Tag Archives: Thomson Reuters

It’s a kind of Euro

In Italy things are off the walls, now we see ‘New elections loom in Italy‘ (at https://www.theguardian.com/world/2018/may/27/italys-pm-designate-giuseppe-conte-fails-to-form-populist-government), where it again is about currency, this time it is Italy that as an issue with ‘country’s Eurozone future‘. In this the escalation is “the shock resignation of the country’s populist prime minister-in waiting, Giuseppe Conte, after Italy’s president refused to accept Conte’s controversial choice for finance minister“, there is a setting that is given, I have written about the folly of the EU, or better stated, the folly it became. I have been in favour of Brexit for a few reasons, yet here, in Italy the setting is not the same. “Sergio Mattarella, the Italian president who was installed by a previous pro-EU government, refused to accept the nomination for finance minister of Paolo Savona, an 81-year-old former industry minister who has called Italy’s entry into the euro a “historic mistake”“, now beside the fact that an 81 year old has no business getting elected into office for a number of reasons, the issue of anti-Euro Paolo Savona have been known for a long time. So as pro-EU Sergio Mattarella decides to refuse anyone who is anti-EU in office, we need to think critical. Is he allowed to do that? There is of course a situation where that could backfire, yet we all need to realise that Sergio Mattarella is an expert on parliamentary procedure, highly educated and highly intelligent with decades of government experience, so if he sets his mind to it, it will not happen. Basically he can delay anti-EU waves for 8 months until after the next presidential elections. If he is not re-elected, the game changes. The EU has 8 months to satisfy the hearts and minds of the Italian people, because at present those options do not look great. The fact that the populist choices are all steering towards non-EU settings is a nightmare for Brussels. They were able to calm the storm in France, but Italy was at the tail end of all the elections, we always knew that, I even pointed it out 2 years ago that this was an option. I did mention that it was an unlikely one; the escalating part is not merely the fact that this populist setting is anti-EU; it is actually much stronger anti Germany, which is a bigger issue. Whether there is an EU or not, the European nations need to find a way to work together. Having the 2 larger players in a group of 4 large players is not really a setting that works for Europe. Even if most people tend to set Italy in a stage of Pizza, Pasta and Piffle, Italy has shown to be a global player and a large one. It has its social issues and the bank and loan debts of Italy don’t help any, but Italy has had its moments throughout the ages and I feel certain that Italy is not done yet, so in that respect finding common ground with Italy is the better play to make.

