[kenberg]

I was listening to NPR again while driving, I think I got this right.

A week or so back, a reporter called up e-trade, or some such, to buy a treasury note. Face value of $1,000 and due at the end of this month. The purchase price was $999.78. The point they made was that confidence in the U.S. government had not fallen so much as to be too costly. But then they announced that today a $1,000 note costs $999.99. Of course it is now nerer to the due date. I was still struck by the fact that the profit of 22 cents for a note bought a week ago is 22 times the profit for a note bought today.

All of which proves I don't know nothing about finance. Nothing new there.
22 cents on a note bought a week back works out to maybe a little more than a penny a day, say $4.00 per year. So it's a 0.4% per year interest rate, more or less. That sounds like something I would expect. But who buys these things for 999.99?

[blackshoe]

Heh. That reminds me. Back in the 80s, a real estate investor friend of mine told me this story:

He walked into a bank 30 minutes before closing time on a Friday, the beginning of a three day weekend, with a cashier's check drawn on that bank for four million dollars. He told the teller he wanted to buy a three day "banker's acceptance", a sort of short term CD. She didn't want to do the paperwork, so she declined. He said "Fine. Cash the check." She gave him the CD.

[y66]

Quote

Jeb Bush, the former governor of Florida, continued his pre-Presidential campaign campaign by arguing that the G.O.P. made a huge mistake when it shut down the government in an attempt to dismantle the health law.

If they had shown some “self-restraint,” he said in an interview with ABC that was broadcast on Sunday, the government shutdown would not have eclipsed media coverage of problems with the site.

He also said that Republicans should try coming up with a reform plan of their own instead of just complaining about Mr. Obama’s ideas.

“I think the best way to repeal Obamacare is to have an alternative,” Mr. Bush said. “We never hear the alternative. We could do this in a much lower cost with improved quality based on our principles, free market principle. And two, show how Obamacare, flawed to its core, doesn’t work.”

Wow. If the Republicans are smart, they will just hand Bush the nomination now and skip the primary circus that weakened their chances in 2012. Rubio and Ryan are lightweights. Rand Paul is not electable. Christie will have to change parties to have a chance.

[FM75]

kenberg, on 2013-October-18, 11:36, said:

I was listening to NPR again while driving, I think I got this right.

A week or so back, a reporter called up e-trade, or some such, to buy a treasury note. Face value of $1,000 and due at the end of this month. The purchase price was $999.78. The point they made was that confidence in the U.S. government had not fallen so much as to be too costly. But then they announced that today a $1,000 note costs $999.99. Of course it is now nerer to the due date. I was still struck by the fact that the profit of 22 cents for a note bought a week ago is 22 times the profit for a note bought today.

All of which proves I don't know nothing about finance. Nothing new there.
22 cents on a note bought a week back works out to maybe a little more than a penny a day, say $4.00 per year. So it's a 0.4% per year interest rate, more or less. That sounds like something I would expect. But who buys these things for 999.99?

Sorry Ken, bond mathematics is really trivial, when there are no call or put options involved. Maybe you just needed to work things out a little more than you did. Also, researching the concept of a yield curve might help.

[FM75]

Surreal is the Obama spectacle explaining the success of the program...

"Nobody's madder than me [sic] about the website not working as well as it should, which means it's going to get fixed," Obama said. (That follows, how?!)


Yeah, right. They had three and a half years to build a web-site. And, oh crap! Not only does it not work. But there is nobody to blame, and not a clue as to what is wrong with it, nor when it will be fixed. Gosh - maybe they only found out about a three plus, year project not working last week?


About the only take-away here is that he can't blame the NSA, the Chinese, Korea, Iran, or Al-Qaeda.


Who is still in Guantanamo, again?


Surreal also. The failure of the Tea Party to extend the debt ceiling in exchange for defunding the failed contracting for development of the health insurance web site - since after all, you can do it all by phone or regular mail!

[mike777]

kenberg, on 2013-October-18, 11:36, said:

I was listening to NPR again while driving, I think I got this right.

