UHC Passes, Why no Drop in Dow?

[Lurker]

Considering the dire predictions the conservatives have been predicting if Health Care comes to pass, why is the stock market essentially just giving a yawn? Shouldn't the market be reacting to this socialist assault on the capitalist system?

 

[JoeTheJuggler]

Sword of Truth predicted a "bloodletting"--but in fairness he said it will happen either today or tomorrow (Tuesday). So give it another 36 hours or so.

http://www.internationalskeptics.com/forums/showthread.php?postid=5740791#post5740791

ETA: As of noon Monday, the DJIA, NASDAQ and S&P are all up.

 

[Newtons Bit]

Considering the dire predictions the conservatives have been predicting if Health Care comes to pass, why is the stock market essentially just giving a yawn? Shouldn't the market be reacting to this socialist assault on the capitalist system?

There aren't any Health Insurance companies on the DOW (that I'm aware of). Maybe you should look at them.

 

[JoeTheJuggler]

There aren't any Health Insurance companies on the DOW (that I'm aware of). Maybe you should look at them.

I don't think that was the prediction. The prediction was that there would be a bloodletting on Wall Street. And Sword of Truth was not alone in this opinion.

A great many of the effects of the bill don't go into effect for a long time either, but the prediction was that news of the passage of the bill would have an immediate bad impact on the stock market.

ETA: I looked around, and health insurances companies are down a bit following yesterday's vote, but only by about the same amount as they went up the last couple of days before the vote. Nothing dire.

At around noon Monday the NYSE Healthcare Index (NYP.ID) was up.

 

[Shalamar]

There aren't any Health Insurance companies on the DOW (that I'm aware of). Maybe you should look at them.

They may be up. After all, with mandatory coverage, and no public option.. people would have to turn to the private companies for coverage. More people buying.

 

[drkitten]

There aren't any Health Insurance companies on the DOW (that I'm aware of). Maybe you should look at them.

This looks an awful lot like goalpost shifting to me. The doom-and-gloom scenarios I was hearing forty-eight hours ago were about how health care reform was going to destroy the entire national economy, not just nibble a few pennies off the insurance companies' books and give them to the various companies that actually deliver care (like hospitals).

If the worst thing you can say about health care reform is that UnitedHealth dropped 2% while Aetna only went up half a percent,.... well, that doesn't sound like the "bloodletting" everyone feared.

ETA and by 'everyone' I mean "irrational rightwing lunatics."

 

[Newtons Bit]

I don't think that was the prediction. The prediction was that there would be a bloodletting on Wall Street. And Sword of Truth was not alone in this opinion.

A great many of the effects of the bill don't go into effect for a long time either, but the prediction was that news of the passage of the bill would have an immediate bad impact on the stock market.

I don't buy that particular argument. More people are going to be using more medical services. If anything insurance revenues are going to go way up. I imagine the same will hold true for the entire healthcare industry.

 

[JoeTheJuggler]

I don't buy that particular argument. More people are going to be using more medical services. If anything insurance revenues are going to go way up. I imagine the same will hold true for the entire healthcare industry.

Yes, that's what I would expect, too. I expect insurance company stock will go up again in the next year or two before the individual mandate kicks in.

But many opponents of this bill predicted that the stock market would react extremely poorly to its passage. That's what I think the OP was commenting on. Predictions of a "bloodletting" don't seem to be coming true.

ETA: And didn't you just suggest that we look for evidence of a negative reaction from Wall Street by looking at health insurance companies?

 

[JoeTheJuggler]

If the worst thing you can say about health care reform is that UnitedHealth dropped 2%

And UnitedHealth was up at the end of last week just before the vote. In fact, compared to 5 days ago, the price is still up.

ETA: Somehow I don't think anyone at UnitedHealth will be defenestrating themselves today or tomorrow.

 

[Thunder]

yes, since Armageddon was passed last night, the stock market will drop 4,000 points within the next month or so.

 

[Newtons Bit]

Yes, that's what I would expect, too. I expect insurance company stock will go up again in the next year or two before the individual mandate kicks in.

But many opponents of this bill predicted that the stock market would react extremely poorly to its passage. That's what I think the OP was commenting on. Predictions of a "bloodletting" don't seem to be coming true.

I actually haven't read said dire predictions on the current bill. Hence my momentary confusion.

I could foresee something like that happening with a government run plan, but that does't exist in this bill.

 

[lomiller]

I don't think that was the prediction. The prediction was that there would be a bloodletting on Wall Street. And Sword of Truth was not alone in this opinion.

A great many of the effects of the bill don't go into effect for a long time either, but the prediction was that news of the passage of the bill would have an immediate bad impact on the stock market.

The market is forward looking, so any long term negative effects should be priced in immediately. In fact they would already be priced in, since the bills passage has been likely for some time.

That said, the market is down almost every second or third day even in good times. No doubt there will be a down day sometime in the next month that some people will try to attribute to health care.

 

[psychictv]

There aren't any Health Insurance companies on the DOW (that I'm aware of). Maybe you should look at them.

