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 Nate Silver looks at Trump’s New York blowout of Ted Cruz and the road ahead to his needed 1237 delegates for a first ballot
victory.
It looks as though Trump will win every New York county except for Manhattan. More importantly, it looks as though he’ll eventually get something like 90 delegates of the 95 available in New York
I’m not sure we’ve learned as much about how Trump will perform outside the Northeast. It’s been a highly regional campaign so far, and Trump will probably still need to win both Indiana and California to clinch 1,237 without uncommitted delegates. If he loses both states, we’re probably headed for a multi-ballot convention, which would be trouble for Trump. If he splits Indiana and California, Trump will be right on a knife’s edge — that’s the case where the extra two or three dozen delegates he’ll pick up in the Northeast tonight and next week could be the most helpful to him.
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 A spokesperson for the Obama administration dismissed the news that UnitedHealth’s withdrawal from most of the 34 ObamaCare Exchanges in which it currently
sells as unimportant and denied that there is any chance that the Exchanges will collapse. United has cited losses of $650 million in 2016 alone as reason for the withdrawal.
Healthy people consider ObamaCare a bad deal, writes Cato Institute’s Michael Cannon. Mr. Cannon explains why UnitedHealth’s withdrawal from O’Care’s Exchange is more ominous than the
administration would like us to know.
- Why United Health’s departure shows ObamaCare is suffering from self-induced adverse selection. Although UnitedHealth did not have the lowest-cost premiums in the Exchanges, it still lost money, suggesting that high-cost patients are shopping for the most comprehensive benefits regardless of cost. UnitedHealth offered coverage that was attractive to the sick.
- Why UnitedHealth’s departure from the Exchange is bad news for other carriers, who are already suffering unsustainable losses. “Even after the government threw all the subsidies it had at Exchange carriers, 70% still reported losses, according to the consulting firm McKinsey. The average
profit margin was negative in 41 states.” When UH’s sicker-than-average enrollees enroll in whichever remaining plans offer the most comprehensive coverage, losses will mount for carriers of those plans.
- Why UnitedHealth’s departure shows O’Care’s premiums will continue to rise. “The Obama administration claims the impact on premiums will be small because UnitedHealth accounts for just 6% of Exchange enrollments and didn’t price its products competitively. Yet
the KFF (Kaiser Family Foundation) estimates that without UnitedHealth, premiums would have been 1% higher in 2016–and that’s before we include the most important effect of the company’s withdrawal.”UH’s costlier-than-average enrollees will enroll with the most comprehensive coverage on the market. As losses mount, carriers will increase premiums.
- Why there will be more exits. If those carriers’ losses are too great, or if the government blocks them from increasing premiums sufficiently, those carriers will exit the Exchanges, just like UnitedHealth has. Mr. Cannon also predicts that the next carriers to leave the Exchanges will be those offering comprehensive coverage at moderate or high premiums.
- Why UH’s departure shows quality under O’Care will continue to fall. “Obamacare will keep punishing whatever insurance company offers the best coverage. The law is literally rigged to create a race to the bottom. That’s why so many carriers are offering plans with high cost-sharing and narrow
networks.”
ObamaCare, writes Mr. Cannon, “makes it harder, not easier, to have secure, high-quality health coverage.”
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 The two most important words in investing, as I have been writing in Richard C. Young’s Intelligence Report for decades, are compound interest.
Albert Einstein described compound interest as the greatest mathematical discovery of all time. Ben Franklin wrote on compound interest, “Tis the stone that will turn your lead into gold.” Charles Munger, longtime partner to Warren Buffett has often said, “Understanding the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of
things.”
Richardcyoung.com contributor, and my longest friend in the investment industry, Dave Hammer recently wrote to me about compounding:
When my great-grandfather came to this country from Scotland to work for GE around 1912, he used his first paycheck to buy one share of GE stock. Today, each of his 23 great grandchildren (who like me reinvested dividends) now has $30,000 apiece. I told this story to GE’s CFO years ago, and he used it in his investor presentations. It was a compound return of 9.5% and a great example of
compounding.
