KeNo's Housing and Economic Portal: Thursday January 30 Housing and Economic stories

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Obamacare Customers Skew Older as Young Invincibles Wait to See - (www.bloomberg.com) About 70 percent of Obamacare’s customers are 35 years of age or older, indicating that U.S. health-care overhaul is initially attracting a less healthy population that may drive up insurance premiums. The federal- and state-run insurance exchanges signed up 2.2 million people for private health plans in the three months ended Dec. 28, the U.S. Department of Health and Human Services said in a report released today. About 24 percent were 18- to 34-year-olds, and about one-third were 55 or older. The Obama administration wanted 18- to 34-year-olds to make up about 40 percent of total enrollment to help offset the cost of care for older and sicker people. Missing the target for the “young invincibles” may lead insurers to adjust prices if gains aren’t made by the March 31 end of enrollment.

Did Banks Dump Structured Financial Products in Your Pension Fund? | Janet Tavakoli - (www.tavakolistructuredfinance.com) Banks and investment banks were large direct and indirect subprime lenders. I’ve written extensively how desperate banks accelerated sales of fraud-riddled residential mortgage backed securities and collateralized debt obligations as the market unraveled. In addition, variable-rate auction securities (also known as auction-rate securities or ARS), backed by municipal bonds, student loans, subprime mortgages, and/or subprime backed collateralized debt obligations, comprised a $330 billion market. By the end of 2007, municipal bond insurers, including MBIA and Ambac, that credit wrapped the ARS were in trouble after writing credit default protection on toxic collateralized debt obligations with banks. The same banks that blew up the monoline bond insurers dumped doomed ARS on investors. Banks sold long-dated auction rate securities as if they were money market instruments. They told customers that if there were no buyers at the regular short-term interval auctions at which the ARS coupons reset, the banks would buy back the securities. Retail investors and condominium associations were told these were a prudent substitute for T-Bills, just before the market fell apart. To be clear, banks lied to unsophisticated buyers to foist losses on them.

Who's Buying Obamacare, in Three Charts - (www.bloomberg.com) More than 2.1 million Americans selected private health plans throughhealthcare.gov and state-run websites through Dec. 28, the Obama administration announced today. Another 1.6 million were judged eligible for Medicaid, the federal-state insurance program for the poor. Most of the new enrollees in private health plans—1.8 million—signed up in December, after the White House relaunched the Affordable Care Act’s stuttering website on Dec. 1. People can still enroll in Obamacare plans through the end of March to get coverage this year. The White House is hoping for a mix of people that includes enough young and healthy folk to balance the medical costs of older enrollees who need more care. Here’s a snapshot of who signed up in the first three months. All data are from the Department of Health and Human Services, through Dec. 28.

The House Passed A HealthCare.gov 'Security' Bill That Helps No One And Fixes Nothing - (www.businessinsider.com) On Friday, the House passed the Health Exchange Security and Transparency Act, a one-sentence bill that, in the event of any security breach of HealthCare.gov, would require the government to notify affected individuals within two days. But the real purpose of the bill seems to be to keep negative attention on HealthCare.gov, not to keep users' information secure. The ranking Democrats on the House Committee on Oversight and Government Reform noted in a memo that "there have been no successful security attacks to date on HealthCare.gov," "HealthCare.gov does not collect or store detailed personal health information," and there are already protocols in place "for informing affected citizens as rapidly as possible in the event of a security breach."

Next financial crisis could be coming - (www.cnbc.com) The "Lehman weekend" five years ago has taken on symbolic importance as the fulcrum of the financial crisis, but the roots of the crisis were broad and deep—planted in years of unconstrained excess on Wall Street and prolonged complacency in Washington and financial capitals worldwide. "Shadow banking" permitted the financial sector to engage in highly leveraged, short-funded maturity transformation with too little transparency, not enough capital and little restraint. Large firms became more interconnected and became increasingly reliant on short-term funding from repo transactions, derivatives, money market funds, securities lenders and prime brokerage business. Huge amounts of risk moved outside the more regulated parts of the banking system to where it was easier to increase leverage. Legal loopholes and regulatory gaps allowed firms to evade oversight. Investment banks, insurance conglomerates and other entities performing the same market functions as banks escaped meaningful regulation on the basis of their corporate form, and banks could move activities off balance sheet and outside the reach of more stringent regulation.

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