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

Re: Can We Survive the Next Financial Crisis?

#171

Post by nonbel » Mon, Sep 10, 2018, 9:30 PM UTC

headmelted wrote: post #146

gascan wrote: post #137

Earlier quoted context omitted.

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.

Nah, you just have to go elsewhere because the US healthcare system apparently includes a bunch of unnecessary or overpriced expenses. Or you just say you dont have insurance so you get charged at 10-50% the "chargemaster" price.

Think about how cuba is able to have similar life expectancy, etc at a fraction of the cost with chronic shortages and subpar sanitation. Most likely there are many medical procedures doing at best nothing for the patient except draining their wallets.

Worse, it could be that treatment 1 for problem A causes problem B which leads to treatment 2, etc, etc for some moderate benefit at great cost over just dealing with problem A.

Worst, it could be the medical treatments are having a net negative effect on people's health. Eg, those studies that estimate hospital errors (not even just death from dangerous treatments applied as standard) are the third leading cause of death in the US.

Re: Can We Survive the Next Financial Crisis?

#172

Post by Nelson69 » Mon, Sep 10, 2018, 9:32 PM UTC

crazynick4 wrote: post #104

y-c-o-m-b wrote: post #21

The definition of "we" and "survive" needs to be established clearly first and I don't think all those fancy graphs and market trends will define them. There's a lot of people that ended up bankrupt, in a bottomless depression, turned to drug abuse or committed suicide because of the last crisis. Wages are still relatively low while prices continue to climb. Many people are working 2-3 jobs and having trouble affordi…

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

This is slightly off topic, but I'll ask.

I refinanced my house and as part of the process I get copies of the credit reports pulled. Anyone know why they last a lot longer than 7 years? It has all my mailing addresses for over 20 years. They asked me about a student loan I had paid off 10+ years prior. Is the "7 year" thing just a myth?

Re: Can We Survive the Next Financial Crisis?

#173

Post by iamaelephant » Mon, Sep 10, 2018, 9:36 PM UTC

headmelted wrote: post #130

crazynick4 wrote: post #104

Earlier quoted context omitted.

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

"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…

Why is it bananas that you can't just walk away from a debt? The foreclosure system in USA is a significant part of what caused the mortgage crisis.

Re: Can We Survive the Next Financial Crisis?

#174

Post by antt » Mon, Sep 10, 2018, 9:41 PM UTC

craftyguy wrote: post #15

HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

> The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. If that's true, then why is the current government working hard to remove any protection (however meager it is/was) to prevent the same mistakes from happening all over again? If the working class has no tolerance for these things, then it definitely isn't reflected in the people the working class has ele…

>If the working class has no tolerance for these things, then it definitely isn't reflected in the people the working class has elected to 'represent' them.

Because regardless of what you hear median income is the highest it's ever been: https://seekingalpha.com/article/4203346-july-2018-median-ho...

This is the first time that the real median hourly wage for full time employees is higher than it was in 1968.

Re: Can We Survive the Next Financial Crisis?

#175

Post by nonbel » Mon, Sep 10, 2018, 9:43 PM UTC

chimeracoder wrote: post #158

longerthoughts wrote: post #150

Earlier quoted context omitted.

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

> But inflation also implies economic growth Inflation does not imply growth in real GDP, no. > which generally raises the value of equity holdings. The impact of inflation is dependent upon asset allocation. Ceteris paribus , inflation hurts debtholders (who, incidentally, tend to be wealthy), and it helps debtors (who, incidentally, tend to be poorer).

Inflation hits prices before wages. Wage increases due to inflation always lag the price increases of the food/shelter/etc people need to buy.

Is this controversial?

Re: Can We Survive the Next Financial Crisis?

#176

Post by topspin » Mon, Sep 10, 2018, 9:46 PM UTC

darawk wrote: post #57

> The leveraged loans are now being packaged into collateralized loan obligations and sold to investors. Sound familiar? And the CLO market has grown to match the size of the CDO market at its pre-crisis peak. Yet one major difference makes the CLOs of today less scary: The loans that comprise them are backed by collateral, and if one of the companies in the mix defaults, an investor can find recourse through the sal…

> but weren't they collateralized by the homes?

Much exaggerated in value homes, yes.

> And wouldn't that make this CLO market exactly identical to the CDO market?

The mortgage debt market is backed by GSEs. When the bubble popped Fannie and Freddie held over $5 trillion in mortgage securities. They are the market maker -- the buyer of last resort -- that makes the whole mortgage securities market liquid.

CLOs don't have such a market maker. There are certainly market makers, but they aren't US GSEs with multiple trillion dollar balance sheets backed by the US Treasury. This limits the degree to which the CLO market can overextend.

Not that corporate debt can't grow to disruptive proportions. Problems with corporate debt is how the term 'junk bonds' emerged as a household word in the 80's. Now that we're rolling BBB quality debt into CLOs (as of last April, apparently) the clock is ticking once again.

