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Commentary on The Capital Markets- Category [Editorial]
2017-07-21 18:05 by Karl Denninger
in Editorial , 300 references
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The cat dragged this in..

"The ObamaCare reform fiasco looks like a tipping point toward a strain of toxic political paralysis that might literally kill the government as we’ve known it. Over the many months of debate, congress never even got around to raising the salient issue: that the 18-or-so-percent of the economy “health care” represents consists largely of outright racketeering."


Oh, and I believe it's now up to 19% and change, soon be 20.

And somewhere not far from there the entire mess comes apart.

3+% real GDP expansion cannot be achieved when one dollar in five is literally stolen for an alleged "service" that is worthless at best and kills you at worst.

Let us not forget that to consume you must first produce, or convince someone you will in the future (he then lends you what you spend, of course.)  The latter has been made easy over the last 30 or so years (since the early 1980s) by a generally-declining interest rate environment.

You take a million dollar loan @15% interest and you have to come up with $150,000 a year or they come take your property.

But when the rate falls to 10%, you can borrow a million and a half, spending the other $500 large.

Then the rate progressively falls to 1% and that original million dollars is suddenly $15 million, all of which you blow because you no longer feel any need to produce anything.

The problem is visible to anyone who thinks, but nobody ever does.  What happens when the rates stop going down -- or God forbid, go up?

Well, if they go up to a mere 2% then you suddenly have to come up with $7.5 million when the best you can manage is a $150,000 a year coupon payment!

If you don't get this then you don't understand how bad it's going to get.

2008 was a Girl Scout Picnic by comparison since the interest rates on short-term paper have plummeted by some 70% or more since then.  The Federal Government alone has more than doubled its indebtedness.

The racketeering in the health system must be stopped here and now.

Yeah, I know that will get bad.

But it won't be anywhere near what comes in the next few months and years if we don't do it.

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2017-07-19 13:26 by Karl Denninger
in Editorial , 264 references
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.... fixing the government paid medical programs -- Medicare and Medicaid.

My plan does this. It not only puts a stop to the expansion of Medicare spending (and cuts it both immediately and over time without denying care to anyone in the program) it deletes Medicaid without denying care to one single person.

Let me be clear -- it does not evade all the Medicaid expense.  But it does stop nearly 100% of the gaming of Medicaid and it drops the absolute expense amount dramatically.

Between these two we will immediately and permanently close the entire federal budget deficit.  No kidding, no nonsense, for real.  That's the math and doing so will put approximately 0.75% of real purchasing power back into every American's pocket annually for the next 30+ years.  This is GDP expansion in real terms, not nominal and it is the only way you're going to get a sustained 3+% real GDP expansion on a per-capita basis in our economy.

There is no other way to do it.

As a first step we must stop the extortion game played by both medical providers and health insurers in concert, which (because there are multiple entities involved colluding) ought to bring Racketeering prosecutions.  But prosecution isn't the point -- stopping the scam is.

Once that's stopped, or in concert with it, we can then demand that 100+ year old law be enforced, which immediately levels prices for everyone.  At the same time we retain the existing safety net for those who have no means to pay but at the same time we put in place a robust measure to collect said expense if someone becomes able to pay later -- a factor that is completely missing in today's system.

We cannot pass a system that removes that safety net.  But we also cannot live with a system that is rife with fraud and extortion -- it is extracting one dollar in five in our economy today, and given the demographic realities and the forward obligations the federal and state governments have taken on we either stop this now or it will collapse both within the next five years.

That's the choice folks -- we either do it now or we're ****ed.

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2017-07-18 11:13 by Karl Denninger
in Editorial , 813 references
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The Senate's GOP-written theft en-masse bill (allegedly to "repeal and replace" Obamacare) is dead.  There are now enough committed no votes to doom it, and it's been essentially abandoned.

The latest is a claim that we will instead see a clean "repeal" of Obamacare.

America, wake up.


This is the time when you must do so.  When you must make damn sure your Representative and Senators understand that they will be fired or even worse if they don't cut the crap now on the health care system in this nation.

What does cut the crap mean?

First, put an immediate stop to medical insurance extortion and Racketeering.  The act of threatening you with a charge 10x or even greater than an "insurance company" would pay (and thus you would pay by transference since you pay for said insurance) if you have no insurance meets the clear definition of extortion (threatening you with financial ruin if you do not take an action said provider wishes you to take) and since both the providers and insurance companies do so in concert it certainly appears to meet the definition of Racketeering under Federal Law.

This can be stopped with a one sentence bill which I have written on here.