A week or so back, a reporter called up e-trade, or some such, to buy a treasury note. Face value of $1,000 and due at the end of this month. The purchase price was $999.78. The point they made was that confidence in the U.S. government had not fallen so much as to be too costly. But then they announced that today a $1,000 note costs $999.99. Of course it is now nerer to the due date. I was still struck by the fact that the profit of 22 cents for a note bought a week ago is 22 times the profit for a note bought today.

All of which proves I don't know nothing about finance. Nothing new there.
22 cents on a note bought a week back works out to maybe a little more than a penny a day, say $4.00 per year. So it's a 0.4% per year interest rate, more or less. That sounds like something I would expect. But who buys these things for 999.99?

leverage.

They borrow millions at basically zero %.... this is how the fed keeps the system working.....

Now do this day after day after day....

also it works the other way.....borrow at zero sell bonds for over 1000 and pocket the profit when you buy back at 1000 again at zero cost..yes the fed jacks up prices to over 1000 then lets you borrow at zero.

[hrothgar]

FM75, on 2013-October-21, 22:44, said:

They had three and a half years to build a web-site. And, oh crap! Not only does it not work. But there is nobody to blame, and not a clue as to what is wrong with it, nor when it will be fixed.

I would have been very surprised if the web site had a nice, smooth, error free launch.

Almost anything of this magnitude is going to have teething pains.
It's a fact of life.

I don't care if the web site was written by government contractors or private industry...
The start of a big launch is painful.

For all those people who are working themselves up into a tizzy over this, I'd just like to remind them of some examples from the last year:

Romey's centralized command and control site for "Get out the Vote" efforts (Project Orca) was all but unusable on election night.
http://www.politico....1112/83653.html

Apple's new mapping application had a disastrous launch, as did their IOS 7 release.

[mike777]

The metric remains, 50 million don't have insurance...do the uninsured have insurance now? Is insurance cheaper and quality of care better? All the rest is nonsense and a distraction.

At this point I can report my insurance is much higher as are many around me. At this point this is hurting people...

[Winstonm]

mike777, on 2013-October-22, 03:42, said:

The metric remains, 50 million don't have insurance...do the uninsured have insurance now? Is insurance cheaper and quality of care better? All the rest is nonsense and a distraction.

At this point I can report my insurance is much higher as are many around me. At this point this is hurting people...

The law calls for the uninsured to have insurance on January 1, 2014, which, at last check, was not now. The cost of insurance is higher than in the past because we are not purchasing the same product as in the past - there are some for whom cost will be higher, but for low-income Americans the cost will be lower due to tax credits, while the choices of plan types is much broader.

[kenberg]

I've been waiting for Obama to say "You're doing a heck of a job, Sebby". Glitches are to be expected, glitches of the currently reported magnitude really should lead to a resignation, just as the muck-up after Katrina required resignations. You only get to screw things up so much before you turn the job over to someone else.

I am not required, or at least it is my understanding that I am not required, to register on this site. Whew!. I would be very reluctant to interact with a site that is so badly designed. The administration will look monumentally silly if they fine people who do not register on a site that is not, or for a large part of the sign up period was not, working. The order of events must be: a. Get the site working then b. Set the deadline for when registration must be completed.

This is too bad, and that's a huge understatement. Ten years from now, no one will really remember who was president during the Benghazi attack. They will remember who was president when the ACA was put in place just as everyone knows who was president when Social Security started. It is largely seen by supporters as Obama's hallmark achievement. It was the bete noir for the recent Tea Party nonsense. How Obama could allow this to crash so badly is incomprehensible to me.

What was it Truman said? Oh yes, the buck stops here.

[hrothgar]

mike777, on 2013-October-22, 03:42, said:

The metric remains, 50 million don't have insurance...do the uninsured have insurance now? Is insurance cheaper and quality of care better? All the rest is nonsense and a distraction.

At this point I can report my insurance is much higher as are many around me. At this point this is hurting people...

I suggest that you invest more time and effort searching the exchanges for good policies.
There's all sorts of anecdotal evidence about individuals complaining that the new policies are much more expensive.
Typically, it turns out that folks didn't do a good search.

In some cases this is a deliberate attempt to create a biased narrative (see http://www.motherjon...-bothered-truth)
In others, its poor search.

