Insurance, Weather, Goldie and the SNB

I Hate United Healthcare

I posted an early version of this letter last year. I’m pissed enough and I think this is relevant enough from me to put up the latest version.

This letter and the pricing structure contained in it has been approved by the NYS Insurance Commissioner. These rates are not inconsistent with what a different insurance provider would charge. For a family of four in NY it now costs $67,634 per year to buy health insurance.

If you live in NY you have to pay an extra 8% tax on income. This hit coupled with the IRS gets one easily over the 40% mark. To make an after tax income of $67k one has to earn $113K. And that is just to cover an insurance bill. Forget about what everything else in life costs. For what it is worth the average income in NYS is $47k

The brave folks in D.C. are working on plans of how to fix this problem. We have to wait another three years for any benefits from Obamacare, and in all likelihood that plan is going out the door. I have to wonder how many people are going to die as a result of this mess.

Question: Have others gotten similar letters to this in the past month or so?

 

Weather is Changing – Hang on Gulf Coast

The super La Nina we have been struggling through has broken. From NOAA:

La Niña weakened for the third consecutive month, as reflected by increasing surface and subsurface ocean temperatures across the equatorial Pacific Ocean.

What are the computers telling us what will come next?

Nearly all of the ENSO models predict La Niña to continue weakening in the coming months, and the majority of models indicate a return to ENSO-neutral by May-June-July 2011.

Here is the chart of the computer forecasts. The ones that worry me are those that are projecting an ENSO of +1 by the summer's end. This condition has brought us active hurricane seasons in the past.

What might the weather patterns be if we do get back to La Nina conditions? History says it will be dry in the West, hot in the South and wet in the North East.


Take a look at the pacific jet stream during La Nina. Does it appear to blow directly from Fukushima to the United States? Looks that way to me.

The Goldie Call

Many observers of the markets have already commented on the Goldman call(s) this week for a break in commodities pricing trends. (Zero Hedge link) I'll toss in my two cents.

I guess there is a possibility that GS is putting out this word as a public service message. But I highly doubt that. Three times in one week is manipulation in my book.

Buy the dip on this one. Goldman is setting up a bear trap. They should just shut up. They can trade their book all they want. But they are taking their book and that is quite another matter.

Who’s losing in FX?

Did you notice that the USDCHF solidly broke 90 last week? The Swiss can blame Bernanke for this. The CHF is not so strong against the Euro these days. This is a dollar move.

The Swiss economy is not very dependent on the dollar exchange rate. The Euro link is a much bigger headache for them. But the drop in the dollar is hurting the Swiss people in a different way. The Swiss National Bank is getting killed (again) on their reserve holdings. This is a recent breakdown of their portfolio:

How bad are those losses? From the end of 2010 till the close on Friday it comes to $4 billion. It’s even worse when you go back to June of last year. In a little over nine months their USD book has cost them a very lumpy $15 billion. That comes to a tidy $2,000 for every citizen. That may not seem like a big bundle for all those rich folks in Switzerland. But consider the magnitude of this error. If each American took an FX hit of $2,000 it would come to $600b. Heads would role if that happened.

The SNB has dug themselves a hole. They can’t get out of it. This hole will have to get bigger. Keep in mind that every dollar of these losses is a dollar is spec hands. The SNB is making hedge funds/bankers rich. What a silly system we have.