In all this President Sergio Mattarella is not nearly done, we now know that Carlo Cottarelli is asked to set the stage to become the next Prime Minister for Italy. The Italian elections will not allow for an anti-EU government to proceed to leave the Euro, Sergio’s response was that: “he had rejected the candidate, 81-year-old Eurosceptic economist Paolo Savona, because he had threatened to pull Italy from the single currency “The uncertainty over our position has alarmed investors and savers both in Italy and abroad,” he said, adding: “Membership of the euro is a fundamental choice. If we want to discuss it, then we should do so in a serious fashion.”” (at http://news.trust.org//item/20180527234047-96z65/), so here we all are, the next one that wants to leave the Euro and now there is suddenly an upheaval, just like in France. Here the setting is different, because the Italian President is Pro-EU and he is doing what is legally allowed. We can go in many directions, but this was always going to be an unsettling situation. I knew that for 2 years, although at that stage Italy leaving the EU was really small at that stage. Europe has not been able to prosper its economy, it merely pumped 3 trillion euro into a situation that was never going to work and now that 750 million Europeans realise that they all need to pay 4,000 Euro just to stay where they are right now, that is angering more and more Europeans. the French were warned ahead, yet they decided to have faith in an investment banker above a member of Front Nationale, Italy was not waiting and is now in a stage of something close to civil unrest, which will not help anyone either. Yet the economic setting for Italy could take a much deeper dive and not in a good way. The bigger issue is not just that Carlo Cottarelli is a former International Monetary Fund director. It is that there are more and more issues shown that the dangers are rising, not stabilising or subsiding and that is where someone optionally told President Sergio Mattarella to stop this at all costs. Part of this was seen in April (at https://www.agoravox.fr/actualites/economie/article/a-quand-l-eclatement-de-la-203577). Now the article is in French, so there is that, but it comes down to: “Bridgewater, the largest hedge fund (investment fund – manages $ 160 billion of assets) of the world has put $ 22 billion against the euro area  : the positions down (“sellers”) of the fund prove it bet against many European (Airbus), German (Siemens, Deutsche Bank) French (Total, BNP Paribas) and Italian (Intesa Sanpaolo, Enel and Eni) companies, among others. The company is not known to tackle particular companies, but rather to bet on the health of the economy in general“. So there is a partial setting where the EU is now facing its own version that we saw in the cinema in 2015 with The Big Short. Now after we read the Intro, we need to see the real deal. It is seen with “Since 2011, € 4 billion has been injected into the euro zone (that is to say into commercial banks) by the European Central Bank (ECB), which represents more than a third of the region’s GDP. The majority of this currency is mainly in Germany and Luxembourg, which, you will agree, are not the most difficult of the area. More seriously, much of this liquidity has not financed the real economy through credit to individuals and businesses. Instead, the commercial banks have saved € 2,000bn of this fresh money on their account at the ECB until the end of 2017 (against € 300bn at the beginning of 2011) to “respect their liquidity ratio” (to have enough deposit in liquid currency crisis).As in the United States, quantitative easing allowed the central bank to bail out private banks by buying back their debts. In other words, the debts of the private sector are paid by the taxpayer without any return on investment. At the same time, François Villeroy de Galhau, governor of the Banque de France, called for less regulation and more bank mergers and acquisitions in the EU, using the US banking sector as a model.” Here we see in the article by Géopolitique Profonde that the setting of a dangerous situation is escalating, because we aren’t in it for a mere 4 billion, the Eurozone is in it for €3,000 billion. An amount that surpasses the economic value of several Euro block nations, which is almost impossible to keep with the UK moving away, if Italy does the same thing, the party ends right quick with no options and no way to keep the Euro stable or at its levels, it becomes a currency at a value that is merely half the value of the Yen, wiping out retirement funds, loan balances and credit scores overnight. The final part is seen with “The ECB also warns that the Eurozone risks squarely bursting into the next crisis if it is not strengthened. In other words, Member States have to reform their economies by then, create budget margins and integrate markets and services at the zone level to better absorb potential losses without using taxpayers. A fiscal instrument such as a euro zone budget controlled by a European finance minister, as defended by President Emmanuel Macron, would also help cope with a major economic shock that seems inevitable. Suffice to say that this is problematic given the lack of consensus on the subject and in particular a German reluctance. The European Central Bank has issued the idea late 2017, long planned by serious economists, to abolish the limit of € 100,000 guaranteed in case of rescue operation or bankruptcy bank (Facts & Document No. 443, 15/11 / 17-15 / 12/17 p.8 and 9)” (the original article has a lot more, so please read it!

It now also shows (read: implies) a second part not seen before, with ‘The European Central Bank has issued the idea late 2017, long planned by serious economists, to abolish the limit of € 100,000 guaranteed in case of rescue operation or bankruptcy bank‘, it implies that Emmanuel Macron must have been prepped on a much higher level and he did not merely come at the 11th hour, ‘the idea issued late 2017’ means that it was already in motion for consideration no later than 2016, so when Marine Le Pen was gaining and ended up as a finalist, the ECB must have really panicked, it implies that Emmanuel Macron was a contingency plan in case the entire mess went tits up and it basically did. Now they need to do it again under the eyes of scrutiny from anti-EU groups whilst Italy is in a mess that could double down on the dangers and risks that the EU is facing. That part is also a consideration when we see the quote by Hans-Werner Sinn who is currently the President of the Ifo Institute for Economic Research, gives us “I do not know if the euro will last in the long run, but its operating system is doomed“, yet that must give the EU people in Brussels the strength they need to actually fix their system (no, they won’t). The question becomes how far will the ECB go to keep the Eurozone ‘enabled’ whilst taking away the options from national political parties? that is the question that matters, because that is at play, even as Germany is now opposing reforms, mainly because Germany ended up in a good place after they enforced austerity when it would work and that worked, the Germans have Angela Merkel to thank for that, yet the other nations (like 24 of them), ignored all the signs and decided to listen to economic forecast people pretending to be native American Shamans, telling them that they can make it rain on command, a concept that did not really quite pan out did it? Now the reforms are pushed because there were stupid people ignoring the signs and not acting preventively when they could, now the Eurozone is willing to cater to two dozen demented economists, whilst pissing off the one economy that tighten the belt many years ago to avoid what is happening right now. You see, when the reform goes through Berlin gets confronted with a risk-sharing plan and ends up shouldering the largest proportion of such a machine, that mechanism will avoid the embarrassment of those two dozen Dumbo’s (aka: numnuts, or more academically stated ‘someone who regularly botches a job, event, or situation’), whilst those people are reselling their idea as ‘I have a way where you need not pay any taxes at all‘ to large corporations getting an annual 7 figure income for another 3-7 years. How is that acceptable or fair?

