James Woolley's blog

Some Choice Comments on the Health Insurance Legislation

Some outstanding and brief comments from around town on the recent passage of that health insurance legislation.

From Kaiser Health News,

Most health industry sectors are winners – some bigger than others -- under sweeping health care legislation that will expand coverage to 32 million uninsured Americans over the next decade, analysts say.

Hospitals, doctors, drug makers and most health insurers will pick up armies of new paying customers. Nursing homes and Medicare's private health plans will face steep government payment cuts, however.

From professor of economics at Middlebury College, Robert E. Prasch, from the New Economic Perspectives site at the Univ. of Missouri,

The Global Agenda: Privatizing the Planet -- Part Deux

SDRs, PPPs, the IMF, UN and World Bank

In the first installment of The Global Agenda: Privatizing the Planet, I attempted to establish the suggestion of the underlying foundation and causation for Public-Private Partnerships (PPP), that being debt financing, which propagates debt trading, debt swaps and various and sundry securitizations and securitized financial instruments.

Within this post, I shall attempt to establish the connection between the IMF's Special Drawing Rights (SDR), the creation of debt and those private-public partnerships as debt-affiliated vehicles which are a major force in the privatization of everything.

Admittedly, these connections may appear tenuous to some, but it is definite food for thought.

Exhibit 1

From an International Monetary Fund (IMF) report, dated March of 2006:

63. Public/ private partnerships (PPPs) are currently not covered in statistical guidelines. At the January/February 2006 meeting, the AEG agreed that the PPPs are sufficiently important to be described in the revised SNA. It also agreed that a list of indicators would be useful to help determine the economic owner of the fixed assets associated with a PPP but that it was necessary to examine arrangements on a case-by-case basis. An annex on PPP will be included in the SNA, with an understanding to keep abreast of developments in international accounting standards.[1]

Exhibit 2

The Global Agenda: Privatizing the Planet

Debt, Debt Trading and Why It Is Important

You don’t have to repay the advance we gave you last week, provided you spend half of it next week.

A bit of history on debt from Prof. Buckley of the University of New South Wales (Australia),

The beginning was in the early 1980s. And in the beginning were bad loans, and from the loins of these bad loans sprang debt-equity exchanges, which quickly begat debt-for-nature exchanges, and then debt-for-education exchanges, and most recently, debt-for-health exchanges. And today, when all the begatting has been done, the progeny are known mostly as debt-for-development exchanges, or sometimes as debt-for-investment projects (by those who wish to suggest for the technique a more commercial focus).

Where is the exchange when a rich country offers to cancel some of its loans to a poor country, if the poor country spends money on a development project? That’s like our saying to our daughter, ‘You don’t have to repay the advance we gave you last week, provided you spend half of it next week’. [1]

Thus we observe early forms of debt trading, of sorts.

In the debt-for-health segment of the professor's report, we also note:

The Global Fund to fight AIDS, Tuberculosis and Malaria, is another UN initiative. It is a public-private partnership which seeks to finance public health initiatives in developing countries.[1]

The honorable professor mentioned the early 1980s, so let us examine a presidential-level cabinet meeting which was taking place in the White House, 1600 Pennsylvania Avenue, USA, at that time.

The Big Short (Michael Lewis)

And That Giant Squishing Sound

A must-read book is Michael Lewis' latest: The Big Short: Inside the Doomsday Machine, truly an outstanding description of the factors leading to the meltdown.

While I hold Mr. Lewis in utmost respect as a thoroughly intelligent observer and author, as well as thoroughly honest, I disagree with his conclusions as well as one item in his book.

As Mr. Lewis was utilizing public sources, he can be forgiven if he was redirected, or misdirected on one item (which he honestly doesn't pinpoint as a ground zero event), where he identifies Michael Burry as the instigator of the naked swap, so to speak.

I resolutely believe this was in place long before Mr. Burry inquired into its creation, and there is much extraneous data lying around to validate this assertion.

One Thousand Names for Fraud

One sometimes hears a repeated exaggeration of the Inuit (inappropriately referred to as Eskimos) language, claiming that they have hundreds of words to describe snow. While the actual number is considerably less, this exurban legend does make its point.

I suspect that centuries from now, historians will remark similarly about 21st century America, stating that they had one thousand names for fraud.

The Blackstone Group: Tax Fraud Incorporated

A year or so ago, it was reported that the private equity firm, the Blackstone Group, was going public. Like many, I gave little thought beyond the fact that they had sought investment from China due to their brittle financial position at that time.

Recently, I came across an excellently written research paper by a law professor at the University of Illinois College of Law, Victor Fleischer, titled Taxing Blackstone.

2012: The Mayan Prediction

Alternative Thinking in Economics

I have a friend named Maya, who is very talented at advanced statistics. Over the weekend, together with some others across North America, we sat down to look over the numbers pertaining to unemployment. At least one was online via the telephone (that would be landline to you data comm and SS7 aficionados), the others communicated over the Web.

In looking at those numbers, together with correlating data, we arrived at some rough calculations that might give one pause.

The Cauldron: Healthcare costs, pension funds, LBOs, SPACs and PIKs

Double, double toil and trouble; Fire burn, and cauldron bubble. – Macbeth, by William Shakespeare

The financialization of the American economy certainly represents a bubbling cauldron, and the cauldron has bubbled over quite recently, and we sadly can look forward to further overflows.

This post is meant to build upon my previous post on healthcare cost drivers, as well as building upon a recent Instapopulist post by Robert Oak on the pension funds shortfall.

Previously, I had stated the premise of the rise in healthcare costs due to private equity firms' leveraged buyouts of health sector companies together with any and all speculation by healthcare hedge funds.

A Brief History of Securitization

Or....

Shadow Bankers Gone Wild

 

 

Preamble

Recently the New York Times published yet another article expressing surprise at the previous existence of securitized financial instruments prior to the last several decades. Securitized financial instruments, or actually securitization, has been around for at least several centuries, and whenever it becomes widely used a Great Depression, or economic meltdown, ensues.

This is the foundation for that bandied about term, “shadow banking.” Without securitization, there would be no such capability. With securitization, the process for creating debt-financed billionaires and multi-millionaires reaches critical mass.

Unfortunately, so to does the dramatic increase in unemployment and poverty.

Those so-called “experts” or “pundits” who continue misleading the populace with extravagant claims as to the recent origins of the securitization process have done a major disservice to society. This brief blog will attempt to rectify this situation.

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