Most studies are showing that the prices on the exchanges are significantly less than what people are paying before.

I'm quite sure that there are some people who are going to be worse off under the new regime. However, I don't expect this to be widespread.

[y66]

Good story here: How The First Internet President Produced The Government’s Biggest, Highest-Stakes Internet Failure by Alex Howard

Quote

I’d like to believe it’s possible to reform procurement without completely starting over, if only because that’s not an option for federal agencies. The problem is that here, we’re talking about real money and real power. Entrenched players have genuine reasons to fight change, from the systems integrators to the big enterprise IT companies that Vivek Kundra memorably called as “IT cartel” as he left office.

The Obama administration, perhaps ironically, has made several other important steps toward this much-needed change, from introducing Presidential Innovation Fellows to bringing in entrepreneurs-in-residence. Indeed, the Department of Health and Human Services’ young chief technology officer, Bryan Sivak, has been pushing for many of these changes throughout his career in government. The part of Healthcare.gov that he was responsible for — the front end — was built using agile development, open source, and open standards, working in the open on GitHub with a small D.C. startup. Notably, that part of the site has worked in the midst of all the challenges that the site has had over the past two weeks. The rest of the site, built by CGI Federal, QSSI, and a dozen other contractors, was, by contrast, business as normal. As The New York Times documented Sunday in a well-reported feature on issues at Healthcare.gov, political decisions drove deadlines and the inability of government officials to say that it was not ready for prime time.

The sad truth is that unless we reform how government buys, builds, and maintains information technology, we will continue to get more Healthcare.govs. They’ll be built at regulatory agencies, scientific agencies, or places like HUD or the Department of Education or nameless federal agencies that most people don’t know exist, along with higher-profile ailing IT projects at the Department of State. Federal IT may be too big to succeed.

I have no doubt that this debacle is incredibly embarrassing for the president and his administration. It’s given huge political ammunition to the opponents of the Affordable Care Act and unfortunately further damaged the trust and the government’s ability to accomplish big things throughout the country. It’s not clear if the tech will be able to be fixed in time for the second stage of people rushing to get insurance before the deadline.

[ArtK78]

Well, the Obamacare website has been active now for three weeks. I guess it is long past time to declare the whole system a failure. After all, not everyone in the country is getting healthcare for less money than they paid before, and there are still many who have no health insurance. Furthermore, the problems with the website are legendary.

Yes, three weeks is certainly enough time to conclude that this is a disaster. After all, who could possibly expect that it would take more than three weeks to cure the decades of neglect in the health care system that has brought us to this point.

All of the criticism of Obamacare is right. There was no point to this high-minded exercise in socialism. And it will bring America to its knees - mark my words. Yes, Obamacare is no doubt the worst thing to ever happen to this country (I know, Jon Stewart did mention that there was something called slavery in this country at one time, but clearly Obamacare is worse).

[y66]

No sarcasm in the water cooler please!

[Winstonm]

y66, on 2013-October-22, 08:44, said:

No sarcasm in the water cooler please!

And no fighting in the war room!

[y66]

The spectacular failure of the healthcare.gov launch is a huge hit to the launch of Obamacare 1.0. But Obamacare will survive, thrive even, because there currently are no good alternatives.

[y66]

Good one Winston.

[blackshoe]

kenberg, on 2013-October-22, 06:06, said:

What was it Truman said? Oh yes, the buck stops here.

I have the distinct impression that in Obama's world view there is no buck.

[mycroft]

Well, that makes a nice change from his predecessor...oh wait.

[kenberg]

For me, it is not at all a matter of declaring Obamacare a failure. I wish it well. it is a matter of acknowledging a screw-up when I see it. The Tea Party shut down was a monumental Republican screw up, I hope Republicans can see that this is so. The roll-out of Obamacare was a pretty significant screw-up as well. In both cases the result will be a reduction in the stature of the people responsible. There is no way around this fact.

I really do not care if we are looking at FEMA after Katrina under GWB or the roll-out of Obamacare under BO. A botched job is a botched job. Hari-Kari is not required, but an acknowledgement of reality is always to be desired.