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I watched several companys report earnings yesterday and most were in line with Wall Street expectations One company caught my eye with their quarterly report that gave me as much insight into the overall economy as it did into the companys own personal outlook.
Aetna is a company that offers health insurance to working people. With all the prognosticators saying we are in a recession,we will be in a recession or we have been in a recession,Aetna shows me some evidence maybe things are quite as dire as most are telling us.
In a recession I would think an insurance company such as Aetna would be one of the first to have a downturn. A recession to me is a period of high unemployment,negative GDP growth and high inflation and so far I don't see any of these factors becoming overly excessive. In a recession you would expect Aetnas membership to be dropping as health care costs soar due to inflation and unemployment rises as companys lay off workers or to put freezes on hiring. With Aetna this just isn't the case as membership for their health care products is rising!
Aetnas membership actually grew last quarter by 614,000 to over 17 million members. Premiums surged but companys are still insuring their workers. And if you read my post on WAMU you will know why this really surprised me and I think you will be surprised too. Aetna affirmed 2008 guidance and will be adding 350,000 new insured members from I thought one of the most unlikely of sources; Bank of America. In this "recession","credit meltdown" housing crisis' and all the other terms to tell us how bad things are 2 companys are actually doing better than they should be. Bank of America adding 350,000 employees to Aetnas health plan doesn't make me think things are collapsing around me in this "election" year.
While all the talk from the media is painting such a dire picture,a lot of companys are doing very well. Granted we do have some problems and some sectors of the economy are suffering,but overall we are not doing that badly. Aetna and BAC seem to be painting a different picture than the media. With Aetna and BAC seeming to be doing business as usual and the other quarterly reports yesterday and new unemployment claims dropping by 32,000 yesterday I don't see things as bleak as most of the media.
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