dissected
    3) Revaluing the yuan: Be careful what you wish for

    The American Bankers Association’s recent meeting resembles a pep rally, as bankers gear up to oppose financial reform. One vows, "We’re not going to sit silently while we are blamed for problems that were caused by others." Goals: no consumer protection agency, keep national banks exempt from state consumer laws, keep Fed oversight for state-chartered banks.

    The Fed must disclose documents identifying financial firms that might have collapsed without the bailout, a federal appeals court said. The Freedom of Information Act “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs writes. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”

    Hospitals demand higher reimbursement rates and insurers respond with threats to drop them from coverage networks. It’s an example of why insurance companies oppose healthcare reform: They say all the focus is on them, without any attempt to curb others also responsible for cost increases. Hospitals say Medicare shortfalls are forcing them to come up with revenue elsewhere, and premium increases are as high as 39% in some markets.

    "The next time an IT analyst tells you that the Windows 7 PC upgrade cycle or the move to Cloud computing are the main events in the IT market, hit him over the head with your smartphone," Keith Woolcock says.

  147. Preach brother, preach.

  148. Phil,
    What is the official DIA play over the week end holding 109 Jun and 108 1/2 covered with mar 31 106 and most 108 shorts  thanks

  149. Possible buy the mar 31 back ?

  150. "Hospitals say Medicare shortfalls are forcing them to come up with revenue elsewhere"
    Isn’t this saying that the gov’t run healthcare system is being subsidized by insurance companies? 

  151. Seems a bit odd that AMED’s up almost 4% today with the health care vote over the weekend.

  152. AMED is flyng! 

    Funny how CNBC says "Gee, maybe universal health care will be good for the health care industry" and there is a frenzy of buying in that sector.  Did this really not occur to anyone before?  Also funny how they came out with that story as GE was in danger of missing $18 into the close.

    AET/Yodi – I’d be careful adding money to health insurers right now.  Wait until next week and see what the reaction to the Health-care bill is. 

    Wow, oil got very popular in the last 10 mins – up from $80.50 to $81 like a rocket.  We wouldn’t want China to get the impression anyone was selling it would we?

    DIA/Yodi – June $109 puts, now $4.50, 1/2 covered with Apr $107 puts, now $1.50.

    Medicare/Wayne – It’s saying that the whole system is a mess and needs to be torn down and rebuilt from scratch. 

    Damn those Democrats, Cap!  Thank goodness for Murdoch’s (#117 on Forbes with $6.3Bn, which doesn’t include the hundreds of Billions of assets he controls) Post or they’d probably be getting away with it too! 

  153. SS,  67.50 has really been the line of the day today.  I guess it comes down to whether Mr. Stick shows up.

  154. Alsos
    I must respectfully disagree. I have studied history extensively, and I can not recall an empire, country or any political entity that was BUILT by Socialism. I can, however name many that have been DESTROYED or are in decline as a result of Socialism. We, unfortunately are headed in that direction, as evidenced by the support given through our recent elections.

  155. Phil,
    I see your points.  Just let you know, I didn’t have rich parents, we(4 kids) selling lotto tickets on the street when we were in elementary school. I delivered newspaper, milk since I was 15(as in nightly high school).  I worked part time to have my college degree.  I worked few years to have enough money to come to US for my master degree, in the mean time I worked few months for a gas station night shift(12am to 7am) to raised my tution.  I appricated the system gave me the chance to have what I have.  BUT I DO WORK HARD FOR IT. 
    If you don’t work hard you are not deserve it.
    Have a nice weekend, all.

  156.  Wayne,  i think that physicians will take the brunt of this reform – we will end up working more for less.  In anesthesia, we do medicare cases just to have the opportunity to do commericial insurances.  I sincerely believe this "reform"  will lead to more allied healthcare providers such as pa’s, nurse practiioners etc.  If that is what is cost-effective and desired by society than so be it – but the only solution in my humble opinion is saying NO to unnecessary procedures like artificial knees on fat people and MRI’s and CT scans for everyone.  

  157. judah – yeah that is a good line.  The stick would be the only reason for me to jump on TNA.  To tough for me to call it at the moment.

  158. i moved out of the house when i was 151/2 yrs old; lost my father at 16; have worked 47+ jobs; including Mcdonalds and Burger King. The majority of millionaires are rags to riches stories, one just needs to read a few thousand biographies and confirm that. Peter Daniels, an Australian Billionair was an illiterate brick layer at age 26. Great Bio! he taught himself how to read and write by listening to tapes in his car. His elementary teacher for years pounded into him what a loser he is and he’ll never amount to anything.
    I now own several businesses including stock trading. It is the Free Enterprise system we enjoy that lets an ambitious person succed; it’s bad enough we have to buy food stamps for people who choose not to work. Food, house, and car is not a right to be furnished by others, those items are rewards of one’s ambition to learn and go through the pain of growth to better himself. Socialism makes a very weak people, for you’ve taken away the right to fail or succed. It’s getting to where if you want to get ahead, you need to become an illegal alien--then you get all the perks from Obama and his heroes; crecdit cards, and you don’t have to pay taxes!! People who don’t like it here need to go live in Iran and tell their woes to the ever merciful Ochmadineshad………………

  159. disaster hedge -  I have DXD position right now  as July 25/33 call spread with sell july 27 puts b/e is 28.40, right now I am in negative (5732) … any adjustment needed or wait till next week see how market react.  thx

  160. SS,  I’ve got either one ready to go.  Just looking for this level to give me direction (and that gets back to our earlier discussion).  It is up or down from here.

  161. Gel – Do you feel the capitalistic system we currently live with can go on indefinately if everything, as of today, stayed the same?

  162. is anybody watching volume today? is it stickable?

  163. Phil,
    By the way, you think $8.00 per hour is bad?? try got up 4am every morning(rain or shine, summer or winter), ride bike delivered newspaper dood by door for 3 hours for $37.50(what I was making) a month.
    Don’t get me wrong, it’s good to work at McDonalds.  I just don’t like "some" people choise not to work but get handouts.

  164. Phil, I bought AMGN APR $55/65 calls @4.11 but I already cashed out the $65 call sold @$1.6. Now the $55 call is worth $4.8. Do you recommend seling call again? If yes,  at what strike price and month?

  165. Hey, hey, hey, class!
    It’s about 3pm.  Mr. Stick is coming.  Be quiet!

  166. Hi guys I see mucha political problems and discussions on our financial side, come and live in Mexico you get beheaded if you not in line, you find many fellow country-man just enjoying the sunshine and let God be a nice man.

  167. It’s looking to me like Germany really may not budge on the Greece issue. We haven’t been hearing about it much in our financial media, but read the FAZ and there are a lot of articles like this one:

    This is a Bundesbank board member saying that the best outcome is for the Greek CB to declare insolvency. As the article goes on to note, it’s unclear how the IMF is going to be able to do anything significant.
    A lot of bets have been placed that this *somehow* resolves itself. Those bettors may be in for a surprise.

  168. I see the DOW is frozen on the screen or is it just my bade line?

  169. Sell naked
    Didn’t quite understand.
    1. july spread of $2 – ok
    2. sell apr $40 naked puts?
    China/Dilbert – I prefer the EDZ hedge to China as China can be so crazy that FXP is like a roulette wheel.  EDZ is way up (almost 10%) from where we jumped on them Wednesday but not so bad and you can go for the July $43/49 bull call spread at $2 and you can sell the Apr $40 puts for $1.10 and those can be rolled even to July $31 puts (now $1.20) but, obviously, when the May and June contracts are published there should be better opportunities.  EDZ is an ultra so a drop to $30 is 33% which means it would take more or less and 11% gain in emerging markets to knock you down that far by July.  As long as that doesn’t happen – you are spending $1 to buy $6 in insurance.

  170. Cap – NY Post and National Review? For an "Independent" You have some odd news sources. Sorry Bro…….

  171.  Phil,
    I have 30 BIDU Sept 550 calls sold for an avg of $65, however these were rolled up from earlier BIDU positions.
    Net I am down about $30 on the calls plus I owe the current premium of $55.
    At the moment, I feel comfortable holding this thru Sept because I think that BIDU is very richly valued.
    While I agree with you that most of the news of GOOG’s departure is baked into the stock, I would like to  minimise my exposure to Mondays news.
    Can you suggest some positions that I might take to mitigate my Call exposure.
    Previously you had suggested Sept 510 puts. I was thinking of selling the Apr 580 Puts @30 as a hedge against a short term runup in the stock. 

  172. 1020
    Our capitalist system is flawed for sure, and it is not because of the entrepreneurial spirit that has prevailed for so long. United States is still the most successful country historically, but is in danger of maintaining that status. I believe the demise of the country is attributed to the acceptance of values that are repugnant to a successful society. To name a few I would emphasize the prevailing mind set of rewarding those that have no desire to achieve and penalizing the aggressive achievers. This is evident in our educational system – dumbing down the classrooms so that everybody gets an "A", and most can’t even read, let alone understand the text if they could. The tax system, and the welfare policy rewards the underachievers. Our penal system is in shambles and nothing is done to address crime in an aggressive manner. I believe the Capitalist, entrepreneurial system is the best for everyone, but political efforts to liberalize the "concept of responsibility and meaniful effort" has all but destroyed the expectations for a continuation of the dreams one would expect from a properly functioning Capitalist society. At this juncture, ( UK is a good example) society looks to other systems, such as a Socialist government, in order to make corrections and "keep the peace", but the success of the past is gone forever.

  173. So buying a EDZ call – will it go up if china drops?

  174. Definitely Stickable.  Narrowing bollinger bands; likely to get a move one way or another …

  175. Delbert
    yes it should, but it is not just China but all emerging market

  176. don’t know how they plan to make a stick today, who gonna buy this market over weekend???

  177. 1020 … would love to see your news sources.  I go for truth, wherever it may be.
    You may be a perfect example of someone who when he does not like the message and can’t rebut it, you attack the messenger.
    I’ll be happy to sign you up for a subscription to America’s Newspaper of Record; just let me know….

  178. Yodi, if I care to be beheaded, I will go to Saudi or Pakistan, thank you very much !

  179. :wink:

  180. here we go……..

  181. tchay – that means if India drops on monday edz will go up?
    Why is edz up so much then? I thought the emerging markets were ona  roll

  182. weeeeeee

  183. well said, gel 1 1020!
    we need more dreamers to dream dreams and are willing to pay the price to make those dreams come true, that is what provides jobs to the people that are hopefully someday going to build their own business and hire people; and so on. You never help the train by hurting and destroying the engine by more taxes, bueraucracy and regulation--that is why companies are moving jobs out of the US--

  184. iprosper20
    Your post is right on target, and I agree with you – one can learn much from reading books and studying data in schools of higher learning, but that alone does not prepare you for a successful career. The is a lot to say about the value of "street experience" and hard work. You learn this at a very young age. I started at age 13, driving a gravel truck – had to lie about my age, but I pulled it off. Throughout high school vacations I did heavy construction 12 hours a day, while many others were taking golf lessons or vacationing at the lake. Some of my buddies did the same as I and they went on to become very successful MDs. The wimps who were too much of a sissy to get a summer job, ended up working in menial jobs later in life, hoping to get a job from someone like me.

