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Yes, you're going to die.

We all will die.

We have some choice as to how and where, but not the final outcome.  That's known in advance.

We have heard for decades about how "terrible" this part of medical care this or that might be.  That administrative overhead has grown here, there, and everywhere.  That cost is going up due to this, that or whatever.

The latest screamfest is about MACRA and claims that it will "destroy" Medicare doctor choice.  Like so many claims before it this one centers on trying to get you buy into the idea that all these "great plans" are really about pushing Grandma, in a wheelchair, down the stairs -- or off the cliff, as Democrats have repeatedly charged.

But nobody wants to talk about the truth.

The truth is that technology drives productivity, and productivity drives down cost.  It does so every time that the market is allowed to work. It is why you can buy a $35 computer today, right now, that is the size of a credit card, can run your house, browse the web or do all sorts of things that a computer costing a million dollars 40 years ago could not.

Oh, and did I mention that it requires less electricity than one 25 watt light bulb, where the former model 40 years ago required industrial power (and the power bill to match) along with forced air conditioning under a raised floor lest it literally melt down from its own heat.

You'd think medical care is exempt from this, but that's only because you live here in the United States.

Let's just take one example.  MRIs have been revolutionary in many areas of medicine.  By allowing imaging of soft tissue that was formerly impossible, along with having zero radiological exposure (that is, no risk of causing cancer or other problems as with an X-ray, CT scan or similar) they have brought precise diagnosis of maladies that formerly were nothing more than a guess.

But.... here in the United States they're expensive.  If you have allegedly "good" health insurance you might not think so, but in fact they are.  An MRI scan costs from $1,000 to $3,000 or so in the United States, and whether you pay it out of pocket or it is billed to some "insurance company" and thus is hidden in cost from you, that's what they cost.

We have US companies that make the machines used for those scans.  We also have doctors trained to read them, which is inherently part of it.  And, to hear the medical folks talk, they tell you these machines are expensive, trained radiologists are expensive, and, well, that's what it costs.

They're lying, they're bilking you, and they all ought to be in prison.




See, there is this little nation called Japan.  Japan is also a first-world nation.  Japan also has firms that make MRI machines. Japan has doctors, including trained radiologists.  And in Japan, you can walk into a clinic and get your MRI done for somewhere between $100-160.  In cash.

But wait, we're told -- that 10x, 20x, 30x price here in the United States is reasonable and necessary.

Sure it is -- if you support being bilked, price-fixing, intentionally buying up competitors and either shutting them down or raising their prices, "affiliating" all the centers with hospitals (at even higher prices) and more.

And all of this, I remind you, is illegal.  Not "a little" illegal either; felony illegal.

So says 15 USC Chapter 1.

Said law is more than 100 years old.  It bans, under felony criminal penalty, any act that restraints trade, forms monopolies, price-fixes and similar.  Trusts in restraint of import trade (e.g. prescription drugs) are also illegal, albeit at a misdemeanor level (15 USC Ch 1, §8)

We keep asking the wrong questions, and we do it because the media and political parties intentionally ask the wrong questions so as to keep us from asking the right ones.


The right question is: "Why do we need a thing called 'insurance' that is not actually insurance, and why aren't those who sell an intentionally falsely-labeled product or service all rotting in prison?"

You see, insurance is a thing you buy to cover your expense if an unlikely but ruinous event happens.  Medical care in the general sense is not unlikely.  Cancer might be unlikely, but prescription meds, a checkup or treatment for an existing condition are not "unlikely"; they are not only likely in the case of something you already suffer from they're guaranteed!

You cannot buy insurance on your house if it is already on fire.

Why can you buy "insurance" on your medical state to treat diabetes if you are already diabetic?


I've been writing on this since The Market Ticker began publication and in fact have been advocating on this point since the 1990s when I ran my Internet company -- the trajectory, where it was headed, when it was going to happen and the outcome was easily projected even then.  The number of "mainstream media" folks who want to have myself or others who have brought this up with facts and figures on the air, and the number of serious political discussions or debates on the topic over those last 25+ years?


The real discussion, which nobody wants you to ask, is why that MRI is $1,000 instead of $98 like it is in Japan?  You see, the $98 you could pay out of your pocket, and in fact with most "insurance" the $1,000 MRI scan still costs you more than $98!

What does that mean?

Simple: If there was no medical scam in the first place you wouldn't need or want today's version of "medical insurance" and thus you would never buy it.  You would instead be able to and would pay in cash.

There would never have been a "need" for Obamacare, there would have never been an outcry over health insurance, Medicare and Medicaid would not be 37% of federal spending, there would be no federal budget deficit, most of the Federal Debt would not exist and in fact there would be a multi-hundred-billion a year budget surplus, your spending power would be going up by about 2% a year instead of down by 8+%there would be no impending pension crisis nor would cities have gone bankrupt and more.

