Kick the can…

From the WSJ:

Housing Market Masochism

The U.S. housing market is still wheezing: The Case Shiller home-price index has fallen for five consecutive months and 22.5% of all residential properties with a mortgage are in negative equity, according to CoreLogic’s latest data. Bank foreclosures are expected to accelerate, and prices in many markets still haven’t touched bottom. The Obama Administration’s solution? Prolong the pain.

The latest attempt at housing market masochism was reported in a page one story in this newspaper last week. Details are sketchy, but the idea seems to be to force the nation’s biggest mortgage servicers to cough up $20 billion for principal write downs on “underwater” mortgages, in which borrowers owe more than their homes are worth. The money would be extorted as part of a settlement for the mortgage foreclosure kerfuffle of last year. Bank of America, Wells Fargo and J.P. Morgan Chase would likely be among the hardest hit.

This smells like a re-run of the failed Home Affordable Modification Program, or Hamp. Launched in 2009, Hamp was supposed to keep homeowners in their homes. Instead, the program swamped mortgage servicers as debtors rushed for the goodies, gummed up the foreclosure process and left some borrowers worse off. Special Inspector General for the Troubled Asset Relief Program, Neil Barofsky, said in January that Hamp falls “dramatically short of any meaningful standard of success.”

The larger context here is that Americans are figuring out that the multiple government programs to prop up the housing market have only postponed the day of recovery. They have given homeowners the false hope that they can stay in homes they can’t afford, delayed foreclosures that are probably inevitable, and prevented prices from finding a bottom.

Better news for the housing market is coming from Congress, where House Republicans are moving to dump Hamp. Mr. Geithner played the recession scare card yesterday by telling a House committee that closing Hamp would “cause a huge amount of damage” to the economy. But Mr. Geithner has had two years to make a difference with Hamp, and he’s done more harm than good.

This entry was posted in Employment, Housing Bubble, National Real Estate. Bookmark the permalink.

95 Responses to Kick the can…

  1. grim says:

    From Reuters:

    Housing market needs more time to recover-Geithner

    The battered U.S. housing market still needs time to recover as affordable housing prices are up against headwinds of high unemployment, Treasury Secretary Timothy Geithner said on Tuesday.

    “By any judgement you still have a lot of damage for the market to absorb over time. That’s going to take a fair amount more time,” Geithner said in response to a question during testimony on the future of Fannie Mae and Freddie Mac before the House Financial Services Committee.

  2. grim says:

    From the Star Ledger:

    Hovnanian losses signal ongoing housing troubles

    In a sign that the construction industry continues to struggle, Hovnanian Enterprises, the state’s largest homebuilder, reported yesterday that it lost $64.1 million in its most recent quarter.

    The loss for the first quarter of 2011 came to 82 cents a share, higher than the average 66-cent loss that analysts had predicted. The company reported revenues of $252.6 million.

    The first-quarter loss compares with a gain of $236.2 million, or $2.97 a share, last year but that was entirely the result of a federal tax benefit.

    Hovnanian also reported a 13 percent drop in contracts compared with last year’s first quarter. Sales of both new and existing homes plummeted last year when an $8,000 federal tax credit for first-time home buyers expired.

    Hovnanian, which is based in Red Bank, has reported only one profitable quarter since 2006.

  3. jamil says:

    “The larger context here is that Americans are figuring out that the multiple government programs to prop up the housing market have only postponed the day of recovery.”

    Americans?
    I think he means community organizer in chief, professional Left and big business cronies.

  4. Mike says:

    Please someone explain what this means, is a write down being passed on to the buyer? :Details are sketchy, but the idea seems to be to force the nation’s biggest mortgage servicers to cough up $20 billion for principal write downs on “underwater” mortgages, in which borrowers owe more than their homes are worth.

  5. grim says:

    … To the shores of Tripoli!

  6. jamil says:

    ” is a write down being passed on to the buyer?”

    if you can’t find a sucker here, it is you.
    By you, I mean the taxpayer.

  7. grim says:

    From the WSJ:

    Regulators Push 20% Down Payments on Homes

    Banking regulators are pushing for mortgage-lending rules that require homeowners to make minimum 20% down payments on loans classified as lower-risk, according to people familiar with the matter.

    The proposal is being floated as a way to rewrite the rules for mortgage lending to prevent a rerun of the housing bubble and financial crisis that resulted from years of easy credit. The Dodd-Frank financial overhaul law enacted last year enabled regulators to define a so-called gold-standard residential mortgage that would be exempt from costly new rules.

    At least three agencies—the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency—back a proposal to require home buyers to put down at least 20% of the sales price in order to obtain one of these “qualified residential mortgages.” One proposal would also require borrowers to maintain a 75% loan-to-value ratio for refinances, and a 70% loan-to-value for cash-out refinances in which the borrower refinances into a larger loan, according to people familiar with the matter.

    Mortgage-finance giants Fannie Mae and Freddie Mac would also be exempt from the rules while they remain in conservatorship, according to these people. The U.S. took over the firms in 2008, and the Obama administration has proposed eventually winding them down.

    The behind-the-scenes debate over the proposal could have far-reaching implications for how Americans finance loans, because it addresses how much equity new borrowers should have in their homes.

