Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
UnitedHealth still optimistic about PPACA exchanges (Allison Bell, Life Health Pro) One of the nation's largest insurers expects to see strong growth at the Patient Protection and Affordable Care Act (PPACA) public exchange system in 2015. UnitedHealthGroup (NYSE:UHC) will sell qualified health plans in nearly two dozen states in 2015 after selling in only four this year. Another thing noted by UHC is the persistence of small group health plans. They see little erosion in that traditional insurance market.
Why Inequality Matters (Bill Gates, LinkedIn) The richest man in the world agrees that wealth and income inequality in the extreme creates economic, social and geopolitical problems but he diverges from Thomas Piketty's proposal for aggressively and progressively taxing capital. He thinks that the current taxation of labor relative to capital is out of whack and should be adjusted, but he proposes to increase the progressive taxation of consumption as the better focus, rather than taxing capital aggressively.
Risk Aversion and Dollar Strength (Rick Harper, The Wisdom Tree Blog) Over the past ten years the Chicago Board Options Exchange Volatility Index (VIX) and the Barclays Capital Trade-Weighted Dollar Index have spiked in close correlation. The VIX rose from 15.11 08 October t0 25.27 15 October, a one week rise of 10.17. That would put the 7-day span right in the middle of the table below. The S&P 500 lost 3.8% over the same week (comparable to other entries in the table) but the U.S. dollar Index lost 0.48% (totally not close to all the other entries which are gains). So, for right now, we can say that this time is different.
Argentina: You won’t believe what law the government just passed (Simon Black, Sovereign Man) Hat tip to Ian R. Campbell, GEI Discussion Group, LinkedIn. Argentina has just enacted a new 'supply law' which has the non-specific wording that prohibits companies from "setting prices too high, generating too much profit, or producing too little". This appears to be a tool to enable nationalization of any company arbitrarily for any reason at any time, after December 2015, that is, when the new law becomes effective.
China Credit Growth Climbs as Targeted Easing Kicks In (Xiaoqing Pi, Bloomberg) China eased credit slightly in the third quarter according to data released by the PBoC (People's Bank of China). The Chinese are trying to walk a tight rope between declining growth on one side and excessive credit generation on the other.
Implied vol dislocation (Walter Kurtz, Sober Look) The volatility in small cap stocks (RIX) is almost always higher than for large caps (VIX) but the last few days RIX has been higher. Kurtz attributes this at least partly to the unusual volatility of energy stocks, which fall predominantly into the large cap category.
Other Economics and Business Items of Note and Miscellanea
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