The Trojan Horse That’s Tik Tok

A couple of months ago, I had shingles. Yes, I had the shot, about 15 years ago. I remember having chicken pox, so of course I got the vaccine—& they said it was good forever, but it wasn’t. No sores, no blisters, but excruciating nerve pain.

My own doctor was away, so the clinic suggested I see another doctor, which I did. She gave me a prescription, but it was barely effective. A week later, my own physician was back, I saw him, and he gave me another prescription—which took almost three weeks to be effective.

Then, I got a bill for a co-pay. It seems the 1st doctor I saw was NOT in the network! Or—was it a billing error? Or—now do we have to ask, every time we want to see our doctors, and the clinic asks if we’d see another because, for whatever reason, my own doctor wasn’t available—if the doctor they suggest is IN THE NETWORK?

This is obviously either a coding issue or a human failure issue, but no matter. I won’t tell you how many hours I ended up spending with my insurance company straightening this out.

I bring this up because this is a very real problem: healthcare billing snafus. Meanwhile, the old white men in Congress got a bug up their asses that TikTok is stealing Americans’ personal information.

If they are, the train has left the station. Apparently when the credit reporting agencies decided to store all our info in the cloud & that was breached…that wasn’t as huge a problem as Tik Tok.

What will the Chinese (or the Russians, the Indians, Filipinos, Tajikis, Uzbekis etc) find when they steal out personal information? Lots of us have bad credit and don’t pay our bills. Google it. Something like 22% to 47% have over $10,000 in debt.

About 10 years ago, I Googled ‘ceiling fans’. For weeks, on Facebook, I was getting ads for ceiling fans. it’s true for anything you Google. The is no privacy. You’d think, knowing this, any agency that keeps our financial or health records would NOT be storing this info online, but on discs—but silly me, that’s not how it works. Face it. There is no privacy. At least we know where TikTok has their corporate offices. How about all the no-names scamming people, stealing our stuff? We never have any idea where the scammers are. They easily post on all social media, from Craigslist and Facebook to dating sites.

Banning TikTok is banning free speech. There are a million ways around the ban, but right now, it looks like TikTok is playing by the rules.Our federal law makers don’t seem to recognize that they are too late.

Bankman-Fried, FTX, Cryptocurrency: the gist

Fed Study Says Bush and the Banks Didn’t Cause the Great Recession. The Fed Did

We can all point fingers at who was at fault, but the gist of capitalism is investment to make more money. The article dances around why deregulation is bad. Simply, if all the ‘investors’ in the bank pull all their money out all at once, does the bank have the means to stay afloat and continue as a business?

Shit happens. I’m not a gambler, but I take calculated risks, and there is a very fine line between gambling (I’d say hope is involved) and taking a risk (past performance, blah blah blah).

By all accounts, Sam Bankman Fried is a brilliant mathematician. Ironically, both his parents teach business ethics at Stanford. According to a brilliant article by Sheelah Kolhatkar :https://www.newyorker.com/magazine/2023/10/02/inside-sam-bankman-frieds-family-bubble, B-F wasn’t really managing day-to-day operations. In spite of the best lawyers and accountants money could buy, when a single investor, Changpeng Zhao, tweeted he was dumping FTT (digital tokens—a little complicated), he sent a run on FTX, and B-F could not borrow enough actual money quickly enough & the whole scheme imploded. Riiight: he needed to borrow actual currency—dollars—to keep fantasy money afloat.

Just like the Trump boys stated they pay accountants to take car of their business, the boys only ‘supervise’ and apparently don’t read what they’re signing, B-F relied on staff to make sure everything was kosher. But more, he had plenty of actual cash. He just apparently spent it all on gifts for his parents, a fancy penthouse in the Bahamas, and a lifestyle he didn’t seem to really enjoy. His ultimate goal, he and his parents say, was to invest in people, countries. and ideas to make the world more equitable.

Good intentions are not enough. I don’t feel bad at all for the people who lost money with B-F. If they didn’t have it to lose, they shouldn’t have speculated. Even if you trade options, investment firms ask for proof you have a pool of money.

But people invest in crypto because it’s unregulated. This has me scratching my head.Even though it is unregulated, firms invested actual cash in the company….and now they want to be made whole.

This is above my pay grade, but there’s money to be made….by lawyers.

College Choice & College Loan Debt

What are students basing their college choices on? For over a decade, Americans have heard of crippling student loans, and I don’t get it.

There is no doubt that private lenders have done some grossly unethical things to young Americans in terms of writing contracts that are incomprehensible, that allow outstanding balances to grow so exponentially that if the borrowers don’t over pay the contractual amount, the outstanding principle grows. Not ethical, but legal.