Re: Can We Survive the Next Financial Crisis?

#177

Post by sf_rob » Mon, Sep 10, 2018, 9:47 PM UTC

y-c-o-m-b wrote: post #105

travisoneill1 wrote: post #49

Earlier quoted context omitted.

The data doesn't support your conclusion. Almost nobody keeps all their assets in a savings account. What you should be looking at is net worth. https://dqydj.com/net-worth-by-age-calculator-united-states/

I disagree. Net worth is an unstable data point and I always view it as a status symbol more than a realistic means of acquiring cash. For example in a market where nobody is willing (or able) to buy your home, your net worth can be ... well, worthless. In a financial crisis it's even worse. Your "on-demand" cash is what's in your checking or savings account. There's no guarantee you'll be able to tap into your home,…

You're correct in your criticisms of net worth, but that doesn't change that the use of savings accounts to estimate accessible savings is highly questionable, especially in the past few years when rates were hovering right above checking account rates and people got out of the habit of using them (anecdotal).

Re: Can We Survive the Next Financial Crisis?

#178

Post by lostlogin » Mon, Sep 10, 2018, 9:54 PM UTC

crazynick4 wrote: post #104

y-c-o-m-b wrote: post #21

The definition of "we" and "survive" needs to be established clearly first and I don't think all those fancy graphs and market trends will define them. There's a lot of people that ended up bankrupt, in a bottomless depression, turned to drug abuse or committed suicide because of the last crisis. Wages are still relatively low while prices continue to climb. Many people are working 2-3 jobs and having trouble affordi…

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

This sounds like a socialised healcare system by stealth.

Re: Can We Survive the Next Financial Crisis?

#179

Post by notfromhere » Mon, Sep 10, 2018, 9:58 PM UTC

crazynick4 wrote: post #154

ASalazarMX wrote: post #132

Earlier quoted context omitted.

Would this, for example, for cancer? Refusing to pay your first treatment might make access to subsequent treatments harder.

Is it legal for a doctor to refuse treatments that may cost you your life? I understand that an insurance company may refuse to insure you due to preexisting conditions (or at least they were able to at some point), but I think insurance is different from showing up at a hospital in the midst of a life or death situation.

Hospitals have a legal obligation to stabilize you in the U.S.

So they'll treat your heart attack, but they're under no obligation to offer you free cancer treatment.

Re: Can We Survive the Next Financial Crisis?

#180

Post by PeterisP » Mon, Sep 10, 2018, 10:00 PM UTC

crazynick4 wrote: post #154

ASalazarMX wrote: post #132

Earlier quoted context omitted.

Would this, for example, for cancer? Refusing to pay your first treatment might make access to subsequent treatments harder.

Is it legal for a doctor to refuse treatments that may cost you your life? I understand that an insurance company may refuse to insure you due to preexisting conditions (or at least they were able to at some point), but I think insurance is different from showing up at a hospital in the midst of a life or death situation.

In general, yes. You don't refuse emergency procedures (i.e. you're going to die right here right now without it), but life-prolonging procedures (e.g. without this procedure you have a 50% chance to die within 4 months) are a different thing. And for diseases like cancer, if you show up when you're about to die, then there's nothing much can be done; they can put you in coma on life-support to eke out some more "life" but you can't cure it anymore.

And it's worth noting that in medicine there's no fundamental boundary for 'may cost you your life', or if it is, the bar is very low. Taking an x-ray may cost you your life. Not taking an x-ray may cost you your life. Dentist's anaesthesia may cost you your life. Almost every noteworthy medical decision (including purely preventative things or running tests) has some life-or-death effect, there's only a difference in quantity, not a difference in kind. There are no life-saving procedures, there are only life-prolonging procedures. A widespread recommendation that patients meeting criteria X, Y and Z should do a particular diagnostic test will result in deaths of some people, and a widespread recommendation that they shouldn't will also result in deaths of some other people, and the main question is which number of deaths is larger.

On a large scale, medicine is mainly a resource allocation problem - almost everyone could and would live longer if we allocated more care towards them personally or towards that condition, however, the "price/performance ratio" of such procedures is very, very different. There are things like stopping bleeding from trauma, which are very cheap and prolong your life by as many years as you'd otherwise live, and there are drugs and procedures with a six figure price that give an average survival benefit of a few weeks over much cheaper alternatives; and for most of people who'll die in hospitals today we could extend their life by at least one day with extra care; it's just that it's currently physically impossible to do everything for everyone, even if our economy consisted 100% of doctors and nurses caring for each other, because now we can (attempt to) do so much more. So there has to be a line drawn somewhere; some care will inevitably have to be refused to some people, and the only debate can be about the criteria - whether it's medical criteria (e.g. being refused to be considered for an organ transplant since you'll likely die soon anyway for other reasons, and that transplant can give much more years to someone else), or the ability to pay for certain procedures, or some other ways. On a large scale metrics like $/QALY (price for a quality-adjusted life year) make sense, but on small scale it's difficult to judge.