Yves is still hobnobbing with some pretty smart people over in Cambridge. So I am going to take another crack at the links, this time with your help. Thank you NC readers for the many Antidotes and links. I actually have more of both than I can publish. Still feel free to drop me a line with more (email is edh@creditwritedowns.com, twitter address is twitter.com/edwardnh).
Bubbles lurk in government debt – Kenneth Rogoff, FT.com (hat tip Don)
A Math Primer on Sovereign Debt NY Times
Almost human: closest australopithicine primate found New Scientist
Housing market overheating: Royal LePage Globe & Mail (my view has been that Canadian housing was overheating pre-2008. I witnessed a lot of froth in places like Vancouver and Toronto and the whole of Alberta. You had to see all of the ‘luxury’ condos being built to know what I am talking about. Now all of that is back)
Junk has outperformed quality so far this year Mark Hulbert – MarketWatch
How Banks Dress Up Data to Hide Risk Wall Street Journal
Our universe at home within a larger universe? So suggests physicist’s wormhole research Science Daily (I think Mark Thoma has a post up on this)
First animals to live without oxygen discovered Science Daily (Hat tip John for this and the previous one)
Hewlett Packard outlines computer memory of the future BBC (hat tip Stevie B)
Soziale Gerechtigkeit: Die Mittelschicht betrügt sich selbst Spiegel Online (hat tip Peter)
Massachusetts Health Insurance “Market” Just Failed, And There’s Worse to Come Fire Dog Lake (i’d love to hear informed views on this article)
Home equity horror Rolfe Winkler
China’s currency: What can revaluation do? Ryan Avent (Krugman’s recent pieces chastising Joe Stiglitz miss the point. Revaluation gets us some but not all of the adjustment we want)
A Simple Reply to Krugman on Austrian Economics Arnold Kling
China on ‘Treadmill to Hell’ Amid Bubble, Chanos Says Bloomberg
US Judge Seizes $105 Million in Argentine Funds NY Times
Antidotes du Jour hairless animals version. The cat (and supermodel) is from Knute (supermodel Behati Prinsloo included). The baby aardvark is from Mira. And the baby wombat is from May via the Daily Mail.
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A couple more:
FCIC Hearing today !
http://www.fcic.gov/hearings/04-09-2010.php
[They have 500,000 – 2,000,000 documents to make public. Should they now? ]
An article about a thesis on CDO’s that apparently is great:
http://blogs.wsj.com/deals/2010/03/15/michael-lewiss-the-big-short-read-the-harvard-thesis-instead/
Intel has fix for Financial Crisis:
Software that uses brain scans to determine what items people are thinking about was among the technological innovations showcased Wednesday by Intel Corp., which drew back the curtain on a number of projects that are still under development.
http://solanic.com/wordpress/2010/04/09/intel-develops-mind-reading-software-to-embed-in-bankers-to-find-out-what-the-hell-they-are-thinking/
The FCIC should release documents unless they find evidence which can be used to prosecute by State AGs or the DOJ. At the very least, the DOJ should be utilized to sift through these documents. FCIC repeatedly have stated they are underfunded and understaffed. By utilizing other government agencies with the appropriate personnel that have the education and the legal authority to followup, this would provide the FCIC some relief.
If this is an option with is unpalatable to them; politically or otherwise, then release the freaking documents to the PUBLIC. Transparency indeed.
totally agree NS!
my theory has been this:
1. get blogs like this one, to get people to “follow” the FCIC
my theory includes the masses demanding transparency
2. get the open source coders who do projects for orgs like the Sunlight Foundation create ways to view that data from the FCIC
3. that will get the masses to understand why they should be ticked off, and what should be done about it
ed: blogger who covers Massachusetts Health Insurance:
austin frakt @ http://theincidentaleconomist.com/
Comparing the Mass health market failure to the California power disaster of ten years ago is horseshoes to hand grenades.
In California you could trace the costs back to the source. A ton of coal cost $X. The price varied according to source, but whether you got the coal from western mines, eastern mines, Mexican mines, Indonesian mines or Chinese mines, you still had a pretty good idea what actual costs were, industry efforts to confuse the issue notwithstanding.
This can’t be done in medicine because it has uncontrolled costs. The insurers are bad guys, true enough, but they’re caught between rocks & hard places. You’ve got a dozen major equipment manufacturers hawking the latest & greatest, along with the well-known drug companies with all their pills. Each & every one, machine & drug, hyped as “must-have miracle cures” and with only a few exceptions, each & every one of them completely phony.
This is precisely identical to the Pentagon procurement boondoggle. If I wasn’t busy running a bookstore (where, by the way, I publish 17th century medical manuals for the fun of it – they’re better than you think), I’d take a commission to research & report this insane medical mess.
