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Weekend Editorial: The $27,000 Problem |
By Prof. Jeffrey Bierman, CMT
My wife came home from the doctor this week. |
Annual mammogram. Routine checkup. She had a benign form of breast cancer three years ago. Got treated. Got through it. Now she goes every year like clockwork. |
She walked in complaining about the bill. The copay. The deductible. The out-of-pocket costs that keep climbing no matter what insurance we carry. |
I hear it everywhere now. My brother's wife is general counsel for the number one Blue Cross in the country. She's the CEO. She told me flat out they can't get these prices down. They can't do it. |
Health insurance premiums are soaring again. From last year to this year they're up 6%. Next year they're going up another 5% to 6%. |
Jerome Powell keeps telling us inflation is coming down. He's lying. Just a lie. |
The Math That's Breaking Families |
The average premium for a family of four with workplace insurance hit $27,000 this year. |
Let that sink in. $27,000. |
If the average American makes $60,000, half their income goes to insurance. If a family makes $100,000, one quarter of their paycheck disappears before they pay for food, housing, transportation, or anything else. |
That's why everybody's broke. |
And it's not just premiums. Deductibles keep climbing. Copays keep rising. Out-of-pocket maximums keep expanding. Employers are passing more costs to workers because their own healthcare expenses jumped 6.5% this year and are projected to jump another 6.5% in 2026. |
When families are choosing between paying insurance premiums and paying rent, something fundamental breaks in the economy. Consumer spending doesn't just slow down. It collapses in specific sectors while appearing fine in aggregate numbers. |
The Genesis Cog Scanner tracks exactly where this stress shows up first: Insurance companies missing earnings. Retail cutting guidance. Credit card delinquencies spiking. |
These aren't random events. They're connected symptoms of the same disease: families writing $27,000 checks and having nothing left over. |
The Fed's Disconnect |
Powell cut rates 25 basis points on Wednesday. |
He's cutting rates while insurance premiums explode. While families drop coverage they can't afford. While consumer stress shows up in every sector that depends on discretionary spending. |
His reason? Supporting the labor market. Preventing recession. Keeping Wall Street happy. |
But here's what actually happened after the cut: Bond yields went up. The 30-year Treasury hit a 4.6 handle. Bond experts are telling me we're headed to 6% eventually. |
So the Fed cuts rates and yields rise anyway. The market is telling Powell his cuts don't matter. The bond market knows something the Fed refuses to acknowledge. |
Rate cuts help Wall Street finance deals. They help banks expand lending. They help brokerage firms pump up margin accounts. But they don't help the family writing $27,000 for insurance. |
Wall Street celebrates the cuts. Main Street doesn't feel them. That disconnect is the problem. |
Where the Stress Shows Up |
I spent 30 years analyzing companies on Wall Street. Transportation. Retail. Small caps. REITs. I know how to read financial statements. I know what healthy business models look like. |
And right now I'm seeing credit stress everywhere. |
Companies reporting they can't fund their current ratios. Debt problems mounting. Working capital issues spreading. These aren't isolated problems. They're systemic cracks forming because the consumer is tapped out. |
When families spend $27,000 on insurance, they're not buying new cars. They're not renovating homes. They're not taking vacations. They're not dining out. They're not doing anything that requires discretionary income because they don't have any. |
Wall Street's response? "We don't care. Our focus is rate cuts, not credit worries." |
Their assumption is simple: If there's a credit problem, it's not big enough to topple the economy. We'll cross that bridge when we come to it. |
That's not a strategy. That's hope wearing a suit. |
The reality is we don't know who's linked to all these credit problems. We don't know which companies are exposed. We don't know where the dominoes start falling. By the time we find out, the market will already be down. |
The Trading Volume Problem |
Here's how this connects to market stability. |
I know the CEO of Robinhood. Steve Quirk was my boss for years at ThinkorSwim. Brilliant guy. One of the nicest people you'll meet. He knows how to run a brokerage firm. |
But Hood's business model depends entirely on one thing: people trading constantly. |
When families have disposable income, they trade. They chase momentum. They buy crypto. They play options. They fund accounts and take risks because they can afford to lose some. |
When families are writing $27,000 insurance checks, they stop trading. They take their hands off the mouse. They don't fund new accounts. They sit and stare at screens without clicking. Trading volume dries up. |
At ThinkorSwim we had a metric called DARTs. Daily Average Revenue Trades. That's how brokerage firms measure prosperity. When DARTs drop, that's the kiss of death for the business. |
Hood's entire parabolic run depends on the market staying up, crypto staying up, gold staying up, and trading volume staying elevated. The second families start choosing between insurance premiums and account funding, that business model breaks. |
This isn't just about one stock. It's about what happens when consumer stress finally shows up in places Wall Street assumed were bulletproof. |
This Weekend, Face Reality |
Turn off CNBC. Stop listening to Powell's press conferences. Look at your own expenses. |
How much did you pay for health insurance this year? How much more are you paying next year? How much of your paycheck disappears before you even see it? |
That's the real inflation. That's the pressure the Fed refuses to acknowledge. That's the crack forming beneath Wall Street's bubble. |
Monday the market opens. The algorithms do their thing. Wall Street celebrates rate cuts. But none of that changes the fact that families are writing $27,000 checks while Powell tells them inflation is under control. |
The market doesn't care about your insurance premiums. The algorithms certainly don't. They never get sick. They never need mammograms. They don't have wives complaining about copays. |
That's their edge. |
Your edge? Recognizing when the math stops working. |
When the bubble gets so big that reality can't be ignored anymore. When $27,000 health insurance premiums collide with falling discretionary income and rising credit stress. |
Genesis COG tracks these systemic breakdowns before they cascade. |
The system doesn't wait for the Fed to acknowledge inflation. |
It detects consumer stress patterns in sector performance, credit deterioration in earnings reports, and algorithmic positioning shifts that signal when the bubble is running out of air. |
When it bursts, the machines will position ahead of the break. They always do. The question is whether you'll be positioned with them or against them. |
Have a good weekend. We'll see what Monday brings. |
Professor Jeffrey Bierman
Creator of the Genesis COG System |
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