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Our Venture Capital "Experiment" Is Already Putting Profits in Your Pocket

The tech sector is enduring one of its periodic corrections. But the venture-capital fund we told you about back in April continues to make new investments and has seen its net asset value (NAV) surge more than 18% in that short stretch.

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  • Featured Story

    Is Obamacare Creating a Part-Time America?

    Time Sheet Q

    America has become a part-time nation. The Bureau of Labor Statistics recently reported that in June part-time employees in the labor force reached an all-time high of 28 million, 3 million more than when the recession began in 2007.

    The economy lost 240,000 full-time jobs in June and added 360,000 part-time jobs, the BLS noted. Of the 753,000 jobs created this year, 589,000 were part time.

    The real unemployment rate in June, the U6, stood at 14.3%, up from 13.8%, a figure that includes part-time workers seeking full-time jobs and those who have become discouraged and are no longer looking for work.

    Now many economists and many in the financial press with sympathies to the administration have attributed the rise in part-time America to uncertainty among employers about future profitability and growth and not to the looming Obamacare mandate.

    It's ironic that in trying to play down Obamacare's influence on the job market, they end up dissing the president's stewardship of the economy.

    However, Obamacare has likely played a significant role in the part-time job wave. Under the Affordable Care Act, companies with 50 or more full-time workers must provide health insurance to all full-time employees, those working 30 or more hours per week.

    So if your workers don't work 30 hours per week you don't have to provide health insurance. It makes economic sense to have a part-time work force in many cases. Even with the administration's recent one-year extension of implementing the employer mandate until 2015, most small companies are still preparing to it.

    A reported 74% of small businesses are positioning themselves to slash hours, layoff workers or both.

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  • Healthcare

  • Nearly Half of Americans Say Obamacare is a Bad Idea Pout Q

    Obamacare critics have maintained from day one the president's signature healthcare bill is disastrous and doomed to fail.

    Now with just months until the bill takes full effect, more and more Americans are beginning to think the same thing.

    According to recent NBC News/Wall Street Journal poll, support for the Affordable Care Act is slipping.

    The fresh poll shows 49% of Americans say President Barack Obama's health care reform bill is a bad idea. That's the highest percentage since the poll began measuring backing and opposition for the reform in 2009. Only 37% say the plan is a good idea.

    The numbers reflect a sharp increase in disapproval since July 2012 following the U.S. Supreme Court's decision to uphold President Obama's healthcare overhaul. At that time, 44% of survey respondents called it a bad idea vs. 40% who called it a good one.

    The latest poll also revealed 38% of participants said they and their families will be in worse shape under the new health care law, the highest negative outlook percentage toward Obamacare since it was signed into law in 2010.

    Now just 19% say they will be better off while 39% say the law won't make much difference.

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  • California Just Gave Us a Glimpse of How Obamacare Will Fail Games Dominoes Q

    Turns out no one knows how Obamacare will work - not even the big-name insurers.

    And now, we're starting to see the effects of uncertainty.

    Today (Thursday), the Los Angeles Times reported that United Health, Aetna, and Cigna have opted out of the California insurance exchange.

    UnitedHealth has adopted a wait-and-see policy: "We are simply taking the time to carefully evaluate and better understand how the exchanges will work to ensure we are best prepared to participate meaningfully in their development," explains a spokesman to the LA Times.

    Cigna resolved to participate in exchanges in only half of the 10 states where it sells individual health policies, and California didn't make the cut.

    Aetna referred LA Times' questions to Covered California, the state agency in charge of implementing Obamacare.

    That means millions of Californians who will have to choose health insurance from exchanges or face a penalty will not be able to pick plans from those three big insurers - signaling limited options ahead thanks to Obamacare.

    UnitedHealth, Aetna, and Cigna's response to the California exchange is just the beginning.

    These three companies are but the first dominoes to fall to Obamacare's less-than-clear implementation.

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  • How the Sequester is Killing Healthcare Jobs Medical healthcare costs small

    Sequester-driven budget cuts to Medicare are threatening to spur massive job cuts in the healthcare industry.

    And the pain doesn't stop there - the sequester cuts are already making healthcare harder to obtain for some Medicare patients.

    Unfortunately, this is just the beginning. The longer Congress allows sequestration to continue, the deeper the cuts will go and the more widespread their impact.