What you might buy, and companies would offer, is true insurance.  But since the cost of treating things such as cancer would also come down in cost by 80%, 90% or more the cost of insurance against those unlikely but expensive events would be reasonable to purchase.  You'd probably pay a couple hundred bucks for it -- yearly -- which is affordable for basically everybody.

How does it happen in this country, if it is to ever happen?


Not new laws, not new regulations, not more hand-waving by Democrats, Republicans or anyone else.

Prosecution under laws that are over 100 years old, exist now, could have been enforced 30 years ago, 20 years ago, 10 years ago, 5 years ago, 2 years ago, 1 year ago, yesterday, today and tomorrow.

Laws that neither political party will enforce.

Laws that neither a Republican or Democrat White House, which I remind you is where the power to enforce laws rests (in the Executive) has ever in the history of this insane mess enforced.

Laws that no State Attorney General, despite there being laws on most state law books banning these practices as well, along with general consumer protection laws that prohibit deceptive practices (and performing a service without discussing price first certainly would fit that description) has ever enforced.

Laws that, I remind you, neither Trump or Hillary has spent one minute discussing in this Presidential Campaign despite it being within either of their power, if elected, to direct their Attorney General to investigate, bring to Grand Juries and prosecute the rampant, outrageous and clear violation of these laws.

Would there be losers if this was to happen?

There sure would.  Anyone who says otherwise is crazy.

There would be a lot of out-of-work lobbyists, for one.

There would be a material increase in the cost of prescription drugs in other nations because level pricing would force same.  But while their prices would go up, perhaps by a lot, ours would collapse by 70% or more.  Why?  It's arithmetic -- there are 330 million of us and about 1000 million in the OECD world of them, plus another ~300+ million in the "developing" world with a middle class or better income.  We've been paying their bill for decades and the day we stop there is one pool with level pricing for all. Assuming no change in total revenue their prices rise by quite a bit but ours collapse by 70% or more -- in many cases that drop would be 80-90%.

There would be an immediate recession, and a deep one at that, as Health Care went from 19% of the US economy (where it is today) back to about 4%, where it was 30-40 years ago.  However, at the same time that would increase business productivity tremendously, reallocate those funds to production, businesses would flock to the newly-competitive United States and ultimately, within a year or two, we'd win big on both productivity and GDP.   But make no mistake -- there would be losers, and in the short term there would be economic pain, especially for those in the health care sector today.  Indeed, if you're a health "administrator" I hope you can do something else, since your numbers have grown by over a factor of 30 in the last 40 years and none of those additional administrators would still have jobs.

If you have or develop a rare or "orphan" disease you might be screwed.  Let's not mince words on this -- there are certainly things we can do technologically but we cannot afford to do for everyone, or even nearly anyone.  While you will be able to buy insurance against those calamities many people will not, just as many do not buy flood insurance now despite it being cheap if you're in a "no special risk" zone.  If you get flooded without flood insurance, or get an orphan disease without having insurance against it, you're going to be screwed.  And?  Life is a series of risks, some of which you can control and some of which you cannot.  You can insure against whatever you wish but you must not be allowed to take your choices and make them someone else's obligation.  That is how we got to where we are now, in short, and if we fix this that will end.

What if we don't fix it?

Then we all -- this entire nation -- economically die within the next few years. Not at some point in the reasonably-distant future, and not just a possibility either.


That's the choice folks, and if you choose not to decide -- if you choose to remain silent -- you are choosing economic if not personal, and painful, death.

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Come and get it!

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2016-10-24 12:16 by Karl Denninger
in Editorial , 410 references
[Comments enabled]  

If the police (irrespective of the sort; Federal, State or Local) will not arrest the principals when a federal offense is admitted to on video, then the only response that anyone of any intelligence can have to cops until those arrests are made is "**** the Police."

Watch this:

This video contains a raw statement that Hillary Clinton coordinated with and in fact personally ordered these political attacks by a so-called "uncoordinated" group of people.

Look folks, it's a federal offense for a campaign -- and Hillary's campaign is implicated as discussing explicit details of the disruptive activities of these "so-called uncoordinated" series of acts -- to coordinate, say much less directly put forward the "Donald Ducks" idea.

This is illegal -- period -- and yet it is on video.

And not just Hillary -- but the DNC's Brasille, who they allegedly had to clear the events through.

Folks, I don't care if this is a candidate now two weeks before the election -- or is someone who isn't running.  The law is the law and it is clear that the entire DNC and Hillary's campaign are implicated on video tape committing federal offenses, and that Hillary herself steered and approved said messaging.

