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SCOTUS Upholds Obama's Health-Care Overhaul

June 28th, 2012
in Gary's blogging

Obamacare Market Commentary For 06-28-2012

At 10 am the Supreme Court started its day with the decisions of the opinion in Stolen Valor. The markets were reacting with a very slight positive bias as 'dippers' and market gamblers tried to get in early.

When the 5-4 vote in favor of the ACA was announced the markets tumbled down and quick, recovered and down some more. It took a few minutes for the final sentiment to set the stage for the day which appeared to be positive, but on extremely low volume and I would be cautious in determining ANY direction. Right now it appears to be down.

Follow up:

Some quick notes from SCOTUSblog:

-The individual mandate survives as a tax.

-The mandate is constitutional. Chief Justice Roberts joins the left of the Court.

-The Medicaid provision is limited but not invalidated.

-The bottom line: the entire ACA is upheld, with the exception that the federal government's power to terminate states' Medicaid funds is narrowly read.

-The money quote from the section on the mandate: Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it.

-The court reinforces that individuals can simply refuse to pay the tax and not comply with the mandate.

-Justice Ginsburg would uphold Medicaid just as Congress wrote it. That, too, is not controlling.

-In opening his statement in dissent, Kennedy says: "In our view, the entire Act before us is invalid in its entirety."

-Justice Ginsburg makes clear that the vote is 5-4 on sustaining the mandate as a form of tax. Her opinion, for herself and Sotomayor, Breyer and Kagan, joins the key section of Roberts opinion on that point. She would go further and uphold the mandate under the Commerce Clause, which Roberts wouldn't. Her opinion on Commerce does not control.

@KeithMcCullough: These politicians are so far lost at this pt, that it can only end in their tears.

@zerohedge

U.S. SUPREME COURT UPHOLDS CORE OF OBAMA HEALTH CARE

Here we go:

  • OBAMA'S HEALTH-CARE OVERHAUL UPHELD BY U.S. SUPREME COURT

  • 5-4 decisions, with Roberts joining the court's liberals.

  • Court says federal government can’t threaten to withhold money from states that don’t fully comply on Medicaid extension

  • CHIEF JUSTICE ROBERTS SAYS MANDATE IS NOT A VALID EXERCISE OF CONGRESS' POWER UNDER COMMERCE CLAUSE AND NECESSARY AND PROPER CLAUSE

  • HEALTH LAW'S MEDICAID EXPANSION LIMITED BY U.S. SUPREME COURT -RTRS

  • ROBERTS, JOINED BY TWO JUSTICES, SAYS MEDICAID EXPANSION VIOLATES CONSTITUTION -RTRS

  • FOUR JUSTICES DISSENT, SAYING THE PATIENT PROTECTION AND AFFORDABLE CARE ACT GOES BEYOND -RTRSCONGRESSIONAL POWERS UNDER CONSTITUTION -RTRS

  • ScotusBlog conclusion: So the mandate is constitutional

  • The bottom line: the entire ACA is upheld, with the exception that the federal government's power to terminate states' Medicaid funds is narrowly read

  • The ACA is upheld as a tax, not a penalty

The DOW at 10:30 is at 12535 down 95 or -0.75%.

The 500 is at 1323 down 9876 or -0.67%.

$RUT is at 773 down 3.23 or -0.42%.

SPY is at 132.16 down 1.02 or -0.76%.

The trend is down and the current bias is neutral.

WTI oil is at 79.58 trading between 79.52 and 80.55 and the bias is negative.

Brent crude is at 92.68 trading between 92.40 and 93.80 and the bias is negative.

Gold is down today at 1558 trading between 1577 and 1556 with a negative bias.

Dr. Copper is at 3.33 up from 3.30 earlier.

** RRR = Risk Reward Ratio.

To contact me with suggestions or deserved praise:

gary@econintersect.com

Written by Gary









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