    When President Barack Obama and Congress failed to reach agreement on $1.2 trillion in cuts to federal spending before March 30 -- as mandated by the Budget Control Act of 2011 -- the sequester kicked in.

    Medicare providers faced mandatory 2% across-the-board reductions in their reimbursements.

    After the cuts went into effect on April 1, hospitals, doctors, insurers, prescription drug plans, and other healthcare providers immediately felt the impact.

    In short, the sequester is delivering precisely the kind of broad, damaging and indiscriminate cuts that politicians warned would happen.

    And as each day passes, the drastic consequences grow worse.

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  • Obamacare Ruling: Key Takeaways for Investors and Taxpayers It's time to buy some insurance for your portfolio following Thursday's landmark Obamacare ruling.

    The Supreme Court voted 5-4 in favor of President Obama's controversial healthcare reform law, formally known as the Patient Protection and Affordable Care Act.

    The chief and appellate justices upheld the core of the law which has sweeping political and economic ramifications. Many economists, analysts and healthcare experts warn it's a Pyrrhic victory at best.

    President Obama and his supporters cheered the landmark healthcare decision - as Republicans reached for an aspirin, an antacid or an analgesic.

    While the GOP vows to throw out the law on day one if Mitt Romney wins Election 2012, the ruling does remove some of the dark clouds that have been looming over healthcare stocks. The uncertainty of the law's passage has had many market participants staying away from the sector.

    Obamacare Ruling and the Average Household

    What Obamacare means for the average American working family with an annual household income up to approximately $90,000, is that starting in 2014, they will be able to purchase private insurance through new state insurance markets at prices subsidized according to income level.

    Mammograms, cancer screenings and other preventative healthcare measures will be available without deductibles or co-pays.

    Adult children can remain on parents' health insurance plans until they are 26. Seniors can continue to receive discounts on prescription drugs, and health insurers will continue to pay rebates on premiums not adequately targeted at healthcare services.

    In addition, insurers will no longer be able to deny coverage to adults with a pre-existing medical condition and must stop or limit the practice of discriminatory pricing based on gender, age and current health status.

    Furthermore, healthcare providers will gravitate away from the conventional fee-for-service approach toward systems that coordinate care.

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  • Stock Market Today: Obamacare Upheld Volatility in the stock market today is high due to several factors both domestically and abroad.

    The Obamacare ruling is the main driver causing uncertainty in the market, followed by the start of the European Union summit today in Brussels.

    The Obamacare ruling had been anticipated with such fervor that reporters camped in front of the Supreme Court for days before the decision.

    They finally got one - and it may come as a surprise to many.

    The controversial mandate that requires everyone to purchase healthcare by 2014 or pay a small fine was upheld. The vote came in at 5-4 with Justices Scalia, Kennedy, Thomas and Alito dissenting.

    Chief Justice Roberts said that the mandate is not a valid exercise of Congress's power under the Commerce Clause, but it will survive as a tax.

    Republicans had been almost certain that the mandate would be stuck down and President Obama can now breathe a small sigh of relief that his healthcare overhaul has been upheld.

    Back to the EU summit, which has been awaited with such pessimism that the yield on Spanish 10-year bonds has risen above 7% again and the euro slipped to a three-week low of $1.24 versus the dollar.

    There is an unusual and detrimental air of division and discord among the European leaders heading into the summit. The continent needs to work towards more integration rather than fragmentation if they are to lay down a framework for better fiscal, financial and political union.

    U.S. unemployment claims fell slightly from the 392,000 initial claims reported last week to a still alarmingly high number of 386,000 for the week ended June 23. The final estimate for the first quarter's gross domestic product (GDP) came in at the expected 1.9%, but that estimate had already been lowered last week by the U.S. Federal Reserve.

    Looking beyond these reports, here are some stocks in the headlines today.

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  • Investing in Nanotechnology: FEI Co. (Nasdaq: FEIC) is the Top "Picks and Shovels" Play The word "nanotechnology" gets thrown around a lot but it still remains a fuzzy concept for most people.

    From a self-aware, self-assembling grey goo that takes over the world in a Michael Crichton book, to Apple's (Nasdaq: AAPL) Nano music player or Tata Motor's (NYSE ADR: TTM) Nano car, it's hard to get a clear picture of what nanotech really is.

    But as global World Economic Forum member and emerging tech guru Dr. Tim Harper explains, "Nanotechnology is to the 21st Century what chemistry was to the 20th Century."