We’ve all heard, from the time we entered primary school. don’t sign a contract until you’ve read it and understand it. Or—-have somebody you trust read it and explain it to you. Yet, so full of optimism and blind faith (in Jesus?) are the borrowers. it’s as though they think others have more integrity than they have themselves.

But…wait a minute. If we can all see that community colleges are a fantastic bargain (in my case, I took CLEP exams. Google it), why are people choosing expensive private colleges?

I do know people who did their research and chose schools and/or instructors for specific programs, but we all know most students aren’t doing that. They are choosing by location, the attractiveness of campus, or party reputation, or because a friend is going. Or being ‘legacy’ (a parent went there ) So, what is it?

Why are students choosing debt over common sense?

In fact, why do so many students of liberal studies or humanities choose religious based schools?

I can only guess it’s culture…and contacts.

I live very close to Northwestern University. If I wanted to work at McKinsey, I’d go to Northwestern for an MBA. If I was going for a career in Radio/TV/Film, definitely Northwestern. African Studies? Northwestern.

If I planned to go into a corporate setting, I’d probably choose Loyola in Chicago.

At any point in the choice process, does any adult sit down with the student and say, “Now, look, as soon as you graduate, if you borrow, the lender is going to start sending you bills, probably at least $300 a month. How are you going to build equity and pay off this loan on top of your living expenses?

Hope is not a business plan.

There’s enough blame to go around: really bad math teachers, innumerate parents irresponsible with money, and the general milieu of unbridled optimism.

Here’s a suggestion: If you’ve paid off your outstanding principle and your interest rate is over 5%, your lender is paid off.

If You still owe an outstanding balance, what’s your plan? How much can you realistically earn? How are you going to get that income?

No plan? 10% penalty right there. A work-out plan for the next five years, and 6–8 hours a week doing community service, volunteering at schools, learning where you went wrong and teaching younger students what you’ve learned. You also have to write an essay about what you know now that you wish you knew when you took out the loans. We’ll give those essays to high school students.

It’s not an accident that I don’t have school debt. As a teenager, I horrified my parents and acquired skills: dog grooming and training. Their plan for me was to marry well. Nothing you’d brag to your fellow parents of teens about: Something you’d joke about.

At least my mother taught me to budget and be frugal—-delay gratification. I knew that as soon as I became emancipated, I’d always need a roommate to maintain a lifestyle. I took CLEP exams, paid cash for my remaining two years of undergraduate, and got an assistantship with a stipend to grad school. If I hadn’t, I wouldn’t have gone.

I’m not particularly intelligent, but I am skeptical, and I knew I could not have any plan that would work to pay off school debt.

I want to feel sorry for these people, but I can’t. We all got the same information. I chose to work rather than party.#studentloans

A Variable Annuity is a Legal Scam

My father believed in insurance.  He doesn’t trust his own math skills, and granted when you have small children, life insurance is important.  You don’t want your kids destitute if  you die.  So we all believe that is what life insurance is for:  the family you leave behind.  It’s a gamble,  but responsible. 

What kind of parent buys life insurance on his kids?  His explanation:  if we lived, we’d have money for college. Fair enough.

When I had just left home, without a thought about going to college, my father bought a $5000 life insurance policy for me.  He had been led to believe the policy paid 4% interest, and after 5 years, the dividends would maintain the policy. If I added to the policy, I would get  4% interest.  I was skeptical, and asked what State Farm invested in.  My father got angry with me.  He trusted State Farm agent, Bill Apostolakis, and had no idea.  At the time, due to inflation, banks were paying over 6% on savings accounts, and you could get 17% interest on a CD.  My father was exasperated by me. How dare I question.

He apparently took out a $100,000 on my brother, and on my brother -in-law,  Bill Meyer, he took out a $150,000 policy. My sister and brother-in-law had 2 little kids. This was, again, the early 1970s.  We lived and lived.   My youngest sister,  upset that she had no policy, became a co-beneficiary of my sister’s policy on her husband.  My father continued to hound me about adding to the policy.   In fact, I had about $5000 which I trusted him to invest with a friend of his, and…not having any idea what this guy was investing in, but that he was paying 9%, I let that ride for a good long time.  Again  perplexed by the lack of transparency, I moved the account to a Calvert mutual fund. That was the start of my learning to invest and  to know what to look for. I am by no means an expert, but I  am confident about the odds.

My father meant well, but he just couldn’t relate to us kids as adult people.  Part of the problem is my brother has severe Asperger’s, and part of it was my Dad himself.  He was always trying to give us stuff.  He had a small chemical company, and usually he gave us  soap.  Hand soap, detergent that will destroy your clothes (—no joke), or dishwashing liquid.  As he got older… grocery bags full of napkins.   We have no idea where he gets them from, as there is no packaging. I don’t get it, I have a lifetime supply of paper napkins.  We all do, and give them out to friends.