  185. judah – giving TZA a try.  Hadn’t lost money on that one in a while.

  186. SS, Got on TZA when it couldn’t break 67.50.  Best ride of the day for me.

  187. Dilbert
    I think that EDZ is a best hedge for long portfolio because when market correct emerging market go much deeper (procentage ) than US market

  188.  ANTI-STICK!  ANTI-STICK!  Hip Hip Hurray!

  189. Gel – Thanks for your thoughts. I feel every system has its flaws, you bring up just a few excellent examples of ours. Politics are now similar to a Dallas Cowboy/Washington Redskins rivalry. Its nasty, its hateful and the fans love it. Long term, I do not hold out much hope for our nation. I hope to God I’m wrong…… 

  190. judah – we need 67.21 to fall.

  191.  gel, i worked at a ice cream store at age 12 after lying about my age.  subsequent jobs, wendy’s fry boy, pushing carts at sams, UPS(summers in college) and yard maintenance jobs.

  192. OK. Have to comment on the health care debate now. I agree with some of what has been said. We need healthcare for all ; its tragic to see peopl come in with advanced diseases because of lack of care. But, we must be realistic. Everyone cannot have access to the care we provide now. It is too expensive. Three issues in particular are overlooked.
    1) End of life care : we spend massive amounts of money on patients in their last 6 months of life. No other country comes close. e.g. at the hospital i am at now, we had a 101 year old in the intensive care unit for 2 weeks until the family could make difficult decisions. Do i feel bad for them? yes! But, in order to cover EVERYONE we have to ration care to some degree. No one acknowledges this.
    2) Required insurance. Everyone young and healthy MUST pay into the system to balance risks. States are now passing laws to fight the mandatory insurance requirement. In which case everyone sick will be covered, and no one healthy will (until the day they are sick, and then they’ll just pick up that insurance by phone on the way in to the doc).
    3. Family practicioners and pediatricians: in small towns some/many of these clinics will go under if the DRA (deficit reduction act) cuts  go through, which are 21% (delayed a month to april). The bills accounting assumes some level of cuts for the coming 20 years. If we pass "healthcare for all" only to lose these clinics, small town american will not have quality access to care anyways!
    meanwhile jomama, i’m a radiologist, so lets not go around targeting those CTs/MRIs! In fact everyone go out get a CT! :)

  193. Cap – I get mine from PSW of course and I can assure your it’s not MSNBC, allthough I do like Dylan Ratigan…..  :)

  194. Guys,
    I think you should not put yourself as an example, you are a winners and it is probably only 5% of population. I guess it is quite dangerous when only 5% of population (winners) are happy and 95% is not

  195. SS, Took half off at 67.21.

  196. gel1- I agree with you. The problem with liberals is that they ignore the realities of humanity and the world around us. Its one of the reasons their theories have never worked over a prolonged periods of time. Europe is a perfect example of social planning and ultimate failure. 
    Arguing to spend money on "free healtcare for all" while saying spending money on defense is a waste, is a perfect example of innocense and ignorance. It is the denial of the realities of human nature and the real world.
    This impending socai experiment was destined to happen and has been decades in the making.  It’s a cycle that will be short lived (about a decade) and doomed to fail.
    Best strategy is to position yourself to profit from the changes, plan for their failure and capitalize on the recovery.
    Capitalism will return stronger than ever after all these bleeding hearts cry for what they have destroyed. 

  197. Phil: you must have noticed I do not participate in the social/political discussions: people who trade have money, they should be more civilized (not like the people who ridiculed the Parkinson’s disease guy the other day ) and generous meaning less selfish.

  198.  nice Hanna – I will take off my lead during the next case with fluoro.  I agree with your assessment on fam prac and pediatricians.  Did you read that article on Michigan medicaid – very few medicaid providers, so patients have to drive over 2 hours.  We are opting out of medicare at our outpatient facilities.

  199. Please remember and check it out, one of the first major moves of Hitler was to nationalize healthcare……..check it out, that’s one of the best ways to control your life--

  200. AMED/Bord – I keep saying I do not believe that Health Care is a negative for service, testing or equipment companies. 

    By the way, my absolute favorite thing about Murdoch is he fell 100 places on the Forbes list under the previous administration!  Of course, he had a tough life – he had to come back from Oxford to Australia when his dad (Sir Keith Murdoch) died, leaving him only a single publishing empire to run – from there he had to claw his way up by wiping out rival Aussie newspapers, which really took a lot of time away from his yachting until he wised up and bought his pal an election.  That led to strings being pulled to getting him the rights to England’s "News of the World" (kind of like the Enquirer) from which he then mirrored the Australian wipeout of all competition.  Conservatives should be wary though because Murdoch flipped from Thatchers party to Blairs when the winds changed – Imagine Fox news going liberal! 

    LOL Gel – you are simply unshakable! 

    Parents/Bobhu – I didn’t mean you in particular.  Obviously I have no idea of your background but I’m just making the point that people are people and some get breaks and some don’t and it’s not about whether or not someone "deserves" to be treated like a human being or not – some things should be a given.  A farmer hires a vet to take care of his cows yet we’re not willing to make sure the McDonald’s worker gets medicine for his blood pressure?  That’s kind of sick isn’t it?  My main point is that we mis-price labor because labor is not a scarce commodity so we force people to sell it at a loss – below what it costs them to live with any kind of dignity.  That is of great benefit to us as we get cheap shoes, and guys to wipe out seats down at the ballgame and really good seats at the ball game because the riff-raff couldn’t possibly afford to enjoy the same entertainment as we can.  We get to buy homes that take up 10 times more land than the average person and we get to consumer 5 times more fuel and we get to sit on chairs made of rainforest wood – all the spoils of class warfare for the winners.  And keep in mind the system wouldn’t work if we took steps to make sure that everyone was as educated and we were and had the same opportunities that we have because then they’d all want land and fuel too.  What if everyone who did everything for you all day was You?  How many of those jobs would You really be filling?  How would you fill the jobs that You wouldn’t do?  While everyone may have an opportunity to work their way up – you NEED the people who don’t.  Until we improve robots to the point where we can stuff Mr. McDonald guy into the meat grinder and put him out if his misery, we should probably put just a little thought into his care and feeding – just like the other cattle…

    Reform/Jo – I agree but don’t you think it would be more productive for doctors and hospitals to work WITH goverment to come up with a workable plan for US health-care?  You guys are in the position to cut out the insurance companies and the lawyers and set reasonable fees that all can live with.   It’s not a fantasy, it works in England.  A doctor there can make $500K under NHS, more for surgeons and they don’t even pay for college, nor do they have malpractice bills.  It’s not like the money isn’t there with $2.5Tn spent on health care in the US – how many doctors are there?  Let’s say there are 500,000 – $2.5Tn is $5M per doctor per year!  You guys could all afford a DaVinci in the office and really cute nurses and nice beds etc with that kind of money coming in – it’s just misallocated….

    LOL IProsper – so where do you stand on the issue?  8-)

    DXD/Gucci – July is far but you can roll down $2 of intrinsic value for $1.30, so it’s a nice way to give yourself 70 cents.  You are in for $3.40 so you can afford to pick up $1 rolling your callers to the $29s if you have to (would keep you at $3.70 with a $23/29 spread, still good for 60% upside at $29 and $4 in the money.  If they fall further you can sell puts like the July $24s, now .65 for $1.50 or more and then you are in the spread for $2 with a b/e at $25, which is down almost 10% or 5% up on the Dow so you are good to 11,200 with that adjustment.   If your upside plays don’t do very well at 11,200 then the disaster hedge is too much….

    Volume/Tcha – Can’t tell today as we started with 200M in first half hour but now, 293M so very little volume since the opening dump – I wouldn’t count the stick out, that’s for sure. 

    Papers/Bobhu – Me too.  My parents lied for me when I was 10 and I got a paper route and soon took over the one next to me when that kid quit.  I made $20-$25 a week (1973) so I was rolling in dough!  After that I was a busboy from 13-15, then a waiter (still lying about age), then Maitre Di at a Yacht Club, then stereo sales, then managing stereo store then back to being a waiter, landscaping and sometimes pizza guy in college (which I paid for myself).  Maybe I just spent too much time hanging out with the people I worked along side of – I developed these feelings for them like they were real people or something.  Probably my big mistake was getting friendly with them and visiting their homes and listening to their hopes and dreams and meeting their families which were usually just like mine except with jobs that weren’t as good and homes that weren’t as nice.  I know it’s a weakness and I’m sure it will pass – perhaps if I build the wall around the pool a little higher and stop drinking beers with the gardeners…

    AMGN/Jossie – I don’t know that $65 was a realistic target in the first place.  If your spread was $4.11 I sure hope that includes the buy back of the $65 caller!  If you want to stick with it, I’d sell the July $60s for $3 and roll yourself out to the Oct $55s at $7.25 (+$2.50) so you drop the basis to $3.61 on the $5 spread plus 3 months. 

    Viva la Yodi!

    Germany/Eric – I don’t see how they can.  It’s like being at a wedding and one of your poor relatives gets on the  stage and tells you how they need "just" $10,000 to get through a rough time and you are keenly aware that another dozen relatives are waiting for your answer so they can get up on stage and ask too.  It’s a very dangerous precedent for Germany to set, effectively allowing the EU to become a dependent of their economy.  Why should Greece’s creditors be bailed out (the same goes for our set-up too) if creditors learn not to lend into risky situations then countries (and banks) will learn not to put themselve into risky situations and we’ll all be a lot safer. 

    EDZ/Dilbert – Sure, you are raising $1.10 by selling Apr $40 puts naked.  Those can be rolled down but if EDZ stays over $40, then you get that $1 plus a May sale plus a June sale plus a July sale – much better potential than just selling July puts. 

    LOL 1020! 

    BIDU/Oncmed – You can just sell some June $500 puts for $19.  If BIDU stays high, you get $20, which is enough to roll the Sept $550s ($76) to the Jan $640s ($57) not even counting the premium you win on the Sept calls.  If BIDU heads down, the June $500 puts can roll even to the Jan $390 puts ($20) and I’m sure you don’t think BIDU is THAT bad…  Of course the more conservative play is just to sell Sept $500 puts for $35 but then you’re betting against yourself long-term and that’s no fun.

    EDZ/Dilbert – Its weighted with the BRICs

    ROFL Cap!  I literally just fell off my chair laughing!  "I go for truth, wherever it may be."  Oh man, now I have to go to the bathroom I’m laughing so hard…. 

  201. Please remember and check it out, one of the first major moves of Hitler was to nationalize healthcare……..check it out, that’s one of the best ways to control a society--

  202. well said, gel, 1020 and iprosper20… Have a nice weekend all… :-)

  203. DKGuy/Cry  At The rate we are going, EVERYONE will need a box of Kleenex…..

  204. Thank you, bobhu and you as well--

  205. Iprosp – he also took certain members of society that he thought were unproductive to the good of his kind and… what was that yodi said could happen in mexico?