Second, take up a bill to mandate price transparency.  There already is one in the House; that'll do as it's simple, direct and I'd love to see someone argue against it.

Third, take up the rest of my recommendations, or those substantially identical to them.  In short mandate level pricing for everyone, ban blanket consents or any "consent" that does not have a price attached, ban the charging of events caused by a provider to the customer (if I drop my ladder while working on your roof and smash your picture window, I can't bill you for the window!), bar as a matter of law charging "in extremis" patients unconscionable prices (to which you can't consent) and finally, replace Medicaid with a system that bills back to the Treasury in the customer's name for all citizens that are unable to pay.

That latter bill would literally drop medical costs by at least 80% almost overnight.  It would resolve Federal and State budget deficits, end the bankruptcy of states and cities and render moot the need for other than catastrophic health insurance in the first place.  

It would do all of that without costing one single citizen access to health care because if you could not pay you could still access the care and Treasury would get billed, effectively creating a tax debt in your name.  That billed amount would be limited to reasonable charges in exactly the same amount that everyone else paid -- not the 10 or 100x charge that is frequently billed now if you're uninsured.

For those who can't pay now and never can in the future this is effectively Medicaid as we have now, but it's available to any citizen who is temporarily or permanently without funds.  It accrues interest just as does a tax debt, and while that's a fair bit of money it's less than private debt collectors or financing such via something like a credit card.  If you die without sufficient assets to pay then the Treasury (that is, the taxpayer) winds up eating it but that in fact is less of a burden than we have today where the taxpayer eats it immediately and permanently instead of down the road only if you remain insolvent through your life.

It also instantly ends medically-driven bankruptcies for American citizens -- forever.

It saves a crazy amount of money in the budget, easily $250 billion annually in the first years and over the first five that amount will grow dramatically to the point that the budget will balance even with no other changes made to spending by 2020, and be in permanent surplus thereafter -- again, assuming Congress doesn't increase other appropriations or decrease taxes (both of which it will probably do.)

We can do this now

We must do this now.  If we do not the Federal budget is doomed within five years and the States will follow.

But whether we will, or do, resolve this issue depends entirely and only on whether you, as a citizen, demand that it happen and enforce that demand through whatever becomes necessary to do so to the exclusion of other political demands.

BTW, to President Trump: If you cannot get the House and Senate to pass the above then direct Jeff Sessions to start indicting medical industry firms and individuals for violations of 15 USC Chapter 1.  That's a path the executive alone can take and there's not crap the Congress can do to stop you.  If you're looking for a way to drain the swamp alone without Congressional assistance or acceptance -- there it is.

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2017-07-17 08:41 by Karl Denninger
in Editorial , 291 references
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Folks, brain surgery is not routine.  Ever.

Further, you do not discover a blood clot in the brain during a routine physical.  In fact a so-called "routine physical" in today's world catches damn near nothing -- ever -- simply by design, since you usually spend less than 5 minutes with an actual physician.  Granted, a Senator doesn't get "your" physical, he probably gets an hour with an actual physician.  But the point here, in addition to the vast difference between "you" and "Senators", is that there is no instrument that a doctor has in his office that is diagnostic for a clot on the brain.  Generally you find them on a CT (or similar), which is never done routinely because (1) it is relatively expensive and (2) it involves ionizing radiation exposure, which is never appropriate without a damn good reason.

A 2 centimeter "clot" is of course inadequate to describe what was found, since it only speaks to one dimension and such a thing occurs in three dimensions.  Second, a clot occurs after bleeding does, which leads to the next question: What caused it?

Third, where was the clot?  Was it inside the brain or around the brain?  Yes, it matters, but only in terms of degree -- it's not a routine or minor event in any case.

That the press refused to push on this originally is outrageous, but hardly surprising.  We no longer have a Press that actually investigates anything.  They don't even bother calling someone who ought to know and asking them questions; they simply parrot whatever they're giving and call that "reporting."

Folks, that's not reporting -- it's simply amplification.

Reporting requires work, and we're not seeing any of it -- at all -- from any of the so-called "press."  They simply amplify whatever someone feeds them, and choose the sources of said "feeds" to suit favored constituencies.

That sucks, but it is what it is.

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2017-07-11 08:26 by Karl Denninger
in Editorial , 111 references
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This sort of article makes my blood boil.

Life has a way of reminding its benefactors of what an inexpressible miracle it truly is at times. Sometimes doctors play a critical part in making the miracle possible. And sometimes, the miracle comes even when the most well-meaning experts believe that science says there is no hope.