We lived some more….40 or so years more.  I went on a trip, and upon my return, my youngest sister  had emailed, “Bill Meyer died.”  It took me a few seconds to process this.  He died in a freak accident:  he fell, hit his head, and went into a coma.  The sister married to Bill, the guy with the life insurance, was now on her third husband.   In any case, my 2 sisters are splitting that $150,000 policy.

Meanwhile…I had my taxes done, and , for some reason, I had to pay tax on the dividends of $150 or so my  life insurance policy. Nobody can tell me why this is NOT an unrealized gain.  At one point, the policy was worth over $21,000, but due to some murkiness on  State Farm’s end, it dropped to $13,000, & was ‘worth’ $8300.  Yes, it lost value, and I was paying taxes on it.  My father reminded me that it was paying 4%.  I did  the math. Even if it paid 0%, and my father had put just $25 a month in a non-interest bearing account, I would have had over $21,000.  I called Bill Apostolakis. He calls you honey, babe, and doll. He does not respect women.  I tell him I want to cash in the policy, as it is costing money, not making money.   HE starts with the spiel that if I  had only added to it.  I ask him, “did you tell my father that if he had just put $25 a month into a savings account, I would have had more money?”   He hesitated, “Yes…I did.”  “No, you didn’t,” I responded.  The fact of the matter is:  my father paid State Farm to, essentially, keep $5000 in a non-interest bearing account.  Like paying a bank to keep your money in a savings account.

I had to wait a few weeks to get the actual policy, as my father was wintering in another state,and the policy was in his safe deposit box.  He was SURE it pays at least 4%, maybe 9%, he tells me.

My father returned.   He gave me the policy. Wait—there are 2!  One has a face value of $10,000.  I call Equitable Life on that one.  It turned out my father cashed it in 1994.  It is worth $0.00  After taxes, (yes, there are still more!) the State Farm policy was worth about $6,000. IT IS A VARIABLE ANNUITY—where you pay them to ‘manage’ your money.  It’s a legal scam.   There is no indication in the wording of the policy that it ever paid any amount of interest.

This is a legal product. There is probably some disclosure in the legal mumbo-jumbo, but the only beneficiary is the company offering the policy.

I’m not sure how many people remember, but after Donald Trump was installed in office, 1 of the first things he did was do away with the law Barak Obama signed, to make it legal to NOT be a fiduciary. now you have to ask. why would Trump do this? He knows who his supporters are. I mean, the people who give him money.

As my  roommate said, “It looks like the napkins are worth more than your insurance policies.”  No kidding.

The Big Short and Understanding Finance

My 2 flat in Rogers Park, Chicago’s 49th ward.

It’s Christmas Eve, 2015, and I went  to see “The Big Short.”  Although the movie was not well reviewed (Michael Phillips of the Chicago Tribune said that  financial markets were too complicated for the average person to understand. Hence, this movie was boring), I found it well scripted, edited, and acted.

Perhaps  it is because I, also, could see how over heated the real estate market was…and I will tell you  how.

In the mid 1980s, seeing that I would never get rich by grooming dogs, no matter how well I  managed my budget, I decided to learn about the mortgage market and selling commercial paper.  That’s right.  I learned that not just banks, but private investors bought mortgages and you really didn’t need years of college education to sell mortgages.  You just had to know the concepts of present value of future cash flow, loan to value—and the formula to  figure out what a cash flow was worth.  That was it.  Simple as that.  Yes, you need a special calculator to  figure this stuff out, but you can easily learn the formula in a few minutes.

I  learned, via audio tapes, that  brokers sliced up payment streams, and sold portions of mortgages.  You didn’t have to buy 240 payments (a 20 year mortgage), but could by payment 12, 18, 32…whatever.  How would you manage to get paid if the mortgage was sold or the mortgagee defaulted?  Ah, there was the rub.

I wondered how this could be legal.  Well, it was legal because it was not ILLEGAL, and frankly, most people who buy bundles don’t look that closely at what they are buying.  I mean, they don’t look at the value of the property the mortgage is on, trusting appraisers.  They don’t look at the credit histories of the borrowers.  The assumption was that someone was  checking out this stuff…but in reality, nobody was. It just seemed to risky for me.  The only way you could  make money was if you were  a lawyer, and even then, it was an iffy investment.

