Can We Survive the Next Financial Crisis? • Hacker News Board

Re: Can We Survive the Next Financial Crisis?

#141

Post by ksdale » Mon, Sep 10, 2018, 8:34 PM UTC

jandrese wrote: post #117

atomical wrote: post #113

Earlier quoted context omitted.

I think most of the time you can work with the hospital and possibly get the charge cut in half. Then pay monthly payments with zero interest. Has anyone done this?

Getting a $250k bill cut in half doesn't help so much when you used to make $40k/year before you lost your job because of the medical emergency.

One of the hospitals we had a child at had income based repayment and it was a sliding scale all the way up to 100-something thousand dollars per year of income. At the lower end of the scale, they cut your bill to a small fraction of the original bill.

I'm actually surprised this doesn't come up more in discussions about the cost of healthcare.

We were actually uninsured when we had our first child right around the time the ACA came into existence, and my wife had an epidural so it was about as expensive as a birth could be without a C-Section, and after the income based adjustment the bill went from something like $30,000 to only a couple thousand dollars I believe and they also offered a 12 month interest free payment plan.

It was definitely not a side of the industry that I had ever heard about.

Re: Can We Survive the Next Financial Crisis?

#142

Post by AnimalMuppet » Mon, Sep 10, 2018, 8:35 PM UTC

danhak wrote: post #100

travisoneill1 wrote: post #67

Earlier quoted context omitted.

This is backwards. Inflation destroys the value of debt. Poor tend to be borrowers and rich tend to be lenders, so inflation is an equalizer.

Most wealthy people borrow significantly even if they have high net worth (think mortgage on multi-million dollar home or investment property). Inflation helps them while they put their assets to work elsewhere. And it helps them far more than it helps some poor person with a few thousand in credit card debt.

But the wealthy have more assets than debt, so they have more losses than gains from inflation. Sure, they may gain $100,000 on their house, but they lose $1 million on their bond portfolio.

Re: Can We Survive the Next Financial Crisis?

#143

Post by crazygringo » Mon, Sep 10, 2018, 8:35 PM UTC

toss1 wrote: post #135

darawk wrote: post #36

Earlier quoted context omitted.

This is a real misunderstanding of how markets work. An index fund invests in everything, market-cap weighted (usually). This means that your investment merely reinforces the prices already determined by the other participants in the market . There are still huge numbers of active managers, not to mention quants and others. They, collectively, determine the prices of assets. When you invest in an index fund, you're j…

> basically. It doesn't cause amazon to rise in price. Actually, it does. Whenever a company is added to one of the major indexes, it almost always increases in price, and conversely, when one is removed, it generally declines. This is specifically because of all of the index funds that suddenly must put money into/remove it from the stock when it is added/removed from the index. Supply, Demand, price curves, you kno…

But are those short-term artifacts or do they persist?

As long as stock prices are set fundamentally by deep-pocketed institutional investors buying and selling, a stock's price should only be based on expected discounted future cash flows, no?

I can understand a short-term effect if demand suddenly skyrockets, but that can only last a few days, no?

I'm struggling to reconcile traditional supply/demand with the efficient-market hypothesis here.

Re: Can We Survive the Next Financial Crisis?

#144

Post by hndamien » Mon, Sep 10, 2018, 8:35 PM UTC

the_gastropod wrote: post #13

hndamien wrote: post #6

Earlier quoted context omitted.

My theory it is QE and maybe Roboinvesting.

We've been (slowly) raising interest rates for the past few years. And even if it were QE, why would it (and robo investing) affect Amazon 10x more than the broader market?

Well, not all of it. I also think Amazon is a good stock for many reasons. 10x seems like a stretch though, many other tech stocks have seen similar yields.

Re: Can We Survive the Next Financial Crisis?

#145

Post by aphextron » Mon, Sep 10, 2018, 8:37 PM UTC

votepaunchy wrote: post #66

aphextron wrote: post #54

Earlier quoted context omitted.

