Some portion of these people will still have their jobs and be living somewhere like in an $800 apartment (versus a recently adjusted $3500 mortgage) or with a relative. Won't some portion of these forcibly downsized people put a lot of their stuff in storage? If so could this be a positive catalyst for Public Storage (PSA), Sovran Self Storage (SSS) or U-Store-It Trust (YSI)? Do you know any other related companies like maybe a Canadian storage trust of some sort?
Lately there has been discussion trying to decipher why gold is going up (presumably signaling inflation worries) while at the same time treasury yields are going down which signals a lack of concern about inflation and might be signaling a deflation worry.
There are several possibilities for this I suppose including no reason at all but there is one possibility that I have not read or heard anywhere but I am sure that someone has thought of this somewhere.
For simplicity sake let's say gold is expressing an inflation worry and bonds are expressing a deflation worry. Isn't it possible that that each asset class is working on a different timeline? For example gold is worried about inflation in five years while the bond market is worried about deflation right now and for the next, say, two years?
The first flaw I can think of for this line of thought is that I would expect the ten year treasury to look further into the future than gold but the idea of different asset classes being on different time lines seems worth thinking about.
A spirited debate about social safety nets of healthcare and other entitlements broke out in the comments yesterday. I figured out how to articulate my thoughts on this subject and they will be very unappealing to some. In yesterday's post I made a remark about having enough money saved for some sort of medical thing that turns out to not be covered.
I do not want to be in a position where my fate is decided by someone else like an insurance company. If a person needs something medical done and insurance will not cover it and they cannot pay for it out of their savings then yes that is a rotten outcome but there is not much I can do other than pay whatever taxes I am told to pay.
People give themselves a better chance for avoiding this sort of problem by working longer and staying fit. Working longer means less time living off of savings. Staying fit reduces the odds of certain types of medical problems. If you love your work and are motivated to keep doing it until you are 80 then I have to think that the only things in the way of that would be any sort of medical thing or dying. In this case the savings becomes a giant emergency fund, most likely for a health event that is either a one time thing or a chronic thing if insurance somehow doesn't cover what you need.
It may seem like I am harping on insurance not covering but isn't that the biggest fear that most people have; some sort medical need that is not covered and not affordable from savings? I am sorry but I am more inclined to try to prevent my own problems than solve someone else's.On a somewhat lighter note the picture is from the Boston Globe (hat tip to my brother), they have a bunch of pictures posted from the fires in Los Angeles. This particular picture amused me because I have lived it a few times. A few hours after we start an initial attack on a fire we see a scene similar to the one in the picture; that is a bunch of dudes (typically hot shot crews) half my age marching to the fire single file to relieve us.
On a much lighter note did you see the end of the Broncos-Bengals game? That was crazy. Directv gave away Sunday NFL Ticket for free yesterday and I took in quite a bit of the Red Zone Channel, what a great idea. No we are not getting it, only the baseball package for us...for this year anywayXD
37 comments:
I keep wondering about owning a self storage business. Seems like a relatively low maintenance company to own/run.
I agree with you on health care. Insurance or government can both refuse to cover. Refusing to cover can take many different bureaucratic paper intensive delays by either government or insurance companies. Personally I prefer the current system where I get the medical coverage first and argue with the insurance company later. In the final analysis all an individual can do is try to prepare themselves for unforeseen problems.
On treasuries and gold I think you are confused on gold. gold has not correlated with inflation for the last few decades so why all of a sudden to you expect a correlation? Gold is a bet on currencies collapsing due to deflation not inflation.
The topic for today IMO is will Obama start a trade war. He says he doesn't want one and then increases tariffs. Obama talks out of both sides of his mouth MUCH more than most politicians so it is hard to say what he will do. But, if he starts a trade war look out because then I think we guarantee a depression in our future and I am still looking for a japan like out come. This means I still believe the bull market continues for now and we just have one more factor that might end it in the future.
Wow, I've had those exact same thoughts. I've also considered self service car washes. I suppose it just takes money to get it started. The car wash idea I like a little bit better because labor costs would be low (I think). I could hire some high school kids to watch the place if need be. I don't think I would want high school kids watching/monitoring my storage business though.
anon, Mauldin said the same thing you did about gold and inflation. However many people do believe that the lift in gold does signal an inflation worry, Peter Schiff is mounting a run at the senate based on this idea (LOL).
