|
"Bloodbath" Begins March 15; Debt Ceiling Hits; Treasury to run out of cash by June - NO FOOD STAMPS OR WELFARE THIS SUMMER?
Post by Superstation95.com Newsroom - Feb 26, 2017 Former White House Budget Director David Stockman has dropped a rhetorical bomb in his latest interview saying a deal made in October, 2015, between then-Speaker of the House John Boehner and then-President Barack Obama, will slam the country to a halt. “I think what people are missing is this date, March 15th 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015. That holiday expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.” Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity. To be clear, this Debt Ceiling Deadline comes in 16 DAYS. With about $200 Billion in cash on-hand, and with the Treasury burning through about $75 Billion a month, this means the United States government will run out of cash sometime in June. Stockman says: In a typical month we have 250 to 300 billion in revenue coming in… that will easily cover the debt service for a month… that will readily cover social security and other critical payments… but when it comes to paying grants to state and local governments, contractors, or the Army Corp of Engineers, or the Pentagon, or a whole range of other activities, if you don’t have the cash you put the bills in the drawer… I think that is what’s going to shock the system… and it will scare the living bejeezus out of Wall Street and financial markets because then you won’t have a sudden clarification or resolution to the problem.. and that could go on for days and weeks. … This is going to be a maelstrom like we’ve never seen before and the markets are not even remotely prepared for this… Fundamentals don’t matter anymore… nothing is being discounted… it’s all raging robo-machines and day traders thinking that somebody is going to come to their rescue no matter how absurd the bubble gets or how extended the whole system becomes. Stockman claims the fall out will be fast and unprecedented in its scale. He goes on to say: There is going to be a recession… and there is going to be no stimulus left to bail it out… and neither Trump or the Wall Street gamblers even remotely understand. … I see [President Trump] as the great disruptor… I don’t see him as someone who is going to bring about a solution… We have to have the system blow up first for all practical purposes… I think he does not yet understand the magnitude of the problem… the incorrigibility of what he’s inherited. …He doesn’t realize that this problem he is inheriting is a thousand times greater than anything he ever imagined… this is a monster. … Everything leaks and we’re learning in the Trump administration they’re as leak-prone as any I have seen… so it’s all going to leak out… and the stock market…the casino… is going to begin to realize the fact that there is no plan…there is no big fiscal stimulus… the whole system is heading into some kind of crash landing and that’s going to change the manic delusions that are underway today. While no one in Congress wants to vote to increase the debt ceiling, there really is no choice. But Congress may have another agenda - getting rid of Trump. And they may just be willing to allow this catastrophe to happen so they can blame it on Trump! But what Congress may not bank on, is that Trump sees what's coming and may just start issuing LAYOFF Notices to vast swaths of the federal government BEFORE the cash runs out. At that point, Trump will have done what is necessary, and blaming him won't work. Then, too, let's just examine for a moment, what it would mean if Food Stamps (SNAP), Welfare, Section 8, and the like, all end in June. By July, the savages will be on the rampage nationwide because their EBT Cards are useless! But perhaps that's the plan? Perhaps it is long overdue for a complete meltdown of American society in its present form? From June, forward - after the bloodbath -- only the strong would survive. Maybe that's what some are looking to do? Stay tuned, folks, this could get ugly. You’re Overpaying for Drugs and Your Pharmacist Can’t Tell You
by Jared S Hopkins Bloomberg.com February 24, 2017, 5:00 AM EST February 24, 2017, 9:52 AM EST
Eric Pusey has to bite his tongue when customers at his pharmacy cough up co-payments far higher than the cost of their low-cost generic drugs, thinking their insurance is getting them a good deal. Pusey’s contracts with drug-benefit managers at his Medicap Pharmacy in Olyphant, Pennsylvania, bar him from volunteering the fact that for many cheap, generic medicines, co-pays sometimes are more expensive than if patients simply pay out of pocket and bypass insurance. The extra money -- what the industry calls a clawback -- ends up with the benefit companies. Pusey tells customers only if they ask. “Some of them get fired up,” he said. “Some of them get angry at the whole system. Some of them don’t even believe that what we’re telling them is accurate.” Clawbacks, which can be as little as $2 a prescription or as much as $30, may boost profits by hundreds of millions for benefit managers and have prompted at least 16 lawsuits since October. The legal cases as well dozens of receipts obtained by Bloomberg and interviews with more than a dozen pharmacists and industry consultants show the growing importance of the clawbacks. “It’s like crack cocaine,” said Susan Hayes, a consultant with Pharmacy