  206. Wow, what a day…..and what a board.  That was some good reading!  I hope you all don’t mind, my publisher is printing out the books now….have  a nice weekend all.  New Pharma info should be out this weekend.

  207. iprosper
    Hitler made a lot of good things for German economy, just because he is Hitler it doesn’t mean that what ever he did is wrong :)

  208. cap beheaded there is a difference I am rather in MX you pay a brib and you get off free not so sure in Pakistan??? or Saudi they might not like Cheesis

  209. tchayipov,
    So, what’s happen for those "good things for German" which Hitler did??  Maybe he did for himself…  just a thought.

  210. phil : made some money today,but tough wading thru all the social/political comments. Have a good weekend

  211. bobhu: you make a lot of mistakes: its what – not which – Hitler did,, maybe he did it himself,
    Hitler was Austrian, but I am sure you do not know.

  212. Pharm – while you are there, please. i talked to a friend today who has a daughter who works for ISPH. They wanted me to advise as to whether it was good for her to continue socking $ in their stock. Is that one you have covered on this board?

  213. Bobhu,
    how you know Germany lost in First World War, payed lots of contributions and was in very bad shape(economicly) and in 7 years ( from time when he came to power to start of Second World war) he built German economy and they became strongest country in Europe

  214. SS, I decided to hold the other half rather than sell it.  Have a great weekend.

  215. Phil its a good thing we enjoy making each other laugh.
    I aim to re-educate you no matter what it takes ! 
    Gotta get you off the kool aid when it comes to politics.
    I enjoy making you laugh; gotta do something to pull you out of that DU echochamber.

  216. arghh; don’t know what happened with that post.  Scrub the last sentence.
    Have a good weekend all; more armtwisting, bribery and threats from the party in power to come.

  217. RMM it is always easy to correct others mistakes possible try to speak bobhu"s lingua!

  218. Hannacare – "Rationing" (bad word for it) is a must.   It starts with re-educating people as to what is appropriate at end of life.  I think there should be a rule and people can buy "insane method insurance" if they want it.  Then no one will complain because the 90-year old guy with no kidneys and cancer and needs a heart transplant will still have to answer the question we ask now: "Do you have insurance?"   Balance risk – check.  As to the small-towners – that’s still the allocation issue.  It’s going to take a lot more than one bill or one year or 10 years to fix our broken system. 

    5%/Tcha – Not only that but not one person says "Yeah, I had a silver spoon in my mouth and I’m sitting here managing my family fortune."  I guess that never happens…   By the way – not that there’s anything wrong with that.  If I leave my kids $50M, I damn well hope they have time to hang out and trade stocks to keep things interesting for themselves.  My only concern is that they don’t get the impression they are somehow better than the people who are cleaning thier bathroom while they sit in front of a computer screen with that person’s life savings on a single trade…

    Bleeding hearts/DK – I’m getting weepy already…  8-)

    You are a gentleman and a scholar RMM!

    Well said IProsper, I heard that on Fox too - In fact, here’s a word from the Fuhrer himself.  By the way, I heard the dental care at Auchwitz was the best!

    Political/Dflam – I agree but can’t be helped with the bill coming this weekend I guess, people can’t let it go.

    Thanks Cap, I appreciate the effort!

    Have a great weekend everyone! 

  219. have a good weekend everyone, hope next week correction will continue

  220. yodi: brrrrrrrrrrrrrrr, descend to those half-baken levels.  No, my mind would not let me do it,

  221. Oopsie, we lost one while we weren’t lookingLatvia’s government collapses after failing to tackle its crippling economic crisis – 20% unemployment, 18% contraction in GDP.

    What kind of rinky-dink country lets unemployment get to 20% anyway?  Oh…  Unemployment rates rose in 363 U.S. metro areas in January, with nearly 200 topping 10%, the Labor Department says.

    Could the U.S. become another Ireland? Simon Johnson says that how Ireland handled its banking crisis is "a cautionary tale regarding what could go wrong for all of us."

    Much of the burden of paying for healthcare expansion would rest on the backs of investors who face a smorgasbord of new taxes on interest, dividends, capital gains and other investment income. But reading the tea leaves of today’s options action, Jon Najarian says three healthcare stocks stand to benefit: Aetna (AET +3.6%), UnitedHealth (UNH +2.4%) and Wellpoint (WLP +1.9%).

    Deciding that mortgages are a core product, Citigroup (C) will ramp up purchases of mortgages underwritten by other firms and keep more loans on its balance sheet reversing its plan to exit the business. “We decided that we can’t have a consumer bank without a mortgage product…"

    434M on the Dow today – that’s 3 day’s normal volume.  Only down a little so pretty impressive on the whole.  If it lasts into next week then maybe it will be time for some new bullish plays.

  222. I guess I called it right on Telcom the other day!

  223. balance & cwan,
    Thanks for the compliments.  Yes, we love to not play by the rules and portfolio margin gives us that advantage, so we can dream of new plays from time to time.  Have a good weekend all!

  224. RMM Have you ever tried to speak German maybe it would be a good language to learn not for you to descent but to speak to me. BRRRRRRRRRRRRRRRRRR

  225. Piling on from the left…..
    I prefer this Hitler video link that Phil gave over that BS one that came out when Scott Brown was elected (Hitler was a Democrat in that one…. curious thing trying to depict Hitler allied with a party having a bi-racial man as its leader).
    The raging and rhetoric from the right on health care needs to be flushed down the rhetorical toilet. Trying to portray Obama and the Democrats as Nazis and Communists (simultaneously no less!!!) just makes the right wing look freakin’ stupid… nothing else.
    I am not rich by any means, but have worked my way up starting out with menial jobs and paid my own way through school just like a lot of other people on this site.  I am a consultant who works with non-profits and NGOs who serve people who often earn less 5 dollars a day. These people are not lazy and who physically harder and longer than 99% of the people on this website. The only difference between many of you, me and "them" is that we won what Buffett calls "the Ovarian lottery" (Oh wait I forget the Right thinks Buffett a commie too).   Just because people are poor (in USA or elsewhere) doesn’t mean they are lazy or are scamming the system (sure there are exceptions). The poor AND the middle class in the US deserve decent, affordable health care, and right now they don’t get it. I have been to over 50 countries through my work and personal travels, and have had to seek health care in a variety of environments, including some of the poorest of the poor countries. And I must say that my worst yet most expensive health care experiences have ALWAYS been in the good ol USA. This broken system has to change or everyone, rich, poor and everyone in between will suffer.
    Have a good weekend everyone.  

  226. ….And a good weekend to you bord and everyone….

  227. yodi: you cannot take facts: every comment you make has mistakes.
    Du kannst von mir Deutsch lernen. ich hab’s gelernt, properly.

  228. There’s one overwhelming flaw in the liberal argument. We can provide more money and benefits for the regular folks, and it seems to me we already provide plenty, but no matter what we spend and provide, lives DO NOT IMPROVE. It would be great if we could just hand out solutions to problems, but sadly, we can only hand out money.
    And, it’s often disproportionately, MY MONEY. It isn’t so much the money, it’s that it has been mostly wasted, maintaining failed lives. I hate spending money on myself that turns out to be wasted, so you can imagine how I feel about this stuff.

  229. Oh, and I have a question for anyone in the hospital business (which I used to be, long ago). Does health reform greatly mitigate losses from bad debts for hospitals? And if so, where will the new money go?

  230. RMM Das freut mich sehr. Sieh mal einer an, hab noch ein schoenes Wochenende. Schuess

  231. yodi:
    auch auf Deutsch machst Du Fehler, Tschuess.
    Jedoch dein Deutsch ist besser als dein Englisch.
    Nichts fuer ungut.

  232. RMM ‘schuess" ist slang und kein Deutsch, kauf dir mal eine Unterhose eine Nummer groesser !!!!

  233. Flaws/Barf – That’s an interesting thing to say.  Our government collects $2.5Tn and spends $3.5Tn to "take care of us."  That’s (what they collect) $11,666 for every man, woman and child in America so figure about $40K per family.  I guess one solution is for them to just give us a check and let us all move to South America, where we could live really well for that kind of money! 

    Since about $2Tn of that money is collected from the top 20% and we can assume that the 40-80 percentile are "middle class and don’t need wellfare.  Then that means we can allocate $2Tn down to the bottom 40% (120M) which is now $16,666 per person or $50K per family.  That would rocket the entire bottom 40% (averaging $20K per household) up to around the 30th percentile.  Then we have a country with a massive middle class and no poor people at all.  No more need for social services, everyone can afford health care, plenty of money for consumer spending, hosing, whatever and those of us in the top 20% can run our businesses and take advantage of servicing the affluent masses.  That’s one solution…

    Or we could set real standards for health, nutrition and education that give that bottom 120M every possible opportunity to move up the ladder.  Europe does this very well.  College is free but you earn your way into it – if you don’t test well in high-school you know by 16 that you are destined for a life of manual labor but, because they have health care and other support structures – there’s really nothing shameful about that.   Meanwhile, those with aptitude, regardless of social standing, can earn their way into graduate and professional schools. 

    It will take us 20 years of that just to be able to say that there really is equal opportunity for all to succeed under the American system and it has to start by not allowing children to be born into poverty.  I work with the Food Bank and I won’t bore you with statistic but the bottom line is we throw out more food than 120M people can eat every day.  As with everything else – it’s a misallocation of resources. 

    I’ve said about fuel consumption – a .50 per gallon tax on gas generates $150Bn a year in revenues and if you don’t want to be affected by the tax – just consume 20% less fuel – which will be doing everyone an additional favor.  A similar tax on food could be put in place too to hopefully prevent waste but the key is to re-allocate (I know, Commie talk) resources that are being wasted anyway. 

    We DO spend $2.5Tn on health care while all of Europe, with 25% more people, spent $1.4Tn on health care per year.  If this were your typical capitalist business, someone would be hired to come in and be given a 10% bonus ($110Bn) to get the costs down to EU levels.  They would come in and mercilessly hack out the middlemen and eliminate waste and make tough decisions on end of life care etc.  and they would save $1.1Tn or so dollars and everyone would stand around and cheer for the great capitalist.  They wouldn’t wind about how "unfair" this was to the suppliers who get squeezed, would they?  

    So why all the whining?  Because the suppliers, in this case, are able to get in front of the process and spread money around and convince the board of directors to squash the hiring of the efficiency coordinator and they are able to stop the company from focusing on saving $1.3Tn.  If American business ran the way the special interests run our governent then we’d all be working for China!

    So that’s my "liberal" arguement – stop wasting Trillions of dollars for inferior health care.  We have a system that doesn’t work and we are getting our asses kicked by countries that have health care that doesn’t burden the people or the businesses in their nations.  Our auto companies spend $1,500 per car on health care.  In Europe it’s $600 and in Japan it’s $500 and India can make a whole car for $2,500 and they have universal health care for a Billion people (not that it’s any good but at least they try).   Doesn’t that alone tell you something is really, really wrong with our system?