In Part III, I will give you another astounding example of the power of compound interest. I will also explain how we use the miracle of compounding as the core of everything we do for clients of Richard C. Young & Co., Ltd.
See Part I by clicking here.
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Is this what the death of money looks like? Whatever your thoughts on Harriet Tubman vs. Andrew Jackson, is futzing with currency portraits the priority of the Treasury Dept.? With negative rates the world over, cash is becoming a luxury. Government wants your cash. Bureaucrats will never be satiated no
matter how many of your hard earned tax dollars government destroys. It doesn’t respect money. It doesn’t respect the moral high ground that exists between buyer and seller. As far as government is concerned, it is the buyer and the seller. If you don’t like it, tough. The end goal of government is to digitize your cash. And by ignoring the needs of those who have it by focusing on pet projects, government is hastening the death of money.
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After living through more than 87 straight months of a Democratic president elected on a platform of “Hope and Change,” how is it possible that so many under-50 liberals are rallying around Bernie Sanders as the agent of change? The WSJ’s Daniel Henninger then asks, “What, exactly, is
Barack Obama, Hillary Clinton or even Bernie Sanders supposed to deliver that an infinity of politicians and public officials before them haven’t already delivered?”
As imperfect as it may be, the federal budget embodies what the U.S. is, writes Mr. Henninger. The 2015 federal budget spent 21% of the U.S. economy underwriting programs. Here are some programs funded by that $3 to $4 trillion:
Welfare programs include: the negative income tax, SNAP (supplemental nutrition), housing assistance, SSI, Pell Grants, TANF (temporary assistance for needy families), child nutrition, Head Start, job training programs, WIC (food for women and children), child care and Liheap (energy subsidies) (listed at federalsafetynet.com).
Entitlement programs include: Social Security, Medicare, Medicaid, unemployment insurance and the Affordable Care Act.
Education: A website called CollegeScholarships.org lists “Grants from the U.S. Government: Free Money from Uncle Sam.”
“Why are 25-year-old liberals crying out for ‘change,’ if you are spending $4 trillion every year on all this stuff?” asks Mr. Henninger. “There’s hardly anything significant left to deliver …”
More on the failed policies of liberalism here.
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 A President Hillary Clinton would nominate a powerfully anti-Second Amendment liberal to the Supreme Court bench. With Justice Antonin Scalia on the scene, the
court was pro Second Amendment by just a single vote—Scalia’s.
NRA Executive Vice President Wayne LA Pierre writes:
For the nation’s 100 million gun owners—led by the National Rifle Association—the election of Hillary Clinton as president coupled with the election of a Senate led by arch gun-banner New York’s Sen. Charles Schumer, would guarantee that the high court would be dominated by “progressives” who would doubtless reverse the landmark decisions upholding the Second Amendment
as an individual right.
The 2016 presidential election, unlike any in my memory, is a single-issue election, and that single dominant issue is the Second Amendment. A vote for Hillary Clinton is a death vote for your gun ownership rights and, as our Founders envisioned, for your family’s protection against the tyranny of an overreaching “progressive” central government.
Join the NRA and immediately sign your family up for the NRA’s excellent handgun safety course. (More on training here). A passing grade will allow you to obtain, where
legal, a state concealed weapons permit.
Clinton wants to double down on the failed gun philosophy of Barack Obama.
Donald Trump and Ted Cruz need to make the Second Amendment priority number 1 in their campaigns.
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 It turns out lifestyle is important to millennials at the cost of not paying down student debt or saving for retirement. In a recent survey by Providence, RI based Citizens Bank, as reported by Reuters and picked up by the St. Louis
Post-Dispatch:
Fewer than half (47 percent) of millennials, those in the 18-35 age group, who are college graduates, would be willing to limit their online food delivery in return for reducing their student loans.
Other priorities? Concerts, sporting events and lattes, as well as travel and vacations.
