Markets are supposed to be "forward looking"

[vanzandt]

A couple things. The tech wreck didn't really take spending money out of the hands of most Americans. I'm sure many lost a fortune in their 401k's and mutual funds, and certainly market players like us did... but this is different. This hits home directly with take home income.

People get sick. Costs keep going up year after year with a double digit vengeance. Out of pocket expenses for care and drugs are very real and very painful. This is not just political... I mean it certainly has that attribute and for good reason.... but it has a very real effect on everyday people.

I had a long conversation with a retired cop I know who is having to sell his RV just because he is paying $1300/month for coverage and his wife's drugs cost $800 out of pocket. He said he needs the money and chuckled as he said he will never be able to afford to use it. This is a big city unionized cop with 30 years on the books. He was a mess. It really opened my eyes to the reality of what is really going on. I suspect he is one out of many many millions of people. And its only going to get worse. That money has to come from somewhere.
This is the type of long term macro bust that Soros has written about. These things take years to pan out. But from where I sit, there can be no other outcome.

Regarding brick and mortar retail.... you are 100% right. Cities across America are awash in vacant strip malls in all but the most affluent areas. There's nothing more ugly than nearly abandoned commercial real-estate who's few tenants are salons and carryouts. And it is everywhere you look, at least in the fly-over areas of the country which encompass a very large percentage of our population. Many of the large REITS geared specifically to commercial property that are highly leveraged are certain to fail. Will that precipitate another crisis(?)... I don't think so. This situation has been parroted in the main stream press for quite awhile now.

But healthcare expenses will. They are slowly but surely, like a leach, sucking more and more disposable income out of the average American's pocketbook...and I expect we are at the tip of the iceburg. But its going to be over a period of years... a slow and steady bear market the likes of which we have never seen will start when we least expect it. Even Amazon... especially Amazon...is going to feel the effects of increasingly less consumer spending. Its going to happen. It has to.

 

[vanzandt]

One of the things about ET that I like is that it hones my somewhat "leaves something to be desired" writing skills.
And they do suck. I enjoy the practice of writing (its kinda like working out at the gym) here for the real world stuff.... where it counts. So what I write here can sometimes be condensed into a few short bullet points.... So... let me bulletize some things here.

Fact 1) Monthly pension payments do not go up.

Fact 2) The costs of medical insurance does year over year for working stiffs and pensioners alike.

Fact 3) Increases in the take home pay of Americans still working is not even close to the double digit increases in out of pocket medical expenses thrown at said workers.

Fact 4) The more people spend on medical out of their own pockets... the less disposable income they have.

Fact 5) Less disposable income means less spending on all things consumer. Period.

Fact 6) America and our markets are driven nearly 100% off of a consumer based economy.

Fact 7) And this one is arguable but I am right.

Wall Street and Washington have no real clue as to what is really going on until some study or some government statistic heralds it as an observed phenomenon. This is how I knew to go long CMG at $42 and short DG, DLTR, TGT, KMX etc when no one else did....The list is long... and my being right is certainly not reflected in my trading accounts. Thats my bad. I gamble. I swing for the fences short term. Bad juju. But this point is not about my portfolio and how I trade or how much money I have made or lost.... this is about WS being out of touch and the last to know.

Its easy for folks making mid to upper 6 figure incomes to say "Oh... the markets will take care of that... its all good".

Thats dead assed wrong. I have always been able to foretell on a macro level domestically whats up and this is one of those times.... again.
The stars have aligned in regards to what I see. You can write off what I say... or you can plan accordingly. Do with it what you want, but what I write here today will manifest itself as being 100% spot on. The facts speak for themselves. Time WILL march on. Take nothing for granted. We *ARE* living in a house of cards.

.........Here's to new highs tomorrow! Party on.

 

[themickey]

So you are implying a recession is creaping upon us like a slimey little snake because of healthcare costs which is sucking the blood out of our disposable income like a slimey little vampire?

I have always been able to foretell on a macro level domestically whats up and this is one of those times.... again.
The stars have aligned in regards to what I see. You can write off what I say... or you can plan accordingly. Do with it what you want, but what I write here today will manifest itself as being 100% spot on. The facts speak for themselves. Time WILL march on. Take nothing for granted. We *ARE* living in a house of cards.

 

[vanzandt]

So you are implying a recession is creaping upon us like a slimey little snake because of healthcare costs which is sucking the blood out of our disposable income like a slimey little vampire?

Literary flare aside.... thats pretty much it. You got it.

 

[piezoe]

Without going into a lot of detail.... a series of events and conversations with people very well versed on the subject has enabled me to understand that this is problem that can not be fixed.

Of course it can be fixed, and the only industrialized country that hasn't fixed it yet is the United States!

In all other industrialize nations there is a third party payer, just as in the U.S.; yet costs are half as high, or less. Therefore the explanation for extraordinary U.S. costs can not be couched alone in the presence of a third party payer . There must be, at minimum, another factor involved.

There are in fact multiple factors at play. In the U.S. for example, regulatory capture is highly significant. There is one factor behind much of medical pricing, however, that regardless of country, if allowed to, will dominate all the other factors affecting price. And this is the inherent inelasticity of pricing for many medical procedures. That is to say, the buyer is not free to walk, so there can't be a two-way market.

Whereas many U.S. politicians play deaf and dumb when it comes to recognizing inelasticity in medical pricing, this is not so in other countries. All other industrialized nations except the U.S. have solved the inelasticity problem by giving the government monopoly power to dictate prices. This is done by either making the government the third party payer -- the most efficient approach, or alternatively dictating pricing via closely regulated insurance carriers, e.g., Switzerland. Rather than target cost efficiency as in other countries, the U.S. targets, somewhat unwittingly it would seem, maximized profit via cost shifting, and accepts, as a consequence, that not everyone will have access to routine medical care. These drastically different approaches to the challenge of providing medical care explain nicely why the medical sector component of GDP in the U.S. is at least twice as large as in all other industrialized nations.

All other countries have drastically lower medical costs; yet results are much better everywhere else.* Obviously you as a patient, in general, get far less than you pay for in the U.S. But on the other hand you as a provider do far better, on average, than providers in other countries.

Elective procedures in the U.S., such as plastic surgery, lasik, etc., allow us to observe what happens to pricing when there is a two-way market.

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*Check out the WHO rankings if you question this.