rb
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Posts posted by rb
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When you Canadians compare the US to other developed countries in regards to healthcare you are missing the most crucial element. The American government (federal and state) implicitly or even explicitly drafts effectively all healthcare legislature to raise the cost of healthcare. Banning Medicare negotiation of drug prices, banning Medicare from factoring costs into procedure evaluation, HMO regulation to increase their costs, cost for service model enforcement, banning re-importation of drugs, etc. Of course the out of control healthcare inflation spiral began coincident to the Great Society legislation. All this is done because American politicians care more about the healthcare industry than the taxpayer and the voter is too dumb to care about costs. I see no reason why single payer wouldn't just exacerbate this.
I don't think that your leaders have a secret goal to increase health care costs. I think that's it's more of a byproduct of your toxic political process mixed with a good helping of lobbying. And don't get me wrong we don't have the perfect system here in Canada either. There's tons of inefficiency, waste, and abuse. Lobbyists are working big time here as well. We're always looking to make it better. But despite all its faults our single payer system delivers universal health care and clocks its costs at 10.4% of GDP vs the US at 17.1%.
I think your argument that you just can't do it is a cheap cop-out to not even try. So every other country in the world can do it, but for some reason the United States cannot.
You say that you see no reason why single payer wouldn't exacerbate cost increases. I guess it's because you haven't looked. Medicare which is effectively a single payer system and has cost increases for medicare have been lower than for private insurance. Users also seem to be very happy with the product and don't want to privatize Medicare.
Medicare is also much more efficient. I looked at 3 big insurance companies Aetna, Cigna, and Humana. Their average loss ratio (how much they've spen't on actual care as % of revenues) in 2015 was 73.7%. That means that 26.3% of premiums did not go to care. If we assume that's the ratio across the system and US care is 53% private. This adds to $434 billion. Medicare's admin ratio from what i remember is around 2%. So if you shifted to single payer with nothing else changing then you would save $401 billion. The real figure would be larger when you factor in that you would get better pricing from service providers and drug makers and so on. But even if the government does none of that you save $400 billion a year. That's 81% of the 2015 budget deficit.
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Or are you just saying, "I don't give a damn about the costs of the system, or how well it works, and about people who die through no fault of their own, because my freedom to do whatever the heck I want is more important than anything. I don't care who gets screwed in the process because if they were screwed it was probably their fault anyway."
I think the quoted part pretty much summaries his argument. From experience I don't know if there's much point in arguing. I spent an hour (I won't ever get back) drafting a reply to him because I have this romantic notion that there's still humanity and goodwill in the world and if you make good arguments you'll be able to swing people into doing the right thing and make our society a better place.
What it appears to me as an outsider is that the value of an American life is determined by how it's lost not by how it's lived.
3 Americans loose their lives abroad then navy fleets need to converge, the air force needs to be deployed, countries need to be punished, potential trillions need to be spent, no problem. 16 Americans die in a mass shooting on American soil... well second amendment what you gonna do? 1/2 of American population is in danger of poverty? Well fuck'em they bought iphones. Millions in danger of dieing because of poorly designed health care system... well let them die, they don't have enough money to pay what it takes, freedom, no communistic system, USA! I guess that's what American exceptionalism is.
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The current system is just retarded -- I had an MRI on my elbow and I get all this junk mail from the insurance company about explanation of benefits, and explaining what they pay and what I have to pay. I have conversations with a doctor about which surgeon my insurance may or may not cover, etc... etc...
Regardless of politics, who likes dealing with all this crap? Don't you want to enjoy life instead of living this way? It's a fucking nightmare of bullshit paperwork.
Hey Eric, I know we've sparred about this sort of stuff in the past. And I'm sorry that you've had to go though the stuff that required an MRI.