But somehow in the twisted, upside-down case of a little 11-month-old baby boy named Charlie Gard, doctors and the judiciary have said that, not only is there no hope, but rather than release Charlie to the care of his parents, they have also omnisciently decided to literally hold him hostage – insisting not only that Charlie must die but that he also must be in their "care" when he does. It is a case that rocks America to our core, because if something like this can happen across the pond, it can certainly happen here.

The "solution" being proposed is to grant him and his family permanent residency in the United States so that (1) they can travel here and, unsaid, (2) that we the taxpayers will wind up expending unlimited amounts of money on a futile "treatment."

There is a reason we should not permit drug advertising in the United States (it's banned in most other nations) and it's the same reason this sort of "law", if it was to pass, is a monstrously bad idea.  The reason is science is easily trumped by emotion and there is, in fact a scale between "worthless" or "futile" and "useful."

Charlie Gard has a terrible condition.  It is true that there is a treatment that can help some people with that condition.  Unfortunately, as the court records have shown, Charlie has the form for which there is no known therapy that has ever helped a single person suffering with it.  This condition is universally fatal; it's a genetic defect for which there is no cure as it is present in every cell in his body and which we cannot reverse.

But boy, he's cute.  Most babies are.  It's very easy to trigger the cute baby syndrome in humans, at which point you can tug on people's hearts and suspend their mental capacity.  That is what is going on here.

It is indeed outrageous if Britain is literally imprisoning that kid, refusing to release him to his parents.  The truth is probably materially more-subtle; it might be something along the lines of "he will die almost immediately if disconnected from the machines to which he is presently tethered."  However, irrespective of this his parents should be able to sign him out where medicine has no rational answer and take him home.  If he dies then he did not die by man's hand -- he died by God's.

There is a huge difference between "eugenics" -- or anything similar to it -- and this case, although the article quoted tries to make the moral equivalence.  Sorry, but nope.  There is no equivalence between a person who is able to survive on nothing more than the ordinary requirements for any carbon-based animal life form -- food, water, reasonable shelter and the routine disposal of bodily waste and someone who requires extraordinary technological intervention just to survive for a few minutes longer because their cells have a genetic defect which makes it impossible for that person to sustain the normal functions required to live.

Folks, this debate is one that nobody wants to have but we must all have it, and we must eject from the public square those who take the position propounded in the cited article -- whether they be Senators, Representatives, preachers or Presidents.  One has a right to life.  One does not have the right to steal unlimited amounts of money required to obtain extreme technological measures in order to sustain one's life.  Medical care is a service and one does not have the right to compel others to provide a service to you on other than mutually-agreeable terms.

We all begin dying the moment we are born.  Every one of us is born with an hourglass full of sand, representing time.  It bleeds off and eventually runs dry.  For most of us all but the last small bit of that hourglass is painted over, so we cannot see how much sand remains until it is nearly exhausted.  Most of us learn that we are low on sand months, days, hours and in some cases seconds before it runs out.

Sadly, some of those hour glasses have very little in them to begin with.  Occasionally we can add more sand to them through various measures.  Some are fairly ordinary; don't eat carbohydrates in any material degree, for example.  Others are a matter of risk:reward trade-off -- don't engage in anal sex, for example, or do take care of that aching tooth so it doesn't abscess and lead to a brain infection that kills you.  And still others require interventions that were impossible years ago, but now are not -- kidney transplants, to name one.

But when we get into the realm of interventions that technology has made possible we run straight into the not-insubstantial matter of cost.  We have a medical monstrosity on our hands that nobody will go anywhere near in the political or policy sphere because as soon as you do you're accused of trying to kill Grandma -- or Charlie Gard.

This is not only a false equivalence it's used as justification for literal armed robbery and, in this case from what I can discern outrageous abuse of a young child for profit.

There are, sadly, zero odds that Charlie Gard will be materially helped by anything medical technology can currently offer.  Again, there is no clinical record supporting the parents' and others' demands that he be given this "therapy" that has, according to the literature I've read, never successfully helped one person with the specific form of the condition he has and is not, even in the less-severe forms where it has provided benefit, actually arrested or reversed the condition.

Subjecting someone to a useless and futile medical procedure, no matter what it is, is abuse of said person.  When said person is on the verge of dying extending their suffering in this fashion is outrageously abusive to the point of being a criminal act.

Two wrongs do not make a right.

Allow Charlie to be at peace.

We do not have to like the fact that we all have that hour glass, but liking it and accepting it are two different things.

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