Outcomes Specialists in Lake Zurich, Illinois. “They just can’t get enough.” Bottom of Form The cases arrive at a critical juncture in the quarter-century debate over how to make health care more affordable in America. President Donald Trump is promising to lower drug costs, saying the government should get better prices and the pharmaceutical industry is “getting away with murder.” The Pharmaceutical Care Management Association, a benefits-manager trade group, says it expects greater scrutiny over its role in the price of medicine and wants to make its case “vocally and effectively.” Racketeering Accusations Suits have been filed against insurers UnitedHealth Group Inc., which owns manager OptumRx; Cigna Corp., which contracts with that manager; and Humana Inc., which runs its own. Among the accusations are defrauding patients through racketeering, breach of contract and violating insurance laws. “Pharmacies should always charge our members the lowest amount outlined under their plan when filling prescriptions,” UnitedHealthcare spokesman Matthew Wiggin said in a statement. “We believe these lawsuits are without merit and will vigorously defend ourselves.” Mark Mathis, a Humana spokesman, declined to comment. Matt Asensio, a Cigna spokesman, said the company doesn’t comment on litigation. “Patients should not have to pay more than a network drugstore’s submitted charges to the health plan,” Charles Cote, a spokesman for the Pharmaceutical Care Management Association, said in a statement. Benefit managers are obscure but influential middlemen. They process prescriptions for insurers and large employers that back their own plans, determine which drugs are covered and negotiate with manufacturers on one end and pharmacies on the other. They have said their work keeps prices low, in part by pitting rival drug makers against one other to get better deals. The clawbacks work like this: A patient goes to a pharmacy and pays a co-pay amount -- perhaps $10 -- agreed to by the pharmacy benefits manager, or PBM, and the insurers who hire it. The pharmacist gets reimbursed for the price of the drug, say $2, and possibly a small profit. Then the benefits manager “claws back” the remainder. Most patients never realize there’s a cheaper cash price. “There’s this whole industry that most people don’t know about,” said Connecticut lawyer Craig Raabe, who represents people accusing the companies of defrauding them. “The customers see that they go in, they are paying a $10 co-pay for amoxicillin, having no idea that the PBM and the pharmacy have agreed that the actual cost is less than a dollar, and they’re still paying the $10 co-pay.” On Feb. 10, a customer at an Ohio pharmacy paid a $15 co-pay for 15 milligrams of generic stomach medicine pantoprazole that the pharmacist bought for $2.05, according to receipts obtained by Bloomberg. The pharmacist was repaid $7.22, giving him a profit of $5.17. The remaining $7.78 went back to the benefits manager. Opaque Market Clawbacks are possible because benefit managers take advantage of an opaque market, said Hayes, the Illinois consultant. Only they know who pays what. In interviews, some pharmacists estimate clawbacks happen in 10 percent of their transactions. A survey by the more than 22,000-member National Community Pharmacists Association found 83 percent of 640 independent pharmacists had at least 10 a month. “I’ve got three drugstores, so I see a lot of it,” David Spence, a Houston pharmacist, said in an interview. “We look at it as theft -- another way for the PBMs to steal.” Lawsuits began in October in multiple states, and some have since been consolidated. Most cite an investigation by New Orleans television station Fox 8, which featured interviews with Louisiana pharmacists whose faces and voices were obscured. Tight Restrictions Many plans require pharmacies to collect payment when prescriptions are filled and prohibit them from waiving or reducing the amount. They can’t even tell their customers about the clawbacks, according to the suits. Contracts obtained by Bloomberg prohibit pharmacists from publicly criticizing benefit managers or suggesting customers obtain the medication cheaper by paying out of pocket. Pharmacists who contract with OptumRx in 2017 could be terminated for “actions detrimental to the provider network,” doing anything that “disparages” it or trying to “steer” customers to other coverage or discounted plans, according to an agreement obtained by Bloomberg. “They’re usually take-it-or-leave-it contracts,” said Mel Brodsky, who just retired as chief executive officer of Pennsylvania’s Keystone Pharmacy Purchasing Alliance, which buys drugs on behalf of independent pharmacies. OptumRx is among the three largest benefit managers that combine to process 80 percent of the prescriptions in the U.S. The other two, Express Scripts Holding Co. and CVS Caremark, haven’t been accused of clawbacks. CVS doesn’t use them, it said in a statement. Express Scripts is so opposed that it explains the practice on its website and promises customers will pay the lowest price available. Potential Death Blow Pharmacies fear getting removed from reimbursement networks, a potential death blow in smaller communities. But some pharmacists jump at opportunities to inform customers who question their co-pay amounts.“Most don’t understand,” said Spence, who owns two pharmacies in Houston. “If their co-pay is high, then they care.” States are responding. Last year, Louisiana began allowing pharmacists to tell customers how to get the cheapest price for drugs, trumping contract gag clauses. In 2015, Arkansas prohibited benefit managers and pharmacies from charging customers more than the pharmacy will be paid. “The consumers don’t know what’s going on,” said Steve Nelson, a pharmacist in Okeechobee, Florida. “We try to educate them with regards to what goes into a prescription, OK? You’ve got to kind of tip-toe around things.” Why Biggest U.S. Creditors Are Selling Treasuries: QuickTake Q&A
