Will the Anthem-Cigna deal cost you money?

The question posed by the Los Angeles Times is ludicrous. Dave Jones, California’s insurance commissioner, said he doubts there will be any significant benefits to customers from this latest merger.

This is a no brainer. With reduced competition Anthem will be able to raise their rates and possibly reduce coverage for many with hard to treat illnesses.

In a society where profits are the driving force we all know that this merger will be approved and everyone will pay more for coverage. Even those not enrolled with Anthem or Cigna will see their rates increase.

Imagine the cost of the food you eat if there was only one source. You must buy your food from that one source or grow it yourself. That one giant food store chain sets the prices and the profits rise to the delight of the stock holders.

We need more people like Senator Bernie Sanders. When will this situation change? Not until the majority of the population voices their opposition.

Is it Greed or Simply Evolution?

Greed: a selfish and excessive desire for more of something (as money) than is needed. That is the Merriam-Webster definition.

When I was a boy reading comic books there was a character in the Donald Duck series named Scrooge McDuck. He loved money and the cartoon showed him rolling in dollar bills and dancing on the money. That was a characterization of some people in this world. Was that greed?

The stock market continues to hit new highs every several months. The S&P 500 reached another new high on Friday, February 13, 2015. Apple Computer shares are at or near their highest level ever. Most people do not own enough stocks to feel a significant impact. The wealthy, whose source of income is the stock market, are the beneficiaries of this situation.

Meanwhile BBC.com and Fareed Zakaria GPS reports the findings of Oxfam, an anti-poverty group, that the combined wealth of the world’s richest 1% will overtake that of the other 99% of the world’s population by 2016. Furthermore the richest 80 people in the world have collected the same amount of wealth as the bottom 3.5 million people-$1.9 Trillion.

There are two facts that are slowly destroying the middle class and causing even greater harm to blue collar laboring classes.

Without government involvement jobs are performed at the lowest pay rate which moves jobs to the poorest countries.
Technology enables employers to replace workers performing repetitive work with a machine.

These are not new facts. Queen Elizabeth I (queen of England 1558–1603) denied a patent for the first knitting machine in 1589. It was denied because of her concern for the security of the kingdom’s many hand knitters.

Robots install rivets on a 2015 Ford F-150

Paul Wiseman of the Associated Press posted an article titled “Robots replacing workers at a faster pace”. The report was replicated by many news media outlets including ABC, Fox Business, etc. The article said “A new report says that cheaper, better robots will replace human workers in the world’s factories at a faster pace over the next decade, pushing labor costs down 16 percent.” The mechanization has impacted only 10% of the possible uses for robots. 90% of the changeover is still in the future.

Recently two public parking lots I had occasion to use had no pay clerk at the exit. The system was automated. Soon there will be no one to take your order at McDonald’s.

I could go on with more examples of lost jobs thanks to technology or replacing middle income workers with low paid workers but you already understand the point I am making.

The question to candidates for the next president of the United States is what will you do to change the obvious decline in the income of the majority of Americans? You ought to ask your congressional representative and senators that same question.

Enjoying the Stock Market Rise? Now might be the Time to Sell!

Revised December 2, 2013

The marvelous thing about the stock market is you can find someone, an expert, who will say the words you want to hear. Thus if you believe the stock market will continue to go up there are plenty of stock market advisers who will tell you that the end of the rise is no where in sight. However, if you are skeptical about the continued rise in stock market shares then you will listen to those who say now is the time to sell.

After all, buy low sell high demands you get out now! Frankly it looks like a bubble to me.

Economist Caution: Prepare For ‘Massive Wealth Destruction’

Starts with these two paragraphs.

Take immediate steps to protect your wealth . . . NOW!

That’s exactly what many well-respected economists, billionaires, and noted authors are telling you to do — experts such as Marc Faber, Peter Schiff, Donald Trump, and Robert Wiedemer. According to them, we are on the verge of another recession, and this one will be far worse than what we experienced during the last financial crisis.