Health stocks outpace market after reform passes
* Health insurer index rises 0.7 percent
NEW YORK, March 22 (Reuters) - Shares of Medicaid insurers, hospital companies and even drugmakers rose on Monday as many investors concluded that passage of landmark U.S. healthcare legislation will add millions of new paying patients.

http://www.reuters.com/article/idUSN2211367620100322?type=marketsNews

 

[Francesca R]

There aren't any Health Insurance companies on the DOW (that I'm aware of). Maybe you should look at them.

Maybe there's some in the S&P500 Healthcare index, you think? (Arrow is today's open)

 

[JoeTheJuggler]

The market is forward looking, so any long term negative effects should be priced in immediately. In fact they would already be priced in, since the bills passage has been likely for some time.

That said, the market is down almost every second or third day even in good times. No doubt there will be a down day sometime in the next month that some people will try to attribute to health care.

I'm sure you're right. I'd just point out that they didn't predict a down day. (In fact, even the most optimistic of us don't predict that Wall Street would not have a single down day over a period of a month.)

They were predicting really bad things. Again, the term "bloodletting" springs to mind. . . .

It will be hard for them to argue that an outcome indistinguishable from what you would have expected if the bill hadn't passed is evidence of any such a tragedy.

 

[JoeTheJuggler]

I actually haven't read said dire predictions on the current bill. Hence my momentary confusion.

See the link I provided in my first post on this thread for an example.

ETA: I imagine you made your first post in the thread without having seen mine yet, since we posted at nearly the same time.

 

[Praktik]

Well im always wary of these narrow glimpses into the stock market being used for partisan ends - but looking at Francesca's graph puts the lie (as if it needed it!) to hysterical claims of a "government takeover" or "socialism".

Clearly, that health index has been clocking up as the vote approached - signalling perhaps that these companies saw benefit to them under the bill rather than harm.

Even so, let's say this bill was a single-payer system coming down the pipe and the graph showed the opposite - would that be a bad thing, really?

We shouldn't extend whats happening in one sector to general claims about the health of the economy. Who knows, maybe America without a health insurance industry would be better off, even if it meant the healthcare index would be plummeting right now...

 

[drkitten]

W
Even so, let's say this bill was a single-payer system coming down the pipe and the graph showed the opposite - would that be a bad thing, really?

Of course not. Any more than the announcement by Everready that they've perfected an electric car that really does what people want (drives forever on four AAA batteries) would be a bad thing, just because it happened to tank Ford.

We shouldn't extend whats happening in one sector to general claims about the health of the economy.

I don't think that anyone's doing that. But this exercise is useful to illustrate the utter lack of support for any of the prophets of doom who publically predicted Armageddon as soon as the bill passed.

We're simply following the goalposts and continuing to not see support.

* Armageddon? Maybe not.... but we'll see blood in the street Wall Street.
* Blood in the street? Perhaps not. But we'll see the health care industry tank.
* Tank? Okay, it hasn't tanked yet. But it will tank _soon_. Why, I bet the S&P 500 Health Care Index will fall at least once over the next thirty days.

The point isn't that anyone knows what the future holds. The point is simply that the people who did, claim, very publicly, to have seen disaster in the future apparently mis-read their tea leaves.

 

[JoeTheJuggler]

The point isn't that anyone knows what the future holds. The point is simply that the people who did, claim, very publicly, to have seen disaster in the future apparently mis-read their tea leaves.

I think maybe the problem is they were trying to read tea bags.

 

[drkitten]

I think maybe the problem is they were trying to read tea bags.

Actually, I think it's more that the people making the claims weren't making them to be believed, but just to be heard.

The modern Republican party has turned into the discourse equivalent of peacock feathers. (Actually, I think all political parties have this element, but the Republicans have just taken it a step further and in a more public way than usual. Normally the Democrats have most of the publicity whores.) There's an element of anger among the base -- there's always an element of anger among any base -- in that the world isn't The Way I Want It To Be Right Now, and it's hard to figure out a way to get quickly and easily from here to there.

But I can at least be angry about my inability to get from here to there. And I can talk loudly about how I want to get from here to there, and how if I ruled the universe, we'd be there by next week.

And someone else can say how if he ruled the world, we'd be there by Friday. And I can respond that, well, if I ruled the world, we'd be there by Tuesday evening, and he'd respond "lunchtime" and I'd say "elevenses" and.... you get the idea.

And our mutual audience would love it, because they want to be there last week. The more over the top our promises, the more the angry people who just want to hear promises will like it.

I don't really believe I can get there by elevenses. Heck, I'm not sure how to get there at all. But if I tell people that, they won't listen to my plan that just might get us there in five years, if everything works out. Because as much as anything, angry people simply want to vent -- and venting is more enjoyable, short term, as actually working for a long-term plan that probably won't work out anyway.

So if we're discussing health care reform, and it's being pushed by the wrong group of people, I get more mileage out of calling them wrong than I do by being analytic about the proposals strengths and weaknesses. I suggest that it might not expand coverage, someone else comes along and says it will deny coverage, and a third person starts raving about "death panels" and mandatory euthenasia. Who's going to tap into the angry-raving-lunatic vote the best?