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The Dark Side of Student Loans
Issue #528, June 25, 2018

The Cost of Out-sourcing Convenience
Issue #527, June 18, 2018

Social Security: 66 or 70?
Issue #526, June 11, 2018

Student Loans: There’s (Unfortunately) a Lot More!
Issue #525, June 04, 2018

Co-signing a Note
Issue #524A, May 31, 2018

The Knight Frank Luxury Index and Collectables
Issue #524, May 28, 2018

The Importance of Diversification: The Myth of Diversification
Issue #523, May 21, 2018

How to Save Thousands on Your Food Bill
Issue #522, May 14, 2018

MoviePass and Other Things
Issue #521A, May 10, 2018

Degree Inflation, Long Training Periods, and “Certification”  Part III
Issue #521, May 07, 2018

Degree Inflation, Long Training Periods, and Certification” Part II of III
Issue #520, April 30, 2018

Follow-up on Several Things
Issue #519A, April 25, 2018

Degree Inflation, Long Training Periods, and “Certification”: Part I of II
Issue #519, April 23, 2018

The Kids Birthday Party Hustle
Issue #518A, April 18, 2018

A Pension Question: Part II of II
Issue #518, April 16, 2018

A Physician is an Executive
Issue #517A, April 11, 2018

A Pension Question: Part I of II
Issue #517, April 09, 2018

Is the Correction Over?
Issue #516A, April 05, 2018

Used Car Dealers, Student Loans, the Chinese, and Uncle George’s Rule
Issue #516, April 02, 2018

Starter Homes
Issue #515, March 26, 2018

Redecorating: Beware!
Issue #514, March 19, 2018

NASDAQ Closes at Record High
Issue #513, March 12, 2018

A 40% Chance
Issue #512, March 05, 2018

Several Things
Issue #511, February 27, 2018

Human Capital, Education and Wealth
Issue #510, February 19, 2018

Another Stock Market Update
Issue #509A, February 18, 2018

Some Thoughts on Savings
Issue #509, February 12, 2018

A Stock Market Upfate
Issue #508S, February 10, 2018

Who Can You Trust? Part II of II
Issue #508, February 05, 2018

The Christmas Decoration Pre-worn Jeans Hustle
Issue #Interim Bulletin #507A, February 03, 2018

2018 Outlook for Financial Markets
Issue #507, January 29, 2018

Who Can You Trust? Part I of II
Issue #506, January 22, 2018

Life Insurance Settlements
Issue #505, January 15, 2018

Commodities and Buying the Breakout
Issue #504, January 08, 2018

Buffett Wins His Bet
Issue #503A, January 04, 2018

Practice Real Estate and Free Agency
Issue #503, January 01, 2018

Outlook for 2018: Part III: Stocks and Bonds
Issue #502, December 25, 2017

My Outlook for 2018: Part Ii: Precious Metals
Issue #501A, December 21, 2017

Outlook for 2018: Hard Assets: Part I of III
Issue #501, December 18, 2017

More Thoughts on Bitcoin
Issue #500A, December 14, 2017

Fees and Good Relations with Bankers
Issue #500, December 11, 2017

Salvator Mundi
Issue #499A, December 07, 2017

Should You Rent or Own a Home?
Issue #499, December 04, 2017

A Gift Subscription
Issue #Interim Bulletin #498A, December 02, 2017

Stocks vs Real Estate: Asset Allocation: Part II of II
Issue #498, November 27, 2017

When Good Enough is Fine
Issue #497A, November 22, 2017

Stocks vs Real Estate: Asset Allocation. Part I of II
Issue #497, November 20, 2017

The Saudi Arrests and the Perils of Foreign Investing
Issue #496, November 13, 2017

Gambling and Las Vegas
Issue #495, November 06, 2017

Some Tips on Auto Insurance
Issue #494, October 31, 2017

Bitcoin and the Digital (Crypto) Currencies
Issue #493, October 23, 2017

The Coming Bear Market: Part II How to Prepare
Issue #492, October 16, 2017

Some Observations on Cemeteries
Issue #Interim Bulletin #491A, October 12, 2017

The Coming Bear Market: Part I: The Myth of Buy and Hold Forever
Issue #491, October 09, 2017