SD and BillB around here it is common for storage owners to live very close to the facility (essentially living there). I think the running of the business as opposed to the business itself is somewhat tricky, if the subtlety there is conveyed.
All I can do is may my taxes is a smug response to the needs of your fellow americans. Let them eat cake.
not sure it is smug so much as just selfish but i believe my wife and I do quite a bit in the way of service in the areas where we can.
Ever since Carter made education a cabinet position during his administration the US educational system has been going down the tube for decades. If the government ever gets control of health care you can expect them to destroy the US health care system.
Anyone who thinks a small business is easy to operate (successfully) probably has never run one.
If it were that easy, and attractive, there'd be car washes on every corner. Ditto for self-storage. Mind you, there are several self-storage operations not to far from us. And yes, it does appear that the owners are more hands-on than you might think.
BillB, your idea of hiring some high school kids to watch the place (car wash) is sweet, but perhaps a little optimistic, unless you came across the right kid or two.
BillM
Personal responsibility for attending to one's needs seems to a quality lacking from those responding critically to your posts yesterday and today.
Charity begins at home.
Afterwards,for example,we donate to charities that payout over 90% of donations to specificically targeted areas of human need.
With government taxing us twenty four hours a day, seven days a week and three hundred and sixty-five days a year - forever, our politician's "charity" is already obscenely overfunded.
"f it were that easy, and attractive, there'd be car washes on every corner."
Well, yes. In my area, they are about that common. Which is probably why I see so many in the "businesses for sale" section of the Tribune!
I'm with the no business runs itself group here so do not assume it will run itself. Woody Allen said something like 90% of success is showing up. I think he had a point and you will have to show up.
As far as car washes, make sure you understand this is not your home and therefore the epa regulates your run off into the environment and epa personnel can make the irs seem friendly.
Just a point, America has the lowest taxes of any first world country. Also this counrty uses its tax policys as welfare for the rich.
I think the "if it were easy everyone would do it" goes without saying. If it were easy, I'd be doing it right now :) BillM is right, I am too optimistic. But thankfully just in my mind. I run a small business now and know how much work it is.
[humor attempt]
To anon about U.S. taxes, I punched the last guy in the mouth 10 times for giving me that line, but I'm only going to punch you 9 times. Does that make my actions more justifiable towards you? Just a point! [grin]
[/humor attempt]
With that many car washes around I'd be looking at a supply and/or maintenance business myself; e.g., the folks who made the most money during the American gold rush were the pick and shovel (and blue jean) suppliers, not the miners.
That gives me a recall. I used to live in a small town where there seemed to be a beauty shop on every corner with lots of good old boys bidding on private woodland so they could log to a rough-cut mill and all I could think is that all that direct competition must be keeping everyone a little poorer. And then I recall wondering who the beauty product supplier was or if anybody was using the mill's sawdust for mulch or fiberboard production, maybe making furniture, or growing Portabella mushrooms on the oak slash (don't laugh, they were going for more than $5/lb wholesale at the time and grew like weeds in oak bundles just left leaning against each other in the remaining woods).
As to selfishness, I'm all for it, but mission-defeating incentive structures, inefficiency and excessive economic rents -- all of which accurately characterize the US healthcare finance system from top to bottom -- simply make me bilious. I mean for crying out loud, 20% of the US adult population under 65 is completely uncovered and even those who are covered can not avoid bankruptcy if their luck really turns bad while France, France goddammit, spends 5.5% of GDP less on health care (11%) than the US (16.5%) and fully, I mean fully covers everyone with an extensive mix of private and publicly supported facilities providing comparable or better health outcomes than the US overall; e.g., http://tinyurl.com/akdzd
Enough already. Let's make some money, we're all going to need it. Well, I'm pretty sure BillB will need it to tape his knuckles up [g]
But RW, the point (to me) of France is that they SHOULD provide that. If I were a citizen and they did not, I'd go insane.
My expectations are different if I have a 30% income tax, a 20% VAT on most services, and approx. a 5.5% VAT on food.
