Dear Congressional Wealth Destruction Followers:

Would you let a doctor who had a financial interest in your death by owning a life insurance policy on you recommend critical care for you?

I didn't think so. In fact, I think if there were a doctor who had such a policy, and collected on it, it would be a crime. Or at least make 60 Minutes.

The latest central planning initiative from Congress is the deceptively named Comparative Effectiveness research program. Congress has created a central committee to "study" what works best for health care on a cost vs. benefit basis -- i.e., dollars in versus healthcare outcomes. (It seems to me that nowhere else in the entire federal budget does the government ask if we are getting our money's worth.)

But, while this committee starts out as a study group, it's quite clear that its goal is to impose a straight jacket on health care choices and give more power to the government. Having fewer choices will mean higher death rates than we have now. For example, the survival rate for European men with 16 different kinds of cancer is ~47% while in the United States the survival rate is 66%, or 40% better. Do we really have to become like Europe? To quote Susan Hayward, "I want to live!"

Certainly, the healthcare stocks want to live. They got a reprieve when Tom Daschle's nomination was scotched, but in the last couple of weeks, many have gone down even more rapidly than the S&P 500 Index. For example, Humana is down 42% in 2009, more than double the fall in the S&P 500 Index. The fear and uncertainty surrounding the industry at this time is palpable, and their stocks are not performing as much like the inelastic demand safe-havens they traditionally were in difficult economic times.

While the rationale for the Comparative Effectiveness committee is cloaked in saving scarce dollars, the failure to apply common sense ways to limit health care costs (such as limiting malpractice lawsuits or capping pain & suffering damages), like they do in those European countries that are ostensibly healthcare utopias, show that Congress is interested in gathering power as much as saving costs. Will John Edwards really still be able to win $30,000,000 malpractice judgments while the rest of us are reduced to a life value not to exceed our hospital bill when we are old?

Much more worrisome to me is that, as the Tsunami of entitlement spending promised to the baby boomers (and everyone else) through Social Security, Medicaid and Medicare grows, the government will start to look at each senior citizen as a liability to be limited, and perhaps cut off by following proper "Comparative Effectiveness" guidelines. If I am only worth so much to the government, and they have to pay me another $20,000 per year for five more years if they cure me, aren't they incentivized to pull the plug? And even more incentivized with a 45% death tax?

Completely missing from any discussion about healthcare is the impact of the MARKET on the presence of HOPE. When you've just been told you have cancer, and, because you are 77, no expensive drugs will be used because the cost/benefit ratios are not good, and there is no one else you can turn to because the free market in health care has been destroyed, there is little cause for HOPE. When you and your loved ones hear that you have cancer, but know that somewhere, somehow, out there in the market is one more thing you can try, you may believe you can find a cure, and that belief alone may help win your fight against cancer.

Without a free market, the government will ration hope along with rationed drugs. And they will do so with the same excellence they apply to running the Motor Vehicle Bureau. Because that is the nearest model of how the government would allocate our most scarce resource...the time we have left.

Sincerely,

Eric T. Singer
President

Congressional Effect Management
420 Lexington Avenue
Suite 601
New York, NY 10170
http://www.CongressionalEffect.com
Ph: 646.307.4180
Assistant: 646.307.4183

The Congressional Effect Fund seeks to avoid market destabilizing uncertainty and the effects of news of potentially wealth damaging legislation by investing in the market (via the S&P 500 Index) only when Congress is on recess, and primarily in interest bearing instruments when Congress is in session.

The Congressional Effect Fund is the culmination of my many years of frustration with government folly, and I am delighted to have launched and be managing a vehicle I hope will reward investors and, in so doing, also highlight the deleterious effects of poor Congressional action. It is my sincerest hope that strong investor support of this endeavor will promote and further freedom in America as our founding fathers intended.

If you need assistance completing the investment application, or have additional questions about the Fund, please do not hesitate to contact me directly. Or, you may contact the Fund's distributor, Matrix Capital Group at 1.888.553.4233.

Investments in mutual funds involve risks. Read the prospectus and consider the Fund's investment objectives, risks, charges and expenses carefully before investing or sending money. The Congressional Effect Fund is a newly-formed entity, and although the Advisor’s portfolio manager, Eric T. Singer, has been a portfolio manager for private investment vehicles in the past, he does not have previous experience running a registered investment adviser or managing a mutual fund. Accordingly, investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategy and investors in the Fund bear the risk that the Advisor’s inexperience managing a firm may limit its effectiveness. There is no assurance the Fund’s investment objectives will be achieved. Past performance does not guarantee future results. Investment return and value will fluctuate so that when redeemed, shares may be worth more or less than the original cost.