    It is unclear whether the proposal will garner support among other regulators and be acceptable to the White House and Congress. Altogether, six federal agencies—the three supporting the proposal plus the Department of Housing and Urban Development, the Federal Housing Finance Agency and the Securities and Exchange Commission—must sign off on the proposal before it is released for public comment. It could not be determined Tuesday whether all the agencies would support the 20% down-payment standard.

  8. grim says:

    From Bloomberg:

    Mortgage Applications in U.S. Fell Last Week as Purchases Slid

    Mortgage applications in the U.S. fell last week, reflecting declines in purchases and refinancing that signal a lasting housing recovery will take time to develop.

    The Mortgage Bankers Association’s index of loan applications decreased 6.5 percent in the week ended Feb. 25. The group’s purchase index dropped 6.1 percent, and its refinancing gauge declined 6.5 percent.

    Unemployment at 9 percent may be holding back sales, at the same time mounting foreclosures limit construction and depress house prices. Recent gains in borrowing costs also have removed some of the incentive for purchases and refinancing, delaying a sustained rebound in the industry that triggered the recession.

    “The housing market is still fragile,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “But it looks like we are bouncing along the bottom rather than seeing new downside.”

  9. yo'me says:

    Regulators Push 20% Down Payments on Homes. Interest rates are going up.

    Will this be enough to get homebuyers start shopping before it becomes into law?

  10. grim says:

    From CNBC:

    Planned Layoffs Jump in February

    Planned job cuts rose sharply in February compared with January, with most of the layoffs coming from the government and non-profit sectors, according to figures from outplacement company Challenger, Gray & Christmas out Wednesday.

    Companies expected to lay off 50,702 workers last month, up 32 percent from the month before and up 20 percent than layoffs planned in February 2010.

    That was the highest level of planned cuts since March 2010.

    Planned layoffs in the government and private sectors soared 154 percent from January and 196 percent from the year-ago period. The US Postal Service cut 5,600 jobs in recent months, Challenger, Gray & Christmas said.

    ““It is too soon to say whether the increases in January and now February represent a trend,” CEO John Challenger said in a statement.” Certainly the specter of rising gas prices could impact employers’ staffing decisions over the next six months.”

  11. gary says:

    The Case Shiller home-price index has fallen for five consecutive months and 22.5% of all residential properties with a mortgage are in negative equity.

    tick…. tick…. tick…. tick….

  12. Dissident HEHEHE says:

    USA INC.

    Saw this little graph filled beauty kicking around the blogoshpere and not sure if it was posted here:

    http://www.kpcb.com/usainc/USA_Inc.pdf

    Feel free to share this gem with any of your friends and family the next time they tell you how we’re turning the corner.

  13. Shore Guy says:

    Hamp? HAMP!? I thought Timmy was in favor of hemp.

  14. Dissident HEHEHE says:

    Of course some people, usually the knee jerk public employee socialist MSNBC viewing variety, will say that reports like the one above are all right wing propaganda. I guess right wing propaganda = math.

  15. JJ says:

    Is someone who uses HAMP, a Hamper, if so I got some dirty socks I like to give them.

  16. sas3 says:

    At the National Governors Association, President Obama just threw his weight behind a bipartisan effort in the U.S. Senate to allow states to innovate with health reform, including adopting a public insurance system or single payer health care system by 2013 instead of 2017.

    The governors embraced the state innovations waiver proposal, since conservative states want to weed back the federal health reform, and states like California might like to push ahead with public insurance options or single payer health care systems.

    This will turn out interesting. Partisan hackery aside, I hope exploring multiple options will help find a solution that provides high quality health care to most (all?) at a much lower out-of-pocket cost and govt spending.

  17. Lone Ranger says:

    “The larger context here is that Americans are figuring out that the multiple government programs to prop up the housing market have only postponed the day of recovery.”

    Fantastic, the sheeple are beginning to understand?

    You can freeze, delay, postpone, manipulate, lie and print until you destroy the currency. It’s simply a hope and a prayer. Mr Market always wins in the end. Keep listening to the pundits. They are in the early stages of blowing this whole charade to smithereens.

  18. Kettle1 says:

    Hey look out for that ceiling!

    Total US Debt Hits $14.195 Trillion, $99 Billion Away From Debt Ceiling; Treasury Revises Breach Date To As Soon As April 15

    http://www.zerohedge.com/article/total-us-debt-hits-14195-trillion-99-billion-away-debt-ceiling-treasury-revises-breach-date-

  19. Kettle1 says:

    Mike,

    That works out to about 2K per underwater home owner. A joke at best given it would then probably make the banks immune from any previous back action

  20. chicagofinance says:

    Booya the Roubinator in action………..

    MICHAEL CORKERY
    A consulting firm founded by economist Nouriel Roubini said there could be close to $100 billion of municipal-bond defaults over the next five years as state and local government-debt problems damp the U.S. economic recovery.

    That figure would by most estimates represent a significant increase over defaults in recent history, but it doesn’t appear to be as dire as a prediction last year by analyst Meredith Whitney.