  234. Here’s a good comparative health care chart for major countries.  Page 2 has the numbers. 

    Here’s the CRS Report to Congress – a pretty definitive study on the subject.  I wonder how many people with opinions have actually read this thing, including Congresspeople…

    Here are the WHO 2009 stats comparing 192 countries in 9 categories

    Yeah, let’s fight to maintain the status quo on this national embarrassment! 

  235. Inspire/morx – don’t know much about their pipeline, but they did have a failure with one of their drugs.  Didn’t hurt much, though.  I will have to do a little digging this weekend.

  236. Stat of the day: 93% of analysts expect S&P to rally higher.

    S&P companies register net positive announcements of $4.4B in expected dividend payments this quarter, largest since $6.7B in Q4 2007 and a sharp contrast from the record $38.7B decrease a year ago. “Of significance is that seven issues in four different sectors were confident enough in their future earnings ability to initiate a dividend this quarter, which speaks to the recovery,” an S&P analyst says.

    Top-ranked renewable energy investor Thiemo Lang is buying Chinese solar-panel manufacturers, even as other hedge funds sell hard-hit stocks like Yingli Green Energy (YGE) and Fuel Systems Solutions (FSYS). Noting massive short bets, Lang thinks his peers have oversold the industry.

    A Russian aerospace company is planning to bid on the contract to replace the Air Force’s aging fleet of aerial refueling tankers, the latest twist to the ongoing saga involving Boeing (BA), EADS (EADSF.PK), Northrop (NOC) and others.

    Yale’s endowment fund is moving money out of hedge funds to allow for bigger bets on private equity, real estate and commodities. Alternative assets "tend to be less efficiently priced than traditional marketable securities, providing an opportunity to exploit market inefficiencies through active management," Yale said in its yearly report released yesterday.

  237. cap the outragious lawsuits that happen; that will reduce insurance premiums for the doctors; helps reduce their overhead.  One of the highest mortality rates in this country is Medical Doctors, they over work themselves to death-average age of death for them is 52. Dentists, last i checked had the highest suicide rate; the overhead of college, equipment and malpractice insurance--most don’t get out of debt until after their 50. many people don’t see the other side of operating a business or the costs involved.If people would read history, a lot of it, they may get a better perspective at what works and doesn’t. When Chamberlin danced off the airplane waving the paper that Hitlet signed, saying " there’s peace in our time"-- so naive, While Hitler was powering up the war machine to invade the Rhineland. Since nobody restrained him, it empowered him to greater invasion efforts, that he knew would go unanswered.
    A favorite story was of the eagle who traded a feather every day for a fish from a pelican on the beach, he thought was a good trade because then he did not have to find a fish in the water himself. Pretty soon came the day, he could not fly. This is what is duping a lot of people--they trade their freedom for someone else to take care of them.
    We do have the best healthcare in the world, that is why people from all over the world come to the us for treatments/surgery. Talk to a Canadian, if you want to know firsthand how hood socialized medicine is, many die on the waiting list because the "government management" doesn’t deem them worthy of treatment asap.(that’s called rationing healthcare to curb expenses) WHERE IS THE MERCY TO YOUR FELLOW MAN ON THAT DEAL?    
    good medicine will simply go blackmarket, to escape the regulation/taxation/massive insurance costs
    "every man is my superior in someway, in that i learn of him" --Ralph Waldo Emerson

  238. Phil, if you give the bottom 20% $16,667 each, in most cases, it won’t produce any significant difference in those lives a year later. That’s all I’m saying. I’m not saying it isn’t a reasonable thing to attempt, I’m saying we tried, and it doesn’t work.
    Do you have any relatives, Phil?
    I rest my case :)

  239. Oh, and my Canadian friends belong to "private" health care systems. The two tier approach is alive and well, wherever people aspire to pay for proper services, and not have to accept the administrator’s view of the thing.

  240. iprosper
    I agree, here in Canada waiting list pretty long, and it is stupid why they don’t allow private Health Care, if I can afford it I should have this option, this is reason why reach canadians go to US for surgeries. I guess Health Care system should be somewhere between US and Canadian systems. But it is hard to argue against Phil that anybody must have rights to be treated if he is sick and it should not be dependant of his financial condition

  241. barfinger
    here in Alberta we don’t have private health care system

  242. Fun fact: We have eaten 8 trillion calories worth of Oreo’s since 1912.

  243. …makes me wonder how many lives we could have saved.  :-(     Food waste is one of our greatest everyday, acceptable  evils, imho.

  244. Are the Dems bluffing about having the votes ?

  245. The hospitals already treat thousands and thousands of people that do not have insurance; look in LA and other places where there is more people with/without healthcare--when a person shows up in trauma, the core of our belief system and value of life kicks in-yes, we do take care of them, and do the paperwork later or eat the expense--they save the life first, ask for information later. That comes from 4 different doctors we have known for years, one doctor simply left his business and anc California because many people believe doctors are rich and are the last to get paid--he couldn’t put the baby’s back, so he left with over $146,000.00 in receivables he could not collect on. Maybe he should have called Obama to bail him out? no, he maned up, cut his losses and did other business(he dabbles in stocks, this i know)
    I urge people to go themselves, to several hospitals and find out the truth for themselves!! everyone has an agenda and can or will stretch the truth or simply lie over and over, swaying a public that is too lazy to read history; check the facts; and check the source. It has been written in a great book " My people die for lack of knowledge"

  246. This POS HC monstrosity does little to nothing about "fixing" any problems in health care system.
    It is just a tax and spend FUBAR disaster in the making; raising taxes; decreasing quality of care; increasing costs; increasing burdens on tax payers and increasing the deficit.   It is simply nuts.

  247. This video sums it up nicely:


    Here’s some others:

  248. Videos – I had to remove the images because they were killing the page loads. 

    John Stewart vs Glenn Beck Part 1  &  Part 2.

    Watch out for insidious social justice

  249. I have a question I’ve never seen answered about health care.  Where is all the money going and how does the government running it lower the costs?  As far as I know, doctors aren’t making a killing, insurance companies make reasonable profits (at least they must not be too great because I haven’t seen any investment ideas for them), and malpractice costs may be high but in line with costs.  I also think the federal government running health care reaches beyond it’s constitutional power.  I would much prefer my state run the program.  I feel we would get more efficient results without the bribes (or whatever they call them) and deals that have to be made to pass this federally .
    Btw Phil, I’m writing down all the benefits you think the gov’t should offer and I fully expect these to be offered on Phil’s stock island.  :)

  250. Money/Wayne – Well the insurance companies take about 20% of the money right of the top vs. 2% for the government administration of medicaide so that’s one place insurance companies cost us an extra 18%.  Then there’s the cost of the hospital and doctor and clinic administrations dealing with the insurance companies and that’s another 11% of total costs vs 1% for the government so +28% by inserting insurance companies into the mix.  Then you have a whopping 15% for malpractice insurance and legal costs so now we’ve spent 46% of every US insurance dollar and we haven’t even seen a patient yet!

    You say reasonable profits but let’s say the doctor wants to make $100,000 a year so he treats 4,000 patients at $25 each (11 per day) and everyone is very happy. 

    But everyone is not happy.  The doctor needs a place to practice ($25,000 a year) and he needs a nurse to help him ($40,000) and he nees a receptionist to schedule the 4,000 appointments ($35,000).  So now each patient must spend $50 each and they are not as happy but not miserable.

    Now the insurance company gets involved and they need to make a "reasonable profit" so they take $40,000 on top of the $200,000 that needs to be paid out to the doctor and the staff but dealing with the insurance company makes the doctor need a bookeeper because it’s no longer just $50 a patient – now there are forms to be filled out and monthly reconciliations etc so that costs him another $30,000 a year and suddenly costs are up to $85 per visit. 

    Then the insurance companies (and this is how it started) begin suing doctors for not taking proper care of their paitents forcing the doctors to take out malpractice insurance (which the same insurance companies sell to the doctors) and the doctors now have to have attorneys on retainer and suddenly there’s another $35 added to the visit cost, now $120 per visit.

    Multiply that affect along to the pharmacy and hospitals and labs and that’s how you get to $2.5Tn from something that used to cost $25 a visit (and the doctor came to you!).  In the above video of the French system, the reason they are so effective is because they have moved back to the model of sending the doctors to see the patients.  No forms, no insurance – if you have a medical problem a switchboard doctor picks up the phone and, if he decides, he can send over anything from a nurse with pills to a full ER crew and the whole thing happens for free – they come and go and you sign a single piece of paper indicating you’ve been treated. 

    The downside is the doctors in France aren’t rich but there are a lot more of them per capita – it’s just a good solid job for a smart person to have if they like helping others for a pretty good salary.

    Philligan’s Island will have no medical services but we are hoping some of the residents will be doctors so we can annoy them on the street and at the supermarkets by going up to them and asking them to "just take a look" at whatever is bothering us…  Residents will be encouraged to either date nurses or at least keep one or two as mistresses.  There will be a mandatory death penalty for lawyering of any kind so malpractice won’t be an issue and we’ll be somewhere in intenational waters so there should be plenty of drugs for whatever ails you…  8-)

  251. Everything hinges on education. Without it, you can’t advocate for proper health care, for housing, for a civil rights bill that ensures your rights.- Susan L. Taylor

    Whether it’s making sure that families have access to quality health care and child care, or making sure that our children receive the best educational opportunities we can give them, we must remain committed to these needs because our children are our future. - Blanche Lincoln

    America’s health care system is in crisis precisely because we systematically neglect wellness and prevention. – Tom Harkin

    America enjoys the best health care in the world, but the best is no good if folks can’t afford it, access it and doctor’s can’t provide it. - Bill Frist

    America’s health care system is neither healthy, caring, nor a system.- Walter Cronkite

    Let’s face it, in America today we don’t have a health care system, we have a sick care system. We wait until people become obese, develop chronic diseases, or become disabled – and then we spend untold hundreds of billions annually to try to make them better.- Tom Harkin

     It is time that we take control and find a way to curtail the explosive costs of health care. Small businesses deserve a chance to channel these funds toward other needs, such as expanding and creating more jobs for the economy. - Christopher Bond

    The largest portion of our state budget is Health and Human Services. It will grow by approximately $500 million. A half a billion dollars is a very big number.- Mitt Romney

    It’s not just frivolous lawsuits that weigh down the economy; the ever-increasing cost of health insurance does, too.- Bill Owens

    A Harris poll I’ve seen says only 12 percent of the electorate names taxes as one of the most important issues facing the nation. Voters put tax cuts dead last, behind education, Social Security, health care, Medicare and poverty. - Lane Evans

    Without health life is not life; it is only a state of langour and suffering – an image of death. Buddha

    Everyone should have health insurance? I say everyone should have health care. I’m not selling insurance.- Dennis Kucinich

  252. I will take the France Insurance system but can we control the doctors in US to take 50K to 100K annual salary?  lol.

  253. Thank you, yodi

  254. Well, when you get your news from comedy satirists Jon Stewart and Colbert, you are a) truly an informed citizen; and b) in no position to comment on anyone else’s point of view !   Throw in Joy Behar and Olbermann and a couple of cab drivers and you will be all set !