That said, your point is valid. If we can't do it better than France...... - hahah.
I wonder if we're just going to have to raise income taxes in this country and/or eliminate holes in the tax scheme. I dunno.
Anyway, I don't want to drag this out. Let's get back to my small business get rich quick schemes.
I have a 5 point health care reform plan that I have circulated among my friends for a while. The basic premise is that to fix health care you should clearly identify major problems and then implement fixes. In contrast the health plan in congress focuses on buying a new car instead of changing your flat tire.
This plan happens to eliminate the medicare and medicaid bureaucracies but retains health care assistance for the poor and elderly. Maybe some of you will find it interesting.
5 easy steps to reform health care
1) Eliminate any subsidies for employer provided health plans. Reason:
these subsidized employer plans distort the market for health
insurance, eliminate choice, magnify the difficulties of unemployment, inflate health care costs, and
over-generous plans reduce incentives to seek health care only when
necessary.
2) Eliminate exclusions for pre-existing conditions. Reason: people
with pre-existing conditions clearly need health care too, if it is
universally illegal to screen on this basis then all insurance
companies will have a level playing field.
3) Set a minimum deductible that all insurance plans must use. Reason:
this will get rid of $0 deductible plans because they create distorted
health care use patterns.
4) Eliminate agricultural subsidies that tilt the American diets
towards high-fructose corn syrup, subsidized dairy products,
subsidized beef etc. Reason: our fatty, nutrient-poor diet is the real
cause of the bulk of our health care crisis.
5) Replace medicare and medicaid with a subsidy, such as a refundable
tax credit, to buy individual health insurance plans. Note: private
health plans will suddenly be available due to steps #1 and #2 above. Reason:
A government program is the least efficient way to accomplish anything
and so such should only be used where absolutely necessary. It is not
necessary or helpful to have a government bureaucrat between you and
your doctor.
I think your plan makes my insurance costs go from $3120/year (maybe less, I'm too lazy to do a quick check) via paycheck deductions to probably something like $15k - $20k or more/year since I have to kick in my employer's subsidy. PLus my medicare taxes. Plus a higher out of pocket because this changes the copay vs. deductible system I have now.
I'm not sure what that accomplishes.
I've never seen any data that suggests that ag subsidies affect diet. Maybe what you really want is for insurance companies to provide incentives for better health.
Man why does this discussion draw me in. heh.
I have also considered owning telecommunications towers. The carriers pay every month and the maintenance is minimal.
I don't know Roger but it seems to me alot of people are losing their
home because they lost their job...
they bought a home never thinking that one of the married partners would lose their job. Lesson learned: only purchase a home based
on earnings of ONE partner.
If things are so bad that you lose
your home I would think the owners would be SELLING their stuff...
storage fees are expensive...
ask any parent that stores his
college kid's stuff over the summer.
Hummm, how do you invest in flea markets....I remember in Florida
people would open their storage
unit on the weekends and sell
stuff they had gathered over the
week.
Does the volume in the stock market still seem awfully low
to you?
I'm always looking for a good
place to store cash, I know
that has been discussed here
before...but do you have any
new ideas?
thanks reo
My son is attending college in
Las Vegas. He says people are
buying a new home; moving in
and THEN forclosing on their
first house. If they forclose
first before moving they can't
get a new mortgage. Think about
it....everyone is moving into
everyone elses house...LOL
The option arms start to default fall 2009 through to 2011 and will be larger then sub-prime.
Short financials, short the DOW, short everything, go cash/gold, ..
This has been charted and explained all over the internet for years now.
This will result in another banking crisis and lets hope Obama can force BOA, JPM, GS, WF, CITI, ect. into bankruptcy this time and not allow another massive taxpayer bailout as Bush and Paulson initiated.
Hence Obama's speech today.
Hence Gold going up.
ect..
