Obamacare users in New York brace for double-digit 2017 premium hikes
Come 2017, thousands of New York's Obamacare users will wake up to double-digit premium hikes, the latest group of consumers affected by Affordable Care Act cost increases as insurers hemorrhage money from healthcare exchanges.
In a statement on Friday announcing 2017 premiums, NY's Department of Financial Services (DFS) said after weighing insurer requests, the state settled on an average hike of 16.6 percent for individual exchange users in the state, while small group users will see a lower average increase of over 8 percent.
Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees.
DFS officials said the premium hike was lower than the 28 percent average sought by health care providers, and added that the savings would spare policyholders more than $302 million overall.
The Last Known Gold Deposit
Gold is one of the rarest elements in the world, making up roughly 0.003 parts per million of the earth’s crust. (For some perspective, one part per million, when converted into time, is equivalent to one minute in two years. Gold is even rarer than that.) If we took all the gold ever mined—all 186,000 tonnes, from the bullion at Fort Knox to India’s bridal jewelry to King Tut’s burial mask—and melted it down to a 20.5 meter-sided cube, it would fit snugly within the confines of an Olympic-size swimming pool.
The yellow metal’s rarity, of course, is one of the main reasons why it’s so highly valued across the globe and, for most of recorded history, recognized and used as currency. Unlike fiat money, of which we can always print more, there’s only so much recoverable gold in the world. And despite the best efforts of alchemists, we can’t recreate its unique chemistry in a lab. The only way for us to acquire more is to dig. But for how much longer?
Goldman Sachs analyst Eugene King took a stab at answering this question last year, estimating we have only “20 years of known mineable reserves of gold.” The operative word here is “known.” If King’s projection turns out to be accurate, and the last “known” gold nugget is exhumed from the earth in 2035, that won’t necessarily spell the end of gold mining. Exploration will surely continue as it always has—though at a much higher cost.
(In fact, our insatiable pursuit of gold might one day soon take us to space, as President Barack Obama signed legislation in November that permits commercial mineral extraction on asteroids and the moon. Many near-Earth asteroids are said to contain trillions of dollars’ worth of precious metals and other minerals. But that’s a discussion for another time.) We’ll probably see a surge in mergers and acquisitions, as I told Kitco News’ Daniela Cambone this week. I think that as long as they have reliable output, mid-cap companies could be gobbled up by the Barricks and Newmonts of the world.
The Warren Buffet Economy: How Central Bank Enabled Financialization Divided America
During the 29 years after Alan Greenspan became Fed chairman in August 1987, the balance sheet of the Fed exploded from $200 billion to $4.5 trillion. Call that a 23X gain.
That’s a pretty massive increase—so let’s see what else happened over that three-decade span. Well, according to Forbes, Warren Buffett’s net worth was $2.1 billion back in 1987 and it is now about $73 billion. Call that 35X.
During those same years, the value of non-financial US corporate equities rose from $2.6 trillion to $36.6 trillion. That’s on the hefty side, too. Call it 14X and take the hint about the idea of financialization. The value of corporate equities rose from 44% to 205% of GDP during that 29-year interval.
Needless to say, when we move to the underlying economy which purportedly gave rise to these fabulous financial gains, the X-factor is not so generous. As shown above, nominal GDP rose from $5 trillion to $18 trillion during the same 29-year period. But that was only 3.6X Next we have wage and salary disbursements, which rose from $2.5 trillion to $7.5 trillion over the period. Make that 3.0X.
John Williams-World Class Crash Coming No Matter What
Goldman Sachs hints at London exodus due to Brexit vote
Is Goldman Sachs the first of many financial institutions to move thousands of employees out of London after Britons voted for Brexit – Britain Exiting the European Union? While the Remain campaigners warned that this might happen, the Leavers accused them of scaremongering and assured us that nothing of the sort would occur. So, who are we to believe?