    Related Reading
    SmartMoney: Why Muni Bond Fears Are Overblown 2/1/11
    Financial Advisers on Munis: Don’t Panic 2/1/11
    Muni Bonds: Meredith Whitney’s Gloomy Forecast Gathers Doubters 2/8/11
    MarketWatch: The Great Muni Panic 2/8/11
    In Muni Bond Ills, Danger and Hope 2/9/11
    Illinois Bond Sale Gets Done at a Cost 2/24/11
    Hedge Funds Prop Up Muni Market—for Now 2/25/11
    Topics: Municipal Bonds
    .Mr. Roubini is known for his prescient warnings about the 2008 financial crisis. In weighing in on the muni-bond market, his firm joins a chorus of high-profile commentators who have offered their take on the fate of the once-staid market. It took a dive late last year and in recent weeks has made up some losses.

    The report, by David Nowakowski and Prajakta Bhide at Roubini Global Economics and released to clients Monday, says state and local debt problems aren’t “systemic” in nature, nor will they “infect the financial system.” The authors of the report declined to comment.

    Most of the defaults will occur among special government projects and revenue-generating entities that aren’t considered viable, it says. “Defaults will continue to be isolated events.”

    Tracking the total number of defaults can be difficult because they are concentrated among small bonds that aren’t rated by national rating firms. Those firms typically track the bonds they rate.

    Experience WSJ professional Editors’ Deep Dive: Muni Debt WatchORLANDO SENTINEL
    Road Board Seeks to Refinance Debt
    Dow Jones News Service
    Hedge Fund Buyers Fill Gap in Muni Demand
    Dow Jones Capital Markets Report
    Illinois Prices Pension Bond Deal Access thousands of business sources not available on the free web. Learn More S&P/Investortools Municipal Bond Index, which includes $1.27 trillion of municipal debt outstanding, reported $2.65 billion in defaults last year down from $2.9 billion of new defaults in 2009.

    Combined defaults of rated and unrated bonds were as high as $8.5 billion in 2008, according to some estimates.

    The Roubini report says that relying on the history of low default rates in the municipal debt market is “Pollyannaish.”

    “Avoiding a crisis will involve real austerity that has only partially been implemented thus far,” the report states.

    Still, the report points out that recovery rates for investors on defaulted muni bonds are typically about 80%, “far higher” than for corporate bonds. It also said an analysis of the Chapter 9 bankruptcy provision for municipalities shows bondholders retain strong protections.

    Ms. Whitney, an independent analyst who correctly predicted future bank troubles in 2007, last year made a controversial prediction of 50 to 100 sizable muni-bond defaults, totaling “hundreds of billions of dollars.”

  21. NJGator says:

    Charlie Sheen v Muammar Gaddafi: whose line is it anyway?The US actor and the Libyan leader have produced some choice lines recently. Can you distinguish between them

    http://www.guardian.co.uk/world/quiz/2011/mar/01/muammar-gaddafi-charlie-sheen-quiz

  22. JJ says:

    He is an idiot, read the article and it states no real defaults at GO level, good revenue level or any decent bond, he is talking junk bonds based on poor revenue streams may have higher defaults. Even then we are talking mainly “technical defaults”. What does this means, said Charlie Sheen? It means, buyers of junk muni funds searching for yield who don’t understand risk may get beaten like a red headed stepchild.

    chicagofinance says:
    March 2, 2011 at 9:08 am
    Booya the Roubinator in action………..

  23. Shore Guy says:

    Even if we hit the limit, it will not mean automatic default. There are ways of moving funds around. It will, on the other hand, put real pressure on those who refuse to act absent a freight train heading their way.

  24. Shore Guy says:

    “President Obama just threw his weight behind a bipartisan effort in the U.S. Senate to allow states to innovate with health reform”

    He was for healthcare reform legislation before he was against it?

  25. JJ says:

    HCBK, hudson city bankcorp just blew throught their 52 week low, two years ago you guys loved that bank. What up?

  26. JJ says:

    Guy weighs like a buck thirty

    Shore Guy says:
    March 2, 2011 at 9:50 am
    “President Obama just threw his weight behind a bipartisan effort in the U.S. Senate to allow states to innovate with health reform”

  27. borat obama says:

    First

  28. borat obama says:

    Hi. Fiveeeeee

  29. Shore Guy says:

    Count me in:

    http://www.politico.com/news/stories/0311/50489.html

    Poll: Some Americans would welcome a government shutdown

    Read more: http://www.politico.com/news/stories/0311/50489.html#ixzz1FSFHCDxr

  30. Shore Guy says:

    The moth moves closer to the flame, it sems.

    http://www.cnn.com/2011/SHOWBIZ/TV/03/02/charlie.sheen.sons/?hpt=T2

  31. Shore Guy says:

    snip

    Quinnipiac also polled on some of the budget questions that are troubling governments in Wisconsin, Ohio and other states.

    Government employees are paid too much, 42 percent of those surveyed said — a response from 59 percent of Republicans and 31 percent of Democrats. Six percent of Republicans and 24 percent of Democrats said public workers are paid too little.

    Sixty-three percent of those surveyed said they would support requiring public employees to pay more for their benefits and retirement programs, while 31 percent were opposed to such a proposal. Republicans and independents were stronger in their support of public employees paying more, with 72 percent of GOPers saying they want to see public workers contribute more, while 70 percent of independents said the same. Democrats are more divided – 47 percent said they support public workers paying more for their benefits, while 45 percent said they would oppose such a move.

    The voters surveyed were split along party lines in their support of – or opposition to – limiting collective bargaining for public sector unions. Fifty-nine percent of Republicans said they support collective bargaining restrictions, while 33 percent of Democrats and 45 percent of independents said the same.

