Black Coffee: End of Summer Edition

It’s time to sit back, relax and enjoy a little joe

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance. Here’s what caught my attention over the past week…

I’m Bret, from, and I’m bringing you this week’s edition of the Black Coffee. Len is attending FinCon12 in Denver and he asked me to take the wheel and give it a spin while he’s away.

Blogs I’ve Been Following This Week

The Chicago Financial PlannerLessons from the Groupon and Facebook IPOs. Like I have been saying for well over a year, Facebook’s fan base could go poof at any time in the future. I seem to remember that happening to Friendster and MySpace, not that long ago. More important, the amount of revenue wasn’t even on the same planet as the stock’s offering price, at nearly 100:1 P/E ratio. That was before they downgraded the earnings, but forgot to tell investors. Whoops.

Out of Your RutForget the S&P 500, it’s the P/E10 that Really Counts. Rob is a guy who really knows about P/E ratios. If you want to seem cool to all of the friends in your social network, you could invest in the latest hot IPO. If you want to make some money, you should invest in the stocks that have earnings. Yup, companies like Apple and Google are way cool, because they earn boat loads of cash. Don’t ya want some?

Hope to Prosper10 Threats to your Future Prosperity. This guy is kind of an odd-ball. But, he’s been around for a long time and he actually invests money from each and every paycheck. I recommend you read about these 10 threats or else you may wind up like the homeless guy pictured in this post.

Debt Free Adventure Proverb about Saving for a Rainy Day. With summer officially over and fall just around the corner, saving for a rainy day sounds like a good idea. Since I have a leaky deck right now, I have had to save up quite a bit in order to keep the rain at bay. I just hope I can get it fixed before the rain gets here.

The Way-Back Machine: Past Posts Of Mine You May Have Missed

From May 2011:

The High Cost of Being Poor (and How to Vanquish It)— We’ve all seen difficult times, so that’s nothing new. Here’s an inspiring guest post that Len featured from someone who ended up hitting rock bottom financially.

Podcast News

Len’s latest roundtable appearance on Average Joe’s weekly financial podcast, Two Guys and Your Money, can be heard on Episode 9: Nerd Wallet, Buying a House, Insurance Costs & Combining Family Finances.

By the way, Len wanted me to remind you that you can listen in every week for a chance to win some fantastic prizes.

He also wanted me to tell you that even though he enters every week, he has yet to win anything. But he’s not bitter.

Credits and Debits

Debit: Claims at the Democratic National Convention of 4.5 million new jobs turn out to be bogus. The actual figure is 400,000 fewer people are working than when President Obama took office. Now you know why nobody trusts politicians. They lie a lot; especially with the elections coming up and the economy in shambles. It doesn’t matter if they are Democrats or Republicans. They just blame the other guys.

Debit: According to CBS Money Watch, the National Debt has now surpassed $16 Trillion dollars. This is the equivalent of every citizen owing $50,000 and every taxpayer owing $140,000. According to my math, not enough citizens are paying taxes.

Debit: In other bad news, the U.S. has slipped down the global competitive rankings of the world’s most competitive economies. This is the fourth straight year of decline, which sounds like a coincidence. The reasons cited include lack of economic stability, mistrust of the government and concerns over its debt. Need I say more?

Debit: Facebook shares have dropped by more than half since its IPO and many analysts recommend avoiding the stock because of the poor fundamentals. It’s funny how many of these analysts were recommending the stock at twice the price, when they were acting as shills for the investment banks. Analysts are for sheeple. I try to avoid the heard.

Credit: According to author Gordon Chang, the wheels are coming off the Chinese economy. Chang wrote a book called The Coming Collapse of China, so that’s pretty much what I would expect him to say. But, he does cite important things such as manufacturing surveys, price indexes and zero growth in energy usage. Why am I so happy about this? It’s not for the cheaper prices at Wal-Mart folks.

Credit: Last month brought record sales of the Chevy Volt, which is selling better in its second year than the Prius did in its fourth. Meanwhile, sales of the Chevy Cruze plummeted in June and July, but seem to have rebounded in August. Maybe Len’s proclamation of the death of electric vehicles is a bit premature. I’m not sayin’. I’m just sayin’.

Credit: What is the secret of the Volt’s success? Consumers and automotive experts agree, a $260 monthly lease for a $40K car is a sweet deal. Paying more than $4 per gallon for gasoline isn’t. For a guy like Len, who commutes more than 35 miles each way and could plug in at work, it’s almost like a free car. Did I mention he could use the carpool lanes? It’s all about the incentives.