Here's how my experience in Canada went with a health issue with my sister a while back:
She plays soccer pretty hard one day. Comes home in pain. A couple of hours in her knee is pretty swollen. I take her to a walk in clinic close to my house. I swipe my government issued health card. I see a doctor. He says it looks pretty bad and i should take her to a hospital. I go there, I swipe my the card, talk to a nurse, 20 minutes we're in to see a doctor. He gives her a bunch of pain killers to make her comfortable and sends her to get x-rays. We come back he looks at the x-rays, says it doesn't look good. Schedules her for an MRI 3 days later and an appointment with a surgeon a week later. A week later we meet with the surgeon he walks us through the MRI and shows how her ACL is ripped and schedules a surgery 6 weeks later.
My sister goes through the 3 hour surgery, turns out that the guy is also a plastic surgeon and does the thing without leaving any scars (which is nice since my sister was 17 at the time). No paperwork, no hassle. Really, the hardest part of the whole thing was when she was high on oxys after the surgery and was hearing things that weren't there.
Then at the end of the year we've paid our taxes. And really our taxes aren't much higher than yours. Yet millions of people yell at the top of their lungs that your system (which you call retarded) is better and resist even thinking about change.
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This is as a reply to Apg12. I'm not going to quote the whole rant because it'll clog up the board.
But WOW! Just wow! I don't even know where to start.
I guess I'll star with the non health-care stuff. Yes I've read the whole article. I've also read the title which refers to half of the US population. This is a majour problem in your country. As a great patriot do you think of any solutions for that problem or do you just go like "oh fuck 1/2 of the US"? Do you actually think that 1/2 of the people in the US got there by buying iphones and paying for weddings? Or maybe is there a bigger more systemic problem? Did you stop yourself to thing about that? Or did you just go... well they bought iphones that's where all their income went. And what's your solution to that problem? Let's take away the safety net? Sure let's take 1/2 of the US population that are at risk of poverty and push them into poverty that'll solve the problems with your solve the problems with the American society. That'll make America great again. 50% poverty rate.
And even for the person in the article. As you said he's one of the people of the middle to upper middle class. He's paid taxes, why shouldn't he be entitled to the programs he's paid into? That's what the safety net is. A wide insurance policy. If you paid your premiums for car insurance and you get into an accident you're not gonna claim it cause you can pay for it yourself? I don't think so. So why should he forgo government assistance for which he paid even though he made some mistakes? Or is it just the "job creators" that should receive government assistance even though they didn't really pay so much for it?
Anyway, let's move on... I love how people like you who have no idea what communism is make all these grand statements about communism. A tell tale sign is the use of the word "communistic". The is no such thing as more or less communistic. Communism is an absolute thing. But I'm sure you know better.
I also see that you have a big problem with Cuba. Cuba couldn't be close to the US. When the whole world knows that Cuba is better at health care than they are at cigars. I'm sorry, but Cuba for all its faults is very good at health care and at producing good doctors. It's not my fault.
Also the fact that you would propose the French as a model of a balanced diet society is laughable. They are super carnivores, devour carbs, love their cheese, and everything gets fries in either butter or duck lard. There's your picture of health.
Your assertion that it doesn't matter where the cost increases are coming from is non-sensical. So you have two systems in your country. Medicare and the private system. Medicare run by the government costs less and it's cost rate of growth is lower. The private system is more expensive and it's cost rate of growth is higher. But that doesn't matter. The private system is better!.... Because why? It's not "communistic"?
I'm not gonna go point by point for the rest of your post cause frankly is like a bowl of spaghetti. I'll try to paraphrase instead. You argue that life expectancy should have no bearing on the effectiveness of a healthcare system. On the US healthcare system in particular because over there u redistribute healthcare from people with less money to people with more money. If you were to extrapolate that is akin to saying that the healthcare in an oppressive African country is great because even those those people who are dirt poor die early the dictator who can pay lots of money to the doctor gets to live to a ripe old age.
Your argument also reads as well the other developed countries systems delivers care to everyone equally no matter of their social status (yuck!) fixes everyone, makes people healthy and they live longer than us but we all have to wait in the same line (double yuck!!) and costs less. Our system delivers care to less people, we live less longer, and costs a hell of a lot more but by god it's awesome because it's less "communistic" because it doesn't deliver care to those people! yippee ki yay!!! USA!!! USA!!!
