Wednesday, July 30, 2014

Regarding the accounting shift in Obamacare

Let's go through the number real quick.

The monthly Obmacare cash flow through the government is likely to be about 1/4 of the total  healthcare industry, 3.75% of GDP. But for normal add ons let us make that 1% of GDP per quarter. But the first two quarters will likely be 1.5% each because of start up costs.

The first state and local bill, 1.5% of GDP, was delayed one quarter.  But billing caught up, so we see a near 3% GDP state and local bill for Obamacare, one of those bills should be pushed back to Q1. That makes Q1 a -.5 print, and Q2 a 2.5 print.  Now, currently the Fed pays half, which would be another 1.5% over the two quarters, which will be remitted back to the states.  But the DC is just now getting billed. So, over the current quarter we should see the Fed dump nearly 1.5% of GDP in bonds and bills on the market to cover its half of Obamacare.  That is our test.

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