  255. Cap – You may wish to re-write your above comment " Well, when you get your NEWS from COMEDY SATIRISTS Jon Stewart and Colbert"……You, "independents" do enjoy satire, that RED EYE on FOX, now thats some funny sh*t!  ;)

  256. Phil… Just back from a cocktail party, and thought I would see how the day ended. Not much change from earlier today, and the debate over healthcare is still unresolved. I have to prick the bubble of hope you hold so dearly – that if we were to allocate just $2 T of our hard earned money, as a gift to the bottom 40%, then this $50 K per family would put our "humpty-dumpty world back together and all would be well. This experiment has been tried in the past by President Lyndon Johnson, through his "Great Society" war on poverty. Check out the stats – $1.5 T was spent and this was added to the national debt, as that was money spent over and above a balanced budget. This amount of money is the same as you have suggested in order to bring the country in balance with Nirvanna. We all agree the "war on poverty" was a total unmitigated failure, as the poverty level today is far greater than it was in that period of time, and we are stuck with the debt forever. Failures in the past should be somewhat of a guidline in the present, in order to avoid  the same mistakes.

  257.  Interesting stuff. One point : In france, I would have gone to college / med school free (and combined, perhaps), and then had a short training period. I then make 50 to 100k, starting to practice at age 26ish.
    In the US, i went to 4 yr college, 4 yr med school, 1 yr internship, 4 yr residency, 1 year fellowship, at which point i could start paying back 220k in student loans. Lets say age 32ish, if lucky and without breaks. If i made 100k at 32, i probably take home 68k post tax. Then i can pay 22k in student loans a year (hopefully to finish in 15 years). For years of training, my post loan post tax salary is 46k. Eeek! 
    Educational reform and educational cost control are key to reforming physician pay. You all know the power of interest. Those poor loans that were taken out in year one of college have multipled like crazy by the time you can start paying them back at the end of training. Give me free schooling and shorter years of training, and pay me less. 

  258. gel1 – You made me smile when reading your comments with "Just back from a cocktail party" and "war on poverty" included in them. I may not always agree with you, but you do have my respect. Have a good weekend.

  259. RE "Why we need gov’t run health insurance" — A couple of things i noticed in the video.  First, when we needed GRHI 2 people were well and 25 were sick, then when we had GRHI 25 people were well and 2 people were sick, just thought that was funny.  But, according to my second point in my first post, he uses local/state gov’t run operations (fire dept., police, and water treatment) to "show" that the gov’t can run things effectively. 
    RE "France’s system of health care" --  Sounds like they have some good ideas, but I can’t understand why those ideas couldn’t be implemented here without the gov’t running it.  Also, they still have private insurance, and it seems like without it they could still be liable for a large hospital bill because I thought they said that the gov’t covered 65% of costs.  While that may be good for a doctor visit, 35% of a major surgery is still expensive.  Not sure how that squares with a $190 delivery though.
    RE "Thought Bubble"  — Phil, you definitely need to add some thumping music to your site, then your points will be undeniable.  I don’t think this video had anything new to offer, besides the fact that everyone has a right to indoor plumbing.
    RE Phil --  A recurring theme I keep hearing about why we need GRHC is to take the insurance company profit out of the equation.  In fact, in the "Why we need gov’t run health insurance" video he says it’s "the biggest reason" and that the "gov’t would spend more of the insurance pool on caring for people’s health, probably much more."  The "probably much more" makes me laugh, because a 30 second search on google led me to .
    So, 2.5T/300M = 8333/person for health care
    13B/254M = 51 insurance profits/insured person
    8333 – 51 = 8282/person  cost for healthcare – insurance profits
    18.6B/43M = 432/person waste by medicare
    432 * 46M = 19.9B wasted when just the uninsured are added to the gov’t run plan
    It seems to me insurance company profits are a drop in the bucket of total health care costs.  And while the doctor’s may save some on less forms, I think we all know gov’t won’t be as efficient in handling claims as an insurance company.
    As for the malpractice problems, are there reforms in the health care plan?  I can’t see how the gov’t running health care reduces these costs.

  260. Sadly Gel, I guess I have to clarify that simply handing money from the top 10% to the bottom 40% was tongue in cheek – just illustrating how much money is actually available to throw at the problem.  I supppose I should know better – as Cap illustrates, conservatives don’t really get satire - but I guess that’s why you guys also think Fox is real news and not just the Conservative version of Comedy Central only with less fact checking in the news division…  8-)
    And don’t forget – they actually asked Steve Colbert to Speak at the White House Correspondent’s Dinner thinking he was really a conservative host!  The best part of this speech is at the end, when Laura Bush, who may have been the only conservative at the table who got what Steve was doing, says "Get F’d" to Steve!  Oops, I was just watching it again, maybe the best part is where he flips off Scallia to his face (about 14 mins). 
    Doctors/Hanna – That’s a good point, which is also why the supply of doctors in France is so much better than it is here - many more people making comfortable livings instead of the capitalist survival of the fittest system we put our doctors through here where they are $250K+ in debt out of college and forced to inten for no money with crazy long house so they can’t even get a second job and then some get rich and some go broke.  Sadly, the best way for doctors to get rich is to prescribe a lot of things people don’t need and to "play ball" with the insurance companies.
    Maybe that’s a problem we have, I keep hearing people say "that’s not going to fix" this and that but you need a 20-year plan to reform the health care system, you can’t flip the switch tomorrow and say we have a French or English system. 

  261. The decline of our society has many contributors,  but the biggest being the decline in values taught by parents to children (respect, discipline, short term sacrifice for long term gain, patience, tolerance, teamwork, etc.).
    We have made this worse by our unwillingness to adequately supervise and eliminate duplication and improve efficiency in our government(s) (remember we have three levels across 50 fiefdoms), simplify our tax codes, adequately define exactly what services & functions public institutions should perform, limit lobby powers, limit the use of tenure in schools, limit benefits of public employees to those of their private peers, adequately educate sufficient engineers domestically(while we uselessly subsidize dead industries, bail out banks), etc, etc. 
    Our political unwillingness to address these issues across all political spectrum has sown the seeds of both oligarchy and stalemate rendering us ineffective at governing, and relegating the political debate to unintelligent polemics.
    If we don’t wake up, start new political parties, and reform our inefficient government institutions relatively soon, we are doomed as a society. Change will require agreement on core values, committed cooperation, and dramatic reform of our institutions. 
    I’m not optimistic for my kids future, nor proud of what it looks like we’ll leave them

  262.  BTW – forgot to mention the lack of a coherent energy plan after more than 35 years since the first oil embargoes! We’re so broken!

  263. Costs/Wayne:  I think part of that problem is you think in terms of 35% of what our hospitals charge while their hosipitals think $100 a day is plenty to charge a patient.  Check out this chart on pill prices:

    The problem with having this discussion once in a while like we do is it’s a massive issue.  You are focused on these profits etc without looking at the bigger picture of the benefits of preventive medicine as practiced in other OECD countries.  Easy access to medical care prevents emergency needs and saves tens of Billions of dollars.  This isn’t some fantasy game being made up by liberals – this is the way medicine actually works in 19 of 20 of the G20 countries.  It’s almost like religion, I guess, as half the people simple don’t believe the other side is even possible, not matter what facts are presented. 

    Here’s where we were in 2006, before 4 years of 15% cost increases in the US (rest of the world averaged 4.5%):

    This isn’t "a little off" this is RIDICULOUS!  That’s OUR money that’s being spent, whether the government spends it or the people spend it, it’s infefficient, it’s wasteful and IT’S NOT CAPITALISM!  This is not the result of a truly competitive marketplace with an efficient pricing structure – this is the result of a caputured market forced to funnel money through endless channels of gate-keeping, profit-taking bureaucrats that does nothing to foster either price competition or performance.  It’s a scam and we are a nation of suckers handing over $1.5Tn to people who are robbing us blind and providing us LESS EFFECTIVE care than almost any other country in the world.

    That’s OK though because we bend over and take the same treatment from defense contractors and commodity pushers so why shouldn’t the American people pay way too much for Health Care too – it’s the American way, I guess and, by God, we’re going to defend it with our dying breaths – which will come about 4 or 5 years sooner for us than most countries! 

  264. Phil – Interesting discussion y’all have going on here. Now, I am not an expert on healthcare, so I will refrain from commenting here. But the only thing I know is that the cost of same medicines is 1/10th or even less in countries like India. So, something is really wrong.
    Read an interesting article sometime back in some magazine, which described how the costs of healthcare were much lower in asian countries and people from countries like US are traveling to asian countries to get procedures, surgeries done (even dental work) as it is much cheaper over there. Now, healthcare is being outsourced as well.

  265. First, I think you’re mistaking many people not wanting to do what’s been proposed to doing nothing.  As I said in the beginning, I think everyone having health insurance would be great, but I would like the states to run the operation. 
    Ok, so per the first graph on Lipitor.  Are the prices cheaper because of price controls?  There must be some free market involved or the Netherlands wouldn’t pay twice as much as Spain.  Does the health care bill include price controls on medicines?  I think the first graph is much more telling than the second.  Don’t know how to post graphs, but the one i found ( it looks like the obesity rate in the U.S. is about 12% higher than in the EU.  Add in another 12% for overweight and that’s almost 25% overweight/obese in the U.S. than in the EU.  I think that has more to do with our life expectancy than the health care we receive.
    I can see how similar markups in everything used in health care would cause the expenses to explode.  Why does this kind of markup exist in our healthcare system, but not other industries?

  266. Here’s where we stack up in something as basic as infant mortality (notice a pattern?):

    Oh, wait!  I’m sorry.  My mind has been changed by Paul Brown (R-GA), who said: "If Obamacare passes, that free insurance card that’s in people’s pockets is going to be as worthless as a Confederate dollar after the war between the states — the Great War of Yankee Aggression."  Damn, that cracker makes a good point!  Maybe we’ll work on that slavery issue next (getting it back, of course). 

    One of the reasons I am so into health care is I had worked with some guys a long time ago to set up a supplimental insurance program for big corporations where we lowered their care costs dramatically by outsourcing major medical procedures.  Here’s a chart that illustrates, in the true capitalist spirit, how much money can be saved by simply leaving this country to have something done:

    These are real costs for the same operation.  And please don’t start with the not trusting foreign doctors crap – they’re the same guys who operate on you here and, for doctors used to operating on Asians – our giant American bodies are like Frankenstien to them, making their work much easier!  8-)

    That’s the Global free market at work.  Leave this country and pay 80% less in fees for the same operation.  They use the same machines, the same drugs, they generally have more staff than a US hospital.  In fact, the kind of places you end up in with these programs are more like high-end private clinics that cater to the wealthy than a standard hospital. 

    America is a unique country in the way that so many of its people will defend the rights of corporations to charge obscene amounts of money for things.  To me, it’s a simple, capitalistic issue – WE CAN GET IT CHEAPER SO WHY DON’T WE?