Most of the above group are known bear market advisers. How about Oaktree Chairman, Howard Marks? He has a bundle of funds to manage. He posted this article on Morningstar. Not a bear market web site.

The Race is On

. . . there’s a race
to the bottom going on, reflecting a widespread reduction in the level of
prudence on the part of investors and capital providers. No one can prove at
this point that those who participate will be punished, or that their long-run
performance won’t exceed that of the naysayers. But that is the usual
pattern.

I know, you want to squeeze every last drop out of the unbelievable rise in the stock market. After all the S&P 500 is up over 25% this year alone. The problem is that when it drops, the falls seem to come fast and furious. Just remember, mutual fund trades occur at the end of the day. In just one day the market lost 777.68 or 6.98%. That was not in 1929. That was September 29, 2008.

Oh well that was 2008 you are saying. That was the start of the Great Recession. What about the 15% drop in August 2011? That occurred between August 4 and August 10.

Don’t be greedy!

Golden Years – A Tale of Madness and Greed

A story from Businessweek magazine.

One Nevada man prepared for everything but the inevitable

By Devin Leonard

Walter Samaszko Jr. was not a guy who wanted company. He covered the windows of his house in Carson City, Nev., with cardboard so the neighbors couldn’t see inside. He made the postman stick the mail through the slot in his garage rather than coming to the front door. He was so good at keeping people away that when he died of heart failure at age 69 in June, nobody noticed until his house began to smell. Someone called the sheriff’s department. A hazmat team removed Samaszko along with part of the floor he was stuck to.

That’s when everybody found out why he hadn’t been more sociable: The dour, white-haired recluse had been hoarding $7 million worth of gold coins, most of them hidden in the crawl space beneath the house. Some were in an old washing machine. There were British sovereigns dating back to the 1840s, Austrian ducats, and South African Kruggerands. But mostly Samaszko had collected rolls and rolls of $20 American gold pieces, the kind with double eagles on them. He also had $12,000 in cash, a stock account worth $165,000-and $200 in the bank.

The person who discovered Samaszko’s secret was Jeri Vine, a local real estate broker hired to clean up his house. She spent five days combing through his possessions. Samaszko had been prepared for the worst. He owned several guns, gas masks, and survivalist manuals. His cupboards were filled with canned The person who discovered Samaszko’s secret was Jeri Vine, a local real estate broker hired to clean up his house. She spent five days combing through his possessions.

Samaszko had been prepared for the worst. He owned several guns, gas masks, and survivalist manuals. His cupboards were filled with canned tuna fish. He had a lot of Johnny Mathis tapes. Vine threw most of it out. “We had like a 33 yard dumpster on the driveway,” she says. “I filled that thing.”

On the fourth day, Vine opened a metal ammunition box in the garage. It was full of gold coins in plastic cases. She called Alan Glover, the public administrator of Carson City. “Alan, get over here immediately!” she told him. “There’s so much money it’s unbelievable.” The sheriff’s department returned to the house, this time with metal I detectors. It took Glover and three attorneys two days to count all the coins. With the help of a numismatic expert, they determined that Samaszko’s clutch was worth $7 million. The gold is being stored in a vault in Reno until a local probate court judge decides its fate.

Samaszko may have been prepared for a societal collapse, but not for his own end. He had no will. Nor did he have any children. Glover was able to locate a first cousin, Arlene Magdanz, a part time teacher in San Rafael, Calif., who hadn’t seen him in years. Glover expects the probate court to release the fortune to Magdanz after the IRS extracts its cut. (He estimates the federal government’s take will be about $800,000.) The tale of the elderly recluse who turned out to be a millionaire became a brief sensation, with Vine and Glover appearing on the Today show.

Vine eventually sold Samaszko’s house for an undisclosed price. Some prospective buyers just wanted to see if there was any more gold hidden there. “One guy had his contractor friend go underneath the house,” Vine says. “I told him we went through that place with a fine-toothed comb. Never heard from him again.”

It’s easy to see why Samaszko’s death and the revelations that followed fascinate people. How many of us would have kept $7 million in a crawl space and not touched it? It makes you wonder what other secrets died with him.