Friday, August 23, 2013

The Man Who Was Treated for $17,000 Less

In this article the author made an important observation: 3rd party pay system caused the healthcare inflation. that includes all the private insurance on the market today. Instead of requiring everyone to have insurance, government should make health insurance with a deductible less than $20,000 illegal. That is only way to remove 3rd party pay system. The author's intention is to criticize Obamacare, but the system before Obamacare wasn't working, and the author knows that.

Sunday, August 18, 2013

Careful investment on higher education

The high cost of higher education in the US is a significant financial burden on middle class parents and students. Therefore the investment needs to be carefully considered. Just like any business decision, smart investment means limited resources is allocated in areas that demand is stable or growing, and the supply side is not overcrowded by excess capacity. Students need help to get these information and college has a responsibility to provide.

Misallocation of resources, be it housing, steel mills or individual skills, will make the society less productive and everybody poorer. People in position to guide others should take on the responsibility to help our youth make wise decisions.

One more thing to add: we should encourage our youth to start using Coursera and EDX as early as possible. A lot of practical wisdom can be learned from there with very little cost.

Saturday, August 17, 2013

Department of Justice sue to stop the merger of American Airline and US Airway today, citing consumers being hurt by higher prices and lesser choices. The market share of the companies: Delta (22%), Southwest (21%), United (17%), American (13%), and US Airway (12%), all others (15%).

The purpose of merge is to reduce industry wide capacity. Passengers are likely to face less choice and higher price.

While colluding to raise price is illegal, horizontal merger is not necessarily so. It is a complicated issue.

Argument for the merger 

Mom and Pop investors, stop trading!

Need to Know News subscribers were able to make split second trades to gain as much as 16% in value, according to WSJ, using government data they got a few seconds before everybody else. If you are investing in the stock market, your best chance is buy and hold a diversified portfolio that has low expenses. If you try hard to follow the economic news and trade on it, mostly like you will lose big.

Need to Know News under Federal Investigation

What kind of news service you would pay $375,000 to subscribe? 

"Need To Know News"!

Need to Know News under Federal Investigation 

Mortgage rates rised more than one percent in June

Treasury International Capital (TIC) published yesterday for June. China and Japan combined sold $42 billion of treasury security, likely in response to Bernanke's talk of tapering QE. The sudden rise of mortgage rates in June is certainly influenced by the two big creditors of the US. World economies are so interlinked today that policy coordination can not be over emphasized. We live in an interdependent world.

Why Indians are craving for gold?

India gold imports hit a record 162 metric tons in May as global prices fell, prompting government to impose a duty increase to 8 percent. The government wants to hold bullion imports this year to "well below" last year's figure of 845 metric tons. Indian Prime Minister Singh: "We seem to be investing a lot in unproductive assets." The real problem behind the appetite for gold is India's high inflation, running at 6% currently, and a depreciating Rupee. A slowing economy makes stock investment riskier. Gold becomes the asset of choice for saving.