Obamacare aftershocks: Healthcare companies still woozy in Friday stock action

Warning shot by UnitedHealth (UNH) heard ‘round the capitol as the “I told you” brigade revs up for 2016. Rest of market positive, but eroding near the close.

Just in time for Christmas, your bigger Obamacare premium and even bigger deductibles. But if you want your healthcare plan, you can keep it. (Cartoon by Branco, reprinted with permission. See below*)

WASHINGTON, Nov. 20, 2015 – We were among the first yesterday to note the ringing announcement—or really an aside—tossed out yesterday by mega-insurer UnitedHealth (UNH). Whatever its initial intent, the company’s hint that they might drop out of Obamacare exchanges nationwide in 2017 and would cut the marketing budget for their 2016 plans turned out to be like detonating a chunk of plastic explosives during Thursday’s trading action.

It’s not a mistake that we’re drawing this explosive analogy with yesterday’s announcement. As if UNH’s warning blast itself was not, it set off chain reaction detonations that clobbered not only its own stock but the shares of every other publicly traded company that participates in the convoluted Obamacare system.

Read also: Obamacare reality slaughters UnitedHealth [UNH], other insurers

That in turn, creamed these stocks and hammered ETFs and allied companies in the same basic business. It hit investors and particularly HFTs like a ton of bricks, broadcasting to all what we’ve been preaching here since, oh, 2010 or so. Namely, that, while some way to address this nation’s healthcare problems is still a major issue, the Obamacare monstrositypushed solely by the Democrats and the greedy insurers and drug manufacturers they managed to co-opt — is collapsing under the weight of its own inherent lack of planning, resource management and common sense.

Republicans are clearly excited to get this gift of an issue back on the table just in time for the 2016 election party. It could be a winner. Then again, given the instinctive obtuseness of America’s Stupid Party….

UNH, which also feasts at the Medicare table, courtesy of its long-time, technically hands-off relationship with yet another liberal funding vehicle—AARP—is obviously shocked, shocked that the Obamacare promoters in Congress and the White House misled them with rosy Obamacare profit projections, all of which, as anyone who reads can know, are turning back to the dust they always were.

So now, UNH is likely outraged that it clearly can’t make money on this massive federal government charade. Their announcement yesterday was a warning shot across the administration’s lame-duck bow: either get us more taxpayer money, or we’re outta there.

It’s not exactly what Obama’s and Harry Reid’s minions expected to hear from this industry, at least not yet. But it was bound to happen since Obamacare is really designed to strangle the insurance companies so they’ll ALL pull up stakes and leave, allowing the federal government to go to the single-pay, government owned and operated socialist healthcare scheme they’d always planned in this scam from the very beginning.

Finally seeing the obvious, healthcare stock optimists launched yesterday’s massive dump-a-thon of healthcare insurers Thursday, likely exacerbated by HFTs either dumping more shares or shorting even more.

The healthcare companies are trying to recover today. But it may be some time before they even get back to even after Thursday’s shocker. But it just goes to show you. If you put faith in anything America’s socialist party either promises you or bribes you with, you’ll always wind up the bigger fool in the end. America’s political left, 2015 edition, just wants more and more and more of your money—and that includes the big corporations who… donate lavishly to America’s socialist party.

Now they’re reaping their dividends from the corrupt federal government, all of which, surprisingly, are showing up as red ink.

The unions, which routinely support Democrats, have discovered the same thing, as this administration uses the SS Storm Troopers of the EPA to crush all remaining jobs in mining and manufacturing, because… global warming climate change.

In Obamanation, you NEVER get what you pay for. But will the unions and corporate giants learn? Nahhhh…. That’s what’s wrong with the U.S. today.

Regarding the rest of the market, stocks are trading positively today against a messy backdrop. But as we enter the final hour of Friday trading, the averages are beginning their traditional Friday afternoon swoon. Strongly up earlier in the day, averages are slowly sinking, likely leading to a weak but positive close, but maybe not by much. Bad things usually happen on Monday trading, too, and the sensibly faint-of-heart just don’t want to be there.

Today’s trading tips

Defensively, we lightened up a bit on Molina (MOH) yesterday, one of the worst hit of the healthcare providers but one that’s more involved with administering state Medicaid programs than it is with Obamacare products. That said, the company is highly leveraged, so it moves faster and nastier than the insurance giants so we reluctantly took a partial haircut yesterday as we’re now too old to sustain the heavy losses that bothered us when we were just starting out.

Everything else: too slippery right now. In 2015, three out of four Mondays have been down days, meaning that if you really want to buy something, it’s usually on sale Monday. So we’ll watch and wait and see what happens then before we even think about moving.

*NOTE: Cartoon by Branco, reprinted by arrangement and permission, courtesy of ComicallyIncorrect.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17