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What We Read Today 05 December 2014

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.

Notice: We are converting to a new format for this column over the next several days. Content may be curtailed while we make the change. average premiums going up in 2015 (Ricardo Alonso-Zaldivar, Associated Press, MSN News) As we predicted, headlines and articles seen by millions of Americans will be totally misleading. See following two articles from 'behind the wall' 03 December 2014.

The article above is new today. Following below are two detailed discussions from 'behind the wall' from two days ago. This represents the kind of informative discussion that can be read daily with a $25 a year subscription to our premium content. Please show your support of Global Economic Intersection by subscribing.

A look at 2015 individual market health insurance rate filings (PCW, Health Research Institute) This data can supply a headline for everyone, just not the same headline. For Obamacare opponents the headline could be : ACA Premiums for 2015 Surge by up to 51%. For Obamacare supporters: ACA Premiums for 2015 Slashed by as Much as 25%. And for those trying to be objective: Incomplete Data Indicates Average ACA Premiums for 2015 May Increase by 3.7% to 5.4%. All three headlines are factually correct but none reflects with accuracy what is going on. For example, most states and the federal website have additional plans added to exchange menus. Thus an increase or decrease in average premiums does not indicate how premiums have changed for carry-over plans because the new plans are included. Examples of data from three states illustrates the variation in the data from state to state:

Minnesota: Premium Increase Range = -14.4% to +51.1%; Average Premium Increase = 12.4% (largest increase in country); Median Premium Increase = 9.2% (fifth largest); 2015 Average Rate = $319 (7th lowest); Number of New Plan Bids = 1. States with average 2015 premiums closest to Minnesota are Texas ($316) and Arizona ($313).

Mississippi: Premium Increase Range = -25.0% to +6.5%; Average Premium Increase = -9.3%% (largest decrease in country); Median Premium Increase = -9.3%% (fifth largest); 2015 Average Rate = NA ; Number of New Plan Bids = 1.

Arizona: Premium Increase Range = -25.0% to +23.5%; Average Premium Increase = 4.5%; Median Premium Increase = 9.7% (fourth largest); 2015 Average Rate = $313 (5th lowest); Number of New Plan Bids = 6.

See also next article. Click on map below for interactive display of data state-by-state:


Early Exchange Outlook 2015 (Ceci Connolly and Caitlin Sweany, The Health Care Blog) The early indications for 2015 is that there will be major expansion of plan offerings under ACA (Affordable Care Act). At least 15 of the first 28 rate filings will offer additional plans this year. Of the 176 plans filed for ACA coverage in 2015, 36 (20%) are new. In Arizona, 6 new plans have been submitted to the state and five in Virginia; Washington, Arkansas and Tennessee show three new plans each. According to this article, insurance giant United Health Group is planning a major expansion of offerings for 2015. There are also indications that healthcare co-ops will be expanding significantly. These member owned and operated healthcare insurance arrangements covered 400,000 in 2014. There will likely be fallout from the current number of co-op plans over the next several years as smaller entities may have difficulty in paying back federal start-up loans totaling about $2 billion. Note: This article is four months old and the specific numbers contained are different from the up-to-date data in the preceding article. The bottom line is that many ACA customers from 2014 may find better coverage and lower costs by comparative shopping during the 2015 open enrollment now underway (15 November 2014 to 15 February 2015). Renewing existing coverage without checking will cost many who do it.

Articles about events, conflicts and disease around the world


Ferguson Witness Testimony Shows Distrust Of Police (International Business Times)

New York's Verdict: We can't Breathe (The New Yorker)

Charles Barkley speaks out on Ferguson USA Today)

Kenny Smith's open letter to Charles Barkley about Ferguson (USA Today)

What the Eric Garner Grand Jury Didn't See (The New Yorker)


Patient Who May Have Ebola Arrives in Atlanta (Associated Press, abc News)

CDC: More Than 1,400 People in U.S. Being Actively Monitored for Ebola (Sharyl Attkisson)

Islamic State

Obama’s Flawed Islamic State Strategy: From Saudi Arabia with Love (Geopolitical Monitor)


Turkey 'guilty of religious discrimination' (Al Jazeera)

Turkey and China fall in Transparency International corruption index (euronews)

Russia, Turkey Lead Global Decline in Internet Freedom: Report (NBC News)


A Palestinian State: Elusions and Illusions of Sovereignty (Geopolitical Monitor)


Radio Free Syria (The New York Times) Hat tip to Eliza Griswold, Newsana.


A New Deal for the Kurds (The New Yorker) Oil deal may preserve Iraq as a country.

There are 7 articles discussed today 'behind the wall'.

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Crude: Unknown Territory (Dave Gonigam, 5 Min. Forecast) Quoting Greg Guenther:

“… this could be the final nail in the coffin of the commodity ‘super-cycle’ that began about 15 years ago. From 2001-2011, the price of copper exploded more than 620%, topping out near $4.50 a pound. That’s a huge. And the breakdown we’re seeing now could easily send copper prices to $2 or lower over the next couple of years.”


The Luxury Market's Achilles Heel (Realtor Mag) The year-over-year growth rate for luxury home purchases by overseas buyers is slowing in the U.S. International investors have been a particularly strong component of the sales for homes $1 million and up. See next article.

Sales of Million-Dollar-Plus Homes Growing, But Who’s Buying Is Shifting (Nela Richardson, Redfin) Sales of luxury homes has been outperforming the market for about three years but the rate of growth is slowing. See graph below. One of the two strongest markets currently is Houston, buoyed by the oil boom. See table below. But, with the global petroleum price war, will this market dry up quickly as well?



What if Obama gave FDR's 'I welcome their hatred' speech? (Eric Black, Minn Post) Hat tip to Roger Erickson. The author says that Obama has never had the political position to be able to make such a speech and have any further future in government. Before 2012 and he would not have been re-electable. After 2012 and he would have had even less leverage to get anything done. Today the "hatred" is organized in a way that it never was for Roosevelt, according to Black.

Gasoline Price War Lights Up in Oklahoma City as $2 Floor Drops (Margaret Newkirk and Lynn Doan, Bloomberg) Competition drives prices as low as $1.95 a gallon for regular on Wednesday (03 December). Remember 2008 when gasoline dropped below $1.50 in many parts of the U.S.? Of course some will remember 1970 when price wars frequently saw $0.25 a gallon for regular and prices over $0,30 were considered outrageous. Note: Adjusted for inflation that $0.30 a gallon of gas from 1970 would cost $1.88 today and the price war $0.25 would be $1.57. But back then 15 mpg was "good mileage" and today 30 mpg might be a good comp. Driving a car today in the U.S. is therefore quite a bit less expensive, at least for gasoline, that "the good old days". But if gasoline were to go back to $4.00 the "good old days" would be "good again".

Click for interactive graphic at the St. Louis Fed.

DELAYED REACTION: Apartment Construction Boom to Impact Rents, Occupancy in 2015 (Randyl Drummer, Multifamily construction may be catching up with demand. With vacancy rates beginning to trend upward, the robust rent increases enjoyed previously by landlords in most U.S. metro areas are expected to decelerate to below 2% in 2015 as the multifamily market shifts from full recovery into an expansion phase. But rental markets will receive some support from the fact that home ownership rates are still declining, now down to 64.4% according to this article, and also from an employment picture which is continuing to improve. See recent GEI Analysis articles on the U.S. housing market: here and here and here. See especially: Is There a Rental Shortage - Inflation Threat?


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