    They were also divided over state politicians’ intentions with their efforts to limit collective bargaining, with 60 percent of Republicans calling it a cost-cutting measure, and 54 percent of Democrats saying it is an effort by Republican politicians to control unions.

    Read more: http://www.politico.com/news/stories/0311/50489.html#ixzz1FSGin0Ri
    snip

  32. sas3 says:

    Shore,

    “He was for healthcare reform legislation before he was against it?”

    C’mon… The rationale seems to be “if your state can find a better way to to cover as many or more than the HCR does, you can try that approach”. It’s far from a position “against HCR”. The Faux News types will jump on your (half serious?) question and peddle it as a fact.

  33. Anon E. Moose says:

    yo [9];

    Regulators Push 20% Down Payments on Homes. Interest rates are going up.

    Will this be enough to get homebuyers start shopping before it becomes into law?

    Before it comes into law?!? I can’t wait for it to come into law! When what was 3.5% FHA downpayment on a $500k POS cape needs to stretch into a 20% downpayment, the price drops to $87,500. I’m not predicting an 82.5% decline from peak, just illustrating the point – the weak buyers (and the weak product) need to get flushed out of the market for a recovery to begin.

  34. chicagofinance says:

    clot: more Q’s on this solar farm thing; from the standpoint of resale, would a farm sell for a substantial discount with panels covering 10% of the acreage?

  35. Juice Box says:

    re # 34- Moose FHA will still let you borrow up to 1.4 m for a Four-plex crapshak in Newark.

    As you know this is all political, they are talking the talk (mostly Geithner) of downsizing slowly Fannie,Freddie and FHA taxpayer guaranteed mortgages but do you think they are going to shut the money faucet off before the next election? Private banking is going to want allow more than 20% down to Finance in the future with it’s inherent risk, and no way stretching payments out 30 years.

  36. JJ says:

    20 % down, 20 year mortgages and low rates only to buyers with solid credit history is a dream come true for buyers on sidelines with a large downpayment waiting for prices to fall. Should knock another 20% off pricing. But this dream may not come true as broke dicks have rights to buy mcmansions in the USA

  37. Anon E. Moose says:

    JJ [37]: +1

  38. A.West says:

    sas3,
    Real innovation in health care reform would be to turn medical care back over to the market. The government already controlls over half of that industry, it’s not an “innovation” to figure out the details of having the government take control of the other half.

    Government schools are subpar, and would be whether planned by the local, state, or federal government (or all of the above). Three layers of bureaucracy in health care won’t fix the problem.

    Here’s a lecture that identified the problem way back in 1985 – the predictions are coming true, and solutions continue to be ignored:
    http://www.aynrand.org/site/PageServer?pagename=arc_leonard_peikoff_medicine_the_death_of_a_profession

  39. chi (35)-

    Out of my area of expertise on that one. My guess is that it depends on how much the panels may be pumping back into the grid, if anything.

  40. Outofstater says:

    News this morning: Libyan city of Al-Brega, an oil town, has been bombed by air, presumably by the Libyan air force. Just one bomb so far. American soldiers shot at the Frankfurt airport. Two dead, one badly wounded. Shooter from Kosovo is in custody. Good God.

  41. chicagofinance says:

    The end is nigh…..
    BOGOTA, Colombia – The mascot owl that was kicked by a soccer player is dead, with the apologetic perpetrator ordered to pay the bird’s medical bills and do volunteer work at a zoo.

    The owl, a good-luck charm for the Colombian team Atletico Junior, was kicked by an opposing player during a game Sunday in Barranquilla.

    The bird had been expected to recover from what were thought minor injuries, including a small fracture of its right leg. But Veterinarian Camilo Tapia said the owl went into shock after it was brought in for treatment.

    The owl had the bad luck to be hit by a ball and landed near the corner of the field. Deportivo Pereira defender Luis Moreno walked over and kicked the bird about three yards to get it off the field. He did not know it was the home team’s mascot. Fans at the game responded with cries of “murderer, murderer.”

    “I want to apologize to the fans,” Moreno said after the game, a 2-1 victory by Atletico Junior. “I was not trying to hurt the owl. I did it to see if it would fly. What I wanted to do was get it off the field. The kick was a product of tension on the field at the time.”

    Humberto Mendoza, the director of agency overseeing environmental issues in Barranquilla, said he was investigating possible sanctions against Moreno.

    “We are gathering information to determine the level of aggression,” Mendoza said.

    Mendoza said Moreno would have to pay the cost of treating the owl and visit a local zoo for volunteer work.

    Officials for Deportivo Pereira and Colombia’s soccer federation said Moreno also could face a suspension or fine.

  42. JJ says:

    can someone ban the spammer stephan and pray he rots in hell

  43. A.West says:

    Hehehe, (12)
    That USA Inc. report is rather interesting and depressing. They should have attempted a calculation of the NPV of future claims on taxpayers though. That’s the asset that the creditors are counting on.

  44. sas3 says:

    # A. West

    “medical care back over to the market”

    if it is completely up to the market forces, a big set of people will save small amount of money (e.g. pools of general healthy individuals; people that are fine with maximum life time limits) while a small set of people would be very badly affected (e.g. kids born with medical conditions). Market forces will be driven purely by profit motives, without much leverage to address exceptional cases (for the society in general and for customers).

