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FACT CHECK: Health insurer profits not so fat

Goldenboy219 said:
Diminished credit availability causes spending (necessary for cash flow) to decrease almost in an exponential fashion.
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Increased revenue, regardless of credit, will cause cash flow. When business is up, workers work more, then get paid more, then go spend more at the store, the real estate agency and the car dealer and everywhere else in between.
 
apdst said:
Increased revenue, regardless of credit, will cause cash flow. When business is up, workers work more, then get paid more, then go spend more at the store, the real estate agency and the car dealer and everywhere else in between.
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And just how do you think most Americans buy big ticket items like houses and cars?
 
apdst said:
Increased revenue, regardless of credit, will cause cash flow. When business is up, workers work more, then get paid more, then go spend more at the store, the real estate agency and the car dealer and everywhere else in between.
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Increased revenue signifies increased demand for the marginal product of labor/capital. Greater credit availability necessarily boosts demand!

:2wave:
 
winston53660 said:
And just how do you think most Americans buy big ticket items like houses and cars?
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With cash flow!

On a serious note, positive cash flow is a major component to credit availability, although not a constant (for many reasons).
 
winston53660 said:
And just how do you think most Americans buy big ticket items like houses and cars?
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Thye make money at their jobs to pay for them. It doesn't matter if they finance those goods, or pay for them outright, if the company isn't making money, because the economy is down, the employees are making more money, so they're not buying anything.

It's going to be next to impossible to get a loan anymore without putting down the required 20% up front, even with creative financing. If people aren't making money, they can come up with the down payment, therefore, won't be buying anything and it won't matter how much credit is available.
 
apdst said:
Increased revenue, regardless of credit, will cause cash flow.
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Yes it can come in one end and go out the other end. Increased revenue does not automatic mean "better times".

When business is up, workers work more, then get paid more, then go spend more at the store, the real estate agency and the car dealer and everywhere else in between.
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But that has nothing to do with increased revenue. Time and time again, we see companies with increased revenue and profit lay off people. Laid off people do not go out and spend more.

Plus increased revenue does not mean increased profit.
 
Goldenboy219 said:
Increased revenue signifies increased demand for the marginal product of labor/capital. Greater credit availability necessarily boosts demand!

:2wave:
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Not necessarily. If people don't have the money to pay off that credit, they won't be using it.
 
Goldenboy219 said:
With cash flow!

On a serious note, positive cash flow is a major component to credit availability, although not a constant (for many reasons).
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Oh yeah I agree a positive cash flow is definitely needed but with out credit availability the economy will stagnate.
 
apdst said:
Thye make money at their jobs to pay for them. It doesn't matter if they finance those goods, or pay for them outright, if the company isn't making money, because the economy is down, the employees are making more money, so they're not buying anything.

It's going to be next to impossible to get a loan anymore without putting down the required 20% up front, even with creative financing. If people aren't making money, they can come up with the down payment, therefore, won't be buying anything and it won't matter how much credit is available.
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Answer a quick question: Why is it when a large business has a neutral cash flow, and their credit availability diminishes, the firm will most likely lay off employees?
 
apdst said:
Not necessarily. If people don't have the money to pay off that credit, they won't be using it.
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BULL****!!!!!!!!!

Future income expectations is the main determinant in purchasing decisions. Otherwise, what is the point of credit if you already have the cash in hand?
 
PeteEU said:
Yes it can come in one end and go out the other end. Increased revenue does not automatic mean "better times".
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No, it doesn't, although decreased revenues is a guarantee of, "not so good times".



But that has nothing to do with increased revenue. Time and time again, we see companies with increased revenue and profit lay off people. Laid off people do not go out and spend more.

Plus increased revenue does not mean increased profit.
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Where do you get that from?...:rofl

1. I've never seen a prosperous company lay people off. If a company is producing more goods and services, they're going to need all their employees to handle the increase in business volume.

2. The only way that increased revenue won't mean inreased profit, is if there is some sorta catastrophic shortfall that wasn't foreseen, or, the company was orginized in such a way to not make money, to begin with.
 
winston53660 said:
Oh yeah I agree a positive cash flow is definitely needed but with out credit availability the economy will stagnate.
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Exactly. One of the reasons Africa is poor and remains poor is the total lack of credit for business and ordinary people (relatively speaking). In fact the UN and others have promoted "mirco credit" to poor local farmers and especially women who then have used the money to start very successful local business. Once the credit was available then the local economy grew and people became richer. Without it, it was the same old same old.
 
Goldenboy219 said:
Answer a quick question: Why is it when a large business has a neutral cash flow, and their credit availability diminishes, the firm will most likely lay off employees?
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I'm not talking about companies that break even, or show a loss. You're talking about two different animals.
 
Goldenboy219 said:
BULL****!!!!!!!!!

Future income expectations is the main determinant in purchasing decisions. Otherwise, what is the point of credit if you already have the cash in hand?
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I'm not talking a company. I'm talking about private citizens.
 
apdst said:
No, it doesn't, although decreased revenues is a guarantee of, "not so good times".
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Not necessarily. Say for instance a major component production has a positive supply shock, where the cost has diminished accordingly. Due to the competitive nature of firms, a decrease in price is necessary.