My niece learned the  mortgage business (and was a lawyer), and I called her about a mortgage because I wanted to lower my payments.  She got me a ‘no document’ mortgage, meaning I didn’t have to prove income.  At the time, I was earning under $30,000 a year, but my credit was good, and my  ‘loan to value’ on the house was very good, so it wasn’t a problem.  After a few years, I thought I could do better, and wanted to retire a line of credit which was never very transparent, and I could never get a statement  on how much principle I owed, so I , again, refinanced with a broker who got me  a mortgage based on the LIBOR (London Interbank Offered Rate—a rather bogus index used in the USA), which was  at 3%, but adjustable. The broker told me  the rate was very stable, and rarely fluctuated more than .25, but that turned out  not to be so, and within  six months the rate climbed from 3% to 5%, and I again refinanced.

I just love HGTV, and I loved the shows about house flipping and people house hunting.  What I was seeing, on those shows, was people were being approved for  mortgages with no or hardly any (2%?) money down, based on their incomes, not expenses, and clearly people were buying much more  home than they could afford.  But it was legal.

I was seeing this with some friends as well. I thought that this could not possibly go on.  People were trusting banks, were carrying too much debt on credit cards, and all that needed to happen was for energy prices to go up or people losing jobs for whatever reason, or becoming over extended (a good one was  investors buying a bunch of property, not keeping the property up, getting rent payments but not paying the mortgages on time because  that’s how  some people manage their finances).

This movie shows that—all of that—really well…and virtually all the practices that led up to this are still legal.   Our Chicago area schools are not really teaching finance, or compound interest, or budgeting…especially not in low-income areas…and we still have people thinking this is  just not an interesting subject.  These are the same people who don’t bother to  check out the political candidates positions online (easy enough to do, but they go for the bloviators), and don’t vote, anyways.  Then, they complain.

I had read excerpts of Michael Lewis’ book, and learned about Michael Burry (excellently portrayed by  Christian Bale).  This movie should be shown  to every highs school student.

William O.Douglas, Supreme Court Justice, first head of the SEC

I was a teenager in the late 1960’s.  We had the Conspiracy 7 trial in Chicago. The music group Chicago, and Crosby Stills & Nash sang about it. The whole world  (is)watching …The Democratic Convention  in 1968, which the Yippes, working with other left groups, were  going to disrupt if the Democratic Party if they didn’t  put  planks in to end the war in Viet Nam, and address civil rights. The Black Panthers were active, and President Johnson, who only became president due to the death of Kennedy, declined to run.  Hubert H Humphrey lost to Nixon, who promised to end the Viet Nam war.

Of course, it backfired.  Nixon got elected.  About this time, William O. Douglas  published Points of Rebellion  .  He addressed what progressives expected   of their elected leaders…everything from civil rights to an end to unjust wars, to environmental conservation.  He really spoke to me.

Douglas  wrote a lot of books.  In retrospect, it is hard to believe he found the time, and I will explain.  He was the  first head if the Security & Exchange Commission.  He was appointed by FDR.  He saw straight away that  it would be virtually impossible to regulate public companies, and their official, legal filings were always inaccurate—to use a term.  He saw that  ultimately  staff would be in league with the  entities they were charged to regulate—-&  told FDR that the  SEC should be abolished in 10 years, and reformulated another way with other employees—and that  government employees should never be allowed to work for the  companies they  once regulated (it took over 50 years to get some sort of law addressing this—&  there is no retrospective on this…Newt Gingrich, the  most obvious…).

Douglas had a lot of integrity when it came to addressing what affected the citizens of the USA.  Check him out on Wikipedia….  so, then you wonder….

When did he find time to court the 4 women that he married—-& if you notice  the chronology, he was always cheating.  He was a womanizer.  &, you have to wonder about the 2nd, 3rd, & 4th wives…the last one being about 40 years younger than he was.  All you can think is that he was charming beyond words.

I recently read one of Douglas’ biographies, Go East, Young Man  .  Having been  IWW, I was very interested, as I was a Wobbly, and because he had so impressed me in my youth—-but I got to thinking….we really don’t teach out own history very well to our  high school students—the ones who will be voting.  I had no idea how the SEC came into existence, but what  with what happened at the end of the Bush administration—-running into what Obama inherited, and the bailing out of AIG and many, many other public companies—bailouts that  did NOT help  the majority of Americans deal with the fall-out they caused—and—in fact—-kept us all in horrible economic circumstances (so—if you believe Obama is a socialist—this bail out was proof he is not—-he is in league with the rich) where so many  families lost their homes…& nobody explained what could possibly have happened if AIG actually failed…..this is a travesty.

In any case, Douglas was a progressive, an environmentalist, and had a huge effect on what is now conventional wisdom in this country, womanizer or not. Do we really care about his sex life?  No.  But you would think, in writing Go East, Young Man, with all the name dropping…he would have said something about his wives!