    Like plastics, computers, and the Internet before it, nanotechnology will change the world in ways that we can't even imagine now. That's how powerful the nano-world will become.

    That's why every long-term growth investor needs to consider investing in nanotechnology. In terms of scale, the potential for investors is simply enormous.

    That's why one company, FEI Co. (Nasdaq: FEIC) is on my list of "buys" as the top "picks and shovels" play.

    The Miracle of Nanotechnology

    So what exactly is nanotech?

    It's a way of working with objects and materials at the atomic level, one molecule at time.

    That means that in the near future, we will be able to custom design structures literally from the ground up, molecule by molecule, creating a quantum leap forward in medicine, materials, electronics, food, and fuels - practically everything we know of.

    In fact, one of the biggest sectors where nanotech continues to have a huge impact is in drug development and drug delivery.

    Recent nanotech developments include: cancer treatments without chemotherapy or radiation, long-dose treatment of diabetes with a single monthly injection, long-release or on-demand blood pressure medications, and textiles to build skin, bone or organs from you own cells.

    Developments like these will invariably lead to big money

    A recent report by Cientifica, a leading global emerging technology consulting firm predicts:

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  • Healthcare Mandate Question: Should the U.S. Government Require Everyone To Buy Health Insurance? In a year of sweeping overhauls in healthcare, financial reform and tax policies, critics of U.S. President Barack Obama's proposals have called them ineffective, shortsighted and misinformed.

    This week, in a case that will likely go all the way to the Supreme Court, a federal District Court judge in Virginia added the term "unconstitutional" to that pointed list.

    The provision in question is part of the Patient Protection and Affordable Care Act of 2010, the U.S. healthcare reform initiative signed into law in March. It requires all Americans, unless exempted for religious or other reasons, to carry health insurance - or to pay a penalty for failing to do so.

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  • Congressional Spat Over Doctor's Medicare Pay Threatens Obama's Healthcare Reform Effort A Congressional stalemate over how to stave off a hefty pay cut to doctors treating Medicare patients threatens to undermine President Barack Obama's healthcare reform effort - even as the administration mails out a glossy brochure to reassure seniors the healthcare program is on solid ground.

    For the third time this year, Democrats and Republicans are squabbling over a provision to approve billions of dollars in new spending to avoid a scheduled 21.3% cut in reimbursements to doctors who treat Medicare patients.

    If GOP senators don't allow the stalled proposal to pass, some doctors will stop treating Medicare recipients, Obama said... Read More...
  • Japan's Astellas Pharma Is the Latest Company to Go Global to Dodge Patent Problems Japan's second-largest drug maker Astellas Pharma, Inc. announced yesterday (Sunday) it would buy U.S. biotech OSI Pharmaceuticals, Inc. (Nasdaq: OSIP) for $4 billion to increase its exposure to the U.S. pharmaceuticals market and build up its struggling pipeline.

    The all-cash bid is Astellas' second for the sought-after OSI after a March 1 $3.5 billion offer was rejected. Astellas will pay $57.50 per OSI share, 11% more than the first offer and 55% more than OSI's last closing price before Astellas starting bidding. OSI closed at $59.80 Friday.

    OSI's money-making cancer drug Tarceva generated $1.2 billion in sales last year and is projected to bring in $7 billion in revenue through 2020. Astellas wants to build a global cancer-drug business and jointly develop more cancer drugs with OSI.

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  • Buy, Sell or Hold: Is Pfizer Inc. (NYSE: PFE) the Right Prescription for Your Portfolio? In 2008, the journal Health Affairs reported that 25% of China's adult population - about 375 million people - was "overweight" or "obese."

    That number is expected to double by 2028, and obesity is just one health issue in a densely polluted nation that finds itself battling a growing list of ailments.

    So it's no surprise that China's pharmaceutical market has been surging at a compounded annual growth rate (CAGR) of more than 16% -- the fastest pace in the world, according to research by market-intelligence leader IMS Health Inc. (NYSE: RX). IMS Health estimates that by 2020 the Chinese market for pharmaceuticals will be $110 billion, second only to the United States.

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  • The U.S. Employment Outlook: Bad For Paychecks, Good For U.S. Stocks You undoubtedly know by now that the U.S. economy added 164,000 jobs in March. While that was the best number in ages, anyone who looked closely at the payrolls report issued by the U.S. Labor Department would discover that it was actually riddled with problems.