The Market makes New Highs
Issue #490, October 02, 2017

The Importance of a New High
Issue #489, September 25, 2017

A Little Insurance: Wealth, War and Wisdom
Issue #488, September 18, 2017

Some Observations
Issue #487, September 11, 2017

How to be Successful in Your Career
Issue #486A, September 07, 2017

How NOT to Buy a Home
Issue #486, September 04, 2017

This Week in the Market
Issue #485, August 28, 2017

Is the “Trump Bump” Running Out of Gas?
Issue #484, August 21, 2017

Gold is on the Move
Issue #483, August 14, 2017

The Importance of Estimation
Issue #482, August 07, 2017

Buying Art and Collecting: Part II of II
Issue #481, July 31, 2017

Buying Art and Collecting in General, Part I of II
Issue #480, July 24, 2017

Physicians need to be More Forceful: Follow-up
Issue #479, July 17, 2017

Physicians need to be More Forceful
Issue #478, July 10, 2017

Your First “Real” Investment
Issue #477, July 03, 2017

Leasing a Watch: Don’t
Issue #476, June 26, 2017

The Importance of Your Children having a Job
Issue #475, June 16, 2017

The Problem with Medical Student Debt is—the Med Schools
Issue #474, June 12, 2017

Critters and Varmints in your Home and Yard
Issue #473A, June 07, 2017

Leveraged ETFs
Issue #472, May 29, 2017

Leasing a Vehicle: Don’t!
Issue #471, May 22, 2017

Issue #470, May 15, 2017

More on Buying Jewelry
Issue #469, May 08, 2017

Buying Jewelry: Gold, Diamonds and Pearls
Issue #468, April 30, 2017

Thomas Sowell: Part III of III
Issue #467, April 24, 2017

Thomas Sowell: Pat II of III
Issue #466, April 17, 2017

Live Close to Where You Work
Issue #465, April 10, 2017

Medtronic in Hospital Management
Issue #Interim Bulletin #464A, April 07, 2017

Thomas Sowell: Part I of II
Issue #464, April 03, 2017

A Political Contribution a an Investment: Part II of II
Issue #463, March 27, 2017

A Political Contribution as an Investment: Part I of II
Issue #462, March 20, 2017

Buffett Selling Vacation Home
Issue #461, March 13, 2017

Advanced Placement (AP) ourses
Issue #460, March 06, 2017

The Importance of a Credit History
Issue #459A, March 02, 2017

A Credit Card Scam
Issue #459, February 27, 2017

The Electronic Health Reord
Issue #458, February 20, 2017

Issue #457, February 13, 2017

Platinum and Palladium
Issue #456, February 06, 2017

Economic Outlook for 2017: Part II of II
Issue #455A, February 02, 2017

Economic Outlook for 2017: Part I of II
Issue #455, January 30, 2017

A Story From Vegas
Issue #454A, January 25, 2017

Land Donation Deals and the IRS
Issue #454, January 23, 2017

The Theory of Gambler’s Ruin
Issue #453, January 16, 2017

Student Loans: But Wait, There’s More!
Issue #452, January 13, 2017

A Second Home
Issue #Interim Bulletin #451A, January 04, 2017

The Consumer Confidence Index
Issue #451, January 02, 2017


By Robert M. Doroghazi, M.D., F.A.C.C.

Social Security

Issue #450, December 26, 2016

    The Social Security Act was passed in August, 1935, and implemented in 1937, when the first payroll taxes were collected. The $2B withdrawn from the economy caused the stock market to tank in what was quickly called the Roosevelt Recession.
    RMD comment: The economy was still fragile, and this new tax was enough to tip it over. I believe this is one of the reasons the Federal Reserve has been so slow in raising interest rates.
    The first monthly payment was on January 31, 1940 to Ida May Fuller. In 1937, 1938 and 1939, she paid a total of $24.75 in payroll taxes. Her 1st check was $24.55. By her 2nd check, she had already received more than she contributed. By the time of her death at age 100 in 1975, she had received $22,888.92.
    RMD comment: a Ponzi scheme is when initial investors are paid high returns from money paid in by later investors, who are eventually left holding the bag. Face it: SS is a Ponzi scheme. But: promises have been made, they must be fulfilled. For a significant percentage of the elderly, SS is their only or principal income. Unfortunately, any attempt (so far) to have a reasonable discussion on how to keep the program solvent (aside from just raising taxes) is quickly met with shrill arguments that everyone will lose benefits. 
    The last widow of a Civil War veteran died in 2003 (In the 1930s, times were so bad that young women would marry 80 and 90 year old Civil War vets for their pension). As of 2013, one man was still receiving an annual pension of $876 for his parent’s service in the Civil War (not that far-fetched. See below).
    RMD comment: When you promise someone something forever, you find out that forever is a very long time.
    Many people, including my mother, believed there was an account somewhere with their name on it just waiting for them that contains all of the money they contributed while they were in the work force, often for a half century or more.
    When the Social Security Trust Fund runs a surplus, the excess funds are used by the government for non-Social Security purposes (they go into the general budget and are spent on whatever the politicians want to spend it on). The Treasury sends the Trust Fund non-marketable securities which pay a market rate of interest and which are backed by the “full faith and credit” of the federal government. At the end of 2014, the Trust Fund contained (or alternatively, was owed) $2.79 trillion.
    The Trust fund obligations are considered “intra-government” debt, a component of the “public” or “national” debt. As of June, 2015, the intragovernmental debt was $5.1T of the $18.2T national debt.
    RMD comment: So: what’s in the Social Security Trust Fund? IOUs. The money paid out is from the money currently taken in. Initial investors are paid off by later investors.   
    Not to worry, though. The government has withheld over $1B in Social Security payments from those behind on their student loans.
    RMD comment: Nothing shows the absurdity of the student loan bubble more than retirees with student loans.
    The stock market rally continues to impress:
    1) Capital is fleeing the Eurozone and China. Where is it headed? Here.
    2) Financials have led the way. It’s tough to have a healthy stock market if the financials do poorly.
    3) The VIX (Volatility Index) is also called the fear index because it spikes higher when the market is in trouble. This week it dropped to a 1 ½ year low.
    In 1989, I saw an 88 year old man who was the 18th and last child of his father’s 5th wife. RMD: “How old was your father when you were born?” Patient: “62”. RMD: “So he was born in 1839”. Patient: “Yes, and he was a Civil War veteran”. 