by Brian Chappatta Bloomberg.com February 22, 2017, 12:00 AM EST It’s the biggest pile of debt in the world -- the $13.9 trillion U.S. Treasuries market. It’s been built with the help of foreign central banks and investors, who have clamored to buy U.S. government debt through good times and bad. But what happens if they lose their taste for Treasuries? With creditors from Tokyo to Beijing to London having second thoughts, we may be about to find out. 1. Have foreigners ever held this much U.S. debt? No. Nor has the U.S. ever owed so much. Foreign investors own $6 trillion in U.S. government debt, up from $3.08 trillion in 2008. (The share of debt owned by foreigners went down in that time period, to 43 percent from 56 percent, primarily because the Federal Reserve was buying so much itself.) 2. Why such rapid buying? Unconventional monetary policies from the European Central Bank and the Bank of Japan sent trillions of dollars of government bonds to sub-zero yields. That meant investors were essentially paying for the privilege of owning the debt. Many found that notion unbearable, so they flocked to the U.S., where yields remained positive, if still near all-time lows. 3. How do we know creditors are having second thoughts? They’re selling, a lot. Investors in Japan, the largest holder of Treasuries, culled their stakes in December by 2.39 trillion yen, the most in almost four years. China’s holdings dropped by the most on record during 2016. While the two countries still hold more than $1 trillion of debt each, this trend by America’s two biggest creditors has caught bond traders’ attention because it’s a departure from the buying binge of the recent past. Domestic investors likely picked up the slack, since benchmark 10-year yields climbed as much as 90 basis points from their lowest point on Election Night in November. 4. Why are they selling now? In part for the same reason a wide range of investors elsewhere have been selling, too. There’s a broader market trend that’s been termed the "global reflation trade" in which bond traders have been driving up yields in the belief that stronger growth in the U.S. and Europe, plus President Donald Trump’s ambitious plans for debt-fueled spending, will put an end to a long period of low inflation and the low interest rates that accompanied it. In addition, with good alternatives at home, investors may be pulling back out of a desire not to get caught up in any geopolitical drama sparked by Trump’s aggressive talk about a tougher approach to trade. 5. What’s the worry? For investors, a selloff of bond holdings -- or even just a drop in bond purchases -- risks reducing the value of outstanding Treasuries, harming portfolios. For the U.S., which relies on bonds to finance government deficits, reduced demand means higher borrowing costs, squeezing the budget even more as spending on an aging population is projected to dramatically increase. For Trump, the headaches are both economic and political. His policy proposals include big tax cuts and increased spending on infrastructure and the military, which could translate to extra debt, which would be a lot less affordable if borrowing costs go up. 6. What’s the political problem for Trump? Selling all that debt cheaply is going to require not just a domestic but a global buyer base. That need could collide with Trump’s plan for an aggressive campaign against what he calls unfair trading practices by other nations, most particularly China. Calling countries currency manipulators and threatening to erect big trade barriers isn’t a way to engender goodwill overseas. China could stop buying Treasuries or conceivably sell off much or even all of its giant reserves. That would leave permanent and long-lasting damage to the U.S. bond market. 7. Wouldn’t a big selloff hurt China, too? Yes. But it would hurt in the sense of short-term losses on investments; the pain for the U.S. of higher interest costs would sting for years. Higher U.S. borrowing costs would also spill over into the private sector, where companies have embarked on major debt sales to cheaply finance their own growth. But there are reasons China is unlikely to dump a vast amount of its dollar holdings. China’s U.S. securities are how the nation deals with its large trade surplus. (American companies must sell dollars to China in order to buy yuan so they can buy and import Chinese goods into the U.S.) They’re also how China fixes its exchange rate to the dollar. 11 Deeply Alarming Facts About America's Crumbling Infrastructure