Great! I thought you guy were the Christian country, Guys like you always go about that, it seems like help thy neighbour got replacet by fuck thy neighbour. And when he's down fuck him agian!
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Yea, basically MIC is writing CDS on subprime mortgages.
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CMHC is a crown corp. But there are other players such a Genworth and Canada guaranty. I believe they have been agressive in increasing their market share after the government forced CMHC to reduce risk. In the first place it was the feds that doubled their cap to $600B after GFC to help the Canadian economy.
Yea, that's what I've been talking about. MIC is Genworth. What I've said is that MIC doesn't have government backing. As you said they've aggressively picked up all that risk that the feds didn't want. One such area are loans to self employed that have no income verification. In Canada it's not a NINJA loan it's mortgage insurance for hard working entrepreneurs.
But as far as I know the only people that get insurance from MIC are the ones that don't qualify for CMHC. So you gotta think that the most rotten of the stuff will be with the MIC or Canada Guaranty.
It's also interesting that we're in the middle of a boom boom bull market and MIC trades at 2/3 book
I remember seeing that MIC insurances also backed by the Canadian government. Can anyone validate or deny that information?
BeerBaron
Just checked it out.
Outrageously there is some government involvement. Basically the government backing is this: if MIC goes bust and can't fulfill its obligations then the lender eats the first 10% of the loss and the government takes the rest. My government must be insane to backstop insurance contracts written by these clowns. :o
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CMHC is a crown corp. But there are other players such a Genworth and Canada guaranty. I believe they have been agressive in increasing their market share after the government forced CMHC to reduce risk. In the first place it was the feds that doubled their cap to $600B after GFC to help the Canadian economy.
Yea, that's what I've been talking about. MIC is Genworth. What I've said is that MIC doesn't have government backing. As you said they've aggressively picked up all that risk that the feds didn't want. One such area are loans to self employed that have no income verification. In Canada it's not a NINJA loan it's mortgage insurance for hard working entrepreneurs.
But as far as I know the only people that get insurance from MIC are the ones that don't qualify for CMHC. So you gotta think that the most rotten of the stuff will be with the MIC or Canada Guaranty.
It's also interesting that we're in the middle of a boom boom bull market and MIC trades at 2/3 book
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I think inflation is coming. It will help a lot of the issues with the current economy like over-valued real estate and excessive government and other debt.
Likely the scenario is inflation rises due to increased costs due to things like rising wages and commodity prices. The fed will be lenient on this as it wants higher wages and employment and prices. Inflation will likely get up towards the 3% area, then the Fed raises rates slowly, allowing inflation to crush the real value of the excess debt. Finally, inflation gets too hot and the Fed raises rates a lot and we get the inevitable recession and bear market.
I'm sorry, but I think you're way off the mark here.
First of all, we're talking about Canada here, so the Fed has nothing to do with this.
Second, I don't think we're anywhere near a commodity up cycle. Even then I don't think supply side inflation is what you're looking for to cure these ills.
Third, the idea that rising wages are just around the corner is a bit of a fantasy. Even if you would get a bump in wages that won't push inflation up. What you're describing would require a tight labour market and a supply constrained economy and we're pretty far away from both of those.
I'm sorry I wish you were right cause then the situation wouldn't be as dire. But it's not the case.
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In Canada, the insurers are backed by the tax payer ( if I understand this correctly). Until 2011 CMHC insured 50% of all mortgages. But there is tremendous amounts of HELOCS out there that are interest only payments and aren't insured. The so called ATM.
CMHC is the government and they write the bulk of insurance. MIC is private without gov't backing and they have been more than eager the worst of the mortgages out there (think NINJA). They're also too small to be systemically important. So if something happens IMO they're one of the first to go. I don;t think there's gonna be any gov't help for that one.
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Guys, cmon.... I know these are issues that people are passionate about. And that are pertinent to our current societal debate but please let's keep this thread about the annual meeting.
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They're definitely getting insurance from somewhere. I can't see how CMHC would write that policy.