    Beyond capitalism, I see it as my own patriotic duty to protect my country from harm and draining $1.5Tn a year out of the hands of our people and allowing 50M of our people to go without care is harming my country and it’s people.  50,000 people a year die in this country from lack of health care - that’s one 9/11 per month – yet people march on capital hill to maintain the status quo.  42,000 babies die in our hospitals (7/1,000 infant mortality) vs what would be an average (at 4/1,000) or 24,000 in the average EU nation.  That’s 1,500 infants a month dying under our health care system.  Were they too lazy?  Were they stupid?  Did they not have the balls to grab the brass ring?  I guess it’s their parents fault for failing the great capitalist lottery – had they made better life choices, worked harder, been more productive – they might have been able to go to a hospital where their child would have lived.  Ain’t that America?

  267. Phil – Great charts, figures illustrating the difference in costs between US and other countries. Total cost of getting healthcare somewhere else including flights, acco etc would still be much less compared to getting them in the US. And there are world class facilitates which operate in partnership with major chains.
    Really supports the point that I made earlier.

  268. To the first graph I found, (
    "The primary reason for the United States’ higher infant mortality rate when compared with Europe is the United States’ much higher percentage of preterm births. In 2004, 1 in 8 infants born in the United States were born preterm, compared with 1 in 18 in Ireland and Finland. Preterm infants have much higher rates of death or disability than infants born at 37 weeks of gestation or more (2-4, 6), so the United States’ higher percentage of preterm births has a large effect on infant mortality rates. If the United States had the same gestational age distribution of births as Sweden, the U.S. infant mortality rate (excluding births at less than 22 weeks of gestation) would go from 5.8 to 3.9 infant deaths per 1,000 live births, a 33% decline. These data suggest that preterm birth prevention is crucial to lowering the U.S. infant mortality rate."
    Now I guess it’s possible premature births are due to lack of healthcare, but according to this ( it doesn’t seem that way to me.
    The second graph is just a reinforcement of the Lipitor.  Again how does the healthcare bill lower these costs. 
    480B/43M = 11163/person on Medicare
    Granted Medicare is caring for older people, but I wouldn’t say it’s heart valve replacement in India cheap.
    And also is this even constitutional.  Why can’t the states each have their own program?

  269. Doing nothing/Wayne – I’m sure you’ve heard the expression "Don’t let the perfect be the enemy of the good" and the other expression "All that is required for evil to triumph is for good men to stand by and do nothing."  Please don’t kid yourself – we tried health care 20 years ago and it was defeated and before that Kennedy and Johnson had tried it and it was defeated and in between those times did you see the Republicans working with the Democrats on a better plan or are the Republicans singing "Ding dong, reform is dead?"

    Here’s Nixon on the subject of health care.  With Ehrlichman giving Nixon a way to create the HMO Trojan Horse saying: "All of the incentives are toward LESS medical care, because the less care they give them, the more money they make."  The next day, Nixon takes the Kennedy/Johnson health care proposals and derails them into HMOs as the great private solution to our health problems – nicely done!

    Then we all know what happened the next time the Democrats got a shot at it, poor Hillary…  The end of this clip is a great note on how this scam works talking about how 14 Congressional aides who worked on the Prescription Drug Bill went to work for the industry once the bill was signed and Congressman Billy Tauzin, who spearheaded the bill, didn’t even wait for his term to end and quit Congress to become the CEO of Pharma (the lobbyist group that wanted the bill passed) with a $2M salary.  It just doesn’t get more blatant than that does it?

    Of course they want you to do nothing – nothing is a $120Bn a month victory for the status quo.  Nothing is $1.5Tn a year in additional overcharges for US Health Care – that’s $4Bn every day you do nothing – nothing is FANTASTIC so whether you do nothing because you are confused, or unsure or on the fence or waiting for a better plan or distrustful of your government or waiting to see what the Republican proposal is or waiting for Congress to get back from a break or waiting for the next election – it’s all nothing and that is $13 per day per person in this country remaining in the hands of the people who currently profit from it.  Nothing is their American dream…

    Pre-term/Wayne – As I said, it’s a complex issue.  Note poor nutrition is a cause, as are infections and untreated diseases and stress – all factors that are less prevelent in countries with strong support networks (for some reason, adeqate pre-natal care is not a factor?).  Fixing health care alone doesn’t solve everything but look at the outrage when we suggest people have the right to be treated when they are sick – imagine if I had the nerve to say that people have the right to eat or even, dare I say, shelter?  No thanks, I’m not taking on this crowd with that crazy kind of Commie talk…

    Healthcare lowers costs by collectively negotiating prices, something we specifically do not do thanks to the Bush bill (see Hillary video above).  In fact, it’s not legal for us to go to Canada or Mexico and buy our drugs there – even though we can take our prescriptions to their pharmacies and have them filled for 1/10th the cost because their governments negotiated prices with the same exact companies that we didn’t.   Like I said, this is not Capitalism because in capitalism we would be buying drugs freely in other countries – this is effecitvely a totalitarian state-mandated medical system that deprives people of choice by handing monopoly powers to the health care providers and robbing the people of their freedom to choose health care in the International marketplace. 

  270. By the way, for those of you so inclined – here’s a good way to contact your Congressman to let them know how you feel about the issue ahead of the vote.

  271. You think health care is expensive now:  just wait until its free.

  272. 1020; I must confess, I have no idea what Red Eye on Fox is ….
    Yah, Phil, us independent conservatives don’t get satire; in fact we have no sense of humor whatsoever !  Just ask you !  hee hee.
    Colbert at that dinner … yeah, he was just rude; not funny.  Maybe you thought so; he was a bore.
    Phil, you keep making straw man arguments, just like your pal O.  The problem isn’t doing nothing.  The problem is his approach to doing an economy & taxpayer & patient killing FUBAR monstrosity.  Its arrogant and reckless and it should just be blown up.
    Obama, the "Not George Bush" president, has shown himself to be an arrogant, reckless, incompetent mistake.
    His 4 years can’t be over with soon enough.  Fortunately in a few months, Pelosi and Reid will (should) be history.  But we will still have the Teleprompter in Chief.

  273. My point is Phil, the bill about to be voted on does nothing to solve the inflated costs that exist.  This is where i got an explanation of the bill (  if you have a better link please post it.  First, it’s going to cost 940B over 10 years. AND, we collect for all 10 years but only pay out benefits for 6.  Sounds like the 2nd decade is going to be tough.  Our current cost is only 8000.
    940B/32M = 29375/newly covered person
    It increases costs on insurance companies.  Now whether you think pre-existing condition denial and policy limits are fair or not is another story, but costs for everyone else will go up.
    Your last paragraph about prescription drugs is great.  The current bill will do nothing like that.  What we need is a 20 page bill that does that.  Then another 20 page bill that does something else very specific.  The clip on France had several good suggestions that could be implemented.
    Personally I think we need to change the way insurance works.  Instead of me going to the doctor and paying a small co-pay, my company should set up a HSA for my family.  I am required to get a physical every year in order to get a refund of my HSA.  When I go to the doctor they subtract the negotiated price from my HSA.  So instead of a $25 co-pay, my HSA is hit for the $100 office visit.  You also get bonuses for healthy living such as not smoking and not being overweight.  At the end of the year, I’m given a check for some % of the balance in my HSA.  The idea obviously needs some work, but hopefully it would help people make educated decisions about their care and encourage a healthy lifestyle.

  274. Colbert/Cap – You are right, he was just rude.  Thank goodnees the next year they wised up and went with the master.  I see you are thinking clearly though, the current plan should be blown up and it’s Obama who’s arrogant and reckless.  You are right, these 4 years can’t be over soon enough so we can get to the second term where Obama can really leave his mark!

    By the way Cap, Obama may be down in approval ratings but there’s not a single Republican that is ahead of him in match-up.  What does that say about the "loyal opposition"?

    a Pew Research Center poll released on Thursday found that despite Obama’s 46 percent approval rating, 61 percent of Americans still say that he is inspiring. Furthermore, 57 percent describe him as decisive, 54 percent say that he still makes them feel hopeful and 49 percent said that he still makes them feel proud. Only about a third would describe him in negative terms like arrogant and detached, or would say that he makes them feel angry.  This disparity holds true even among conservative Republicans, some of his most ardent critics. While only 12 percent approve of the job the president is doing, more than twice as many still view him as an inspiring figure.

    Cap you are the perfect example of a guy who spends so much time reading himself into a self-referential circle that you simply have no ability to see that you are in the minority.  I’m telling you now that health care will pass and Republicans will make a massive mistake running against it as an election theme.  Your man Romney is at least realistic enough to see that the bill is passing… 

    "We would encourage Republicans to follow advice from Mitt ‘I-signed-health-care-reform-into-law-in-Massachusetts’ Romney and run on a platform to repeal health insurance reform – especially in the state with the worst rate of uninsured," said Democratic National Committee spokesman Ricardo Ramirez. "If Republicans want to repeal a deficit-reducing bill that bans discrimination against pre-existing conditions, and instead support skyrocketing premiums and dropping coverage when people get sick, we’ll welcome that debate any day."

    Link/Wayne – Try the NYTimes, good coverage, many links to deep details and analysis.  Even the comments are useful.

    Yes, this is a totally broken system and no, this bill won’t fix it all.  But, if you have a totally broken car and you want to fix it, do you not make any repairs until you figure out the one thing you can do that will fix everything or do you start the project off incrimentally and work towards completion?  Step #1 in a 12-step program is admitting you have a problem.

    I like how you are upset about $94Bn (assuming not a penny is saved to offset it) but our military budget – our ordinary miitary budget, not counting $300Bn of special war spending per year, is $680Bn.  The entire rest of the planet’s military budget – Russia, China, North Korea, Iran, the EU, Australia, South America, India, Greenland, Africa…  is $700Bn.  Most of those people are our allies so we and our allies are outspending our "enemies" by about 10:1 – EVERY YEAR!  Don’t forget that’s not counting the $300Bn a year we’re spending on 2 wars or whatever they are called now. 

    So I’m just thinking that if we can find it in our hearts to justify $680Bn a year + $300Bn a year for the purpose of "keeping America Safe" then perhaps I would like to see 10% of that money used to protect the health of 32M Americans who currently have no protection from sickness and disease.  Sure the plan needs some work but we went into Iraq on a faulty premise with bad information, incompetent leadership and no particular plan at all and look how well that turned out!

    I like your idea and I like many ideas I hear for how to make things better but first there needs to be a framework established under which to begin the fixing. 

  275. Oops, found newer figures on Military spending (not including funding for DOE nukes is HUGE):

  276. Here’s a good chart putting the Health Care spending in some sort of perspective:

    This does not include the special war funding!!! 

    Here was our military spending in 2005, before we really cranked it up in Bush’s 2nd term, pretty much adding the entire budgets of Japan and the UK to our own over the next few years:

    Here’s 2008 in bars

  277. I love this article from 1996 criticizing Clinton’s plan to spend $254Bn on the military as "too high."

    • President Clinton’s request for $254 Billion for the military in 1997, plus congressional promises to add to this funding, mean U.S. military spending will remain near Cold War levels.

    • Most Americans agree that current military spending is too high. They would support cutting military spending and retargeting the savings to other national priorities, such as improving education, fighting crime, reducing the deficit, or even prudent tax cuts.