    Some regulation on things like no maximum life time limits, no dropping people because they developed some new conditions, etc., are essential, and HCR does take care of that.

    Of course, over-defensive medicine and way too many needless tests and procedures (be it out of fear of lawsuits or plain greed of billing for each procedure) should be cut down. That will cut the overall cost of health care…

  45. Shore Guy says:

    This was the right decision, even though there must be a special p[lace in hell for the group getting protected:

    http://online.wsj.com/article/BT-CO-20110302-710444.html

    WASHINGTON (Dow Jones)–The U.S. Supreme Court ruled Wednesday that the First Amendment protects a fringe religious group that protested the funeral of a U.S. Marine killed in Iraq.

    The court, in an 8-to-1 vote, ruled that the soldier’s father could not sue Westboro Baptist Church of Topeka, Kan., for celebrating his son’s death with a funeral picket that included signs saying “Thank God for Dead Soldiers” and “God Hates You,” along with more vulgar messages.

    The case was a test of how far the First Amendment goes in protecting offensive speech.

    “As a nation we have chosen … to protect even hurtful speech on public issues to ensure that we do not stifle public debate,” Chief Justice John Roberts wrote for the court in a 15-page opinion. “That choice requires that we shield Westboro from tort liability for its picketing in this case.”

    Roberts said the group’s messages “may fall short of refined social or political commentary,” but the issues they highlight, including the political and moral conduct of the United States and homosexuality in the military, “are matters of public import.”

    That the group was protesting at a funeral didn’t transform the legal analysis, Roberts said. He noted that the protest was not unruly and took place out of sight of those attending the church funeral service.

    “Any distress occasioned by Westboro’s picketing turned on the content and viewpoint of the message conveyed, rather that any interference with the funeral itself,” Roberts said.

    The Westboro church believes that any misfortune America suffers is divine punishment for the nation’s failure to follow the sect’s doctrine, which condemns gays, Catholics, Jews and others. The tiny church, whose membership largely consists of the founder’s family, pickets military funerals to get attention for its message.

    In March 2006, the church’s leader, Fred W. Phelps Sr., and several of his relatives selected the funeral of Lance Cpl. Matthew Snyder, who was killed in Iraq, at St. John’s Catholic Church in Westminster, Md., as a vehicle for their cause.

    snip

  46. Shore Guy says:

    Sastry,

    The medical “system” in this country is over lauded. We do have the best technology and some of the most gifted surgeons but, we lack a coherent system. Too much money is wasted on defensive treatments, on medical practice management, and other aspects of healthcare that do not benefit patients.

  47. Kettle1 says:

    Doom

    Your favorite foreign outpost is feeling the pinch

    SANTIAGO (Dow Jones)–Chile’s government will delay pushing clocks back an hour for daylight savings time for three weeks as it seeks to stave off a power shortage, Energy Minister Laurence Golborne and government spokeswoman Ena Von Baer said Wednesday, according to local newswire Valor Futuro.

    The government recently implemented preemptive measures, such as reducing voltage by 5% to 10% and saving more water in reservoirs, to avoid power cuts as a severe drought curtails hydroelectric energy production on the central SIC power grid.

    The SIC grid provides energy to over 90% of Chile population and runs from the northern city of Taltal to the southern island of Chiloe.

    Clocks were originally scheduled to fall back an hour March 12 as Chile enters autumn.

    Extending summer hours, “has a relatively low impact in [energy] consumption…but it delivers an important message to residents,” Golborne previously said.

  48. Anon E. Moose says:

    I need a scorecard or something… Kettle1 [reprise] == Cat?

  49. Kettle1 says:

    Moose,

    yes

  50. i have been checking your site site for a despite the fact that now, would seem like everyday i study one thing new

  51. joyce says:

    (47)
    Why is it then that the number and percentage of uninsured has increased as the amount of government involvement has increased?
    Why do some people always cry out that everyone needs health insurance… and not that they need health care? (as if they are one in the same)
    The problem is the lack of a pricing mechanism and the third-party payer system (being either your insurance company or the government). When someone goes to the doctor for an annual check-up, do they have any idea how much that office visit costs? Do they care? I know I don’t. I pay my co-pay and that’s that. If I had to pay the entire amount, I would care and shop around for the best deal (the quality in relation to cost). That goes for the simple things like office visit as well as procedures/surgeries. Do you not think that the competition would lower prices? What’s wrong with that?

  52. Barbara says:

    Joyce
    way back when there was something called “major medical.” That’s all the insurance my parents had. It covered the big stuff, office visits and common RX was paid out in cash. An office visit was 35 dollars in 1984. Not a copay, cash in full.

  53. still_looking says:

    Any recommendations for a good rib/bbq place in northern nj?

    sl

  54. Anon E. Moose says:

    SL [55];

    Not NNJ, but if you don’t mind the drive I like Big Ed’s on Rt. 34 in Matawan.

  55. Mike says:

    Number 55 Tiffany’s in Union that’s what they’re famous for, Ray Liotta frequents the place when’s he home. Not sure but I think they have another in the Fairfield area.

  56. d2b says:

    Barbara 54-
    Surprisingly the cost without insurance as only doubled in 27 years. A physical for school, camp, or work is only about $70 at CVS minute clinic or Concentra. Even stitches at one of these places is only $200. There costs are not outrageous because everybody pays.