So we are about to see a different Euro, one losing value due to QE, due to Italian unrest and against banks that have pushed their margins in the way US banks have them, meaning that the next 2 years we will most likely see off the wall bonus levels for bankers surpassing those from Wall Street likely for the first time in history, at the end of that rainbow, those having money in Europe might not have that much left. I admit that this is pure speculation from my part, yet when you see the elements and the settings of the banks, how wrong do you think I will be in 2019-2020?

So when we go back to the Guardian article at the beginning and we take a look at two quotes, the first “As the European commission unveiled its economic advice to member states last week, the body’s finance commissioner, Pierre Moscovici, said he was hoping for “cooperation on the basis of dialogue, respect and mutual trust”“. I go with ‘What trust?‘ and in addition with ‘cooperation on the basis of dialogue merely implies that Pierre Moscovici is more likely not to answer question and bullshit his way around the issue‘ and as former French Minister of Economy he could do it, he saw Mark Zuckerberg get through a European meeting never answering any questions and he reckons he is at least as intelligent as Mark Zuckerberg. when we see “Cecilia Malmstöm, said “there are some things there that are worrying” about Italy’s incoming government“, she sees right, the current Italy is actually a lot less Euro minded than the setting was in 2016-2017, so there is a setting of decreased trust that was never properly dealt with, the EU commissions left that untended for too long and now they have an even larger issue to face. So that bright Svenska Flicka is seeing the issues rise on a nearly hourly basis and even as we see the play go nice for now, they will change. I think that in this Matteo Salvini played the game wrong, instead of altering an alternative for Paolo Savona and replace him after Sergio Mattarella is not re-elected, the game could have continued, now they are busting head to head where Matteo is nowhere near as experienced as Sergio is, so that is a fight he is unlikely to win, unless he drops Italy on a stage of civil unrest, which is not a good setting for either player.

We cannot tell what will happen next, but for the near future (June-September), it is unlikely to be a pretty setting, we will need to take another look at the Italian economic setting when the dust settles.

 

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On this Friday 13th

There have been a few events going on, with all the hustle and bustle from America we are moving towards a possible point that this nation will be officially renamed, when that happens other domino stones will be pushed into a different direction. Yet there is still time, so we can ignore it for now. What was interesting for me, was a Facebook mail that has all the elements of becoming a flame, a wave of emotions, intentionally set in that way. Yet the part that was actually interesting were the facts that it had. Those facts were indeed interesting to look into, yet not by themselves. At this very moment I am digging to confirm certain numbers and see if they hold up.

 

Income 2013 Income 2014 Change

Aetna, Mark Bertolini

$30.7M $15M -50%
Centene, Michael Neidorf $14.5M $28.1M 93%
Cigna, David Cordani $13.5M $27.2M 101%
Humana, Bruce Broussard $8.8M $13.1M 48%
United Health, Stephen Hemsley $12.1M $66.1M 546%
Wellpoint Joseph Swedish $17M $8.1M -47%

These are health insurances and their CEO’s. This group of 6 have in their hands the health options of the bulk of Americans. Now, before we act in outrage, which we might still do, we see that two of them lost half their income, which in the worst situation, that person (Joseph Swedish) makes in 2 days the same I make in a year. In opposition, there is Stephen Hemsley, who makes in a day, the same I would make in 6 years. Now, we can make this about the imbalance, yet that is not what this is about.