Medical equipment manufacturers & drug makers are selling on fear. Fear of death. Same trick as the Pentagon suppliers: Fear of attack. It’s all fear based. What we need is some sort of national commission to sort out what actual equipment we need & how we should use it. And Gregory House can be a good example: We don’t need all the useless toys shown on House. Week after week, viewers of that show see medical waste, harmful & dangerous procedures, before the show arrives at the same result, week after week: Shrewd deduction of patient symptoms. Machines & the idiots who want to use them only get in the way, creating huge expenses for somebody to pay. (I wonder who? I think it’s a boring show, myself.)
Unless you control manufacturers & pill producers, you would go bust even with single payer. In fact, with single payer you might well go bust even faster. The only thing keeping prices down now is the necessity for insurers to make a profit. Take insurer profits out & manufacturers & drug makers will raise prices to fill the gap.
As I think of it, GE makes a lot of the medical clap-trap. Million dollar machines – you see them on House, GE even gets a plug in the credits. That’s what your insurance money is paying for. What are GE’s profits like? What’s the life-expectancy of a typical machine? How often does it break down? How many of them kill people by mistake? Why is no one asking these questions?
But you would rather rant at windmills. Beat up straw men. As I think of it, aren’t the insurers increasingly refusing to pay for new medical gizmos? Maybe the solution is right in front of us: Keep pushing on insurers & they will push on the system until wasteful machines have been eliminated from the system. It won’t be pretty & it won’t be fast & it won’t be cheap, but it is something that we can do.
Correct… I could. And people who payed objective and critical attention could… and did.
However, Bush admit could (did?) not. FERC did not. Dept. Energy did not. And worst offenders in creating that artificial crisis were running the show.
So when you say:
… with all due respect, I thing you’re confusing cost estimating with the guys pulling the levers on supply, along w/$$ they siphon(ed) out of both systems. And did so, I might add, w/little (or no) added value.
I think that linked article (Scarecrow) is a pertinent one, and shares same epidemic illness that has infected and diseased US finance >> biz over last decade.
“The insurers are bad guys, true enough, but they’re caught between rocks & hard places. You’ve got a dozen major equipment manufacturers hawking the latest & greatest, along with the well-known drug companies with all their pills.”
For the past few years, the biggest driver of cost increases has been provider costs (hospitals, doctors, thuggish health cartels like Partners, etc.). IIRC, those account for about 75% of the increase (using PwC’s numbers). Esp since Mass is full of pricey famous teaching hospitals. Drug prices, as insane as they are, only accounts for about 13% of the increase, and insurers are getting better and better at mitigating drug costs. (The fancy machinery generally shows up as provider costs–“we raised our rates to pay for the new cardiac center”)
Also, in Mass. at least, practically all the insurers are very highly rated nonprofits (typically 2% surplus or less). These plans aren’t Wellpoint. But they have all lost money on Connector plans since the Connector’s inception. The plans the Commonwealth want insurers to offer cannot be offered at the desired prices without significant losses.
disclosure: I work for one of the nonprofits.
“For the past few years, the biggest driver of cost increases has been provider costs … those account for about 75% of the increase (using PwC’s numbers). … Drug prices, as insane as they are, only accounts for about 13% of the increase”
Interesting. Do you have a cite? I’d like to know why I’m seeing double digit insurance increases in a dead economy.
The important thing to realize is that most “medical advances” are, to put it politely, frauds.
Last Halloween I was at a house in Harvre de Grace (MD) & found my host knew a lot about Interferon. Remember? The miracle cure from near 20 years ago. What ever happened to that, I asked.
It was something, he said, but whatever it was, it just didn’t work. (I forget his exact response.)
And you may remember how interferon quickly turned up in women’s skin care creams, and just as quickly disappeared.
A lot of what you’re paying for in medicine is just like that – wonder crap that gets thrown out the day after the big media splash.
I got the numbers from PricewaterhouseCoopers The Factors Fueling Rising Health Care Costs 2008. Prepared for America’s Health Insurance Plans (AHIP), December, 2008.
http://www.ahip.org/content/default.aspx?docid=25123
This probably isn’t the most recent info available. I’d bet that the increase in costs since then has slowed.
Thanks.
This seems to be about right. Massachusetts has world class medical care available, and we pay a premium for that. The final battle over health care costs won’t be with insurance companies, but as you say, with doctors, hospitals, etc. We’ve seen this elsewhere, and it’s a source of tension that’s never going to go away.
from you linked article:
I’ll leave drawing of conclusions as exercise to the astute readers.
Bill G wrote:
“A better solution is for each citizen to pay for their own care and insurance and make tough decisions for themselves.”
Hmmm. Get that knee surgery or pay for my kids to eat?
Interesting that the US is almost alone amongst developed nations in thinking that this is a decision any humane person would ever want us to have to make for ourselves.