    A young man buys homes and fixes them up for rental. A $110K home was in foreclosure. He offered the bank $65K. Turned down. The home was sold on the Court House steps for $48K—to the young man.
    RMD comment: bankers are sometimes willing to suffer a larger loss and sell something at auction (where the price is clear) rather than use their judgment to cut loses and be second-guessed by regulators.
    Bret Stephens notes in Tuesday’s WSJ that when Obama took office in 2009, the US ranked 3rd behind Singapore and New Zealand in the World Bank’s survey on ease of doing business. Now it’s eighth. Eight years ago it took 40 days to get a construction permit. Now it’s 81. Compare this to Israel, one of the world’s leading start-up nations: a decade ago, starting a business took about 34 days. Now it’s 12.
    RMD comment: I think the hopes for de-regulation, making it easier to do business, is the biggest reason for the stock market rally since the election.
    This is from a Texas Hold’em buddy who plays a lot of craps.
    “I was in Vegas last week. Didn’t do well. I talked to some people who said the casinos changes the dice when there is a big event in town. We had a lot of 6/1 7-outs. They were using dice that are balanced near 0 percent. The manufacturers charge the casinos extra for these dice because they have a proven house advantage. When there is an imbalance, say up to 5%, the player has a little more advantage. The casinos use these dice during slow times, trying to take care of their locals”.
    RMD comment: Do the casinos cheat? When the Mob ran the casinos, you bet they did, and if you still won, they’de bust your kneecaps. Today’s casinos are run by corporations. They don’t cheat because they don’t have to: the odds are in their favor.
    When playing craps, both dice must hit the far wall to be considered a legal throw. If you’re a chicken scratcher (you just throw the dice at random), if the dice stay on the table, it’s a legal throw. If you’re hot, or if you demonstrate control of the dice, you can make 20 legal throws in a row, but if one of the 2 dice doesn’t hit the back wall, the House gives you heat. But if you don’t hit the back wall and it’s a 7 (you lose), it’s a legal throw.
    Casino Rule #1: the casino is in business because the casino always wins.
    I highly recommend Northmen: The Viking Saga AD 793-1241 (Haywood, St. Martin’s Press). I like the author’s style, and he talks about many things I have not read about before, such as the origin of the Viking gods, runes, the earliest history of Scandinavia, and the trade between Scandinavia and Europe in the pre-Viking times.
    The first attack by the Vikings on England was at Lindisfarne on June 8, 793. “It is difficult to understand how shocking this attack was: even the attacks of 9/11…which robbed Americans of their sense of invulnerability, falls short. Americans may trust in God but they do not make Him responsible for their defense policy: early medieval Christians did…As pagans, the Vikings felt no qualms about attacking monasteries”. 
    Please don’t drink and drive. Consider: if it costs $10,000 to defend yourself against a DWI, and there is a 1% chance you will be picked up, each time you DUI costs you $100. Would you go to a physician with a DWI? Columbia has a population of about 110K. All arrests are listed in the local paper, and people see it.
    The Radio City Music Hall Rockettes were invited to perform at Trump’s inauguration. Some are upset, even outraged, so participation has been made optional.
    RMD comment: I’m trying to think of what it would be like showing up for your shift at Granite City Steel and saying you can’t work because you’re personally upset, no, offended and shamed, with the results of the recent election.
    “Doc—you’re fired”!! 

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