275  7TH Ave  7th floor New York , NY 10001                                                                                                                dcullinanecpa@yahoo.com

​                                                                                                                                                                                                     Chelsea / Lower Manhattan​​

​Daniel Cullinane CPA                                   p 848-250-9587                                                                                                                                     

Those eligible for the lowest subsidies to buy health insurance were the least likely to sign up for 2015 plans, studies show, another indication of the challenge of boosting enrollment for President Obama's signature health care law in 2016. The percentage of those choosing health plans dropped from about 75% for those earning $23,540 to about 14% for those earning about $47,00, new research from the Urban Institute and the Robert Wood Johnson Foundation.  Premium tax credits available on the federal and state insurance exchanges decrease as consumers earn closer to 400% of the federal poverty limit, which is about $47,000 for an individual. 


This research and other studies of the 2016 plans on HealthCare.gov are likely to further hamper efforrts to enroll some of the remaining people tthat Department of Health and Human Services Secretary Sylvia Burwehall calls hard to reach


When the insurance comparison site Healthpocket asked uninsured consumers how much they could spend on insurance a month, nearly 60% said $100 was there limit. That is about the same percentage that said they had only $100 after paying all their bills. There was an 11% increase in the average deductible amount for individuals and a 10% leap for family deductibles, according to Healthpocket. a single 30 year old man who makes about $35,000 a year would have to pay nearly three times that to get a silver plan on HealthCare.gfov. If he wanted to pay less each month he could drop down to a bronze plan and save about $25 a month but his deductible would be an average of about $5,800 amonth

The US is speeding toward what could be a record year for auto sales. Sales of new cars and trucks rose by double digit percentages at most major automakers in October​, and companies are raising their expectations for the rest of the year. Ford now expects total US sales of 17.4 million this year, just topping the record of 17.35 million in 2001.


General Motors US sales rose almost 16 % over last October, Ford and Toyota reported 13% gains Nissan sales  rose 12.5% over a year ago . and Fiat Chrylser's were up nearly 15%. Honda sales rose 8.6%/ Volkswagen mired n an emissions cheating scandal posted a small gain. US sales rose 14% to nearly 1.5 million according to Autodata Corp. It was the best October since 2001, when zero percent financing offers after the Sept 11 terrorist attacks pushed sales to 1.5 million, according to the LMC Automotive forecasting firm. GM said sales have run at an annual rate of 17.87 million for the past 6 months, putting the year on track to break the annual record.


Roughly one in four small firms plans to make some capital expenditures with in the next three to six months. That is not alot, but the tally is among the best showings since 2009 by small business owners in surveys taken by the National federation of Independent Business. Clearly they remain cautious about spending on new facilities and equipment, though they are hiring more. Much of the spending will go to replace outmoded production equipment and aging vehicle fleets. Only about 12% of smalls see the current economic climate as a good time to expand vigorously, making them reluctant to take on new debt.

Scandal-hit carmaker Volkswage design chief Walter Maria de Silva has resigned, a source familiar with the matter said , confirming a report in Auto Motor und Sport Volkswagen was not immediately reachable for comment on the report, which said de Silva would leave at the end of November and also said a VW spokesman had confirmed it. The magazine said it was unclear who would replace de Silva. 


VW is already struggling to deal with the fallout of its admission that it cheated on diesel-emission tests in the United States. which force its chief executive to quit and will cost it an estimated $8.3 billion.


​It has embarked on a billion euro cost cutting drive as a result and it faces calls for fundamental corporate reform Italian born de Silva, 64 had been chief designer at Europe's biggest carmaker since 2007, with responsibility for all the group's brands. He won Germanty's highest official design prize in 2010 for the Audi A5

Wall Street banks are struggling to sell billions of dollars of loans they made to finance the corporate buyout boom, a sign that investor appetite for riskier debt remians muted despiote a robust autumn rally in other financial markets. The slowdown threatens to cool the surge in mergers and acquisitions that has sent takeover volume in 2015 to record levels, thanks in part to easyh credit. Bank of America Corp Credit Suisse Group AG and Morgan Stanley are among the banks wrestling to sell loans they made to back purchases by firms including Lannett Co and Appolo Globsal Management LLC 

