In a post titled “Health Insurance Industry Registers Its Disapproval Of Senate Health Care Bill”, Faiz Shakir of Think Progress writes:
In the New York Times today, Nobel Prize-winning economist Paul Krugman writes in defense of the Senate health care bill. “[F]or all its flaws and limitations, it’s a great achievement,” he says. “It will provide real, concrete help to tens of millions of Americans and greater security to everyone.” But the health insurance industry and business lobbyists weren’t quite as joyous in their reaction.
He then quotes flacks, lobbyists, and the US Chamber of Commerce bad mouthing the bill before driving home his point with a pointer to the Wall Street Journal for…one-day healthcare stock results:
The Wall Street Journal reports that health-care stocks “fell after the Senate’s approval of the health bill.” Insurance giants “WellPoint, Humana and Aetna were among the health-care sector’s decliners Thursday. WellPoint dropped 1.3%, while Humana fell 1% and Aetna was also off 1%.”
Oh Faiz. Please stop before you hurt yourself. If you don’t understand “profit taking” or “buy the rumor/sell the news” you have absolutely no business including share price information in posts. And if you don’t understand that people have been noticing the lack of pushback from the industry, necessitating a bit of pro forma complaining, you have no business writing about politics.
Let’s take a look at two healthcare stocks over the last three months, roughly the timeframe Congress spent hashing out the details of the bill. (Disclosure: My portfolio contains, but is not limited to, both of these companies. The charts are straight off of Google Finance, with links to assure that there was no funny business.)
Tells a bit of a different story than the one Ol’ Faiz was pushing, now, doesn’t it? Back in mid-October when Progressives in the House were busy signing letters promising to vote against passage of any bill that didn’t include a public option, insurance stocks hit an interim bottom. But in November, when Joe Lieberman, Ben Nelson, Blanche Lincoln, and Mary Landreiu started playing games in the Senate, threatening to filibuster any bill including the public option, both saw significant gains. And then in mid-December when Lieberman and Nelson (both owned-and-operated by the insurance lobby) really turned up the heat, killing the idea of even a triggered public option, and expanded Medicare, there was another bump in the share prices.
So is it really news when stocks that are up more than 30% in two months on speculation of favorable legislative results sell off by 1% when those results are achieved? Apparently Faiz thinks it is. Then again, he’s so gullible that he believes industry PR spin over concrete evidence as displayed by that 30% run-up. So he managed to get the politics, the economics, and the market dynamics all wrong in a single post. That’s excellent work, chief.