I think it's a little short sighted to say that the bank has no risk. Usually you don't see where the risk comes from until the postmortem after the blowup. If it's so clear that there's zero risk why did TD decline? Say they insured it with MIC cause CMHC balked at it. And MIC insures a whole lot of shitbag mortgages. And MIC goes under. Is that really zero risk?
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I'm saying both.
The full study is that she did officially put 5% down because she borrowed 3% from my other sister for the down payment. She also bought the house with her boyfriend who's a contractor. He makes in the 50-60k range per year. A chunk of that is cash jobs. So let's say that there's not a lot of income verification that can be done on his side.
The fact that CIBC wrote the mortgage didn't surprise me that much. Whenever there was a financial blowup CIBC were a player in it. They gave her 5 year variable at 2.2%. And let me emphasize again. This is not prime property!
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yea, in those scenarios you are correct.
Also from the point of view of paying down debt we've seen pretty clearly that it's very hard to do at a large scale. Pretty much the only hope is to inflate it away. Not easy in a low inflation environment.
Personally I don't know what people are thinking. Last year my sister bought a $550,000 house in the middle of nowhere with 2% down. She is making 44k/year. TD wouldn't give her a mortgage. CIBC saw no problem with that.
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A lot of Canadian managers do file 13-Fs though.
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I still wonder about the limited DD, my response to Munger about how limited DD is before marriage, well doesn't living together count?
Well the dude lived in a different time not much pre marital habitation in those days. But I'd say that it will take quite a long time of living together to claim that you've done thorough DD.
Plus it's easier with companies. You can't fix problems in your wife like you would in a company (such fire her reasoning and bring in a new one). And when WB makes a mistake on an acquisition it doesn't leave with 1/2 of BRK's assets :P
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See.. I know you're officially joking. But I think there are more than a couple of people that think that way. Still.. for that to work and not run out of money you need not only low rates but perpetual easing in lending standards. Lately the government has been busy tightening lending standards and I have a feeling that they're only getting started. So I revert back to my original premise.
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The other side is job losses due to deflation if we get lower rates. I can't see businesses prospering in that environment and with automation coming - I don't see how people will afford to pay back the debt they are taking on.
Please explain how monetary easing causes deflation?
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The one thing I've been struggling with is which factors will drive mortgage rates higher?
Rates have kept going lower for the past 30 years. http://www.tradingeconomics.com/canada/interest-rate
If housing and the economy slows down, rates will likely be even lower than today.. With negative rates a possibility, BoC can always pay lenders to lend..
Most government would rather see much higher asset prices, lower interest rates (lower C$), and lower unemployment than lower asset prices, higher interest rates (higher C$) and higher unemployment.
So given the bias of BoC toward lowering rates, will rates ever "normalize"? Is there even a normal?
I've been doing a lot of work on Canadian RE for some clients for the past couple of weeks and I've come to think a lot about this. Especially since I think that interest rates will stay low for a long long long time.
I am by no stretch a visionary or any sort of expert in real estate (is anybody?). But my view is that based on affordability prices topped out in 07-08. But the drop in rates since then pushed the second leg of the advance in 09-present and we're back again to those maximum levels of (un)affordability. Only this time I don't think that interest rates have meaningful room to decline anymore so there goes that level.
Now what I'm thinking and the question I'm posing is: Why can't people just run out of money and the rally to burn itself out without a catalyst? When affordability ratios are such shit won't further price increases just make real estate plainly unaffordable even without rates going up?
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I agree that this is a debate that we need to have. It's a debate that society needs to have. Maybe even on this board. But is it a debate that needs to be had at the BRK annual meeting? Can you imagine this conversation taking place at annual meetings of other investment shops? Ichan, Pershing, Third Point, even Sequoia?
The way I see it it went like this. WB runs one of the most respectable and responsible corporations. WB provides a wide open forum to ask questions about the company. Someone asks a leading question about a company and product the well know that WB enjoys. WB deflects and doesn't put down one of his largest and oldest holdings, an iconic company that has some products that can cause damage if over-indulged. Let's all jump on WB then!