    • Spending on costly and unneeded Cold War weapons programs continues and will increase in the coming years. Total acquisition costs for new aircraft and ballistic missile defenses alone could exceed $500 Billion.

    • The United States can safely and sensibly reduce its annual military budget to about $200 Billion and continue to maintain the strongest military forces in the world.

  278. China:
    To borrow a phrase from that great, great American, former Sen and VP candidate (I forget which party) and just general example of virtue John Edwards,  I see  Two Americas:

  279. I now understand where the confusion came in.  You kept giving evidence that the US spent way too much for ineffective care.  And were pushing for this bill to be passed.  However, this bill does nothing to solve any of the problems you presented.  It’s sole purpose is to expand coverage to the uninsured and those with pre-existing conditions.  It will do nothing to lower the price of Lipitor or heart valve surgeries or any of the other things that you showed were much more expensive in the US.  Now instead of a 2.5T health care system, we’ll have a 2.66T health care system. 
    You said "Yes, this is a totally broken system and no, this bill won’t fix it all."  You should have said "Yes, this is a totally broken system and no, this bill won’t fix it at all, it will simply extend the broken system to everyone."  Granted this may reduce the deficit by 100B in the first ten years (I think we can both agree 157B/year (940B/6years) is a floor on spending and not a ceiling), but I wouldn’t consider it much of a feat to raise taxes by over 1T and spend 940B and then claim to have done something great. The income is never as high as projected and the costs never as low.   Not to mention the fact that we’re collecting for 10 years to pay benefits for 6.  Are we going to cut coverage in 2020, and then resume it in 2024?

  280. Well I see where your confusion is, all the bill does is shift those payments from the Fed down to the states by 2020 – it doesn’t end the plan.  I thought you wanted to the states to have more control?  This will allow you to lobby your individual state to limit or oppose health care reform and then people and corporations will be able to vote with their feet and get the hell out of the backwards-assed states that don’t want health care. 

    What this bill immediately does in stop insurers from cancelling insurance policies on people who get sick (are you against that?) and will stop them from placing lifetime caps on the care the patients get.  New insurance plans (not existing ones) will have to pay the full cost of preventive care and exempt that care from deductables and kids can stay on their parents’ plan until they are 26.  Small businesses (less than 25 employees, avg salaries under $50K) will get a 35% tax credit on premiums and there will be a governemt advocacy office to reconcile contested medical bills so those companies and the employees no longer have to get a laywer to collect their insurance claims. 

    Pre-existing conditions can no longer be a reason for denial, health care companies now have to show the consumer what they do with the money they get (just like charities) and there will be stanardization and simplification of forms over time especially when it comes to showing consumers the rates and benefits so a clear choice can be made (right now businesses have to hire consultants to read through the various offerings and come up with cost comparisons).  There will be a limit on deductables at $2,000 per person or $4,000 per family and inurers will have to apply to raise rates.  Also, people will no longer have to wait longer than 90 days to get coverage on their job. 

    I would be nice to have a bill that immeditately goes into effect tomorrow and changes everything overnight.  I’m sure you can point to many examples of bills that do that.  This one requires people to have health insurance to increase the pool and provides tax credits to pay for it to families making up to 400% of the poverty level ($88,000) and does set up a new pulbic health program (sorry not tomorrow morning) that will be run a s non-profit and will allow anyone in America to be covered.  If the private companies can compete with the government entity on providing lower cost pills and services then people will be free to choose the private companies – that’s why it’s called a public OPTION. 

    The plan also allows self-employed people and small businesses to buy insurance through state-based purchasing pools so instead of having hundreds of thousands of small businesses and individual entrepreneurs negotiate their own rates with insurance companies, they will now be able to negotiate as a group.  Also, if you work for a big corporation that negotiated a great plan and they lay you off, you can keep that plan by simply continuing to pay for it.  I know – it’s EVIL!!!!

    A very big change (the one that adds 32M new people and costs the most money) is that Medicaide, a currently existing and working program, will be extented to ALL individuals under 65 who make up to 133% of the poverty level ($29,327 for a family of 4).  Businesses can foil this entire program by paying people a living wage…

  281. It is always interesting to me that folks put so much credibility in stats and figures comparing the "Quality of Healthcare" of vairous countries to justify a postion that our healthcare system is so expensive while at the same time so inferrior to others that spend far less and are more efficient. I agree our system has serious flaws and needs to be improved. But the basis for comparison to these other countries is laughable.
    In my prior life (before retirement) I worked with the WHO and consulted with other countries who do not have the private insurance options we decry and take for granted today. (They were and still are exploring methods to privatize what they now have since they can no longer afford it).
    I have seen first hand how categories of health such as infant mortality are defined and reported in many  countries around the globe.  To the innocent and unknowing you would think a birth is a birth. Ah, but not so…….. a baby has to meet certain qualifications in order to be defined as a birth. Those qualifications vary by country and those variances are not always taken into consideration in many of these studies.
    I guess it’s only human nature to believe one is taking a correct position on an issue, the "facts" provided back up your postion. These "credible", "independent" organizations certainly don’t have an agenda of their own, do they ?  Hey…….why let the details get in the way. Those details may force a different conclusion. Why would any bleeding heart liberal want that ???  :-)

  282. That’s a good point DK and if I were looking at births in Africa compared to the US I’d agree but perhaps (or perhaps not) we can agree that the EU is fairly civilized with people who are not to dissimilar to us that we should be dismissing their data as if it were gathered at gunpoint in Nigeria. 

    I have friends and family in Europe who use health care in various countries and I’ve been to hospitals in England and Spain myself and you can quote all the statistics in the World and they don’t mean a thing compared to the absolutely ridiculous situation in this country where a human being can’t get treatment due to lack of coverage.  My company’s HR department had to spend thousands of hourse a year just trying to get the insurance company (Horizon Blue Cross/Blue Shield and a couple of others over the years – all the same, all "top-level") to pay for things they were obligated to pay for.  Since we covered people’s whole families I could tell you hundreds of horror stories of cancers, childhood lukemia and diabetes, heart attacks, strokes, accidents etc – that were all in some way, shape or form, denied or delayed.

    Home care was routinely turned down, medications deemed too expensive, treatements were considered "radical".  The list of great reasons not to provide care under the guise of "cost controls" is endless but we did the math and found that we were paying close to $2M a year for Health Insurance and had, over 10 years, used just $11M worth of it – and that was based on face prices from hospitals and doctors and dentists - far above the discounted rates the insurance company paid. 

    To me, this is basic economics – we have a $1Tn middleman in the system that can be cut out.  I don’t need charts that compare care in other countries and quality of care – I KNOW the SAME care can be gotten cheaper!  Why would any so-called capitalist want anything else?

  283. Here’s a nice, simple way to look at it: 

    GE has an insurance plan.  The plan covers 300,000 employees and costs GE an average of $7,000 per employee per year ($2.1Bn)

    Another company has the same plan but covers just 30 employees so they pay $9,500 per employee per year ($285,000). 

    Clearly the insurance company makes money servicing GE and also clearly it’s not going to be possible for the smaller company to negotiate a better rate with just 30 people so it’s "fair" that GE gets a bigger discount. 

    Unfortunately (for America), 75% of the people in this country work for small businesses and, due to insane regulations that protect the insurance monopolies, they are not allowed to pool their resources or even do something as simple as buying their prescription drugs on-line from Canada, where they could save 80% of that cost.

    That extra $2,500 per year multilpled by 75% of a 140M person workforce is $262Bn right there that can be saved by simply allowing small businesses to pool their insurance buying power like the big boys.  Add on their family members and we could be talking some real savings, right? 

    What’s the problem with this?  Well GE doesn’t save much, they’ve already negotiated low rates so they have no reason to support a bill that will enable their competition to have the same health benefits as they do.  I’m sure we all know people who took jobs at big companies – not for the salary and not for the job satisfaction but "for the benefits." 

    Leveling the benefit playing field may force large companies to offer other forms of compensation to attract talent and, even worse, it removes a barrier that prevents talented people from becomming entrepreneurs and starting their own businesses and especially removes barriers that keep employees who have "pre-existing conditions" trapped in jobs that they can’t afford to give up because they will be rendered uninsurable once their COBRA runs out.

    All this other nit-picking over details of a plan and costs and whether or not we should commit to providing care for 10% of our population who currently do without is a big distraction to the main issues and ALL of those issues are addressed in the current plan and that’s why I support it.  It’s good for small business, it’s good for workers and that’s ultimately good for America.

  284. Cap/Red Eye  It’s the Fox Business Networks lame attempt at comedy……

  285. Most of the arguments have been about "spending our money".  We have been fortunate :(   to pay well in excess of seven figures in federal tax due to my and the wifes "hard work" and I would like to see alot less of "our" dollars going to the black hole known as defense spending. Will my voice be heard?

  286. I agree it can be cheaper and perform much better. Your examples, all to sadly exist and are far from rare.
    There are issues as you mentioned above which come about as a result of carriers not being ethical and regulated appropriately. This is not altogether different than the finacail mess of the last couple of years in which we found the regulators not regulating. The same is happening in the states as far as their departments of insurance are concerned.
    Many of the problems (not all) existing today come from ineffective regulations and poor bureaucratic regulator performance allowing carriers to deliver poor performance. This is not to excuse the perfomance of the carriers in the first place but this situation does not allow the market place to compete and work properly. Once again an example of failed regulators being unaccountable.  
    Rate increases are being approved by state regulators in situations where the "home"carriers far exceed the regulatory reserve reuirements ? Why ? As a non resident commercial carrier we had to compete with these organizations and the states made it extrememty difficult for those of us who were less politically connected to be competitive. Therefore regulators were able to control and limit the number of carriers allowed to offer coverages in the state for small and mid size businesses. Thats why in certain states you only see 2 or 3 carriers "allowed" to maket products. The others are not approved either becasues they cannot offer the mandated benefits in that state on a competitive basis or they find their applications take 5 – 10 years to get reviewed for approval and it’s not worth the hassel.
    Havng the feds more involved just adds another failed regulator since their performance on regulating Medicare has been no better than the states and as a result will not accomplish the well intentioned benefits of this bill. Politics will get in the way. Just look at the well publized Medicare Fraud issues that everyone has promised for decades to fix. Not going to happen. 
    This bill will not improve the performance of carriers or reduce costs. It will however raise premiums in the short run which will in turn cause more employers to drop their plans and have their emplyess choose the state sponsored pools which will eventually leave the carriers unable to compete due to the cost shifting. They will end up offering supplemental programs just as they do on Medicare today.
    To lower costs you have to drill down on why a hospital finds it necessary to charge $50.00 for a couple asprin. 
    A couple of painful but real fixes-

    Do not allow doctors and hospitals to cost shift. If the provider is willing to provide a service for what the government is willing to pay, why should they charge more to patients who have private coverage ?
    Do not allow drug companies to advertise their products to the general public. The discalimers are the longest part of the add. They can still advertise to doctors but not to the public. All that saved money could be used for drug development .
    Do not allow lawyers to advertise for malpractice lawsuits.
    Implement licensure limitations on any provider who settles or looses 10 or more malpractice lawsuits. Judged by their peers and medical experts due to case complexities.
    Feds should facilitate a "common plan of covered services" having 3 levels of dedutibles and coinsurance to be used across the country for any employer consisting of less than 500 employees and all individual policy holders. Larger employers can selve insure and negotiate their own plan of benefits and costs but could also particiate in these standardized plans if they choose.
    Each carrier,  if interested in a state, can bid for that standardized plan in each state provided they meet the financial reserve requirements of that state.   The carriers can also offer riders to the standardized plan of covered services to cover such services as invitro fertilization, lasic surgery and other speicalized services that would only apply to a certain subset of the population that may not be included in the standardized covered services. That way the employer or individual would have mutlple carriers to choose from and add additional services to their coverage if they wish above and beyond the standard plan if they so choose.
    States would then be responsible to see to the enforcement of service and financial stability requirements. There would be no denials of standardized services.
    Carriers providing the lowest rates and the best service would be the carriers of choice and could compete with one another for the insured population rather than competing in the state capitals of that state for rate and plan variances.
    No denial for pre-ex conditions provides for compete portability from carrier to carrier and state to state.