Matthew, and others making comments about health care, I throw in these thoughts because they have not been previously mentioned. Your comment #2 "Eliminate exclusions for pre-existing conditions," sounds great, but is the equivalent of making a house insurance company insure a house that is already on fire. If #2 becomes law without an accompanying mandate that everyone purchase health insurance, we can all drop our current health insurance coverage and simply buy health insurance when we become seriously sick. I, by the way, support your #2, but only if it comes with the enforceable requirement that everyone buy health insurance; I understand this requirement is being considered by Senator Baucus' bi-partisan Gang of 6 (3 democrats, 2 republicans, and 1 RINO [Snowe of Maine]).
JCarr
Hi Anon 11:27, yes you are right that certain rules and incentives would be required when eliminating pre-existing condition exclusions.
Stephen you asked if eliminating subsidies that encourage/coerce employers into the role of group health sponsor would raise your personal health care costs. The answer is 'no' because you already pay for your employer's subsidy. On your paycheck this is labeled as 'federal withholding' or equivalent wording.
Anon @ 10:44: that is too much about the Las Vegas housing market. Over the weekend I heard a comedian sing a song to the tune of the Sunday school classic "The foolish man built his house upon the sand" : "prices fell down but the payments went UP, prices fell down but the payments went UP!"
The "wise man" in the song of course used a fixed rate loan structure so for him the refrain was "prices fell down but the payments stayed the SAME!..."
I'm not quite sure why you think federal income tax witholding covers the amount of money my employer pays for my health insurance.
I suspect there could be a fair amount of house jumping or swapping going on (a dangerous game if provable fraud is involved) in what used to be the hottest markets and growing competition to purchase the lower-priced distressed properties too. Calculated Risk has been tracking a number of interesting outgrowths of the real estate/credit debacle, one of which is "accidental landlords" -- folks who had to move but couldn't sell -- with one of the latest being our erstwhile Treasury Secretary; e.g., http://tinyurl.com/lvk9hl (you can't make this stuff up, really).
It's not an investment site per se but I credit CR and his sidekick 'Tanta' (now deceased) with dramatically furthering my education WRT real estate and real estate financing, basically establishing the statistical background and sophisticated interpretation necessary to understand the complex but increasingly Ponzi and reckless practices in the business. By 2006 there was no doubt among the regulars what was happening and going to happen and my subsequent short sales in the relevant sectors -- builders and mortgage lenders mainly -- were among the most confident (and lucrative) I ever laid down.
Stephan, still OT I guess, but the point for me was France is paying significantly less for health care than the US as a GDP% (and per capita) while covering more folks and achieving comparable or better outcomes. Not sure that taxation levels or what people expect have much to do with that; it's a matter of efficiency, of bang for the buck (or Franc).
RW,
"I suspect there could be a fair amount of house jumping or swapping going on (a dangerous game if provable fraud is involved)..."
Not a snow balls chance in hell they can prove fraud. It would be a piece of cake to use the defense that you thought the rental income plus some partime work that never happened were your plan to pay it off and you are simply unlucky and or stupid not fraudulent. As if anyone would ever go after this.
You would have to be caught on tape bragging about the fraudulent intent (and they might catch a few idiots that way). Otherwise people will get away with this plan
As far as france having lower health care costs, I think American obesity and associated diabetes, heart by pass etc have alot to do with it. I also think the enormous expense in the last 6 months of life is funded more in the US than in Europe. If you spend lots more in the last few months and have the fatter, low exercise population you will have higher costs with worse outcomes. Unfortunately this describes the US population and health care costs to a T IMO.
Singapore has the lowest heatlh costs of all modern nations and has world class health care for all.
How? Public Option.
The public option COMPETES with private and this auto-magically drives down costs over time through a process called CAPITALISM.
Obama is right was the money with the public options...hence the $100 million money bomb health insurance exectuives dropped into D.C.
To bad Americans are stuck in thier right vs left wing divide and be conquered mind set.
Obama is working for the average American. Clinton is not. GW Bush was not. Ron Paul is. ect.. Simple as that. Nohing to do with left vs right.
anon 2:21
I agree with you. Allow me the option of private or public. If I can't afford the private, I have the public to provide the care I need.
Of course, nothing ever turns out as planned.
If we stay the course, won't we go beyond the estimated trillions as predicted for the public plan???
I had good health insurance until I was laid off. My wife has breast cancer. We have been denied insurance from 25 firms. One firm did quote a $1500/month fee with no cancer coverage.