I'd say that based on everything that WB and BRK did/does maybe they should get a pass on Coke. But that's just me.
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LOL, look at American healthcare costs compared to countries with single payer systems--America has the same outcomes but is way more expensive. On the other hand, I can see your point.... Why bother examining evidence if it doesn't support your ideology?
I don't mean to be a pest Richard cause I know your heart is in the right place. But small correction. America is more expensive but the outcomes are not the same.
Last time (in 2000) the WHO ranked the worldwide healthcare systems the US came in at 15th in terms of outcomes and 1st in cost earning a global rank of 37. There have been many other studies of healthcare systems since then. The US routinely comes in at the bottom of the developed countries based on outcomes despite being by far the most expensive system.
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Pre-ACA, the government was also spending $0.50 of every dollar in health care. I'm not sure what you'd expect to happen to the price of health care. We see the same thing with the exploding cost of education. If the government spent $0.50 of every dollar spent on hammers, I think we can guess what would happen to the price of hammers. I assume we'd also see calls for the government to nationalize the hammer industry because the 'free market' in hammers just isn't working for Americans. And I don't personally regard it as kindness to force some individuals to sacrifice pieces of their lives to subsidize other people's lives. We used to live in a country that regarded the individual life as sacrosanct. Now it regards your life- your values- as a resource to be bled dry.
On the topic of Obama's economic legacy, I read today that according to a Federal Reserve survey, 47% of Americans don't have $400 of savings. It's unclear to me to what extent Obama's policies are to blame, but I suspect the "closing the insecurity gap" nanny state plays a large role: http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
I don't know if gov't health care spending was 50% of total but it would have been quite high because you have Medicare, Medicaid, and VA. And older people and military people tend to get sick. But if you've done a bit of research you would have discovered that Medicare costs while more expensive than other single payer systems (such as Canada) are way lower then private healthcare. Also cost increases for Medicare were very close to cost increases in Canada. The giant expansion in overall costs was mainly driven by the private side.
On the economic side I didn't say that the current situation in the US is a paradise. Not by a long shot. But the US made a lot of right moves to fix it's economy, more than many other counties. And it has managed to do that despite huge obstruction from the legislative bodies. While the situation now is still not great, in my opinion the current state is pretty close to the top of the range of possible outcomes looking forward from some years back.
About the less than $400 available I don't really see your point. As I've said, it's not an ideal situation. But what is your suggestion? That instead of Obama people should go (have gone) with a Republican party who's chomping at the bit to cut the safety net? Yea, that would really help those people that have less than $400 to deal with an emergency!
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Right. Because pre-ACA companies were doing such a great job at providing health care for employees.
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I have thought about it in 2012 when it came out that Mitt Romney had $100M in Roth IRA ( what you call TFSAs in the states). Turns out that in Canada we have laws especially against that. In addition we have a principle based tax system instead of a rule based system as the one in states. Which means that even if you find a loophole the original intent of the law still prevails. So that's not gonna fly up here. And I don't really feel like going to war with the federal government over stuff like this especially since thy got a 400M war chest for stuff like this.
Where are the accounts of the great real estate investors?
in General Discussion
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I highly recommend The Reichmans. I picked it up in a Library one day and haven't left until I finished reading it. Of course the Reichman empire famously imploded in 1990.
In the search for real estate billionaires on this board I'm surprised no one has mentioned Hong Kong where the great real estate fortunes were made. People like Li Ka-shing. I know that hutchison whampoa has a lot of moving parts but real estate is a big part of it. There's quite a few real estate billionaires in HK. Among value investors Seth Klarman at Baupost tends to dabble in real estate and has done quite well with it.
Now all that being said, I think that the reason that there's not so much talk or advertising of real estate billionaires is because long term real estate is an inferior asset class to business and equity. You also don't hear a lot about Treasury or muni bonds billionaires either (though they exist). Real estate is not a good way to get rich, but it's a great way to stay rich. People love a good rags to riches story, but don't get so animated about an inherited wealth whose recipients haven't blown it story.