>I don't think index fund investors are the cause of Amazon's growth. Sure they are. Index funds are not equally weighted. Practically every tech ETF you can buy has Amazon weighted in the top 10, sometimes over 10% of total assets [0] whereas the average for other securities is below 1% at the most. [0] https://money.usnews.com/funds/etfs/large-growth/invesco-qqq...

The OP cites "S&P 500 or some total market fund", which are market-cap weighted.

Irrelevant. The market cap is still affected by large scale automated passive investing.

Re: Can We Survive the Next Financial Crisis?

#146

Post by headmelted » Mon, Sep 10, 2018, 8:39 PM UTC

gascan wrote: post #137

headmelted wrote: post #130

Earlier quoted context omitted.

"take the hit for 7 years" This is the advice I've heard given to people who are severely underwater on a mortgage, but the idea that you can get sick one time and be financially ruined is still astonishing to me. I guess everywhere has some legislation that is just bonkers, though. I only just recently found out from a friend that you can't legally walk away from a mortgage here (UK) without declaring bankruptcy lik…

the idea that you can get sick one time and be financially ruined is still astonishing to me. FWIW I'm not aware of many people who come down with a cold and are financially ruined. The people I know who are in crippling medical debt have, for example, had both kidneys replaced. While I'm not happy they are in those circumstances, it's not hard to picture two replacement kidneys and all the other treatments involved…

Still though (and correct me if I'm wrong), but if you get sick tomorrow with some ailment for which treatment is complex (and therefore expensive) AND you don't have insurance - your options are to find the money or go bankrupt?

That's nuts in 2018 in a wealthy democracy.

Re: Can We Survive the Next Financial Crisis?

#147

Post by icedchai » Mon, Sep 10, 2018, 8:42 PM UTC

hndude wrote: post #139

icedchai wrote: post #133

Earlier quoted context omitted.

I'm pretty sure "most of the population" has at least seen advertisements for ETrade. Probably too complicated for them though. That's why they'll be working until 85 or eating cat food in retirement...

The amount of condescension/lack of empathy in your comment is astounding. Haven't logged in in 2 years, had to log in to say that. And before you worry that I downvoted you, I still don't have enough karma to do so.

Thanks, I appreciate it!

Re: Can We Survive the Next Financial Crisis?

#148

Post by bitxbit » Mon, Sep 10, 2018, 8:51 PM UTC

People live too comfortably now for us to see anything significant. 2008 was blatant and the Occupy Wall Street movement lasted a hot summer. I know a lot of people are expecting the next crash right around the corner but it's not gonna happen until the Chinese economy collapses which I don't see unfolding without Xi putting up a fight.

Re: Can We Survive the Next Financial Crisis?

#149

Post by [deleted] » Mon, Sep 10, 2018, 8:51 PM UTC

AnimalMuppet wrote: post #142

danhak wrote: post #100

Earlier quoted context omitted.

Most wealthy people borrow significantly even if they have high net worth (think mortgage on multi-million dollar home or investment property). Inflation helps them while they put their assets to work elsewhere. And it helps them far more than it helps some poor person with a few thousand in credit card debt.

But the wealthy have more assets than debt , so they have more losses than gains from inflation. Sure, they may gain $100,000 on their house, but they lose $1 million on their bond portfolio.

[deleted]

Re: Can We Survive the Next Financial Crisis?

#150

Post by longerthoughts » Mon, Sep 10, 2018, 8:51 PM UTC

AnimalMuppet wrote: post #142

danhak wrote: post #100

Earlier quoted context omitted.

Most wealthy people borrow significantly even if they have high net worth (think mortgage on multi-million dollar home or investment property). Inflation helps them while they put their assets to work elsewhere. And it helps them far more than it helps some poor person with a few thousand in credit card debt.

But the wealthy have more assets than debt , so they have more losses than gains from inflation. Sure, they may gain $100,000 on their house, but they lose $1 million on their bond portfolio.

But inflation also implies economic growth which generally raises the value of equity holdings. The impact of inflation is dependent upon asset allocation.