​TRAVEL

COLLAPSING OBAMACARE

​CO-OPS 

​CITIES

A new mobile app promises to shorten wait time in US customs line for travelers entering the country. With the Mobile Passport Control app travelers can submit their passport info and customs declaration forms electronically and get an electronic receipt with an encrypted code prior to arriving in the the US. Upon arrival they present the code to a customs officer stationed at the entry point. The app is free from Google and Apple and is already in use at four airports, Atlanta, Seattle, Chicago and Miami. It will be implemented in San Francisco in about one month and in a slew of other large US airports by the end of 2016

​HEALTH CARE

​YAHOO TO REORGANIZE

The House will not be here for much of the summer of 2016, according to a new legislative calendar released by House Majority Leader Kevin McCarthy. Thw House is set to adjourn on July 15 and not return until Sept 6, according to the calendar. The House will then be in session until Sept 30 and adjourn until Nov 14 after the elections. For the entire year the House is scheduled to be in session for 111 days.

​INVESTORS SOUR ON BANK DEBT

BITCOIN ROCKETS HIGHER

​SMALL BUSINESS

​APPLE EYES NEW PAYMENT SERVICE

SAN FRANCISCO SHERIFF 

​LOSES RE-ELECTION BID

Bitcoin was surging again Wednesday, briefly approaching a $500 price as it jumped more than 20% on the day, and some are worried that something other than speculation may be behind the sharp gains, again The digital currency, which was up well more than 100 percent over the past month before giving back some of its gains Wednesday afternoon, saw a similarly begun spike near the end of 2013. At that time it climbed from about $120 to $1,150 in only a few months on the  back of the first big wave of media attention, investor excitement and possible some sort of fraud from now defunct exchange MT Gox


Now some are blaming this month's runup on a firm called MMM that appears to be a sort of self-admitted pyramid scheme: It says on it website that users donate money to the community in exchange for larger payoffs in the future.  MMM is a community of people providing each other financial help on the principle of gratuitousness, reciprocity and benevolence, the form says of itself, adding that bitcoin underpins its transactions.There are no rules, in principle,the only rule is no rules. At all Even if you follow all of the instructions, you still may lose. Win might not be paid. 


One theory behind blaming MMM for the price jump is that its increasing popularity requires it to demand more bitcoins, for tranasactions, which is boosting exchange rated in the relatively illiquid market.

The  San Francisco sheriff who over the summer became embroiled in a national debate over "sanctuary city " policies on Tuesday lost his bid for rel-election amid a host of local controversies. Sheriff Ross Mirkarimi was defeated by Vicki Hennessy, a former sheriff's official who had the endorsement of San Francisco Mayor Ed Lee and the sheriff deputies association. As of early Wednesday morning, Hennessy had received 62% of the vote to just 31 percent Mirkarimi.


Mirkarimi was the subject of national criticism after Mexican illegal immigrant Francisco Sanchez allegedly shot and killed 32 year old Kate Steinle on San Francisco's waterfront July 1. Sanchez had been released from Mirkarimi's jail in March even though federal immigration officials had requested he be detained for possible deportation


Since then, the sheriff's oversight of the department has been plagued by other high profile mishaps and controversies seen as contributing to his defeat. He had his driver's license briefly suspended for failing to properly report a minor accident while driving a department vehicle and he flunked a markman's test. Before those two incidents, a drug gang leader escaped from jail and guards were accused of staging and gambling on inmate fights. In November 2014, Mirkarimi was forced to apologize for the bungled search for a San Francisco General Hospital patient  whose body was found in a stairwell weeks after she wandered from her room. The sheriff is in charge of the hospital's security but deputies did not search the building until 9 day after he disappearance The city paid the patient's family $3 million to settle the lawsuit​​

For companies with pension plans a mixed blessing in the new budget law. On the one hand they will have to shell out higher premiums to the Pension Benefit Guaranty Corp Flat rate premiums for single employer plans will rise to $69 per participant for the 2017 plan year, $74 for 2018 and $80 for 2019. The flat rate premiums for this year and 2016 remain at $57 and $64 respectively. Variable rate premiums for underfunded pension plans will be increasing as well But firms also get more time to rectify underfunding in their pension plans.

Apple Inc is in discussions with US Banks to develope a payment service that would let users zap money to one another from their phones rather than relying on cash or checks, The move would put the tech giant in competition with an increasing number of Silicon Valley firms trying to persuade American to ditch their wallets in favor of digital options. 


