Thursday, May 20, 2010
Random thoughts from a warped and fevered mind...
A lot of sound and fury emanates from Washington these days about a "corrupt" and greedy Wall St. (full disclosure- I make my living interacting with Wall St. and managing investments). And without a doubt, there have been corrupt actions by firms and individuals that occupy positions of power on Wall St. The solution, at least as proposed by some in Congress, is for more government intervention and regulation. On the surface, that sounds good. Take away the greed and corruption through government regulation and oversight. But here is the important question- what if the government and its regulators are just as greedy and rapacious as the supposedly evil free enterprise of Wall Street? Won't happen, you say? Let me tell you about Shore Bank, a Chicago bank that by all intents and purposes failed. This bank was bailed out to the tune of $140 million by J.P. Morgan, CitiGroup, GE, and Goldman Sachs. Notice anything about these names? GE, Citi, and J.P. Morgan all received massive amounts of TARP or TALF bailout funds from the government. Goldman Sachs is currently under investigation by multiple regulatory agencies into their business practices. And Shore Bank? A major contributor to the Obama campaign. Some of these firms say privately that they have been pressured to assist in the bailout. Connect the dots, and remember Shore Bank the next time you hear someone in Washington say that the government has to intervene in the free market to prevent corruption.
Just wondering- can a bald man get a hairline fracture?
"You do Medicare for God and Country because you lose money on it. The only way to provide cost effective care is outside the Medicare system, a system without constant paperwork and headaches and inadequate reimbursement." So says Dr. Guy Culpepper, a Dallas area family practitioner as quoted in the Houston Chronicle. Since 2007, Texas physicians have been opting out of taking Medicare patients at a rate of 100-200 per year. As of 2008, 62% of primary care physicians in Texas no longer accept Medicare patients. How bad is it for the doctors? In 2001, a doctor receiving a Medicare payment of $1,000 made $410 after covering operating expenses. Cuts have been made to the program through the years to try to curtail expendititures, and there is another cut proposed for this year of 21%. If that reduction is enacted, treating the same patient today would net to them $72. The dilemma for Congress is that if they eliminate the Medicare cuts in order to keep more physicians in the system, it will cost $276 billion over the next ten years. This is problematic for seniors, who have, in many instances, a long history with their primary care physician. If they want to stay with those that opt out of Medicare, their costs will now be out of pocket. This is also going to become a crisis in the future for all of us as the U.S. faces a shortage of primary care physicians.
I used to work at an origami plant, but it folded.
Heard of the PIGS? You have been hearing about one very prominently in the news- Greece. The others? Portugal, Ireland, and Spain. The PIGS are important for several reasons. Of immediate concern is the fact that their economies are on the verge of collapse and, if they do so, could plunge the Euroland economy into a funk and lead to potentially fractious relations among the European Union membership. The financial aid package to Greece has strained political ties in the EU as other members have had to step forward to bail out the profligate and frankly stupid spending and economic policies of the Greek government. My friend Dirk Hoag asked if this was a "Greece fire" or something worse. I think it is a Greece fire that has the potential to burn down the house of the EU. More importantly, Greece, and the other members of the PIGS, should serve as a canary in the coal mine to governments all over the world. Unchecked spending cannot continue without dire, if not catastrophic financial and social consequences. This is a lesson that governments all over the world seem to forget and have to painfully re-learn time and again. Let us all hope that the U.S. is listening and watching lest a Greece fire in our own house get out of control.
Do pyromaniacs wear blazers?
And that, my friends, is my view.