    One problem that I see people don’t use these services, opting to go to the ER because they are stupid. Then the ER jams a $500 bill on them and they don’t pay it.

    Health Savings accounts are one of the best ideas that I have see in a while. They combine major medical and a savings account that would roll over each year. Somebody that uses little care could put away quite a bit in their 20s and early 30s.

  57. Barbara says:

    59.
    d2b,
    There are many seriously diseases whose diagnosis starts at a routine drs visit. If I am having vague but persistent symptoms, I’m not going to the CVS minute clinic, I’m going to the family physician. CVS minute clinic is a novel idea but I wouldn’t be surprised to see it go the way of double coupons in a few years. Its a gimmick imo, and won’t change the third party payer system in any meaningful way.

  58. chicagofinance says:

    The end is nigh…..
    They want to rename the 59 Street Bridge the Ed Koch Bridge….!!!!!!!!!!!!!!

  59. Barbara says:

    d2b,
    but I get what you are pointing out, its a small example of the market working. I get that and agree.

  60. yo'me says:

    We should be directed at reforming our health care cesspool. We pay 10 times what we should for prescription drugs because of our absurd method of financing research through government granted patent monopolies. This government intervention gives an enormous incentive for drug companies to lie about the effectiveness and safety of their drugs, something which they do with considerable frequency. There is a similar story with medical devices.

    Our doctors also get paid far more than doctors in other wealthy countries. This is not true for our retail clerks and our steelworkers. The reason is that our doctors enjoy much greater protection from international competition than less politically powerful workers. We need to reduce the barriers that sustain the high salaries for doctors in the United States.

    We could also be trying to motivate people to support a Medicare buy-in that could save hundreds of billions in administrative costs over the next decade. Or, in keeping with his “freedom” theme, how about just giving Medicare beneficiaries the option to buy into other countries’ health care systems with the beneficiary and the government splitting the savings?

    So, the basic question is whether we confront the powerful interest groups who profit from our broken and corrupt health care system or whether we beat up the retired and disabled workers who depend on Social Security and Medicare.

  61. chicagofinance says:

    extremely valuable

    All You Need to Know About Why Things Fell Apart: Michael Lewis
    http://www.bloomberg.com/news/2011-02-16/all-you-need-to-know-about-financial-crisis-commentary-by-michael-lewis.html

  62. chicagofinance says:

    This is cool:
    Michael Lewis just talking, not trying to sell a book or be political….
    Plus Tom Keane always kicks ass with his bombastic pomposity….
    http://www.bloomberg.com/video/66400062/

  63. sas3 says:

    Yome,

    “Our doctors also get paid far more than doctors in other wealthy countries.”

    Getting past the posts that question how dare you are for deciding how much doctors get paid, and some on how doctors are suffering…

    Some factors for extra cost/protection. MD education is *very* expensive here: 4 year college + 5 year MD (versus a total of 5 year program in many countries). Then there are these frivolous lawsuits that will be judged by a jury not familiar with medical issues. Then there are some doctors that own supporting facilities that really milk the system one procedure at a time. Have some personal experience at one of the clinics where they made me go through multiple expensive tests after my physical — turns out for no reason, I went to a different specialist than the one they recommended and he simply laughed at how much time and money were wasted on the tests.

    “how about just giving Medicare beneficiaries the option to buy into other countries’ health care systems”
    How will it work? Except for very expensive procedures, medical tourism is not cost effective, unless it is to some Dutch city!

  64. Al Mossberg says:

    63.

    Yome,

    What makes you think you can dictate what someone should earn?

  65. still_looking says:

    Moose and Mike,

    Thanks! We gave up and went for pizza :)

    Maybe next week…

    sl

  66. yo'me says:

    Rising medical expenses is the main driving force of our deficit.Just like pensions,property taxes,will never come down until the gubmint figure a way.You can always open the border for foreign MD’s. US pays 10x more than developed countries.There are studies,bringing it down to that level,the US will be running a surplus.

    I just look at a medical bill for a procedure.Doctor send a bill for less than $2000 to the insurance.The insurance paid $500 and was told they are in contract with us.Why not charge what the insurance will pay and becomes the customary rate,so the uninsured don’t get screwed and loose their pants because they got sick.

    If they charge $2000 and take $500 as a payment,they are over paid!

  67. Confused In NJ says:

    59.d2b says:
    March 2, 2011 at 5:40 pm

    Health Savings accounts are one of the best ideas that I have see in a while. They combine major medical and a savings account that would roll over each year. Somebody that uses little care could put away quite a bit in their 20s and early 30s.

    Health Savings Accounts are linked to the 2003 Consumer Driven High Deductible Medical Plans implemented along with Medicare Part D. To have an HSA, you must be in a High Deductible Plan where you currently pay the first $2,400 out of pocket based upon an IRS table. That’s on top of your health insurance premium. You also can’t keep your HSA once you are age 65 on Medicare.

  68. Barbara says:

    Confused,
    last I checked. HSA are utterly useless in NJ. The required insurance plans they attach to these HSAs are so expensive, and coer so little – you may as well just buy the full plan. A couple tests and a little bloodword and you are out of a years worth of HSA, and if you have kids, forget it.

  69. Barbara says:

    erm, blood work.