    The list could go on and on but these suggestions would lower costs.  I’m affraid we are about to throw the baby out with the bath water and force those with coverage to pay more for what many of us already have. In the end we will get less but pay more.

  287. When everything you shown as evidence for needing the dems plan deals with the outrageous cost of health care, and then come to find out, the plan does nothing to reduce these costs, it comes as somewhat of a surprise.
    "Well I see where your confusion is, all the bill does is shift those payments from the Fed down to the states by 2020 – it doesn’t end the plan.  I thought you wanted to the states to have more control? "
    So, they’re passing on 157B (minimum) of unfunded liabilities to the states in 2020?  I think Greek debt will look like AAA debt compared to California in 2020.  This plan is sounding worse and worse. 
    "To me, this is basic economics – we have a $1Tn middleman in the system that can be cut out.  I don’t need charts that compare care in other countries and quality of care – I KNOW the SAME care can be gotten cheaper!  Why would any so-called capitalist want anything else?"
    Why don’t we pass a bill that does something about this.
    I also don’t get how you’re going to increase the costs of insurance companies then pool companies together to get better rates thereby decreasing revenue and have the insurance companies remain solvent. Oh wait, that’s the plan.  As i posted earlier, insurance companies had 13B in profits.  There’s no way they’re going to be able to lower rates 262B or anywhere near that number.
    Again, you can argue for the moral right of what the bill does, but it won’t save any money and will actually increase the deficit by hundreds of billions of dollars over the next 10 years alone (again, minimum)

  288. Pat Caddell Has a Way With Political Analysis  
    On Fox a few ago: "Look, the people who are opposing this are holding tea parties. The Daemocrats are holding a Kool-Aid party. This is political Jonestown."

  289. Many good ideas DK.  Hopefully we’ll have the leverage to get some of them passed now.

    Costs/Wayne – $13Bn in profits?   I suppose you make an excellent point.  After all, poor AET took in $35Bn in revenues and only made $1.3Bn after buying back $750M of their own stock and paying out dividends and tens of millions in executive salaries and bonuses.

    So I want $20Bn in health care and instead of giving $20Bn to my health care providers I give $35Bn to AET who give $20Bn to my health care providers while running up another $13.5Bn in expenses and make a "reasonable" $1.5Bn on $35Bn in sales – BRILLIANT! 

  290. DKGuy
    You have made many very good points that are based, it apears, on a vast level of knowledge and experience. I personally believe the current Senate Bill is a totally flawed piece of legislation, as it does not even mention tort reform, or so many defects that have been known for so long.  Health Care should be market driven – this is an albatross of regulation that is a precursor to the eventual total takeover of health care in the mold of Socialism. Underneat all of the rhetoric, is the desire to eventually have a single payer system and a government that dictates how it will operate, and determine what the participants will earn, and what profits are deemed fair. It will have nothing to do with market forces, but on the contrary, will be under the thumb of political whims and regulatory opinions. I believe, this effort to socialize health care is but one part of a much larger target by the current administration, and will be followed by legalization of all those that have entered the country illegially, and provide them with citizenship. This new massive voting block will almost guarantee perpetuity for this administration, and this is their vision of the end game. With this dynamic in place, the country will evolve into a full Socialist dominated economy. Hugo Chavez accomplished his popularity in the same manner, by promissing free goods and services for those that would in turn support his long term plan. I do not consider myself a political prognosticator, but I do see many signals that point in the direction I have suggested.

  291. Cap/Pat Caddell   A very clever line line indeed….. ;)

  292. After seeing the reports on a little hate from the tea party crowd, I wonder what things would look like if healthcare was pushed by a good looking, Irish/Catholic…….

  293. You’re making up numbers, Phil. ( )  The total cost of administrative fees AND profit at insurance companies is less than 10%.  According to this ( the administrative cost of Medicare is 6-8%, and if you agree with the thesis (basing admin costs on spending instead of number of patients) it’s even higher.

  294. Phil, I would bet the adminsitrator does not make much if any money administering the self insured GE plan. It does look good on the client list however.
    GE is the best negotiating firm in the country. They always win. You as a supplier want to do business with them and they know it. Not a bad position to be in. You ned to be double jointed to bend over far enough in their bidding meetings.
    Gel1, you hit the nail on the head. This is only the beginning and as Medicare expands to THE single payor system private carrriers will be relagated to selling supplemental coverage just as they do with Medicare today. The only way to keep Medicare alive is to bring in younger members and to charge them a premium. So when they bring in everyone from 50 thru 64 in the next few years, employers and unions will rejoice since they will no longer have to cover their higher utilizing employess and they will then be covered as individuals under medicare. The catch however will be that Employers will be taxed in a very special way to off load these employees into the single payor system. Unions however will not be taxed since they don’t employee these folks. It will be done on the bsis that this will extend the life of Medicare and save the system. The taxpayor will not only be supporting Medicare with their taxes but will also be charged several hundred dollasrs a month to participate. Might work financially but you will be left with the coverage the government says you need and not what you want to buy.
    The UAW will be able to pocket the millions of dollars they just negotiated with GM a few years ago to take over the responsiblity for their plan. What a windfall. I wonder if there will be a windfall profits tax ? Nah…
    Once the dreaded middle man is gone I can’t wait for a Senator or Congressman to get that first call from an angry constituent in a panic at 3AM complaining that they are having trouble getting the 3.5 pound premature baby they just delivered that needs a heart transplant to survive on the donor list and what are they going to do about it.. It is their job now baby……. 

  295. Hanna
    I read your earlier posts wherein you laid out the reality of costs and sacrifices that are made by our best and brightest to achieve MD status. It is an incredible investment in time as well as financial resources. After graduating with a major in economics and later law, I spent almost my entire working career as a manufacturer of medical and dental equipment and consumables, and was very close to these professions, so I am very aware of the committment you and others have made. I am very bothered by the way the government has attempted to make your profession a negotiable commodity is a selfish takover of a system that is second to none throughout the world. They are doing the same to the pharmaceutical companies and the related entrepreneurial efforts that have made most of the drugs available in so many countries, that otherwise would  have minimal exposure to this technology. My first company became publically traded on the AMEX. Later on I built a pharmaceutical company that manufactured FDA approved drugs and I concentrated over 50% of the distribution in foreign countries, which brings me to my observation that is relevant to what the government is doing. I had a very large distributor in Russia, that was started by some former Soviet cosmonauts. They bought one of the largest buildings in Moscow from the Russian government after the breakup of the Union, and became distributors of pharmaceutical products among others. When I sold my company, this Russian company had 10,000 employees, many engaged in direct marketing. The President of the company was a MD that could not make a decent living in the practice of medicine and many of the 10,000sales people were doctors and dentists that also gave up their professional carreers in order to sustain a living in sales. This could happen in America.

  296.  DK – I am already starting to say NO as a provider.  The other day, I refused to administer a post op pain morphine shot for a medicaid patient.  I receive 0$ – plust 100% liability for a unemployed person who has all the incentive in the world to sue me.  
    Everyone compares our health system to Europe, Canada etc.  Those folks are walking and eating well.  They don’t watch Jerry Springer and all of the judge shows during the day.  Phil, I realize that you drink beers with your gardener, but everyday america is a little more f’ed up than you realize.  I take care of them, everyday.

  297.  DK – that’s actually a post op morphine spinal – i didn’t refuse her post op pain control – i gave her morphine iv pain pump instead.  

  298. Jomama, it is only beginning. The more you say NO the more other medical providers are also saying NO. They  too have all the risk and no incentives. The next problem you will face however is that the feds will see this happening in droves and force the issue that providers must accept Medicaid and Medicare patients in order to maintain their licenses.  Illegal you say ???? Not if they pass a law that makes this issue one of  "public interest".
    That  will bring on more retirements. I know of 3 already implementing their plans by selling their practices. They are just fed up and will not continue to be pawns of the government waiiting to see if reimbursements will be raised or lowered. They too are implementing their "AR" strategy.
    The more folks will be brought to depend on the government for their healthcare the more expensive private insurance will become. 
    Another perfect example of waste and "government speak" in the bill, in which money will be spent but not to pay providers, is that we have to spend 200+ billion to find and fight the fraud that already exists in the Medicare system. I guess there is an old adage that says you have to spend money to save money ? It’s a government thing…….
    There is nothing in this bill that will lower costs. Private insurance premiums will go up every year at a higher rate of increase than in the past which will force more employers to pay the penalty rather than pay the premium and thereby force their employees into the state run plans. 
    Thus the state plans will become the norm and cost shifting for providers will be over. You all will basically be employees of the govenment as they are in other countries and will learn to live on a government fixed salary. Not a bad gig I guess since you will be treated as any other unionized goernment employee with a full pension and all the other benefits paid for by the taxpayor. Your hours will be fixed and you might even be paid over time ? I exchange you will just have to do what your told and not what you think is right for the patient.
    I guess tort reform will finally be implemented as well since a member can’t sue the government. So all those folks who have been wronged by their plan or provider I guess are out of luck since the govenment is the plan provider. 
    The saving grace for the private industry will be the supplemental business to cover those expenses the government plans will not cover. Similar to what happens in Medicare today. 
    The winner, the govenment. The looser, the taxpayor and medical providers.
    I give the whole thing 8 years and it wll blow up leaving a mess that will make the financial crisis of ’07 and ’08 looking small by comparison. 

  299. DK, i have been practicing for 9 nine years, and have to recertify for my anesthesia boards next year.  I plan to do this only once.  I am smart enough to find something else to do within the next 10 years. 

  300. In order to ostensibly "pay" for the additional costs associated with the passage of this new entitlement, the target is the class that makes over $200,000 annually, as well as the folks who receive income from "Investments", This is totally wrong if you are in any way trying to grow the economy. This disincentivizes those who invest in growth enterprises, and makes risk capital far more expensive. The end result is a slowing economy, and fewer entrepreneurs that are willing to participate. We are only as successful as a country. as the people we elect are smart. Like our educational system, we are progressing in the wrong direction.