Would some of the writers on this blog please come over and talk to my wife about why she will probably die soon. Why, she must have done something wrong in her life and didn't plan accordingly.
I wished we lived in Italy like Jeff.
"Would some of the writers on this blog please come over and talk to my wife about why she will probably die soon."
Have you tried local support groups or churches?
have you considered going abroad for cheaper cancer treatment?
http://www.discovermedicaltourism.com There are many other sites this is just the first I googled.
Is your post real? What are you doing posting on an investment blog when if I were you I would be moving heaven and earth to get my wife treated abroad or get the pharmaceutical companys to donate the cancer drugs or getting local groups to help organize a charity or getting doctors to donate a probono service or anything but posting here.
But yes I am for legislation that insures preexisting conditions are covered like cases such as you described.
I have a friend who owns car washes and a client who owns self-storage units. They have both done very well with them. One has a day job but keeps his nose in his car washes. The other is a retiree who hires a manager to oversee his properties and still covers costs very nicely. He is ruthless with deadbeats. Go more than the statutory time without paying and he is holding a sale of your stuff and renting that unit to someone else before you can blink!
FWIW, DE
I am an investor in some self storage units. Low cost to build, can foreclose if the tenant is 30 days late, no headaches like a residential rental property, good cash flow. And, we leased some land to a cell tower to improve cash flow even more. Pretty good business. We hire college kids to manage or retirees.
However, we have seen a lot more late payments. Usually, they come up with the payment when the foreclosure note arrives, but late payments have increased from around 5% to near 30%.
I feel for the gentleman who lost his insurance and his wife has cancer. Shouldn't he get COBRA for 18 months at least? Plus, the government is covering 65% of the premium for a year. Maybe he is beyond the 18 months of unemployment. But, I am against the government offering a public option. It is nothing more than creative destruction. They start with an option and then muscle the private providers out of business. Having served in the government, they run nothing well - NOTHING.
Here is absolute proof that Americans are nuts.
Why is it that so many American's (especially Rebublicans) have no problem with "the government" running a 100% socialist military, department of defence, pentagon, terroist security out the ying yang, CIA, FBI, DEA, airport security, toilet security, Presidential Library Security Force, War Against Drugs, War on Terror, Don't Tazer Me Bro Police Force Terrorist Training, blah, blah, blah to keep us "safe" from ?
- that is TRILLIONS OF DOLLAR blown out the door each year to who knows what waste.
- where is the Glenn Beck march to close the Defence of Department, CIA, cancel the War on Drugs, War on Terror, CIA, FBI, DEA, ...?
But letting our children, friends, and nieghbors DIE on a daily basis because we cannot spend a few billion on health care is sooo un-patriotic to many of these same people?
fools? brain disease? lead in the water? global brain warming? what is the problem here?
Anyone have a link as to the amount we spend per American death: terrorist attack vs. lack of health insurance?
and I'll even let you play Glenn Beck and assume we prevented 100 9/11 attacks - 2,993 X 100 = 299,300 deaths by terrorist and the numbers will still make you anti health care folks look nuts!
I do not think anyone here is anti health care they are anti government healthcare because as already stated the government can do NOTHING well.
Knowing this, we accept government run police, cia or army because we have a little mor brain than someone who uses an example of putting these in the hands of a private individual or corporation.
This is really the best arguments you can come up with? Who would want private armies or police? We just do not trust the government with things that can be done privately. I still want health care insurance that covers preexisting conditions.
I wonder how many of these comments are being placed by the same person? Also, since some common words are spelled differently in the US versus Europe (defence?), I wonder how many of theSE diatribes are from a certain European?
DE
The reason the gov't spends money on defense is because of the CONSTITUTION. You and your democrat friends (and president) should read it sometime.
Let's at least be civil to each other. I get the sense that the health care topic may interest the readership more than it interests Roger so we should stay on good behavior here. Party politics and fake posts do not bode well for the health care debate at large ;-)
"Do not think of knocking out another person's brains because he
differs in opinion from you. It would be as rational to knock yourself
on the head because you differ from yourself ten years ago." -Horace
Mann, educational reformer (1796-1859)
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