  70. d2b says:

    Confused-
    Understood. A plan that offers users an incentive to keep costs low by offering a measurable reward has some merit. This plan could also have a catastrophic angle so that insured people don’t face bankruptcy. I like this as a government option instead of trying to develop comprehensive coverage for every knee scrape. Maybe the answer should be to develop a new model, like the old major medical.

  71. chi (42)-

    In a place like Baranquilla, this guy is gonna meet the same end as he would had he killed an Escobar.

    “Officials for Deportivo Pereira and Colombia’s soccer federation said Moreno also could face a suspension or fine.”

  72. Confused In NJ says:

    73.d2b says:
    March 2, 2011 at 9:06 pm
    Confused-
    Understood. A plan that offers users an incentive to keep costs low by offering a measurable reward has some merit. This plan could also have a catastrophic angle so that insured people don’t face bankruptcy. I like this as a government option instead of trying to develop comprehensive coverage for every knee scrape. Maybe the answer should be to develop a new model, like the old major medical

    The problem with Consumer Driven Health Plans are they are predicated on you the consumer having access to critical information to make intelligent medical choices. In reality this information is not available to you. As an example, Medicare shows you the actual procedures associated with charges incurred by you. The private plans rarely do. If you try to cost shop you run into the wall of needing the specific CPT code to get an estimate. After significant personal research you find that hospitals in less affluent areas are significantly more expensive as they load up bills for insured patients with overhead from more indigent patients. The Private Insurer will give you an area estimate for a procedure which turns out to be 1/10th of the actual cost. The High Deductible Plans also split you into Network versus Non Network. If you are forced to go Non Network your initial out of pocket cost is $7,200 with Insurance paying 60% until you hit your maximum out of pocket of $33,000. Bear in mind the Insurance Company does not share information with you to make intelligent choices, rather they act as a record keeper, especially of your direct expenses. Luckily, High Deductible plans only apply to the private sector, they were never imposed on Public Sector employees or retirees.

  73. babs (60)-

    I am happily uninsured and have gotten very used to it. Anything major happens to me, let me friggin’ croak. That way, the rest of the family cashes in on my life insurance (term, of course).

  74. confused (70)-

    I could be wrong, but aren’t HSAs eliminated as part of Obamacare?

    I think I heard somewhere that holders of savings in these plans have a date by which they must “use it or lose it”.

  75. Confused In NJ says:

    71.Barbara says:
    March 2, 2011 at 8:55 pm
    Confused,
    last I checked. HSA are utterly useless in NJ. The required insurance plans they attach to these HSAs are so expensive, and coer so little – you may as well just buy the full plan. A couple tests and a little bloodword and you are out of a years worth of HSA, and if you have kids, forget it

    Very True, Unfortunately. Last year I spent $13K out of pocket, primarily because Mrs C. needed a procedure only performed around here by a non network doctor. The Consumer Driven Health Plans foisted on us in 2003 are High Deductible with lower Coverage and More Restrictions. They don’y save any money, they simply pass the cost off to the patient.

  76. Thank God I still get the pleasure of watching Ron Paul ream the Bernank a couple of times a year. Were I at all of the mind that we were not already firmly in a major depression which will take 1-2 generations to overcome, I would find Paul’s rise to chairmanship of his committee a hopeful sign. Unfortunately, all reasons for hope were long ago extinguished for our bankrupt, fascist banana republic of a country.

    “The must watch 5 minutes from today’s second day of Bernanke hearings before congress is the following interaction between the Chairman and his archnemesis: Ron Paul. The first brilliant rebuttal by Ron Paul has to do with the ongoing “Federal Reserve lecturing” on why Congress should not allow out of control deficits to escalate. As Paul so correctly put its, “the Congress and the Fed are symbiotic because the Congress spends and they know there is a moral hazard involved because they know that if interest rates go up, the Fed accommodates them. So the Fed really facilitates this spending, and until we realize this I think the Fed is involved with our deficit and encourages it as well as the Congress.” This is an absolutely smack on point which goes to the whole heart of the real premise behind QE2: keeping rates low so there is no prohibitive lever against runaway deficits. That, and of course, ending up the primary holder of US debt so that the Treasury can convert “interest expense” into “revenue.” And if the 10% of the public that benefits from a Dow 36,000 believes the false “wealth effect” myth in the process (nominal, not real) so much the better. It did, after all, work for a while in Weimar Germany. And while Paul touches on other key topics such as purported price stability (there recently was a scientific paper proving there has been no real change in price stability before and after 1913, which we will track down shortly), real plunging employment and the definition of the dollar (to which Bernanke’s repartee that “Consumer don’t want to buy gold” should probably be reevaluated in light of today’s all time record high price). Yet one exchange that was missing, which was not between Paul and Bernanke had to do with Bernanke’s reasoning why in his view it was not possible to get back to the gold standard: “there is not enough gold.” That, unfortunately, is the most patently absurd claim ever and coming from a Fed Chairman we are pretty confused by its implications. Surely Ben realizes that all that matters is the price equivalent ratio of conversion. There will be more than enough gold if gold is converted instead at $2,000/oz at $20,000, or failing that, $200,000 and so forth. There will be more than enough gold if one ounce is equivalent to a million piece of linen or more, or more realistically, at $6,300 as Dylan Grice quantified previously. We guarantee it. And after all, that is the whole point of a gold standard: not to dilute the currency infinitely.”

    http://www.zerohedge.com/article/watch-highlight-todays-congressional-hearing-ron-paul-vs-bernank

  77. Nothing to be taken away from the fact that CNBC cut away from the hearing just as Paul was tucking into the Bernank…

  78. Confused In NJ says:

    77.Debt Supernova says:
    March 2, 2011 at 9:30 pm
    confused (70)-

    I could be wrong, but aren’t HSAs eliminated as part of Obamacare?

