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Obamacare replacement bill, French elections bugging stocks

Written By | May 4, 2017

WASHINGTON, May 4, 2017 – Drum roll, please. House Republicans seem to think they have the votes Thursday to pass their latest version of “Obamacare Repeal and Replace,” whatever that means these days.

The problem with dismantling this overreaching legislative debacle, put in place years ago exclusively by Democrats, is the original Obamacare’s complexity and deliberate obtuseness. It’s like a game of pick-up sticks: Move the wrong one and the whole pile collapses.

In the current situation, it’s been clear for some time that “repealing and replacing Obamacare” sounded great as a major party plank in the 2016 national elections. But it’s also been clear for those doing the heavy lifting that Obamacare’s labyrinthine structure has to be carefully deconstructed. This means that it may require several legislative and regulatory passes to do so.

I.e., what Republicans are voting on, allegedly today (with no cooperation from Pelosi’s Democrats, of course), is the initial move in what’s likely to prove a painful and lengthy unwinding of this healthcare mess.

Obamacare is rapidly collapsing – evidenced again today by Aetna’s withdrawal from nearly all Virginia counties in 2018 – and something absolutely must be done. But it must be done in phases, the first of which absolutely has to allow all U.S. residents at least one health insurance choice for 2018, which already is not the case in many areas.

We have no idea when today’s vote is actually scheduled as we write this column around noon Thursday, ET. That vote is likely going to take place as late as possible, the usual thing in D.C. But traders and investors are keenly interested in what’s going on with this legislation, and many healthcare and healthcare-related stock scenarios are hanging in the balance.

Read also: Trading Diary: Investors try to avoid headline risk, pain

Hanging as well are financials, as in “Will the Fed still raise interest rates, and if so, when?” Yesterday’s news from the nation’s central bank clearly indicated “Maybe yes, maybe no.” It’s this kind of equivocation at all levels of our national government that has kept most industries away from robust, long-range planning. If nobody knows what anybody is doing, it’s tough to plan future business, as doing so, even with the best of heads involved, is still a crapshoot in the end.

While far distant from the concerns of most Americans, the French election, incoming this Sunday, is also bugging investors. That’s because a win by Marine Le Pen potentially risks absolute destruction for the EU and the euro, the Eurozone’s common currency.

At various times, Le Pen has vowed to depart from both in order to reassert French sovereignty. In addition, Le Pen, like an increasingly restive France, is disgusted by the murderous, out of control immigration from countries full of Islamofascist fanatics eager to transform La France into another branch of the Caliphate.

Indeed, France has suffered the brunt of the murderous Islamofascist fury that has been terrorizing Europe for many years. At this point, what remains to be seen is how many French voters are ready to go extreme on Sunday. Are they as sick of porous, decidedly anti-French border policies as the Deplorables were of our own? Don’t miss the next thrilling episode.

The pollsters – those scientific and highly reliable professionals – seem to be giving Le Pen’s opponent, Emmanuel Macron, at least a 9 to 10 point edge in this election. But then again, how accurate were these soothsayers with regard to the Brexit vote? And didn’t they give Hillary Clinton a minimum 95 percent chance of walloping that hopeless moron, Donald Trump?

So, yeah, if the pollsters have cleaned up their act, at least in France, and are polling an accurate cross-section of likely French voters, Le Pen might already be toast. But if pollsters are still playing in Brexit-Trump mode, Le Pen might win in a landslide. At this point, it’s tough to say, so we’re not placing any bets.

But NEWS FLASH! Just minutes ago, The (Manchester) Guardian reports that The Lightworker himself, Barack Hussein Obama, has issued a strong endorsement of Macron. London’s famous bookies must be scrambling to recalculate odds in the French election, calling to mind the Nobel Peace Prize winner’s uncannily successful campaign warning the Brits to reject the Brexit. Or else.

A Macron victory would make most traders, particularly the bulls, very happy in Monday trading action. On the other hand, it’s entirely possible that if Le Pen grabs the brass ring, we might all be really sorry if we don’t go short the market before COB Friday. But it’s a risk that investors have to take, one way or another.

Finally, just to mess us up a bit more, crude oil prices took a big haircut this morning, with WTI down nearly $2 bbl. to stand at 45.89 as of 12:30 p.m. ET. That’s a whopping 4+ percent drop in just a couple of hours. We wonder what that’s going to do for the Fed’s 2017 inflation scenario?

Markets aren’t liking any of this at all, as the Dow is currently down 84.30 points. the S&P is off 4.88, and the NASDAQ is down 13.24. None of these moves is catastrophic. But as the Obamacare vote rolls – or doesn’t – who knows where we’ll be going next. At this point, we’re keeping at least half our investment powder dry. Maybe this year, we really need to sell in May.

*Cartoon by Branco. Reproduced with permission and by arrangement with LegalInsurrection.

Terry Ponick

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 Senior 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