The prospect of limiting any of these luxuries got the “no thanks” from the majority of millennials who were asked if they would cut back to lower their student loans. The same holds true for cutting Internet service.
Despite being so unwilling to give up life’s little pleasures, more than half (57 percent) said they regret taking out as many student loans as they did, and about a third said they would not have even gone to college if they knew how much it was going to cost them.
That is a big conflict, says Brendan Coughlin, president of consumer lending at Citizens Bank.
“They are very committed to living their life the way they want to live their life, and as frustrated as they are by student loans, they are not willing to make those lifestyle trade-offs,” he said.
Part of the problem may be one of denial and math. The same survey found that nearly half of millennials (45 percent) with student loans do not even know how much of their annual salary they spend on them. It is 18 percent on average, for the record.
On the upside, the vast majority do at least know what they owe — over $40,000 for most. But more than a third (37 percent) are clueless on the interest rate they pay.
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Pat Buchanan lays out a frightening scenario for the future of both Europe and America:
Today, no great Western nation has a birthrate that will prevent the extinction of its native-born. By century’s end, other peoples and other cultures will have largely repopulated the Old Continent.
European Man seems destined to end like the 10 lost tribes of Israel — overrun, assimilated and disappeared.
And while the European peoples — Russians, Germans, Brits, Balts — shrink in number, the U.N. estimates that the population of Africa will double in 34 years to well over 2 billion people.
What happened to the West?
FLASHBACK VIDEO: Suicide of a Superpower: Pat Buchanan on the Death of Western Civilization
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 With the
nation locked in a pulsing tug of war over who gets to determine who goes peepee in which potty, perhaps it is time to consider breaking up the United States.
Don’t laugh. It’s an argument with a rich tradition behind it. Today: the tradition. Next week: the praxis.
One of the first serious debates in American politics was over the question of whether the prospective United States was too large to remain a republic. On behalf of the anti-federalists, “Brutus” wrote that
a free republic cannot succeed over a country of such immense extent, containing such a number of inhabitants, and these encreasing in such rapid progression as that of the whole United States.
Keep in mind, this was the 13 colonies we were talking about. Brutus went on to quote Montesquieu on the ideal size of a republic, concluding on his own that
In a republic, the manners, sentiments, and interests of the people should be similar. If this be not the case, there will be a constant clashing of opinions; and the representatives of one part will be continually striving, against those of the other. This will retard the operations of government, and prevent such conclusions as will promote the public good. If we apply this remark to the condition of
the United States, we shall be convinced that it forbids that we should be one government. The United States includes a variety of climates. The productions of the different parts of the union are very variant, and their interests, of consequence, diverse. Their manners and habits differ as much as their climates and productions; and their sentiments are by no means coincident. The laws and customs of the several states are, in many respects, very diverse, and in some opposite; each would be in
favor of its own interests and customs, and, of consequence, a legislature, formed of representatives from the respective parts, would not only be too numerous to act with any care or decision, but would be composed of such heterogenous and discordant principles, as would constantly be contending with each other.
Is there a historical judgment that, more than 200 years on, holds up better?
As the United States aggressively expanded from 13 small, united states into a throbbing superpower acting on behalf of (or ignoring) any agglomeration of world citizens that caught its fancy, the question became more, not less, pertinent.
George Kennan, the architect of containment who, despite this legacy, was a notable dove and anti-establishmentarian, worried at the end of his life about many things that did not warrant worry, including cars, computers, and women’s suffrage. But he also worried about the sheer size of the United States.. Wasn’t it the case, Kennan fretted, that
[t]he great country has a vulnerability to dreams of power and glory to which the smaller state is less easily inclined[?]
Kennan’s radical solution to this dilemma? He wondered whether
our country, while retaining certain of the rudiments of a federal government, were to be decentralized into something like a dozen constituent republics, absorbing not only the powers of the existing states, but a considerable part of those of the present federal establishment.
Yes, a radical idea. But perhaps a radical idea whose time has come. Next week: what getting from here to there might look like, and why we all might run away from the idea, screaming.
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