The Leave campaign also told us that the pound sterling would not decline and that business and consumer confidence would not be affected. The pound did slide, and business & consumer confidence have both taken an almighty punch in the face. So, the London exodus, if we go by Leave’s widely inaccurate predictions, looks highly likely.
Goldman Sachs, a New York-based multinational banking giant that engages in global investment banking securities, investment management and other financial services, said earlier this week that it may have to ‘restructure’ parts of its British operations as a result of the Brexit vote.
n a Form 10-Q – a regulatory filing posted in the United States Securities and Exchange Commission (SEC) – Goldman Sachs said that the British referendum result might adversely affect some aspects of its operations in the UK and the EU. Consequently, it added, it may have to reconsider how a number of these businesses are structured.
Do Oil Companies Really Need $4 Billion per Year of Taxpayers’ Money?
What would happen if the federal government ended its subsidies to companies that drill for oil and gas? The U.S. oil and gas industry has argued that such a move would leave the United States more dependent on foreign energy.
Many environmental activists counter that ending subsidies could move the United States toward a future free of fossil fuels — helping it curtail its emissions of heat-trapping carbon dioxide into the atmosphere.
Chances are, it wouldn’t do much of either. In a new report (pdf) for the Council on Foreign Relations, Gilbert Metcalf, a professor of economics at Tufts University, concluded that eliminating the three major federal subsidies for the production of oil and gas would have a very limited impact on the production and consumption of these fossil fuels.
Metcalf’s analysis is the most sophisticated yet on the impact of government supports, worth roughly $4 billion a year. Extrapolating from the observed reaction of energy companies to fluctuations in the price of oil and gas, he models how a loss of subsidies might curtail drilling and thus affect production, prices and consumer demand. Cutting oil drilling subsidies might reduce domestic oil production by 5 percent in the year 2030. As a result, he thinks, the worldwide price of oil would inch up by only 1 percent. He assumes it will hardly be affected because other countries would increase production as the flow of U.S. crude slowed. Demand would hardly budge, as the price of gasoline at the pump would rise by at most 2 cents a gallon.
Summertime and the Living Isn't Easy
It's summer time and the living is ... not so easy for some. American workers have been taking less and less vacation over the past 15 years. A study by Project: Time Off found that in 2015, more than half of American workers left vacation time unused.
If you are among this unlucky group, consider our tips on why you should take a break and how to do it.
Vacation is a chance to rest your mind and your body from the demands of work. Doug Walker, manager of HR Services at Insperity said that these psychological and physiological perks can help an employee feel refreshed and more inspired at work and at home.
However, he is quick to point out that a stressful vacation, such as one filled with work emails, may end up leaving a worker depleted. He suggests taking a real break that has no work duties or very limited ones, and allows for some tranquility. "It's in stillness that life's sediment settles and the murkiness becomes clear," Walker said. The United States is the only developed country that does not require employers to provide vacation time, according to the Center for Economic and Policy Research. But workers are often entitled to days off that they simply aren't taking.
Report: Golfsmith considering bankruptcy
On the heels of Nike's announcement that it is getting out of the golf equipment business comes a report that a prominent retailer of golf clothing and equipment is considering filing for bankruptcy.
Bloomberg cited "people with knowledge of the situation" in reporting that Golfsmith International, an Austin, Texas-based chain with approximately 150 stores, is considering filing for Chapter 11 bankruptcy as it looks for a new owner.
According to Bloomberg, Golfsmith has hired investment bank Jefferies LLC to solicit buyers for the chain, and has hired professional services firm Alvarez & Marsal to help it restructure.
“The company’s management team is focused on strengthening the company and its business operations to maintain and expand its position as a leading golf retailer,” a Golfsmith spokeswoman said in a statement emailed to Bloomberg. The company “has engaged financial advisers to explore potential strategic initiatives,” she said. “Golfsmith currently has the necessary liquidity to pay the company’s financial obligations as they become due,” she said.
