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.
Are you ready? I know I am, so here we go …
“It’s not a matter of what’s true that counts, but a matter of what’s perceived to be true.”
— Henry Kissinger
Credits and Debits
Debit: Before 2017 is finished, retailers will have closed more than 6300 stores thanks to many years of steady declines in sales and customer traffic. This is precisely why the stock market is currently in the middle of a brutal bear market that’s ripping the faces off even the most battle-tested Wall Street floor traders. Oh, wait …
Credit: On Wednesday the Dow Jones Industrials crossed 22,000 for the first time ever, and on Friday the index closed the week with its eighth consecutive all-time high. I’m sure by now, most investors are feeling like multi-millionaires, if not financial geniuses. Then there’s me.
Credit: Heck, it seems like only recently that everybody was rooting for the Dow to hit 20,000. Oh, yeah; that’s because it was.
Credit: Not everybody is celebrating though. Legendary Wall Street trader Art Cashin says the Dow’s seemingly relentless rise has him nervous because 50% of the index’s gains have come from just 10% of its stock components. Hey, Art: shut up you big worrywart and enjoy the ride. People are making lots of easy money! Besides … it’s different this time. Right?
Debit: The recreational vehicle industry is enjoying record-breaking growth too, and RV shipments are expected to surge to their highest level ever this year. By the way, the last two times RV sales saw similar spikes, sharp stock market corrections followed. What’s that? Yeah … I should probably just shut up too.
Debit: Then again, stock analyst Jason Goepfert is warning that the number of so-called Hindenburg omens just hit an all-time record — and the only similar cluster that matches the current swarm occurred in early October 2000. Uh oh.
Credit: Before you start pounding on your keyboards to send me a nasty comment, rest assured that I know exactly what you’re thinking right now: What the heck is a Hindenburg omen? Well … I’m not totally sure myself. But it sounds really scary, doesn’t it?
Debit: Meanwhile, the US dollar is in the middle of its biggest collapse since 1985. The greenback has lost 9% (!) against other currencies since January 1st — and technical indicators suggest it could soon fall even further. If so, that would almost certainly result in noticeable price increases for imported goods, including gasoline. We’ll see.
Debit: In fact, with the dollar plunging this year, it’s not too surprising that Alan Greenspan is now predicting that a return of 70s-style stagflation is right around the corner. You know what that means: It won’t be long before everybody finally realizes that the worst thing about the 1970s wasn’t disco.
Credit: That isn’t the only prediction Mr. Greenspan made this week — he also said the massive Treasury bond bubble that’s been building for the past 35 years is living on borrowed time. Apparently, bonds can be irrationally exuberant too.
Credit: When the Fed began its tapering campaign, rates on the 10-year T-bill were more than 3%; and they were above 2.5% when tapering ended. Now they’re near 2.28%. So how come rates haven’t risen even though 75% of historical T-bill buyers are now net sellers? Remember, when people don’t want your debt, rates should increase. Say, do you think the Fed is secretly …? Nahhhh.
Debit: Speaking of liabilities, how far would you go to evade paying a debt? A woman in China used plastic surgery in order to avoid personal debts totaling $3.71 million. No, really. The ruse didn’t work — but at least she’ll look great while she’s in prison.
The Question of the Week
Last Week’s Poll Results
Have you ever been the victim of a burglary?
- No (76%)
- Yes (24%)
More than 1100 Len Penzo dot Com readers responded to last week’s question, with one in four saying they’ve been burgled. According to the latest figures from the US Department of Justice, there are an average of 3.7 million burglaries each year. More disturbing is the fact that 28% of those burglaries occurred when somebody was actually home — although that is actually worse news for criminals who encounter homeowners who protect their castles with firearms.
By the Numbers
Here are a few more burglary stats from the DoJ:
27% Household members home during a burglary who become the victim of a violent crime.
65% Violent-burglary offenders who are known to their victims.
61% Violent burglaries that occur despite the burglar being unarmed.
12% Burglars who are armed with a firearm.
9% Violent burglaries that result in serious injuries to the victim.
17% Burglaries where the offender gains access through an open door or window.
4% Burglaries where the offender gains access with a door key.
Source: US Department of Justice
Insider Notes: Triffin’s Dilemma
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Other Useless News
Programming note: Unlike most blogs, I’m always open for the weekend here at Len Penzo dot Com. There’s a fresh new article waiting for you every Saturday afternoon. At least there should be. If not, somebody call 9-1-1.
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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! You can reach out to me at: Len@LenPenzo.com
After reading about the most important things homeowners should consider in a pest control company, Amanda D. shared this:
I’ve been dealing with mice; so many mice. I hear them in the walls, and the other day I found three in a sack of rice.
Well … I just have to ask: Were they blind?
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c