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Nothing compares to real estate bubbles. What was the next bubble after Japan's real estate bubble? Exactly. Your grand children will say housing prices can only go up and that having any equity in it is foolish. - Use leverage - they will say.
The Banks - Either the Big Money Center Banks will be broken up, or there will be another 2008....They're not sustainable in their current structure, and they control too much in the country.
Citi
JPM
BofA
Wells
Goldman
Morgan Stanley
The banks right now are uninvestable. No one can make heads or tails of their balance sheets.
The Banks - Either the Big Money Center Banks will be broken up, or there will be another 2008....They're not sustainable in their current structure, and they control too much in the country.
Citi
JPM
BofA
Wells
Goldman
Morgan Stanley
The banks right now are uninvestable. No one can make heads or tails of their balance sheets.
I invest in all types of financials. C, JPM, and BAC are some of my favorite investments. I don't have any problem reading their balance sheets. What leads you to believe that large banks are not sustainable? I've done very well with financials and most analysts agree that the banks you listed are a great long term investment.
We've had afew boom-busts in the last dozen or so years..from tech to RE to credit.
What's gonna blow next?
I vote for "The Student Loan Bubble".
The social structure of our country is next. We have gone through the stock market, the real estate market, and soon we'll experience a technology bubble burst. Following that comes the social structure bubble burst.
We are quickly nearing a saturation point in technology where so many aspects of our society require a technology solution that nearly complete dependence upon technology will result. You can already see this in your routine access to government services. Debit cards are used where checks used to be issued and so n=on. Need to renew your driver license or tags for your car? Without an appointment on-line you go to the back of the line. Think about that:
The back of the line. Where have we seen this before? There will some a time in the near future when the reliance on technology will create a greater divide than any we've seen to date, including the rich vs the middle class vs the poor. What will be unexpected is that unlike other divisions, it is the poor's access to technology that completely changes how our society will react to the bubble. The wealthy and middle class will move toward opposite tracks than the poor because the poor will gain the most benefit from using technology to make gains compared to the middle and wealthy class.
Take a look at mobile phones for example. The market for top priced mobile phones is quickly being exhausted and every major manufacturer is racing for very inexpensive product offerings. The reason isn't purely the economics of business. In previous years, those with the financial means had first choice when it came to using technology as a way to access services, both private and public. Bang, here comes the smartphone. Suddenly, those that could never afford a computer gained access to a smart phone that gave them that access. The smart phone combined communication and the ability to use the same device for access to private and public services. That is a radical change from having to use a computer to do that and a mobile phone for communication. In a very short time, the so called digital divide vanished. Notice how almost no one talks about that anymore?
All of this access hasn't yet boiled to the surface. Access to government services through the use of technology is still behind the times. What will happen very soon though, is that so much of the population will have access to government services that what vectors exist will become overwhelmed. The governments at all levels are ill prepared for the next ten years, having in many cases cut the workforce designated to providing services while growing the workforce designated to controlling influence. In other words, promise more and deliver less. As this continues, we'll see more and more dissatisfaction with services because everyone wants what they are promised. The wealthy and middle class are much easier to appease than the poor.
If you tell someone wealthy or in the middle class you will give them something and then don't, they might make some noise and then they do what they've done before, they make it happen using their own resources. Take the price of gasoline. It runs up to $5.00 per gallon and all the people in the wealthy and middle class continued to buy gasoline. They didn't like it and complained but did nothing about it. They had the individual resources to go around the immediate problem. The poor don't have that ability. So far the problems haven't lasted very long. Gasoline for example, ran up and then settled down, a little. The wealthy and middle class are paying more than before but they manage. The poor however, are affected to a much greater degree. At some point, the poor, having direct access to government services, will create such a demand that the available services will not be able to maintain acceptable levels. The wealthy and middle class will do what they've done in the past, use personal resources to make up the difference. As this continues, they will see that the use of technology to access services aren't beneficial to them because now they have to compete on more or less equal footing to gain access to the same service that previously, they had more or less to themselves.
If we look at this in totality, figure the population of the USA. About 400 million. The 1% and then the middle class make up such a small number of that total. As the middle class shrinks only the poor gain a greater percentage, they aren't moving into the wealthy percentage.
