Today is Thursday, May 17, 2012

Economy

Forecasts, reports, earnings.

HWAY: Gallup-Healthways Well-Being index: 49% ‘thriving,’ 47% ‘struggling,’ 4% ‘suffering’

Healthways Inc. (HWAY) appears to be getting a lot of brand building attention for its sponsorship of the new Gallup-Healthways Well Being Index following the announcment of initial results of the survey Tuesday. The survey results are getting a lot of press attention (search the web for Healthways, news), and they undoubtedly will help both Gallup and Healthways sell their services. Healthways provides disease management services to employers, health insurers and Medicare, and Gallup conducts health status and employment satisfaction studies for employers and other organizations. Time will tell how long it will take for Healthways to leverage its data into new business and its increased visibility into a higher stock price, but it’s clear the company has a wealth of new information that its sales people will be showing customers and prospects.

Down the road, insurers might use the survey data to assess the medical risks presented by large groups, or employers may use the data to win lower premiums from health and life insurers. The data also could be used by a contractor to prove to a customer or prospect that its workers are relatively happy and healthy. A hedge fund or other large institutional investor could commission studies of companies to identify those with the most productive work forces. Employers and insurers would have to be careful about how they used the data. They wouldn’t want to be accused of discriminating against older or unhealthy workers.
Some 49% of Americans say they are thriving, 47% say they are “struggling” and 4% say they are “suffering,” according to the initial Gallup-Healthways Well Being Index. I recently blogged about the index here and about HWAY here.

“It’s pretty clear from the data provided through

Weakening economy blamed for drop in eye surgeries

The health care markets are working as demand for eye surgeries falls as the economy weakens, the NY Times reports.

Key graphs:

“We’re forecasting a 17 percent drop for 2008,” said David Harmon, president of Market Scope, an eye surgery market research house.

Mr. Harmon said that when first-quarter data becomes available next month, he expects it to show an even sharper decline in Lasik surgeries than in 2001. That time around, the sour economy led to a three-year slump in the laser procedures, which are typically not covered by insurance.

Lasik — for laser-assisted in situ keratomileusis — typically costs anywhere from $800 to $3,000 or more per eye.

 

Health care companies earnings reports are below estimates so far

Bespoke Investment Group reports that health care companies that have reported their earnings for the first quarter have come in with lower than expected results.
This shows that many health care companies are feeling the effects of a slowing economy, as we’ve been reporting here.

Recession watch: Cut technology spending now

With consumer spending slowing as consumers worry about their jobs and the rising costs of energy and food, if not housing, capital spending declines certainly are in the works as well. Gartner Inc. (IT), a leading technology research and consulting firm, has put out a news release advising its clients and the world to cut their technology spending now.

Obviously, this won’t help technology stocks or the economy, but it’s realistic, and IT managers will be smart to take Gartner’s adivice seriously. Stock charts have been saying the same thing for some time. Click on these charts to see daily, weekly and point and figure charts. Most of these stocks are down quite a big from where they were last fall.

Gartner advises clients:

Bespoke summarizes stock sectors’ earnings projections, which will change

Stock and options prices move in anticipation of changes in companies’ earnings. We’re in a bear market because earnings forecasts are glum and expected to worsen before they get better, having been at record levels in recent years. Bespoke Investment summarizes consensus earnings forecasts for leading sectors.

Beware. These projections are as much guesses as anything else. One reason is that many companies don’t do a very good job of forecasting for their industries or themselves. Thus, they revise their forecasts frequently and give very conservative guidance to protect themselves from shareholders’ law suits.

It’s the fault of mortgage brokers, banks, that subprime borrowers are in too deep?

Legislators in Washington and the states are debating how and whether subprime borrowers can be protected from their ignorance and the greed of mortgage brokers and bankers who suck them into home equity refinancings they can’t afford.

Lobbyists for banks and mortgage companies are arguing that too much regulation will shut down the subprime mortgage market and keep housing sales down forever. But another argument is that if people are forced to save to buy homes, they’ll be more secure in their homes and better off financially. That assumes, of course, that reduced home equity refinancings won’t end our economic boom and raise unemployment to unacceptable levels, whatever they may be.

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Patients accumulate huge debts on hospitals’ affiliated credit cards

Credit card companies and hospitals are making money on the high interest rates charged patients who run up big debts on their cards. The media are reporting the story as a negative for patients.

How long before new regulations follow?

What does this does for the PR of credit card companies and health care providers that partner with them?

Impact graphs from the Boston Globe:

 

Mortgage delinguencies at all time high

The number of people who were sold homes that they couldn’t afford and aren’t paying for is growing despite low unemployment and falling interest rates is growing, with mortgage delinguencies at an all time high.

Few banks are subprime lenders..

Housing: Markets with most aggressive bank home loans are most vulnerable to price declines

Housing markets where banks and other mortgage lenders have been the most aggressive in recent years are the most vulnerable to hard landings as their local markets’ bubbles burst, but three real estate economists who discuss the market on wsj.com don’t seem to think there will be a hard landing in the national housing market.

Some 10% of workers are in housing related industries, which means a decline in home construction affects millions of people.

Housing market headed for hard landing; so is the economy

ContraryInvestor.com lays out a bearish scenario for the housing market, housing stocks and the economy here. You may want to subscribe.