Obamacare, unsustainable

The operating losses continue to mount at struggling Land of Lincoln Health, totaling $90.8 million for the Obamacare health plan in 2015.

That net loss is almost five times greater than the Chicago-based startup reported in 2014, when it totaled $17.7 million. The insurer lost about $40 million in just the last three months of 2015, according to a new financial statement filed with national insurance regulators.

Jason Montrie, Land of Lincoln president and interim CEO, did not immediately respond to a message seeking comment.

Kevin Scanlan, chairman of the insurer's board of directors, said in a statement: "Land of Lincoln Health, like other insurers across the market, continues to adjust its business model as we learn how to best adapt to the new marketplace. . . .The board is confident in its long-term viability and will continue to evaluate and invest in the needs of our members.”

Touted by small businesses as an alternative to big insurers, Land of Lincoln was one of 23 co-ops nationwide spawned by the Affordable Care Act to create competition on the health insurance exchanges and force down prices. It was the only one in Illinois.

But just three years in, 12 of the 23 co-ops had closed as of Jan. 30, according to Sabrina Corlette, senior research fellow at the Center on Health Insurance Reforms at Georgetown University. They were beset by sick and expensive enrollees, legacy insurers with deeper pockets and federal funding that disappeared.

Secession is back in California

CalWatch: Hot on the heels of a high-profile effort to vote California into six separate states, a different kind of political upstart has forged ahead with a long-shot effort to put Golden State secession on the statewide ballot.

Although Louis Marinelli has launched a campaign to represent the San Diego area in the state Assembly, he has also helped found the California National Party, an independence movement angling to put its scheme before voters this November. Marinelli told Vice the name was “inspired by the Scottish National Party,” with its Yes California campaign serving as “a nod to Yes Scotland, the unsuccessful campaign in support of a ‘Yes’ vote in the 2014 Scottish independence referendum.”

Absolutely, why not,  Texas here is your opening, no more threats to subsidize the California socialists.   The Texas secession movement should join forces, where is the Texas Independent party.

Just recycle Cuba Gooding Jr.

Hollywood: The wheels already might be in motion: Since the Oscar nominations were announced Jan. 14, a slew of diverse stories and color-blind castings have gained momentum. Newly announced projects include the young Barack Obama movie Barry and Disney's immigrant story Dr. Q. (Those come on the heels of the record-breaking $17.5 million Sundance deal for Nate Parker's slave drama The Birth of a Nation).

Also a fan of Samuel Jackson, so just recycle either one of those and then Obama and the racists get their thing, and I get mine.

Californias games Obamacare, sticks Texans with the bill

CalWatch: “California lawmakers approved a health plan tax package Monday designed to continue pulling in more than a billion dollars in matching federal money, while committing several hundred million dollars to services for the developmentally disabled, debt relief and other programs,” the Sacramento Bee reported. “The final deal includes tax offsets designed to minimize any hit to health plans that could be passed on to consumers. In addition, to achieve enough Republican support, the package includes several components Republican lawmakers wanted, such as providing more money to help people with autism and other developmental disabilities and forgiving a budget debt owed by skilled-nursing facilities.”

By shifting the balance of taxes, lawmakers ensured that California’s own budget was not hit with a billion-dollar deficit. No money was allocated to make up that difference if a deal was not reached and federal funds dried up. For that reason, Gov. Jerry Brown all but hounded elected officials to hammer out a bargain. Brown “called a special session on health care last year, tasking lawmakers with finding a long-term solution for funding Medi-Cal so the program doesn’t rely so heavily on the general fund, which pays for most state services,” recalled the San Francisco Chronicle. “One of the key priorities was to expand the state’s tax on managed-care organizations — a tax that the Obama administration said did not comply with federal law.”

Anybody see the trick?

No taxes are raised in California, Madical expanded; but we get to keep another billion dollars a year from the Swamp.   But who is the Swamp going to tax for that do-re-mi?   Texans are going to subsidize California liberals? No way Jerry you idiot, what the Texans are going to do is elect Trump.  After a 40 year political career, Jerry Brown still does not get the connection!  The eight largest economy in the world has to budget around a bunch of Swampers some 3,000 miles away, where Texas has veto power.

Trump, 27% in Texas

Texas says, OK, well take this Yawker.
Texas goes to Trump in  Nov, and likely Florida,  Trump might just win in his hometown city, anybody think of that.  The odds are Trump over Hillary.

Trump needs a good second in Texas

He's gotta convince Texas.  His message should be, its either this Yawker or the other one.