Let’s not forget that these are manages health carers. In September 2016 we saw CNN report “A recent report by Kaiser/HRET Employer Health Benefits forecasts that the average family health care plan will cost $18,142, up 3.4% from 2015. That’s faster than wage growth in America“, and “Premiums on the Obamacare exchanges are expected to rise by double-digits this year“. Now, we need to tread carefully here, health care systems require more work and they need to look to what happens in the future, not just what happens now, So when we see Aetna report in 2016 a total revenue of 60 billion, yet an operating earnings of 2.7 billion, we see that there is a margin, yet not an overly exaggerated one. This is part of a system for 23.5 million members. In this on page 7 we see that the revenue is comprised of commercial and governmental premiums totalling 51.5 billion. Yet it goes further, when we see the growth that Aetna has had, the merger deal with Humana, which is interesting as it is set as a 37 billion merger, yet when we see the quarter of quarter growth of 3 years at least, does it make sense to see this as a mere 37 billion dollar merger when the operating revenue has been in excess of 58 billion for well over 3 years? In addition, Aetna reported an operating gain against costs of over 30%, so when we see the CNBC quote on November 10th 2016: “The Affordable Care Act was built on a flawed model that required getting as many people as possible into the insurance system, Bertolini said. And he said he thinks the Republican Party will make good on its promise to repeal it“, we wonder with their operating profits, a managed health care system no less, what are we not seeing? As stated, compared to the revenue, the profits are not outlandish, yet the entire Obamacare issue seems to give another view, one that clashes with the view that we see at Aetna. Now consider another quote, one we see on December 13th 2016, in bizjournals.com. Here we see: “As one of its arguments against the acquisition, the U.S. Justice Department says the deal would drive up prices on health insurance exchanges in 17 counties where Aetna (NYSE: AET) and Louisville-based Humana (NYSE: HUM) now compete“, you see where there is competition, prices are pushed down, so how come I suddenly see an increase in health insurance exchanges? The final part is one that strikes a sting on the violin of chaos too. Consider the quote: “Bertolini also testified that Molina Healthcare Inc., which has agreed to buy Medicare assets from Aetna and Humana for $117 million if the merger is approved“, now let’s be honest that $117 million is nothing to sneer at, yet what are these Medicare assets exactly? Where is the write-off? You see, two companies with a total revenue exceeding $100 billion annually over the last 3 years, in that light $117 million is close to no blip on the radar (0.11%). So why was it mentioned, why put Molina Healthcare Inc. in the picture? Well, like the other two players, they have had quarter on quarter growth for 3 years too, more important, even as their revenue is not as impressive of the two others, we see that annual on quarter, 2015 brought close to 50% growth, whilst 2016 is expected to surpass the 30% mark, those are operating revenue growths nearly unheard of in this day and age. And this is not the adult media sales, this is healthcare, so as we expect that there will always be growth, we need to see where the interests are of these players. Let’s not forget that the picture is changing. Humana Inc. is a for-profit American health insurance company, they clearly state this, so what will become of Aetna when that merger goes through? How will the picture change and how will that impact the members? They are both Managed health care, yet Aetna is not outspoken ‘for profit’, the numbers do bear this out to some degree. Yet in all this is not about the members or patients. This is about the shareholders and both have plenty, the question becomes what direction will Aetna take? Will we see a board of directors that find themselves in agreement with the senate under Emperor Tiberius Claudius Nero, when in 19 AD they proclaimed: ‘Puer Pauper‘ (fuck the poor), which by the way coincided with the expulsion of the Jews from Rome, life is full of irony at times. The reason to make mention of this is because Israel has a health care system not unlike the Netherlands. A compulsory plan where all Israeli citizens are entitled to basic health care as a fundamental right. There a person can sign up with one of four official health insurance organizations which are run as not-for-profit organizations, this is where we see the massive difference. ‘run-for-profit‘ comes at a price and that price is the additional dividends that the members must pay the shareholders. It is not that simple, but you get the idea. In all this the fact that this approach made Israel 4th in terms of efficiency and Israel was ranked 6th healthiest country in the world by Bloomberg rankings. These are numbers any government could be proud of. Neither the US nor the UK make that top 10, according to the article in Bloomberg, the UK doesn’t even make the Top20. So as we realise a few numbers and this all leads to a lot of questions, we can agree that there is nothing against ‘for-profit’, yet who remains in the US with the option to afford this? Perhaps that is why the link to Molina Healthcare Inc., just a small token proclaiming to remain ‘for the people‘, whilst relying on tax deductions and write offs to remain ‘for the shareholders‘. However, let’s face