Friday Night Blues -- NOT! Market Hits Record Despite Headwinds -- February 13, 2015; Health CO-OPs All (But One) Underwater -- Sinking Fast

Wow, where do I even begin?

With all the negative news being reported daily (and there will be a lot of negative news coming out tonight -- the usual Friday night news dump -- after close of business every Friday we see it -- but with all the negative news being reported daily, who would have guessed Wall Street would hit a record high on Friday the thirteenth.

Despite an administration that is the most-anti-business and anti-working class in modern history, or maybe because the administration is so anti-working class -- the market is hitting new highs. One has to remember, with an administration doing what it can to slow hiring, the Fed has no choice to keep rates low: over and over and over we're told the market is being driven by the "easy Fed." This administration is definitely not out to help the "working class":

• it will veto the Keystone XL (huge number of jobs lost)
• ObamaCare (very hard on the middle class)
• immigration policy / amnesty program (and that's where the jobs will go)

Be that as it may, Wall Street is on a roll. It's hard to believe, considering all the headwinds, and considering that a huge sector on Wall Street, the oil and gas sector, is down ten, twenty, thirty, forty percent depending on which specific company one might be looking at.

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Honda Accord Sales Beat Toyota Prius In California -- First Time Ever

Gas2 is reporting:

California is known for imposing tougher environmental regulations on car manufacturers than the EPA...

It became fashionable for every Hollywood star to have one parked in the garage alongside the Jaguar/Ferrari/Lambo. California has a lot of High Occupancy Vehicle (HOV) lanes on its many freeways and Prius drivers were allowed to use them even if they were driving alone. How cool is that? Eco-snobbery drove Prius sales through the roof, making it the best selling car in the state year after year.

Until recently.

During the first quarter of 2014, the Honda Accord muscled its way to the front of the line, edging out even the mighty Prius as California’s best-selling car. There are a couple of reasons for this.

The 9th generation Accord was released last year, so the 2014 Accord represents the latest thinking in the automotive universe. The Prius has been around, virtually unchanged, for almost 10 years. Its shape, once so trendy, is looking a little dated.

The Accord is a bigger car that has more room for families, and the hybrid version gets virtually the same gas mileage as the Prius (in addition to being WAY more fun to drive).  The Accord looks more mainstream, and doesn’t scream “hybrid” the way the Prius does.

The Accord only outsold the Prius by about 300 units (and limited supply could be hurting those numbers), but those sales numbers offer insight into trends in car sales nationally. Prius sales are down about 10% from a year ago, primarily because buyers have many more hybrid models from other manufacturers to choose from. Because California is such a trendsetter, the Accord/Prius battle there provides clues as to how the new car market will evolve in the rest of America over the next year or two.

So many story lines. I believe the "lone driver/Prius in the HOV lane" is being phased out this year in California, but I could be mistaken; don't quote me on that. If I'm wrong, it was the thought that counts. [Update: I was wrong: green decals for cars like the Prius -- hybrids -- are still valid -- but a limited number -- only 70,000. The thinking is that when the 70,000 is reached, the number of Priuses sold will fall quickly. Link here.]
 

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Busted

Forbes is reporting:

When Democrats were ramming Obamacare down Americans’ throats, many of them wanted a “public option” that was supposed to demonstrate just how efficient and affordable government-run health insurance could be. What they settled for was something called “co-ops”—which stands for Consumer Oriented and Operated Plans.

As the Washington Post explains, “The co-ops differ from traditional insurers in their nonprofit status, consumer focus and organizational structure; they will be governed by boards controlled by policyholders.” In other words, the co-ops would get rid of those greedy, self-interested actuaries and insurers who were profiteering on the backs of the sick. Not full-blown socialized medicine, but a good start.

Standard & Poor’s Ratings Services just released its assessment of the 23 state co-ops, and all but one are underwater.

Most co-ops’ weak operating performance is a result of high medical claims trend and not enough scale to offset administrative costs. … In fact, nine of the co-ops  reported a a medical loss ratio of 100% or more through September 2014.”

In short, the co-ops are leaking money faster than an Obama green energy project, or Obama’s student loan program. Some are even spending more on claims than they’re receiving in premiums and that’s before any administrative costs.

Need I say more? Nope, but I will. Later.