Now we get to the bubble. The wealthy and middle class are entirely responsible for the rise of technology. They could afford it at the time it was being developed. As the number of people using technology increases because of access by the poor, the value to companies developing the technologies and providing technology services goes down. Without the wealthy and middle class supporting new technology development, it becomes less and less profitable to develop and service technology. You simply can't promote the development and service of technology through the government, it is the rob peter to pay paul principle. We are getting there very soon. Technology development will slow dramatically, it has already. Wile computational technology continues to grow, the average person isn't benefiting from it. Curing cancer or things like that doesn't benefit the poor as much as it benefit the wealthy or middle class since they are the classes that keep an economy running. That is a harsh reality but reality it is.
So technology will reach the bubble stage, not in development but in access. the use of technology by the poor will simply overload government's ability to service those accessing the services promised.
What we have next is the bubble of bubbles. Our societies structure will experience a bubble burst that will affect most people. Th wealthy will experience the least impact because they live using the least amount of resources in comparison to the availability as a percentage. The multi-millionaire's cost of living as they do is a far less percentage of their available resources than what it takes a middle class person to maintain their standard of living. The poor on the other hand, need only a very small increase to realize a huge jump in improvement and since they have little and the resources they will gain come from others anyway just imagine where that comes from...the middle class.
There won't be a wealthy vs poor scenario, it will be a poor vs the middle class scenario which is far worse. There simply is no access route for the poor to the wealthy. The access to the middle class is achievable though and the middle class has far less abilities to maintain their standard. It takes only a small difference in standard to move the middle class to the level of the poor. Because the numbers of the poor now have access to government services via technology and the vote, the entire burden will come to the middle class. Lets not forget that large numbers of those making promises to the poor are in the 1% and they are in politics. I'm not talking about the wealthy, I am talking about the politically elected that are wealthy or become so after being elected.
These bubbles won't burst in the same manner as past bubbles. The stock market and real estate markets burst seemingly overnight and everyone saw or felt the result rather quickly. What we are experiencing now are bubble that aren't bursting but deflating. The effect is far more gradual but the results will be felt not as individuals but as a society. There won't be the economic effects that hit hard, rather they will be gradual. There won't be wholesale changes in government as we've seen in other parts of the globe but we will see major shifts in how our society operates and who has the power to change it.
What do people mean when they say a "healthcare bubble"? I don't understand how it can be a bubble. Can someone please educate me? Thanks!
Any bubble is an expansion of price. Like blowing a bubble, the price expands
to a point where it is no longer sustainable, then the bubble pops and the price
reverts to a previous state, lower, how low depends on how severe the bubble
was allowed to expand. The faster and bigger the bubble, the worse the pop.
The person who said "healthcare bubble" is saying that prices for healthcare
are not going to keep expanding upward. At some point they will regress or
just stop going up. They are probably thinking about the costs associated
with Kenya Care. After the new system is implemented, at some point the
HC companies will stop increasing premiums because Kenya Care will be
fully implemented.
The healthcare bubble can be described as an inability to sustain service levels using the available resources. It isn't about prices, rather it is about availability. Let me explain further:
Right now, if you have insurance or the financial resources, you can obtain healthcare. As more demands upon the healthcare system are created, the available services are diminished as an available supply. So those with the financial resources just pay more and still obtain the services, money talks. The remainder are faced with less supply even though they have insurance. This is because those with insurance can't control what they pay for the services, the insurance companies do and those prices are set.
As the USA moves to a single payer system, the healthcare services continue to be spread out to meet the demand; more people being covered, same amount of available services equals less for all. That is the fallacy of the single payer system, it does nothing to increase supply of services, it only increases demand. The amount of preventative services made available are nowhere nearly enough to offset the increased demand for all services.
As the demand continues to increase, it creates a bubble wherein the people with the financial resources continue to afford a high level of service but the remainder, even being insured, cannot access services because there simply isn't enough to go around.
At some point, the healthcare system implodes because as time goes on, the lower level services such as preventative healthcare are reduced to make up for the demand in higher level services such as cancer and other serious and high maintenance issues. As more time goes on, there is no more preventative healthcare and only serious illnesses and diseases are treated. All this time, those with financial means continue to pay higher and higher costs but that doesn't matter, they have the means.