ZeroHedge.com Feb 17, 2017 5:14 PM Submitted by Michael Snyder via The Economic Collapse blog, No matter what your particular political perspective is, if there is one thing that virtually everyone in the United States can agree upon it is the fact that America’s infrastructure is crumbling. Previous generations of Americans conquered an entire continent and erected the greatest system of infrastructure that the world had ever seen, but now thousands upon thousands of those extremely impressive infrastructure projects are decades old and in desperate need of repair or upgrading. The near catastrophic failure of the Oroville Dam is a perfect example of what I am talking about. We should be constructing the next generation of infrastructure projects for our children and our grandchildren, but instead we are in such sorry shape that we can’t even keep up with the maintenance and upkeep on the great infrastructure projects that have been handed down to us. Once upon a time nobody on the entire planet could even come close to matching our infrastructure, but now our crumbling infrastructure has become a joke to much of the rest of the industrialized world. Sadly, this is just another symptom of our long-term economic collapse. We simply are not able to put as much of our money toward infrastructure as previous generations of Americans did, and as a result we have a giant mess on our hands. The following are 11 deeply alarming facts about America’s crumbling infrastructure… #1 According to the American Road and Transportation Builders Association, nearly 56,000 bridges in the United States are currently “structurally deficient”. What makes that number even more chilling is the fact that vehicles cross those bridges a total of 185 million times a day. #2 More than one out of every four bridges in the United States is more than 50 years old and “have never had major reconstruction work”. #3 America does not have a single airport that is considered to be in the top 25 in the world. #4 The average age of America’s dams is now 52 years. #5 Not too long ago, the American Society of Civil Engineers gave the condition of America’s dams a “D” grade. #6 Overall, the American Society of Civil Engineers said that the condition of America’s infrastructure as a whole only gets a “D+” grade. #7 Congestion on our highways costs Americans approximately 101 billion dollars a year in wasted fuel and time. #8 According to the U.S. Department of Transportation, over two-thirds of our roads are “in dire need of repair or upgrades”. #9 In order to completely fix all of our roads and bridges, it would take approximately 808 billion dollars. #10 Federal spending on infrastructure has decreased by 9 percent over the past decade. #11 According to Bloomberg, it is being projected “that by 2025, shortfalls in infrastructure investment will subtract as much as $3.9 trillion from U.S. gross domestic product.” The quality of our infrastructure affects all of our lives every single day. For instance, we all simply take it for granted that safe, clean drinking water is going to come out of our taps, but recent events have shown that is not necessarily always going to be the case. Just ask the residents of Flint, Michigan. Water pipes, sewer systems and water treatment facilities all over the nation are aging and are in desperate need of repair. Of course the exact same thing could be said about our power grid. It was never intended to handle so many people, and on the hottest days of the summer the strain on the grid is very evident. And of course the power grid is exceedingly vulnerable to an electromagnetic pulse event, and this is something that I covered in my book on getting prepared. It has been projected that it would only cost a couple billion dollars to harden the grid against an EMP event, but our politicians refuse to spend the money. Meanwhile, President Trump is completely correct when he says that our airports look like something that you would see in a third world country. Most of our airports are at least several decades old, and they are definitely showing their age. But things are even worse when you look at other systems of mass transit around the country. While other nations such as Japan and China are investing huge amounts of money into high speed rail, we are doing next to nothing even though what we currently have is absolutely pathetic. I could go on and talk about our ports, schools, waterways, parks, etc. but I think that you get the point. President Trump’s instincts are right on the money when he says that he wants to spend a trillion dollars on infrastructure. Without a doubt, we desperately need it. The problem is that we are flat broke. We are 20 trillion dollars in debt, and we are adding more than a trillion dollars to that total every year. So where are we going to get the money? It is easy for liberals to say that we should raise taxes, but how much more are you going to squeeze out of U.S. consumers? Two-thirds of the country is living paycheck to paycheck, and we just learned that U.S. household debt has risen to a grand total of 12.58 trillion dollars. Once upon a time, America was the wealthiest nation on the entire planet and we could afford to construct bold, new infrastructure projects from sea to shining sea. But today we have the biggest mountain of debt in the history of the world and we can’t even afford to repair what we already have. When I speak of our long-term economic collapse, this is precisely the sort of thing that I am talking about. We have clearly been in decline for a very long time, and anyone that would suggest otherwise is simply not being honest with you. |
Archives
December 2020
Categories |
RSS Feed