No surprises here. Controlling costs means you ration care through the gubmint, insurers, or citizens. The gubmint has no guts so it tries to squeeze the insurers. The insurers refuse to be forced into a losing deal. The next step in the dance will be for the gubmint to blame the insurers, raise rates, and possibly cut back on what services are covered. Citizens that perceive they are owed health care will consume even more and the great circle of rising costs will continue as demand forces up prices.
A better solution is for each citizen to pay for their own care and insurance and make tough decisions for themselves.
It sounds so simple.
Of course, then again, every other developed country has decided otherwise. Oh yeah, and the per capita costs in those countries are lower than here. I’m sure this is all easily explainable. In fact, I see it for the f’ing conspiracy that it is! Who couldn’t see through the obvious bs in the statistics? It’s really a worldwide conspiracy by the people in power to perpetuate their power by giving universal single payer health care to those who need it. It’ll show everyone!
Never let facts interfere with ideology.
One newspaper article on the subject that the insurance companies were seeing a big chunk of people sign up for a few months when they got sick and then cancel when they got well. The article said the companies claimed this group was running expenses 600% higher than traditional (year long?) customers.
Seems like people found a loophole here.
The article on the Big Bang/blackhole/wormhole is a theoretical doodle. It is based on an analogy with blackholes, that our universe is the result of a whitehole of a greater universe. Strip away the unnecessary verbiage and it is just a restatement of the Big Bang. But it seems to be founded on a significant error. Information is not lost in a blackhole. I had thought this a settled matter for some time. Blackholes will evaporate via virtual particle splits over large timescales back into the informational construct of our universe.
If you like exotic creatures, how about this?
http://www.youtube.com/watch?v=ytJ1yvFPbTE&feature=player_embedded
Well, on the subject of exotic, hairless creatures, this one surely qualifies:
http://www.telegraph.co.uk/news/worldnews/asia/china/7557799/Oriental-yeti-discovered-in-China.html
It seems one best be wary of adult (hairy) wombats:
http://www.telegraph.co.uk/travel/destinations/australiaandpacific/australia/7558903/Man-in-hospital-after-wombat-attack.html
You asked for informed comment on the Massachusetts Health Connector story, and I’ll do my best.
What actually has happened is that a half dozen or so health insurers in Massachusetts have had rate hike requests denied by the state Insurance Commissioner, two of the have decided to sue over the Commissioner’s ruling. This isn’t exactly unprecedented here in Massachusetts, and usually the Insurance Commissioner grants a portion of their requests.
Here in Massachusetts, many small employer provided health plans as well as a big chunk of the individual market goes to local non-profit health insurance providers, whose plans can nonetheless be very pricey indeed. Employer-based pans, like mine, are somewhat less regulated than those in the connector, who are eligible to receive premium subsidies from the state. The UHC plan provided through my employer (a publicly traded retailer) has this year both raised rates about 35% as well as doubled copays pretty much across the board. Ouch. Reputedly, about 98% of bay Staters are covered by some health insurance plan, but frankly, the data is spotty.
Overall, health care in Massachusetts is excellent, especially in complex health issues. Nobody in the world is better, and it is point of pride for Bay Staters. However, it’s expensive. The latest data I can find is that Massachusetts has the 5th highest costs nationwide (2006).
Over the past few decades, Massachusetts has lost the big business players. The state government is the largest employer. Besides this, the only other industries hiring, as of two years ago, were financial services and healthcare providers. As you may imagine, financial services hiring has slowed to a trickle. So many young people here trying to build a career are desperately trying to get into the health care industry. Nursing schools here are evidently beginning to turn out more nurses than there are jobs (one recent graduate I met, having failed to land a position, volunteered and now works in Haiti).
Cost controls are not built into the Massachusetts health system. Competition was supposed to deal with this. Oops.
As for the health insurance providers who brought suit, one is BCBS and the other is a local non-profit, Fallon Community Health Plan. The regulatory environment here can be tough. The Insurance Commissioner’s decisions, on all types of insurance products, are mostly upheld, and the state’s Attorney General has an aggressive consumer advocacy office dating back decades. Likely they’ll get some rate hikes they want, and they know this, so they always ask for LOTS right out of the box.
Due to the legal and political situation, this market isn’t “normal,” and it’ll be interesting to see what happens, though FDL, as we see again, isn’t afraid to overstate it’s case.
Brett, that really helps. Thank you for adding those tidbits to the conversation.
Not at all. Didn’t know quite what you were looking for, so I just dumped everything I could think of. Like the employment picture in Massachusetts. (Huh?)
Forgive me. Sometimes I run off at the mouth.
The point being, it’s not the first time this kind of dispute has cropped up, the regulatory environment is probably tougher than in most places, so the insurance industry has learned to be more aggressive as well.