1. I've never seen a prosperous company lay people off. If a company is producing more goods and services, they're going to need all their employees to handle the increase in business volume.
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I witnessed it last year. When credit availability froze, a whole slew of prosperous firms were forced to either reduce variable costs, or sell assets to pay for fixed costs.

2. The only way that increased revenue won't mean inreased profit, is if there is some sorta catastrophic shortfall that wasn't foreseen, or, the company was orginized in such a way to not make money, to begin with.
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Or.... If the respective firms level of production created diminished marginal returns from labor, i.e. the cost increased relative to the output.
 
apdst said:
I'm not talking a company. I'm talking about private citizens.
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As am i. If a family loses its primary source of income, and all they have to purchase necessities is their credit card, i highly doubt they are going to starve because they dont have the money that month....
 
apdst said:
I'm not talking about companies that break even, or show a loss. You're talking about two different animals.
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No, lets assume the demand for a firms product does not decrease, although their credit availability does. They will have to reduce variable costs in some fashion.
 
apdst said:
Where do you get that from?...:rofl

1. I've never seen a prosperous company lay people off. If a company is producing more goods and services, they're going to need all their employees to handle the increase in business volume.
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Form a thing called reality.

Lets look back in history. In the 1990s GM had BILLIONS in profit per quarter, and yet it laid off people at a near constant pace. Yes it moved its production to Mexico and other places, but that does not change the fact, that GM had mega profits and laid off American workers at a constant pace for decades.

Lets look at today. Electrolux, one of the biggest home appliance companies in the world, had profits jump 6 fold last quarter and yet it is cutting 3000 jobs world wide, 850 in the US alone. Why? Because they are moving production to cheaper locations (aka 3rd. world countries). Again, higher profit does not mean jobs will stay in the US or Sweden (its a Swedish company)

Or how about IBM. In 2005 IBM fired 10 to 15k workers world wide, so to "improve the profit". It had a healthy profit margin already and 7 billion in the bank at the time, but it wanted more, so it fired 10 to 15k workers worldwide to save 1 billion dollars. So again your theory falls apart.

Companies downsize constantly despite higher profit or/and revenue. Usually they do it by moving the production to a 3rd world country, and they do it to up the over all profit and keep shareholders happy. Workers are never a consideration for said companies (relatively speaking). And no I aint saying it is a bad thing (or good), just pointing out a fact.

2. The only way that increased revenue won't mean inreased profit, is if there is some sorta catastrophic shortfall that wasn't foreseen, or, the company was orginized in such a way to not make money, to begin with.
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Wrong again. Companies often have increased revenue but decreased profits. Things like currency exchange rates, strikes, higher commodity costs, and so on, all hit the profit margin. For example during the 140 dollar oil period. Companies could easily have increased sales and hence revenue, but that oil price cut into profit margins considerably.

And then there are the companies who are bloated with cost.. GM comes to mind.
 
PeteEU said:
Form a thing called reality.

Lets look back in history. In the 1990s GM had BILLIONS in profit per quarter, and yet it laid off people at a near constant pace. Yes it moved its production to Mexico and other places, but that does not change the fact, that GM had mega profits and laid off American workers at a constant pace for decades.
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You just answered your own question. People in the states were laid off, because GM moved plants to other countries, where people in thos countries were given jobs.
 
apdst said:
You have the understand that hding money and stealing money, are two different things. It's not illegal to hide money. I do it all the time.
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Keep digging apdst.

(If the guy made a profit for the company, when thy only expect a 6% profit margin, then he most certainly earned it.) Now you follow that up with. (its not illegal to hide money,I do it all the time).

Who you who you hiding it from, the IRS? Is it drug money your hiding? is it offshore?Do you do bushiness with the Gnomes of Zürich :rofl
 
apdst said:
You just answered your own question. People in the states were laid off, because GM moved plants to other countries, where people in thos countries were given jobs.
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Keep digging that hole. You know as well as I do, the only jobs that count are the ones in your own country, not in a 3rd world country. Dont try to hide behind globalization and excuse the acts of companies like GM and others for cutting jobs in the US (and Europe) while racking up billions in profits year after year.

As you stated people without jobs dont spend, hence laying off people in the US (or Europe) will mean less consumption in the very market that those companies sell a majority of their products in. But I am guessing that you are one of those "they can get another different job" types.. well in the real world that is more than often not the case at least in the short term. You wont have a guy working for GM have the same spending habits if he got a job at McD. And you cant have a guy working for GM instantly turning over and becoming a doctor, or nurse, or start his own tech company.
 
Goldenboy219 said:
Diminished credit availability causes spending (necessary for cash flow) to decrease almost in an exponential fashion.
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Well, you have to look at what credit is. First of all, it's not money. Credit is never money and represents no currency. What it is is a "deferred payment", a "contract". Anytime you use someone elses asset and agree to pay later is credit. It has nothing to do with cash flow and everything to do with increasing consumption.
 
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