Either handcuffs come out now and get slapped not only on Creamer and company but also on Donna Brasille and Hillary Clinton personally or there is no reason for anyone to respect any police officer, ever, period, with one exception: You're afraid you'll get shot.

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2016-10-24 09:34 by Karl Denninger
in Market Musings , 267 references
[Comments enabled]  

So AOL, er, Time Warner is being bought by AT&T eh?

Hmmm.... I find this amusing.

I call Time Warner AOL on purpose, because the AOL/TW deal was not only one of the worst corporate deals ever made in terms of destruction of shareholder value it also almost top-ticked the market back during the Internet bubble.

The most amusing part of it is that the argument then was the same as the argument now -- Time Warner and AOL combined because it was a "better way to distribute things", including advertising.

AT&T is buying Time Warner because..... they think they are the "better way" to distribute things, including advertising.

In other words they think they can get a better deal buying a content factory rather than licensing what it produces.  This almost never is true, incidentally, because when you license you're paying only part of the development cost (since others can also license) and are not obligated to license that which is not a winner (for you) but when you own you get to eat the whole thing, including the losers.

Leaving aside the political strum and furor over this announcement the fact remains that it is an admission from AT&T that it has no more growth available to it organically and in fact is staring down a contracting existing business.  That's the only reason to do a deal like this, given the above facts.

Time Warner, of course, has no reason not to take a deal at more than its value; nobody ever does.  At 18x earnings the company is "fully" valued today (I'd argue it's materially overvalued at 18x and nearly 3x book, particularly given that the firm has 1x revenue in outstanding debt!) but we're quibbling now to a large degree at the market; this isn't someone like Netflix or Amazon with 100+ P/Es.

Look, folks, at the end of the day mobile content distribution is always going to suck.  Tiny screens (5" maximum, roughly) will always blow compared against 60" HDTVs and wireless transmission will always lose in both performance and cost-per-megabit delivered against wires (or fibers) -- that's a physics thing.

So what do I think of this deal? It's desperation, in short - and for those who say they don't ring a bell at the top......

They just did.

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Check this out (click the link here for a larger copy):

Stevens was sent in to retrieve the rest of the Stingers....

And what did I say here, back in 2012, just a short while after it happened?

We have a lot of serious problems in this country folks.  Our economy is in the toilet, we have a central bank that is entirely out-of-control and a Congress that refuses to enforce the law that governs its operation (and has serially refused to do so for 100 years), we apparently are arming people who are sworn enemies of the United States and we sit back and we blow Saudi Arabian Kings who demand that the UN trash our First Amendment (and incidentally, Mr. Abdullah, go perform an anatomically-impossible act) instead of declaring him an enemy of our nation, never mind the obvious and well-documented monetary ties between his country and Al-Quaida, not to mention the 9/11 hijackers.

Some of our political candidates would like to argue over things like gay marriage, smoking pot and abortion, or promises to hand out more and more money to people in exchange for their vote.  Others still would like to argue over whether one religion is superior to another.  Others will bleat about how a vote that is not cast for one man is in fact a vote for another, although this is trivially proven to be mathematically false.

This is all small-ball and mental masturbation folks if, as is alleged, a bunch of MANPADs that our government handed to Al-Qaida connected people start being used to shoot down airliners or our economy blows up as a consequence of unbridled, rampant deficits and QE-to-insanity.

We had damn well better wake the hell up as a body politic because if we don't you're going to wake up one of these mornings due to a GE Turbofan engine coming crashing through your roof, on fire and in pieces, and that will just be the beginning of a nightmare that will not end for years.  This assumes that we don't find ourselves in the middle of WWIII with mushrooms sprouting as the fruits across our "magnificent" plain.  That was the ultimate "solution" to the Depression and I'd rather not do it again, especially in a world where the loser can and probably will play "push button vaporization of your nearest city" rather than go down with a whimper.

If you want to know why Stevens was left to die on purpose it's quite simple: Had Stevens lived he would have been Oliver North, he would have blown the lid off Hillary arming jihadists with American-made missiles, one of which was actually used against a US target (albeit clumsily, thank God), it would have led directly to Hillary Clinton and Obama and that would have ended both Obama's Presidency and any prayer of Hillary being able to run for anything other than matron in her Federal prison.

I hate it when I'm right, but what you need to think long and hard about, with the election at hand, is that the woman who did this, with Obama's blessing, has destroyed both Libya and Syria and since she has gotten away with both unscathed, along with what was quite-clearly a blatantly illegal arms program in that part of the world, should she become President her ability to do illegal things like this will be greatly amplified in a world where there are a lot of people with itchy trigger fingers and very large bang-bangs.

If you vote for Hillary you are voting to glow in the dark.

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