    I think I heard somewhere that holders of savings in these plans have a date by which they must “use it or lose it”.

    Possibly, but who knows what will happen with Obamacare. They talk about High Deductible Plans linked with HSA’s as a wonderful choice for the Market Place. In reality many large employers did not offer a choice, they arbitrarily changed everyone to a High Deductible Plan, without choice, to save money. The record keeping alone with these plans is a nightmare. Given the choice I would have gladly payed a higher premium for a Traditional Indemnity Plan. My spreadsheets tracking this nightmare insurance are out of sight.

  79. cobbler says:

    I am not sure CVS minute clinic is a good place to have a physical unless the purpose of the physical is to get the quickest and cheapest sign-off on your kid’s medical forms for the summer camp. In any case, paying for the physicals is not a major contributor to the healthcare costs. However, the fact that the U.S. has something like 75% (I forgot where I saw the number, couldn’t re-discover it) of the global park of the medical equipment costing >$1 mln per piece, IS a major contributor. In most countries MRI machines, proton accelerators, etc, are used more or less 24/7 as the single payer wouldn’t allow purchases of more equipment while the existing is not well utilized. Here, every hospital wants every possible piece of hardware as it is a profit center – and the procedure charges include hundreds and thousands in depreciation.

  80. confused (81)-

    However health insurance plays out, the endgame is clear: big insurers win; you and I lose.

  81. Things could get a little better if we could accept the fact that big insurance and big medicine both have a vested interest in keeping as many people as possible fat, fearful and riddled with disease.

  82. Barbara says:

    78.
    Confused. I can see if you are just out of college, 22 yrs old and your employer has this option (HSAs), but as soon as pregnancies, babies and cancer screenings start, they are worthless.

  83. Barbara says:

    Health insurers serve no purpose outside of inflating costs. I hesitate to use the term because its getting overused but……mafia about nails it. Remember when the mob in NJ pulled strings in NJ and got a bogus 10 cent a month charge on everyones phone bills? Late 90s? Yeah, kinda like that.

  84. Confused In NJ says:

    86.Barbara says:
    March 2, 2011 at 10:29 pm
    Health insurers serve no purpose outside of inflating costs. I hesitate to use the term because its getting overused but……mafia about nails it. Remember when the mob in NJ pulled strings in NJ and got a bogus 10 cent a month charge on everyones phone bills? Late 90s? Yeah, kinda like that

    Exactly True. In a saner environment most people had the Old Blue Cross/Blue Shield Insurance which were “Not For Profit”. For Profit Healthcare is a contradictary concept. You can’t have both as an Objective.

  85. Firestormik says:

    Well, our pediatrtion stopped accepting any insurance and I understand him. He used to be being paid $26 a visit by Oxford. Right now it’s $90 per visit and I don’t mind paying it. At least we don’t have to wait for him for ~hr. My time costs more

  86. Barbara says:

    87.
    Confused
    After all, its the law that the optometrist cannot profit from the sale of glasses.

  87. Anon E. Moose says:

    Barbara [86];

    Health insurers serve no purpose outside of inflating costs.

    Heath insurers (can, in best case scenarios) act as mutual agents to better negotiate costs of black swan events than any individual can. Analogize it to AAA roadside coverage. I don’t know that I will need a tow truck in E. Podunk, WY on a given day to negotiate the cost of that hypothetical tow in advance. I am certainly in no position to negotiate with the tow driver on the roadside with my car smoking in the rain. AAA can reasonably predict that in any given month, 25 of its vastly greater number of members will need a tow in Cheyenne Co., WY, and can negotiate with a provider on that basis to limit the costs. AAA collects a fee from the members for this service.

    Considering then what used to be called “major medical”, I don’t know whether my spouse may need an apendectomy, or I a back surgery, or my kid a tonsilectomy, with sufficient certainty to negotiate reasonable costs for these services with providers in advance. Absent the intermediatry, I would be at the mercy of the provider in an emergency situation. The intermediary gives the pool of individuals negotiating power they would not otherwise have.

    The problem you raise is the insurer keeping some/all/too great a portion of the difference for themselves. Perhaps, but I seriously doubt that the net cost of health care to the covered individuals is greater than it would have otherwise been by the amount of profit taken by the insurers.

  88. Anya says:

    This really is something I need to do more research into, many thanks for the publish.

  89. Will you be talking more about this particular Genre.

  90. I dont speak on countless internet sites that I come across but I felt I couldn’t pass up the chance with this 1. Terrific post. I can only imagine what you will be writing inside the future.

  91. ibinakiwew says:

    rCyMpY rtjptsqlhtqd, [url=http://mcdivzurwlcs.com/]mcdivzurwlcs[/url], [link=http://kxbarfcyzdeo.com/]kxbarfcyzdeo[/link], http://uxboromxgnwv.com/

Comments are closed.