A small but growing number of Americans are already startint o embrace such services allowing consumers to pay baby sitters, split dinner checks and share other bills

​WHITE HOUSE DEFENDS FAILING INSURANCE CO-OPS

The US Army will continue with plans to do away with 40,000 positions. Despite a decision to keep 9,800 troops on the ground ins Afghanistan, a reversal of President Obama's earlier announced drawdown. They will remain for an unknown time, along with hundreds of specially trained military contractors, to train Afgan troops,protect US assets, and target ISIS and Qaeda militants. The cuts, from a force of 490,000, will pinch many Army bases. Private businesses that provide technical equipment and staples, everything from food to office supplies. Hit especially hard over the next two years Military bases in N>C< FA. Alaska and Hawaii. Military posts in Ky. Texas, Ala. Calif. and Washington state will also feel the result of streamlining, which began under then President George Bush and continues under Obama. Congress wll not block the cuts but will reject a new round of base closures.

NOVEMBER NEWSLETTER

In the original plan for the Affordable Care Act (ACA) better know as Obamacare, Democrats wanted in include a public option in the health insurance exchanges, a government run plan that advocates claimed would guarantee affordable access. To critics and consumers,, it looked like an end run to a single payer health care system. A government funded plan could run deficits with noconsequences forcing health insurers to either match the price and got out of business or leave the markets altogether. Republicans accused Democrats of plotting to drive private insurers out of business, while supporters of the public option accused Republicans of leaving consumers at the mercy of forprofit corporations in accessing health care. To critics and consumers, it looked like an end run to a single payer system.


When it became clear that the public option would be a non-starter, Barack Obama and Democrats in Congress settled on a compromise: health insurance co-ops. theses nonprofit entities would operate  under consumer control, provide an option outside of the for profit insurer plans that would focus entirely on patient care. The ACA provided for a significant amount of backing form the federal government, both in loans and in so-called risk corridor funding that gave the Obama administration the option of covering losses for insurers in the first few years of Obamacare


That backstop was necessary, advocates insisted , as insurers and especially the co-ops needed time to adjust for unkown utilization patterns, premium pricing and the proper level of deductibles. The co-ops remained an important component for advocates of the government -controlled system, both as a check on for-proit insures and as a proof of concept for excluding profit based coverage entirely at some point


Eventually, the Obama administration managed to get 23 co-ops in operation by the time Oct 2013 rollout of the Obamacare exchanges. Thanks to the risk corridor and reinsurance provision within  the ACA, those co-ops survived the first two years of the program, abeit with the same premium pricing that other insurers experienced. However, the so called cromnbus bill that resolved the FY2015 budget restricted HHS' risk corridor funding only to monies collected for that purpose, rather than through the agency's budget or other revenue sources.  That is when the house of cards started to tumble. The non-profit co-op model for health insurance turns out to be unsustainable without government subsidies. More than half of the co-ops have been shut down this year, and nine of the twelve have been shut down since Oct 1, either by HHS or by the states i which they operate Over $1 billion in loans and backstop payments have been lost.  


What happened? Predictable the financial model that critics warned would lead to a death spiral hit the co-ops first. Mandated to cover pre-existing conditions at market pricing would create a utilization surge that would reqauire broad premium increases to offset.  The co-ops could not keep up. This disaster is not limited to the co-ops.The same model has forced premium prices on other plans to skyrocket three years in a row, and deductibles to rise to the level where many of these plans are nothing more than overpriced catastrophic coverage.

BENEFITS 

CHINA IS ON BRINK OF MAJOR MILESTONE

​THE ECONOMY

According to several people close to the situation, Yahoo has hired McKinsey & Co to help the company decide which units to shutter, which to sell and which to invest more in. The move comes as the company's long-in-tooth Alibab Group asset moves to completion. Sources said the the consulting firm was meeting with to[ execs to begin the process of figuring out how to organize the silicon Valley Internet company's core businesses going forward It is all part of an effort by CEO Marissa Mayer to turn around the turnaround she has been attempting for more than three years.. In addition to the reflection on what should happen to revive he core, which largely remains an advertising business, Mayer has also over the last month asked her top execs to make gthe three-to five year commitment to the company in writing. That move seems to have backfired a bit, resulting in several jamor departures recently, including European boos Dawn Airey, marketing and media head Kathy Savill, development chief Jackie Resea and many others to other jobs.  Curiouslyl, Mayer tossed them all under the bus in Yahoo's recent quarterly call, slying suggesting to analysts all he departures had been planned and that her current team was Yahoo's best ever.