Fear of recession clouds technology excitement at auto industry conference
The mood at last week's annual automotive business conference, called Management Briefing Seminars, ranged from energetic on new technology to somber over looming concerns about North American auto sales.
The conference, held at the Grand Traverse Resort in Acme and organized by the Center for Automotive Research, provided ample opportunity for industry executives to highlight new advancements in auto tech, while forecasters and economists warned of an impending slump.
"We're still looking for the risk of recession in the 2019 time frame," Jeff Schuster, senior vice president of forecasting for Troy-based LMC Automotive US Inc., told attendees. "We see a flat market this year and next year, and very, very low levels of (production) growth going forward." Schuster said there are growing risks from rising incentives, longer-term loans, growing reliance on fleet sales and leasing. So far, those risks remain on the horizon, but they aren't likely to stay there, he said.
While the forecasts are gloomy for North America, the rest of the world may pick up the sales slack. Schuster said he still believes worldwide global production will hit 91 million units this year and exceed 100 million units by 2019. "We see both (gross domestic product) and light-vehicle sales growth averaging right around the 2.7 percent level," for at least the next five to seven years, Schuster said.
Great Period of Instability
Famed Investor Jim Rogers: ‘Brexit Was Nothing Compared to What’s Coming’
As dire as things currently look around the world, noted investor and author Jim Rogers is warning that things are going to get a lot worse in the coming years.
In a column posted on The Daily Reckoning, Rogers painted a scary picture of the current state of the European Union, recalling recent terror attacks, cop killings, Britain leaving the EU and the Deutsche Bank nearly collapsing. But that’s “nothing compared to what’s coming,” according to Rogers.
“But over the next couple of years, it’s going to get a whole lot worse,” he wrote. “As economies worsen, there will be more social unrest, more angry people, and crazier politicians. Somebody will try to come along on a white horse to save us all, but she usually makes it worse.”
The investing titan said there are “a lot of similarities between the 1920s and ‘30s” when communism and fascism surged around the world. Today, many of the same issues are emerging once again, he added. Brexit could be a triggering moment. This is another step in an ongoing deterioration of events. It’s also an important turning point because it now means the central banks are going to print even more money. That may prop the markets up in the short term.
Demand for Gold Rising, Fear is in the Market
A Donald Trump victory in the US presidential election in November would probably lift Gold prices, according to the Mint that refines almost all the bullion output from one of the world’s biggest producers.
“If someone like Donald Trump does get elected, it will stimulate some fear within the economy as to where things are going,” Richard Hayes, CEO of the Perth Mint, said in a TV interview. “Trump is very much a protectionist, he is very much for almost ‘Fortress America’.”
Gold has rallied about 27% this year on demand for haven assets following the UK’s vote to leave the EU and as the US Fed refrains from raising interest rates. The US race is close after the conventions last month, with polls showing Democratic nominee Hillary Clinton holding a slight lead over Republican Donald Trump.
The markets have yet to deal with the political uncertainty going into the U.S. contest. “If Clinton is elected, I suspect the run up will not be quite as strong,” said Mr. Hayes, speaking last Monday at the opening day of the Diggers and Dealers mining forum in the Western Australian town of Kalgoorlie. “She is more mainstream, and probably the economy will be less likely to suffer shocks.” Bullion for immediate delivery traded at 1,341.4 oz Friday at the close in New York.
Janet Yellen: 21st-Century Houdini
Harry Houdini was the greatest escape artist of the 20th century. He escaped from specially made handcuffs, underwater trunks and once escaped from being buried alive. Now Janet Yellen will try to become the greatest escape artist of the 21st century.
Yellen is handcuffed by weak growth, persistent deflationary trends, political gridlock and eight years of market manipulation from which there appears to be no escape. Yet there is one way for Yellen and the Fed to break free of their economic handcuffs, at least in the short run. Yellen’s only escape is to trash the dollar. Investors who see this coming stand to make spectacular gains.