it, these two (Mark Bertolini and Bruce Broussard) are almost the lowest ones on the Health Care CEO list of incomes, still making per day about what I make per year. Yet even as their incomes drew the attention, it is the coverage, the operating profits and the for-profit sides in some of these Managed Health Care groups, whilst we see places like fortune.com inform its upcoming ‘victims’ that the costs will go up: “costs are expected to grow 6.5% through next year. While costs have finally reached a point of equilibrium after years of double-digit growth” as well as “36% of employers are even considering a defined contribution strategy where they would provide a set sum of money to each employee to pay for health care, and if a health care plan exceeds that sum, the employee is on the hook for the remainder of the cost“, so whatever increased quality of life the Americans did not get, there is information that well over 10% of the employers have adopted this strategy. Such plans, especially with the for-profit health care managers will see a shift in costs, from employer to employee. Fortune.com gives as reason: “There’s two primary factors that affect health care costs: how much is being consumed and the price for services and drugs. As it turns out, prices aren’t what’s primarily adding to the rising trend. It comes down to more people consuming more care“. I personally believe that the truth is somewhere in the middle lane. Both the needs of an aging population and the pharmaceutical patents driving up prices as pharmaceutical patents are chomping down on maximised profit per pill. In this Forbes reported two days ago that the pharmaceuticals are not happy. Here we see the quote “Much of Medicare is now run by private sector insurers like Humana or Aetna, who already bid on drugs to get lower prices (this is known as Medicare Advantage)“, Yet President elect Donald Trump stated: “I worry today that the pharmaceutical industry has a very false sense of relief or security because of a Trump administration and a Republican Congress. I think we should recognize that the drug pricing issue is a populist issue. Americans are rightfully angry. The fault is not, surely, on the pharmaceutical industry’s shoulders, but we bear that because we make the drugs. We innovate the drugs, and as a result of that, whether we like it or not, or we want to try to explain it or not, we have to deal with it.” As stated more than once in the past, I do believe in capitalism, yet at what point does capitalism become plain greed? When we look at the top 20 pharmaceuticals, they are hiding behind a 2% growth, yet these 20 companies which include Novartis, Pfizer and Johnson & Johnson were making 547 billion in 2014, whilst we see that 13 of them are turning a profit with one of them 127%, these are only the 2014 numbers, the profits have been steadily increasing, at the expense of those requiring medication, at the expense of a health care system that can afford less and less. In all this we see that places like Pfizer kept a gross profit of well above 38 billion and they weren’t even the best scoring one. Yet, the connection go on a lot further. You see, with Pfizer we see James C. Smith who is also on the public board of Thomson Reuters, Suzanne Nora Johnson is also on the board of American International Group, Inc. (insurances). James M. Kilts serves on the board of MetLife Inc. as well as Nielsen Holdings N.V. The list goes on. A group of board members already on a massive income, adding the incomes from other boards where they serve with incomes most people dare not dream of. What is more interesting is how we see an almost illuminati sized cloud of interaction with media, insurances and other interactions. All essential and profitable for Pfizer. When we look at Novartis that list of directors takes an even more interesting turn. Ann Fudge who also serves on the board of the US Council on Foreign Relations, with additional functions at Unilever as well as the Northrop Grumman Corporation. Pierre Landolt, Ph.D. who is also the chairman of the Swiss private bank Landolt & Cie SA, a Financial Institution in Brazil and a few other enterprises. Andreas von Planta, Ph.D, linked to HSBC, Moller Finance, and the regulation board of the Swiss stock exchange and finally Srikant Datar, Ph.D., who goes beyond mere Novartis, with additional board placement with ICF International Inc., Stryker Corp. and T-Mobile US. The pharmaceutical boards read like a weave of corporate interaction with links all over the Fortune 500. A conspiracy theorists wet dream.

For us it is not about who they are connected to, but how such links could be used to maximise profits. The idea that the Pharmaceutical industry has its representation, and on the other side we see an optional Novartis with its board member Ann Fudge who also serves on the board of the US Council on Foreign Relations, how is that for hedging your bets on both sides of the profit sandwich?

On this Friday 13th we see news in the Guardian mention of the NHS winter crisis, we have been seeing from all directions the Obamacare and how Obamacare Premiums are expected to Increase by ‘Double Digits‘ in 2017, one can only hope that the first digit is a ‘1’. With pharmaceuticals and insurances both on the maximisation of profit, the people in several places are pushed in a corner with no place to go see about any options.

Only the superstitious will think that the health care news will be better tomorrow, it is Friday 13th after all.

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