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| 2010-02-23 09:18 |
STATE'S RIGHTS AT RISK IN WHITE HOUSE PLAN (FINAL EDITION)
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You know there is one voting bloc that will show up for the President in the next election and
you couldn't blame them. Unions continue to rake in the goodies at the expense of other workers in the nation. The White House has unveiled its
healthcare reform package and Christmas came early for union workers. The plan has a few new wrinkles that get to the heart of why so many people are
afraid of this Administration. Usurping states rights and attacking investors. The so-called "Cadillac" health tax parameters were nudged higher and
are to be implemented in 2018 instead of 2013. In order to pay for this and other adjustments to healthcare reform, President Obama is going to take
it from people that invest by taxing capital gains, rents, and royalties through a 2.9% tax on those families earning (they must feel like they're
stealing it for all the grief coming their way) $250,000 or single person earning $200,000.
I know the White House has little love for
stockholders and bondholders but it is investors taking risk that has been the hallmark of our economic success. In this meltdown people should be
encouraged to invest not be taxed more if those investments yield results. The parameters for the so-called "Cadillac Plans" have been stretched again
and as we said, it kicks in 2018 not 2013. Card Check is looking sweeter and sweeter.
* Households making between $66,000 and $88,000 a year would see their costs capped
at 9.5% of income.
* There will be a $40.0 billion tax credit set aside for small businesses.
* Businesses with 50+ employees will pay
penalties for employees not covered.
Other sources to pay the $950.0 billion healthcare cost:
Red States Lose Again
I will admit it is transparent,
however. And the President is paying back people that voted for him at the expense of those that didn't. I guess that's the way it goes but it doesn't
feel like unity or shared sacrifices are being made by all Americans. I continue to believe this sort of approach will further divide the nation at a
time when all oars should be pulling in the same direction. From a political point of view, locking up 27% of would-be voters in New York is huge;
just add in those receiving welfare and other government financial assistance and you could see the Electoral College tally mount. The top-ten union
states average an unemployment rate of 10.4% and the top-15 states 10.2%. The top-ten states with the fewest union workers have an average
unemployment rate of 9.07% and the top-15 states 8.9%
Then there are the states that didn't vote for the President or are typically what
would be called red states. These states are fierce defenders of individual state's rights, and that will be an issue as the White House wants the
power to squash insurance premiums it feels are too high. Several states already have laws on what percentage of insurance premiums must be spent on
medical costs; the idea of the White House stepping on those rights should frighten everyone. Big brother is too big and too intrusive. I realize big
business needs boundaries, but what we are seeing is the economic recession being used to create the kind of powers a monarchy would enjoy.
There is no truth to the rumor these states will be able to pay
in confederate money.
Sources: The Public Policy Institute of NY State Inc, BLS
I like the idea of fixing the
doughnut hole in Medicare where
recipients get financial assistance with the first $2,830 in prescription
drug payments but are on their own up to $4,550. The problem is this isn't going to be patched up until 2020.
I like the idea of children
staying on their parents plan until the age of 26; when I was that age and just starting out as a stockbroker I opted out of our company's plan
because it was costing me $300 a month. That was a tough nut for a guy working on 100% commission.
On Varney & Co. (I'm part of the company)
yesterday someone sent an email saying insuring people with preexisting conditions was the same as insuring someone after they had a car crash. That
is a clever analogy, but I'm on board with the President on this one. If they pay for insurance they should get insurance.
The
Market
Yesterday showed lackadaisical action to say the very least, the market lacked passion and direction. There was compelling
action in auto parts stocks, restaurants, banks (regional and investment banking), rails, and health insurance stocks. Humana (HUM) +5.56%, Aetna
(AET) +1.45%, UnitedHealth Group (UNH) +3.57%, and WellPoint (WLP) were up because the public option wasn't part of the President's healthcare reform
plan. (This is sure to anger those that think these companies are part of the public domain and should be punished for trying to make profits.)
Enough to Keep the Crowd in the Trade?
By: Brian Sozzi, Research Analyst
This morning, Home Depot Inc.
(HD) released its 4Q09 earnings results and its preliminary outlook for FY10. On both accounts, it's our view that Home Depot delivered. Barring any
materially negative call outs in the 9:00 am conference call, at present valuation (17.5x FY10 consensus EPS, a projection base that is likely to rise
post FY10 guidance) shares of Home Depot remain attractively valued (we have had buy rating on stock since March 24, 2009).
Please visit www.wstreet.com to read the remainder of the piece.
Toyota's
Troubles Could Be Only the Beginning
By: David Silver, Research Analyst
The Toyota saga continues this week as President
Akio Toyoda is set to testify before Congress about what he knew and when regarding the latest recalls. Over the past year, the Company has recalled
more than 8.5 million vehicles for defects ranging from floor mats to brakes to accelerators that stick. The Company is also mulling a recall of
Corollas after complaints about the vehicles' steering began to surface.
Please visit www.wstreet.com to read the remainder of the piece. |   
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