Magic Walrus in action at the G20 meeting

Some investors were calling for a coordinated currency intervention when officials from the world’s top economies met recently. Instead they got an agreement to “consult closely” with each other on exchange-rate polices.

No big deal? U.S. officials see it differently, framing the resolution as an important commitment that could help prevent a cascade of global exchange-rate depreciations.

“There won’t be any surprises. We won’t see countries acting in a way that could trigger the kind of competitive devaluation that leads to potentially a currency war,” U.S. Treasury Secretary Jacob Lew said Tuesday.

U.S. officials pushed the language early in the G-20 talks as part of their effort to preempt the type of volatility that has rocked markets over the last year amid historic capital outflows from emerging markets.

In the first sentence,  what do we see? A bunch of welfare bums reqiuesting currency insurance from delusional policians at the G20 meeting.  Tell the , mostly American investor bums, that it is  none of the politicians business to control currency volatility.

Then we have the master of delusion, Jack Lew, the US Secretarty of Treasury, telling us that he wants orderliness I have news, without volatility the imbalances build, and the big politicos will be without functioning governments.

You can read the article, and what you are seeing is Jack and the delusionals prepping a big recession.  I suggest we eat some volatility today and blow off some imbalances with a mild recession.

Some of us are more knowledgeable about probability distributions than Dean Baker

CEPR: Paul Krugman, who certainly knows better, referred to the "risk of deflation" receding in the euro zone in his blog today. The point is that it doesn't matter if the inflation rate crosses zero and turns negative, the problem is that the inflation rate is too low. It's more too low if we have -0.5 percent inflation rather than 0.5 percent inflation, but this is no worse than having the inflation rate fall from 1.5 percent to 0.5 percent.

As I pointed in my prior post: "The inflation rate is an aggregate of millions of different price changes (quality adjusted). If it is near zero then a very large number of the changes will already be negative. When it falls below zero it simply means that the negative share is somewhat higher. How can that be a qualitatively different economic universe?"

The reason why this matters is that we can get a false complacency over the fact that prices are not falling, just rising very slowly. We should want a higher rate of inflation. And we should not be congratulating the central bankers just because the aggregate measure of inflation is greater than zero.

Let's check out inflation from my favorite chart:

And we see that, from the green line, the average price has not changed in four years, except for housing.  That means, Dean, that in the distribution of price changes, we have a big spike at 6%, and the rest, at best, is a bell shaped curve around zero.  That is not a smoothly changing price system, that is a price system subject to a sudden top.

But it gets worse, Dean, because we lnow that medical inflation runs about 4%, so we have a second peak, and the remaining prices are centerd around -1%.  The second peak, medical, is entirely driven by government regulation of the medical insurance business, and that is not a useful price discovery .  It takes a full generation for the Swamp to discover the real price, and we thus get a sudden, massive stop.

What democracy would that be, Larrry?

Larry Summers: While comparisons between Donald Trump and Mussolini or Hitler are overwrought, Trump’s rise does illustrate how democratic processes can lose their way and turn dangerously toxic when there is intense economic frustration and widespread apprehension about the future. This is especially the case when some previously respected leaders scurry to make peace in a new order — yes Chris Christie, I mean you. 

Out here in California, the unions rule.  

Even if the progressives had a clue, they are still helpless, Jerry Brown gave away democracy to the unions some 40 years ago. According to states rights rules, we will never get democracy back without a full bankruptcy of California government.   California is the largest economy in North America, and if we have no democracy; so the Swamp, including Harvard, is screwed.

But you know that, Larry, your party does not survive except that unions rule over democracy in California and New York.

The auto industry surviving

Ford Motor Co.’s light vehicle sales soared 20 percent in February, while Fiat Chrysler Automobiles NV deliveries climbed 12 percent as both far exceeded analyst estimates, thanks to promotions tied to the Presidents Day holiday and continued strong demand for sport utility vehicles and pickups. Nissan Motor Co. also beat estimates, but General Motors Co. missed.

Ford, projected to report a 13 percent increase for the month, topped that in all three categories: cars, SUVs and pickups. Fiat Chrysler, projected to report a 9.2 percent increase, extended its U.S. sales-gain streak to 71 months. Jeep deliveries advanced 23 percent from a year earlier to 68,228, led by the Cherokee and Grand Cherokee. The SUV brand reported its best February ever, as did the company’s Ram pickups, sales chief Reid Bigland said in the statement.

I was pessimistic because the default index on auto loans was rising.  Here we see enough momentum the autos, and Chinese asset purchases to push the recession  date farther out. I am surprised to the upside.