Mayer may have more of that to do, as sources added those major talent departures are not over. Insiders expect at least tow others reportin directly to her to leave soon.  Mayer recently held an offsite iwth top Yahoo staffers at a SanFrancisco hotel, where they got leadership tips from the new HR head and also got to see a number of initiatives, including a massive effort called Project Indes. The project is apparently gong to be the savior of Yahoo - a one-stop mobile search and indispensable gide in the life of a consumer. Mayer has told many people that Index will be a critical product for Yahoo, orienting the company toward search in a more significant way.,

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HOUSE PLANS HUGH BREAK DURING

​SUMMER 2016

Many local governments are hoping for help from high-tech sources. The trend toward so-called smart cities is gaining momentum as Uncle Sam, big tech companies and universities roll out initatives to improve municipal services. The feds, for instance, will award $160 million in grants to cities to invest in tech designed to speed up traffic flow, send early warnings to citizens about severe weather and more. IBM plans to use data culled from Twitter to find and collect valuable scrap sitting in vacant lots in Detroit. AT&T will bring smart parking meters to 10 cities. US cities have a long way to go on the tech fron. Places such as Singapore and Dubai have investe heavily in smart-city tech and enjoy a big lead over the US

VOLKSWAGON DESIGN CHIEF RESIGNS

The Obama administration defended the health care law's struggling insurance co-ops, suggesting to Congress that cutbacks demanded by lawmakers put added pressure on an altruistic alternative to mega-insurers. State regulators have ordered 11 of 23 nonprofit co-ops shut down over solvency concerns, forcing several hundred thousand customers to to seek new coverage. Only one co-op, the one in Maine made any money last year. Congressional Republicans say  the taxpayer financed program exemplifies "crony capitalism" in which the government backs certain businesses for political purposes.

The argument at Tuesday's hearing before the House Ways and Means Committee was the administration's most direct response to a wave of seven co-ops closing last month. State insurance regulators appear to be moving proactively to avoid serious disruptions for consumers by winnowing out plans that could fail next year, but must find new coverage for 2016. The formal name of the program is Consumer Operated and Oriented Plan or co-op. The federal government provided $2.4 BILLION in loans to get the co-ops going, and repayment from ones that have failed seems doubtful.  As recently as spring, the White House touted co-ops as an accomplishment. But a report this summer from the inspector general of the Health and Human Services department found that the co-ops were awash in red ink. Nineteen co-ops had medical claims that exceeded premium income.  The reasons included higher than expected enrollment of people with expensive health problems, lower than expected enrollment of younger people, and inaccurate pricing of coverage.


 

​DEFENSE

AUTO MAKERS POST BIG OCTOBER

Little doubt now that the Federal Reserve will raise interest rates in December by a quarter of a percentage point With a strong gain in 271,000 jobs in Oct and the unemployment rate down to 5%, which is viewed as full employment, Yellen & Co  are seeing the job growth they were looking for in order to boost rates.  Hiring is up in just about all sectors, construction, retail, business services. health care and food services. Even mining and manufacturing showed improvement, though no net job gains. Still a positive sign for two badly battered sectors of late. Pay gains, also trending up. Oct marks four straight months of faster growth. Though wages are still rising, firms' labor costs are not increasing as fast. 

Small pips in a currency have the ability to make an entire country's goods cheaper or more expensive to the rest of the world in an instant.  In this stage of international finance, the cost financing and value of debt balances can swing massively. This brings us to China, the world's second largest economy, where the country's currency - the renminbi - could see its status in the world change


China has been all over the news with August's currency devaluation and the Shanghai Composite dramatic moves. Since then investors and companies have been concerned about what exactly China means for growth prospects. Some have even attributed their weaker third quarter numbers to it. But there's another overlooked ting financiers should keep an eye on: China wants to get its reniminbi (yuan) into the International Monetary Fund's assets classification known as the special drawing rights or the SDR. Its inclusion or exclusion could have major ramifications in the global markets.


The IMF is about to decide whether to include the yuan in its SDR basket. If the yuan goes in the basket then the likeihood is that the Chinese would prefer a gradual depreciation of their currency against the US dollar. This is good news because it allows time for the real income gains in the West to be spent and potentially get to a positive scenario. If the yuan is not allowed in the SDR the Chinese leadership is not going to wait another five years for the West to accept them Because out of the major economies, the only currency that is seriously overvalued is the yuan and that is the only one that has not engaged in any major effective devaluation. If the yuan is not accepted in the SDR they will go for a one  off large devaluation and that would then be a financial crisis.