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Whether it’s Coakley or Brown, the real winner in today’s election for Teddy Kennedy’s Senate seat will be the health insurance companies. Their stocks are rallying strongly:
Those quotes are just for today. Ranging from Wellpoint being up 3.69% to Humana being up 7.36% at the time I took the snapshot, health insurance stocks look to make billions for their investors today as they celebrate the absence of any true reform that would end the unlimited gravy train they continue to ride.
If Coakley wins, the horrendous bill that mandates purchase of health insurance policies with only minimal improvement of the worst practices of the health insurance industry is more likely to pass. Although some practices such as exclusion for pre-existing condtions and discontinuing coverage after reaching lifetime caps will come under some control, the new "captive" set of customers is expected to offset any losses from those "reforms". If Brown wins, the bill goes down and the health insurance industry continues its ability to insure only those on whom it makes inordinate amounts of money. This situation has no down-side for the investment community, and they are reacting accordingly.
23 Comments
I think your logic is wrong. Scott claims to support health care but wants it started over from scratch, and supported Romney Care. He is free to lobby real hard to bankroll the lobbyists without appearing to be kind of a hypocrite. And if Coakley wins by only a few votes some other Democrat might get scared and vote the other way.
Jim I suspect you are tired from blogging all night. Thanks for the effort.
The market doesn’t care about logic. It only reads what is happening. The market tells us reform is dead. I don’t like it, but I don’t doubt it.
But health stocks rose just weeks ago, allegedly on news that industry friendly reform was at hand. Now stocks are rising because there might not be reform?
This logic does not compute.
They began their rise when it became clear how watered down the bill was. Now that the MaSen race is telling us that the watered down bill has either no chance of passing or no chance of being improved (and hurting the insurance companies), the increase is accelerating. Where’s the problem?
Yeah, Jim really has it all wrong here.
Tue 11:15am “Managed-Care Stocks Surge, Hospitals Drop On Mass. Election “at The Wall Street Journal Online
Tue 10:44am STOCKS-Wall St rises on healthcare, McDonald’s upgradeat Reuters
Tue 10:42am Health stocks pull market higher as Mass. votes AP
yep.
Jim, can we all join the Amish?
If we do, I’m starting on my list of those to be shunned. It’s going to be pretty long…
LOL : ) Great, albeit depressing, post, thanks.
SO there is no difference in the market reaction to “reforms” on the table if Coakley wins and the lack of “reforms” on the table of Brown wins.
What’s the point of this piece again?
It’s really a very short piece. Please read it.
It’s not a binary either/or situation, either way the stocks will rally.
Bingo.
Somewhat off topic,but maybe not.
I wonder how the Big Tobacco stocks are doing after the secret meetings last Friday in Washington:
tobacco and supreme court
Washington Post Big Tobacco tries to avoid trip to Supreme Court – 2 days ago
As part of any effort to convince the government that it should skip a trip to the Supreme Court, the tobacco companies may have to drop plans to ask the …
Salt Lake Tribune – 362 related articles »
Big Tobacco tries to avoid trip to Supreme Court – Salt Lake TribuneJan 16, 2010 … Washington » Tobacco industry lawyers met secretly with Solicitor General Elena Kagan in an effort to avoid the government s last-ditch …
http://www.sltrib.com/News/ci_14209110 – Cached
Big Tobacco makes secret plea to avoid payout – Addictions- msnbc.comJan 16, 2010 … Big Tobacco makes secret plea to avoid payout. Industry wants to keep Supreme Court out of racketeering lawsuit …
http://www.msnbc.msn.com/id/34894780/ns/health-addictions/ – Cached
NOTE: Well, depending upon the outcome of these “negotiations” maybe there is new source of campaign funding.
If Obama wants to start recovering from all this, he should grow some balls. He also needs to more vigorously attack a common Main Street enemy Wall Street and big banks. See this Salon story:
Please, Obama, pick a fight with the banks: Wall Street whines that the meanie president is being unfair. It’s about time
http://www.salon.com/news/bank_bailouts/index.html?story=/tech/htww/2010/01/19/the_politics_of_anti_bank_rage
Great post, Jim!
You sure can’t argue with all of those green arrows pointing skyward.
I’m not sure it’s even possible to convert to being Amish… doesn’t one have to be born Amish?
Actually you can convert, but you have to know Pennsylvania Dutch (German)
Thanks, Elliott, but I’m not likely to learn Pennsylvania Dutch… or German. That language has never attracted me.
The increases have moderated some, but all five are still showing percentage changes that exceed today’s increase by the overall Dow index.
I guess we could consider those overall greater gains (compared to the Dow average) as a kind of “tell.”
Where ever that’s happening, we should possibly be worried, but definitely we should investigate.
This election, like all of them, is another “damned if you do, damned if you don’t.” Unless you’re a hated but wealthy corporation, that is. Sigh.
As I mentioned to Scarecrow earlier today in his thread, I’m very happy that I am not faced with voting in that one. There are very good arguments on both sides of the issue of voting for Coakley and of course Brown should be back in Cosmo, not in the Senate.
Sorry, Jim, but I think Brown is a bit long in the tooth now to be appearing in Cosmo again, even though he does have that vote-winning GOP hair!
Or, maybe not… I just saw another photo of him, in which he looks a bit younger.