    Indeed, the report sends a very clear message: While the March report is consistent with a gradually improving labor market, the numbers hardly convey a sense of an economy that's zooming its way back to health.

    Still, as we'll see, this employment scenario could be a good one for U.S. stocks.

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  • Question of the Week: Do the Pitfalls Outweigh the Promise For the New Healthcare Reform Program? When U.S. President Barack Obama signed the new healthcare-reform bill into law yesterday (Tuesday), it ended months of political bickering and maneuvering, and began a new chapter in the nation's healthcare saga - one in which the country will feel the effects of this sweeping, costly and controversial policy overhaul.

    The fact is that many Americans will have healthcare for the first time ever. Offsetting that bright spot, however, is the reality that the program could add trillions in debt to the country's already burgeoning national debt, further complicating the matter.

    Going forward, it will now be left to the pundits, analysts and the healthcare industry to decipher what these provisions really mean for the industry, for individuals, for taxpayers - and even for investors.

    But here at Money Morning, we wanted to know what you think about this new law. That's why we made healthcare reform the inaugural topic in our new "Question of the Week" feature.

    Money Morning Question of the Week: U.S. President Barack Obama's controversial healthcare proposal is now law. What do you think? How do you feel? Do you think it's a beneficial or harmful move for you as a consumer, as an investor, and as a taxpayer? What do you think it means for our nation's economy?

    What follows is a sampling of the enthusiastic and passionate responses that we received. Make sure to also check out next week's "Question of the Week," a query that seeks your thoughts on the growing levels of U.S. debt.

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  • Healthcare Reform Losers: Companies Providing Retiree Benefits Face Multi-Million Dollar Tax Costs After sending letters of protest to Congress in the months prior to the healthcare law's approval, U.S. companies are now facing multi-million dollar after-tax hits this year due to a tax provision in the new legislation, labeling them healthcare reform losers instead of winners.

    Part of the new healthcare law places a federal income tax on government subsidies given to companies that provide retirees and their spouses with drug benefit plans. The 28% subsidy was created as Medicare Part D, adding a prescription plan for senior citizens to the Medicare Act of 2003. To encourage companies to continue offering retirees a drug plan, the tax-free subsidy reduced companies' costs. Fewer senior citizens then went through Medicare's prescription program - which would have cost taxpayers much more than the subsidy price.

    Caterpillar Inc (NYSE: CAT) and Deere & Company (NSYE: DE) are just two of the businesses that fought the new stipulations. The manufacturers estimate the tax will cost them $100 million and $150 million this year, respectively. Other companies who will pay handsomely include AK Steel Corp. (NYSE: AKS) with $31 million in charges, and Honeywell International Inc. (NYSE: HON) with an estimated fee of $42 million.

    Consulting firm Towers Watson & Co. (NYSE: TW) estimates these taxes could cost companies about $233 per person receiving drug benefits - a hefty price tag when a company gives benefits to 40,000 retirees, like Caterpillar.

    Overall, more than 3,500 companies offer drug benefits to 6.3 million retirees. Although the tax won't be effective until 2011, accounting practices force companies to recognize the fees in the period in which the law is signed. That means the tax could nab $14 billion from corporate profits in a year when companies were hoping to recover from huge losses during the recession.

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  • We Want to Hear From You: What Do You Think About the New Healthcare Law? After months of controversy, political bickering and maneuvering, and intense media speculation and scrutiny, this week became a historically significant moment in the annals of U.S. healthcare when U.S. President Barack Obama signed the new healthcare bill into law.

    Thus begins a new chapter in the healthcare saga, when the country will feel the effects of this sweeping, costly and controversial policy overhaul.

    As with any sweeping legislation, the law is facing both fierce support and opposition as the country digests what the provisions mean for individuals, for the healthcare industry, for the government - and for the... Read More...
  • Drug Companies and Hospitals Get a Boost from Healthcare Reform After months of trying to predict how the healthcare reform proposals would affect the respective futures of their industries, drug companies and hospitals are optimistic about the prospective long-term profits the final version of the health care reform bill could bring them.

    President Barack Obama yesterday (Tuesday) signed the $940 billion health care reform bill with support from pharmaceutical companies and the hospital industry. Both will benefit from a sharp increase in the number of insured customers, as the bill expands healthcare to up to 32 million more people.

    While the bill will cost tens of billions of dollars over the next 10 years, the planned reforms create something drug companies and hospitals can't live without: paying consumers.

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