Happy Fed Day! Ed’s Daily Notes for October 30th   2 comments

We get the Federal Reserve Open Market Committee announcement at 2 pm EST today. Expect nothing, but look for anything.

Bloomberg: Rebuilding Reserves Means U-Turn on Treasuries: Southeast Asia

Southeast Asian central banks are rebuilding their foreign-currency reserves, raising the prospect they will boost holdings of U.S. Treasuries for the first time since February.

Singapore, Thailand, Indonesia, Malaysia and the Philippines reported increases of about 1 percent to 3 percent in their international foreign-exchange holdings in September from the previous month, paring the combined decline this year to 2.6 percent. Monetary authorities in Asia are among the most aggressive sellers of U.S. debt in 2013 as Malaysia, Thailand and Singapore each reduced ownership by between 20 percent and 28 percent through August, data compiled by Bloomberg show.

Policy makers may resume Treasury purchases in the coming months as reserves rise, said Todd Elmer, head of Group-of-10 strategy for Asia ex-Japan at Citigroup Inc. in Singapore. Asian exchange rates rebounded in October after the Federal Reserve unexpectedly maintained stimulus last month, helping revive overseas investment and lessening the need for central banks to intervene to support their currencies.

“Shifts in Treasury holdings are more reflective of ups and downs in reserves holdings, more so than changes in appetite,” Elmer said in an Oct. 23 e-mail interview. “Investors are responding to expectations for delayed Fed tapering, with expansive liquidity arguing for dollar depreciation and inflows into Asian currencies.”

This is something to watch, because it could impact the dollar’s value, and indirectly the equity markets (even though the dollar doesn’t correlate perfectly to the equity markets, it does come awfully close over the long-term). However, it is still too early to expect a market impact yet.

CNBC: Why insurance will be costing more

This speaks for itself:

The fact that many current health-care plans do not offer all the benefits required under Obamacare means that many premiums are likely to jump dramatically, Aetna CEO Mark Bertolini told CNBC.

Bertolini, appearing on Tuesday’s “Closing Bell,” said that most Americans with current plans are below the 60 percent essential Affordable Care Act benefit requirement, and individual plan participants will have to pay a minimum of a 20 percent increase to upgrade, he said.

Citing the current economy and reduced Medicare rates, Bertolini said the health-care company must find a way to bridge the gap between what it will cost seniors to pay out of pocket and what Aetna will be able to cover.

“Aetna alone will pass through to its customers over $1 billion in taxes and fees associated with the Affordable Care Act that need to go into the pricing,” Bertolini said.

The Aetna chief went on to say increased costs to the plans include new taxes and fee implementations, including new changes in ratings to things such as pre-existing conditions as a result of expanding policy benefit requirements.


Posted October 30, 2013 by edmcgon in Bonds, Federal Reserve, Market Analysis, News, Politics

2 responses to “Happy Fed Day! Ed’s Daily Notes for October 30th

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  1. First and foremost: I believe the health care system the U.S. has supported since the end of World War II is broken, cost the country too much, and with the large majority of insured not caring what care costs is the primary reason the health care system is a disaster.

    I didn’t support Obamacare — it doesn’t correct any of the above problems.

    My wife’s company insurance was CANCELLED three weeks ago — doesn’t meet Obamacare requirements (She is in the healthcare industry and thought it was a gold plated policy and is upset with it being cancelled.)

    My wife is going to retire sometime in the coming months. She is eligible for Medicare however I am not. Our plan was for her to take Medicare and for me to purchase a high deductible insurance (I am healthy and we can afford for me to pay for a yearly check up, etc.). This plan is out the window because the high deductible is no longer available due to Obamacare. Good news, if I get pregnant I will be covered for pre-natal care and delivery.

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