At some point, the demand for high level services reaches a point where fewer people, even if insured, can access those services because each healthcare case requires intensive services. When that happens, it doesn't matter if you have insurance or not, Obamacare or not, single payer system or not, there is not enough capacity to treat even the most serious healthcare cases and the system collapses. It collapses because those that can pay will do so and even in a single payer system, the professionals will realize where the butter for the bread is and go there to get it.
To control that, the government will eventually need to socialize healthcare on a national scale. This only exacerbates the problem because then you end up with quota healthcare, something no one talks about and anyone in favor of single payer system ignores or tries to explain away.
As the USA healthcare system moves toward single payer and eventual socialization of the system, those entering the field of healthcare will realize the limitation of their ability to secure a profession that provides them with a higher than average lifestyle and oaths the damned, that isn't going to work. These are people with all the traits needed to succeed in other fields and their knowledge and skill sets enable them to move into other professions quite easily. That help to speed up the collapse of the healthcare system as we know it to be replaced with a quota healthcare system where high level government officials (elected) are always provided with healthcare and those with the financial means can always buy it.
Those that are inside the single payer socialized system will continue to demand healthcare par out of proportion of the system's ability to provide it. This in turn leads to other social issues, none of which have yet to be adequately explored or planned for.
While the healthcare bubble has to do with money in some respects, that is a minor consideration. It has everything to do with availability and access then becomes the commodity, not the money to obtain it.
Unless there is an exponential increase in the access to available services through all levels of healthcare, the bubble is inevitable, it will happen. Unlike the pseudo fiscal cliff, the time it takes to compensate for the increases in demand are improbably at best, able to be solved. It would be one thing if there was an equilibrium right now and we could ramp up access but what we are doing instead is starting with a deficit, adding demand far beyond capacity while at the same time reducing the incentive for people to enter the healthcare system as providers.
That is a recipe for disaster in the healthcare system. This is not Canada, Cuba or the Euro, the USA is unique in that demand has always been a factor that controls costs. In the bubble, demand does not control costs and costs can't affect an increase in supply because the simple problem is that there is no one left to increase the supply, they are off designing and building other things.
The rising cost of health care has nothing to do with speculation, it is based on demand and other factors such as the cost of cutting edge treatments, liability costs, pharmaceutical research, etc. Previous bubbles are based on cost run ups caused by mass adoption of the fallacy that outsized returns on investment were assured in the long term. The tech bubble of the late nineties, the real estate bubble both drew investors willing to pay ridiculous premiums to be in the game.
Health insurance costs will continue to rise as demographics ensure a huge demand and expectations for new and better treatments will fuel R & D, while legislation will continue to impose high costs on pharma and medical equipment manufacturers. Add to that the cost of malpractice and liability insurance.
Tort reform could aid in cost containment and technology may improve efficiencies along the way, to mitigate the rise in costs. Or not.
Of course, the cost of health care will drive the price of health insurance premiums. That is a given.
There could be a future bubble in health care investing, but that will not impact the cost of the actual health care services or insurance rates. Other than that, I would not bet against a continued rise in health related expenses. At this point no one has any idea what the impact of the AHCA will be, how it will impact stock prices or government spending. Bringing many more people to the market place and their expected contributions will have a yet unknown impact, regardless of all the rhetoric.
For these reasons I do not believe the rising cost of health care can be characterized as a bubble in any sense, rather an expense driven by demand. At this point health care stocks do not appear to be excessively valued.
From Fidelity:
Despite regulatory and austerity headwinds, health care earnings in aggregate were positive for the first three months of 2012 and beat analysts' estimates for the twelfth consecutive quarter.
Health care stocks continued to be inexpensive on a valuation basis, hovering near historic lows. Free cash flow yields also have been favorable.
Through various business cycles and extreme volatility, health care has been one of the market’s most economically resilient and consistent-performing sectors, distinguished by stable demand and favorable demographics.
The Banks - Either the Big Money Center Banks will be broken up, or there will be another 2008....They're not sustainable in their current structure, and they control too much in the country.
Citi
JPM
BofA
Wells
Goldman
Morgan Stanley
The banks right now are uninvestable. No one can make heads or tails of their balance sheets.
Everyone sooooo pessimistic lol
Anyway yeah analysts can't and managers disagree.
Jamie Dimon flipped out when he was told to "break-up" JPM so I don't think he's going to. I didn't do a financial analysis on JPM, but I guess it's book value vs intrisnic value.
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