Credit: Across the pond, they are expecting a new European banking oversight plan on September 11th. Scandal after scandal has rocked the EU banking community, including the infamous LIBOR rate setting. Here in the U.S. bankers are emphatic, “We don’t need no stinking oversight.”

Debit: Speaking of bank scandals, a fourth trader is under scrutiny in the JP Morgan whale probe. Under scrutiny is a special term meaning “We haven’t swept it under the carpet yet.” This is a separate issue from the whale poop found by that kid, but it smells about the same.

Credit: One courageous broker at Bank of America was fired for mooning the executives. The bizarre part of the story was that he wasn’t fired immediately. They wrote him up and then decided to fire him later, just a short time before he was about to receive his $2 million bonus. I would expect anyone with this much chutzpa to sue, and he did. But, he lost in court because the judges weren’t impressed with the handling of his assets.

Debit: In June, a record 46 million Americans were on food stamps. This comprises 22 million households and 15% of the total population. There are 23 million people unemployed, a record number of people living in poverty and $5 trillion in new debt has been added in less than four years. If you ask the President, he will tell you “The economy is doing fine” and “We are better off than four years ago.” Ronald Reagan would probably disagree.

Credit: In California, a state known for having a wacky government, there is a new law that will end public pensions for convicted felons. Evidently, it is getting really embarrassing how many former public employees are collecting fat pension checks while sitting in the slammer. This won’t even dent the huge deficit the state is facing, but at least it’s a step in the right direction.

The Best of: By the Numbers (From the 11 June 2011 edition of Black Coffee)

A little numbers fun with the US National Debt:

67 Miles a stack of $1000 bills would reach into the sky in order to retire the trillion-dollar National Debt in 1981, as noted by President Ronald Reagan.

900 Miles a stack of $1000 bills would reach into the sky in order to pay off the $14 trillion-plus National Debt today.

$125 billion Amount Treasury Secretary Tim Geithner says the US government is currently borrowing per month. (Although, in February alone, the government borrowed almost twice that.)

1 Number of iPads the federal government could buy each of its citizens for $125 billion.

$40,000Amount the US government borrows every second.

$106 billion The combined net worth of Bill Gates and Warren Buffett.

28 Days that Gates’ and Buffett’s entire fortunes would fund the government’s deficit spending. Then what? (Clearly, the government doesn’t have a revenue problem.)

Source: Reuters

The Question of the Week

How much is your average monthly electricity bill during the summer?

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Other Useless News

Here are the top — and bottom — five states in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:

1. Delaware (3.05 pages/visit)
2. Alaska (2.67)
3. New Mexico (2.53)
4. Colorado (2.45)
5. Montana (2.43)

46. New York (1.92)
47. Kentucky (1.92)
48. Missouri (1.90)
49. Wyoming (1.85)
50. New Hampshire (1.79)

Whether you happen to enjoy what you’re reading (like my pals in Delaware) — or not (ahem, New Hampshire) — please don’t forget to:

1. Click on that “Like” button in the sidebar to your right and become a fan of Len Penzo dot Com on Facebook!

2. Make sure you follow Len on Twitter!

And last, but not least…

3. Don’t forget to subscribe to Len’s RSS feed too! Thank you. :-)

Letters, I Get Letters

Every week I feature the most interesting question or comment — assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not!

Here’s a letter from Brandy that Len featured in his 1 October 2011 edition of Black Coffee:

What’s it take to become a sulbmie [sic] expounder of prose like yourself?

Practice, Brandy. Lots and lots of practice.

My name is Bret and I approved this message. Live long and prosper.


  1. 2

    deRuiter says

    The reason the Chevy Volt sales are up is that the Obama government is wasting our hard earned taxpayer dollars BUYING all the Volts the market doesn’t want and forcing them on the military and government agencies. Without these false fleet sales, the Chevy Volt, which is an expensive, poorly functioning, poorly designed, environmentally damaging failure, would be nil. You can buy a gas efficient car from Chevy for around $17,000. which is nicer, more practical, and environmentally more sound than the Volt, and operates on inexpensive gasoline. The Chevy Volt costs several times more than the gas powered car, has environmentally damaging lithium ion batteries and runs on dirty electricity from coal fired plants. The Chevy Volt is a boondoggle, and without the Obama administration propping up the sales by buying these fiascos for our military and government fleets, the Volt would fold and go quietly into that long dark night with the Edsel, which was a better car than the Volt is. The private market place has decreed the Volt a failure. The Obama administration is adding the Volt to the list of their “green” failures along with Solindra upon which our taxpayer dollars have been lavishly wasted. The Volt is a dog and that is insulting canines!

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