Most Americans know the U.S. economy is seriously dependent on consumer spending. If typical Americans are not out there spending money, the economy is likely not to do well. Regretfully, retail selling during the holiday season is disappointing and the middle class consistently seriously struggle.  Families are going to have less money in their pockets to spend because of much increased health insurance premiums under Obamacare.

Unfortunately, for them, millions of those families were hit with massive health insurance rate increases.
Health insurance premiums for men are likely to go up by an estimate of 99 percent under Obamacare and health insurance premiums for women will go up by an average of 62 percent under Obamacare.

Most middle class families simply cannot afford that.

Millions of families are receiving letters just like that.  In addition, to say that such rate increases are a "surprise" to most people would be a massive understatement.  Even people that work in the financial industry are shocked at how high these premiums are turning out to be...

"The true big surprise was how much out-of-pocket would be needed for our family," said David Winebrenner, 46, a financial adviser in Lebanon, Ky., whose deductible topped $12,000 for a family of six for a silver plan he was considering. The monthly premium: $1,400.

Since Americans are going to have to pay much more for health insurance, that is going to remove a huge amount of discretionary spending from the economy, which will not good news for retailers.

Stocks simply keep going higher and better, and now what is happening in the stock market does not bear any resemblance to what is occurring in the overall economy whatever. Stocks travel up regardless of what happens.  If there is good news, stocks go up.  If there is bad news, stocks go up. If there is no news, stocks go up. 

It is time to crank up the Looney Tunes theme song because Wall Street has formally entered crazy town territory.  Stocks simply keep going higher and better, and now what is happening in the stock market does not bear any resemblance to what is occurring in the overall economy whatever. So how long will this irrational states of affairs probably continue?  Stocks travel up regardless of what happens.  If there is good news, stocks go up.  If there is bad news, stocks go up.  If there is no news, stocks go up.  On Thursday, the day after Christmas, the Dow was up another 122 points to a different new incomparable record high.

In fact, the Dow has had an astonishing 50 record high closes this year.  At the time, housing costs simply kept going higher and better and everybody rush to buy before they were “priced out of the market”. It is nearly as if Wall Street has not learned any lessons from the last two major stock market crashes at all. Simply look at Twitter.  At this value, Twitter is purportedly pricing 40.7 BILLION dollars. However, Twitter is not profitable.  Not one single dollar.

In fact, Twitter lost 64.6 million dollars last quarter alone.  Overall, the Dow is up over 25 percent thus far this year. It has been an exquisite run for Wall Street.  The median price-to-earnings ratio on the S&P 500 has reached an incomparable record high, and margin debt at the New York stock exchange has reached a level that we have never seen before.  In other words, stocks are massively overpriced and people have been borrowing huge amounts of cash to buy stocks.  We conjointly saw these behaviors just before the last two stock market bubbles burst.

The Federal Reserve cited stronger jobs growth as a reason for its call to start to reverse its bond-buying program. They forecasts unemployment of 6.3 percent in 2014, up from its previous forecast of 6.4 percent. The Federal Reserve tempered nervous investors by suggesting its key federal funds rate would keep less than previously expected. It depends on whether the Federal Reserve’s unemployment rate target is hit. The Federal Reserve has kept interest rates close to zero since late 2008 and has signaled it won’t raise its federal funds rate until unemployment hits, at the least, 6.5 percent.

In a surprise move, the Federal Reserve decided the U.S. economy was doing well enough that it might begin to cut back on its generous $85.0-billion a month quantitative easing (QE) strategy.

It is a “surprise” because the Federal Reserve at the start said it would not think about tapering until the U.S. economy was on solid, sustainable economic ground that meant an unemployment rate of 6.5% and inflation of 2.5%. Today, unemployment sits at seven percent and inflation is close to historic lows at below one percent.

Stock Market Grows

Against a weak economic backdrop, the Federal Reserve created a brave and daring call to slash its monthly QE policy by a paltry $10.0 billion. Which means that rather than pumping $1.0 trillion into the U.S. economy next year, it is solely going to inject $900 billion? In other words, the U.S. national debt goes to increase by $900 billion. (Source: press release, Board of Governors of the Federal Reserve System web site, December 18, 2013.)

If the U.S. economy were on solid footing, Fed Chairperson Ben Bernanke would have created a much bigger dent in his monthly bond-buying program. Instead, he created a token gesture, as he gets able to hand over the baton to Janet Yellen early next year.