Yellen and the Fed face as many constraints as Harry Houdini in trying to escape a potential collapse of confidence in the U.S. dollar and a possible sovereign debt crisis for the United States. Let’s look at some of the constraints on Yellen — and the possible “tricks” she might use to escape.
The first and most important constraint on Fed policy is that the U.S. economy is dead in the water. Quarterly GDP figures have been volatile over the past three years, with annualized real growth as high as 5% in the third quarter of 2014 and as low as minus 1.2% in the first quarter of 2014. We have not seen persistent growth or a definite trend — until now. Finally, there is a trend, and it’s not a good one.
The Market’s Narrative Ponzi
Just as there’s a scheme to pay old investors with new investors money (aka a Ponzi.) There’s another part of the scheme that rarely gets talked about: i.e.,The narrative that fuels the scheme to begin with.
Much like the original structure which involves money, this too needs an ever-growing amount of gullible, willing participants. However, the currency here is narrative.
And just like any Ponzi scheme once you lose the narrative – you’ve lost everything. One can not survive without the other. Yet, it is the narrative more often than not that is needed to drive the scheme ever higher. Without it, the scheme implodes via its own weight. The narrative regardless of how outlandish, bizarre, or full of nothing but outright lies must be maintained and vociferously defended by those who are already caught in the scheme.
In my view the reason why many are finding the greatest confusion, as well as complete consternation is this: Too many are forgetting the “investors” in this scheme are governments (or proxy) with unlimited funding resources, as well as: they also control the narrative. i.e., any data point they wish to convey as what “is” good or bad. I would imagine if Charles Ponzi were alive today he’d argue “And you sent me to jail for?” But I digress. Why the scheme of today is far more troubling than those of any bygone era is as I iterated: the access to unlimited funds.
Is the IMF's Neoliberal Base Unraveling?
If cash is king, how can stores refuse to take your dollars?
We’ve been talking about society’s transition to a cashless society for a long time, but it begs an important question: Can stores and other retail establishments refuse to take your dollars and cents?
As odd as it sounds, this is not hypothetical anymore as a small number of stores and industries have stopped accepting cash and allow payment only by credit card, debit card or via a smartphone app.
Sweetgreen, a high-end salad restaurant, stopped accepting cash in its New York City stores in January. A Boston restaurant near Fenway Park went cashless this past December. Most airlines stopped taking cash for in-flight purchases of food and beverages around 2010. While the trend of smaller stores refusing to accept credit cards because of the high fees is more well-established, the opposite trend of refusing to take cash hasn’t been as well-explored. Let’s examine why they do it and if they can get away with it.
Businesses claim that not accepting cash reduces the chance of stores being robbed, eliminates the temptation for employees to steal money, eliminates the time needed for workers to travel to and from the bank and even reduces expenses by dispensing with the need for bulky cash registers.
62% of Kids Expect Their Parents to Just Pay for Their Dream School
With the price tag of a good college education seemingly always on the rise, it’s no wonder families worry how they’ll cover this major expense. But, according to a survey by T. Rowe Price Group, a global investment management firm in Baltimore, it’s a concern that most students believe should fall on their parents. In fact, 62% of kids expect their parents to pay for “whatever college I want to go to.”
The College Board reported that the average full cost for a 4-year in-state school is about $80,000. Only about 35% of parents who took part in the eighth annual T. Rowe Price Parents, Kids & Money survey realized it cost this much.
The survey also found that more than half of parents (58%) are saving for their kids’ college tuition, yet only 12% of parents reported being able to cover the full cost of their child’s college tuition.
“It’s surprising that most kids expect their parents to cover whatever college they want to go to — and presents a real opportunity to discuss family finances and make sure everyone is on the same page,” Judith Ward, a senior financial planner at the T. Rowe Price Group, said in a press release.