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Len Penzo dot Com

The offbeat personal finance blog for responsible people.

Black Coffee: When Bad Is Good, Down Is Up, and Black Is White

By Len Penzo

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.

I’ve got a busy weekend planned, so let’s get right to it this week.

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

From January 2009:

Paying Off Your Mortgage Is A No-Brainer – Sometime between now and the time I wrote this post four years ago, I came to the reluctant conclusion that US politicians and the Fed were no longer interested whatsoever in the stability that comes through financial responsibility, and the defense of our national currency, respectively. As such, I now believe paying off the mortgage early is no longer the “no-brainer” it once was. In fact, the wide-eyed optimism for the future I display — both in this piece and in my subsequent responses to the commenters — makes me sad knowing that’s all gone now.

And Here’s Some Other Posts You Might Enjoy …

Good Financial Cents – Penny Stock Debacle: How I Lost $5000 — And How You Can Avoid the Same Mistake

Planting Our Pennies – Buy the CD, or Stream Music for Free?

Monster Piggy Bank – Spring Break and My Misspent Youth

Family Money Values – Top Three Reasons Why Wealth Transfers Fail

Thousandaire – The Four Most Important Things in an Economic Collapse

Credits and Debits

Credit: Democrats in the US Senate unveiled their budget plan this week to much fanfare. And why not? After all, budgets are a critical fiscal management tool, which is why the Senate, led by majority leader Harry Reid (D-Nevada), has passed a budget every year for the last four years. Oh wait …

Debit:   Unfortunately, the Senate Democrats’ latest plan fails to eliminate the budget deficit — despite nearly $1 trillion in proposed new taxes. I know.

Debit:   What it does do, however, is increase government spending by 62% over the next ten years. Obviously, when it comes to creating a budget, the Senate Democrats are just a little rusty.

Debit: Yes, that $1 trillion in proposed new taxes is in addition to the $1.058 trillion in new Obamacare taxes that have already been signed into law; the Obamacare taxes are now twice what was originally estimated when it was passed in 2010. And I’m sure the number will be revised higher yet again.

Debit: And just when you thought our expensive healthcare costs couldn’t get any more expensive, think again. That Obamacare tax on medical equipment and supplies will also result in higher prices at the vet’s office. Hey, don’t bark at me — I didn’t vote for it.

Credit: How about some good news? Friday saw the Dow Jones Industrial Average edge down 25 points, ending an impressive 10-day win streak for the index. The last time the Dow saw a 10-day run of uninterrupted gains was way back in 1996.

Credit: In case you’re wondering, since 1945 the Dow has had 11 other win streaks of 10 days or more. The longest ended on January 14, 1987 after a run of 13 consecutive days.

Debit: For the year, the Dow is up 10.76%. Heck, the market is on such a hot streak now that actress Mila Kunis announced that she is finally moving her cash into stocks. Uh oh.

Debit: Of course, economist Paul Krugman believes the markets’ performance is evidence that the economy is recovering nicely. As for those who disagree, well, Krugman says they “don’t have a clue about how the economy actually works.” Hey, we can’t all be as smart as Paul. Or Mila.

Debit: Krugman also believes the Fed should keep the money printing presses on overdrive, just like Japan started doing several months ago. I’m sure he would say that price hikes of 14% to 19% recently announced by Japanese utility companies are merely a coincidence.

Debit: Inflation in Japan is just getting started, but it’s been here in the US for a long time now — despite government claims to the contrary. If the US relied upon the same methodology it used in 1979 to measure rising prices, the official inflation rate would be almost 10% right now.

Debit: I don’t see how getting the equivalent of a 10% pay cut every year — thanks to all that money printing by the Fed — improves anyone’s standard of living. No wonder consumer sentiment is at its lowest point in 15 months. Then again, according to Mr. Krugman, I’m just an economic “doomsayer.”

Debit: Meanwhile, the number of Americans on food stamps set another record in December — almost 48 million people now. Incredibly, the federal government is claiming that increasing the number of people on food stamps actually grows the economy. Unbelievable.

Credit: Our government asserts that every $5 in food stamps spent generates almost $10 in economic activity. I don’t have a Nobel Prize in economics, but if that’s really true, logic dictates that we should be able to wipe out our $16.5 trillion National Debt in about 10 years by simply giving every American an EBT card.

Debit: Ah, there I go again; why am I worrying about the rapidly-growing National Debt? President Obama, after racking up more than $6 trillion in deficits in just four short years, claimed this week that there is no debt crisis.

Debit: So, summing it all up, we’ve got miserable sentiment on Main Street, high inflation, persistently high unemployment, 48 million people on food stamps, more than $6 trillion added to the National Debt in four short years — and the Fed printing $85 billion more each month with no end in sight.

Credit: Even so, there’s unbounded optimism on Wall Street, the President says there is no debt crisis, and Paul Krugman insists the US is on the road to economic recovery. Frankly, that doesn’t make a lot of sense to me. But what do I know.

The Question of the Week

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By the Numbers

According to the US Department of Agriculture website, “food stamps make America stronger.” (No, really):

9 Months the average food stamp recipient stays on government assistance.

6.0 Percentage of Wyoming residents who received food stamps in 2012.

10.4 Percentage of Californians who used the food stamp program in 2012.

22.8 Percentage of residents in Washington D.C. who received food stamps in 2012.

2.9 million Total food stamp program recipients in 1969.

$1.5 billion Inflation-adjusted cost of the food stamp program in 1969.

46.6 million Recipients who used food stamps in 2012.

$78.4 billion Cost of the food stamp program in 2012.

$40.95 Inflation-adjusted average monthly food stamp benefits per person in 1969.

$133.41 Average monthly food stamp benefits per recipient in 2012.

Sources: US Department of Agriculture, US Census Bureau

Other Useless News

Here are the top — and bottom — 5 Canadian provinces and territories in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:

1. Northwest Territories (3.38 pages/visit)
2. Saskatchewan (2.29)
3. Alberta (2.12)
4. Nova Scotia (1.98)
5. Ontario (1.72)

9. Newfoundland (1.50)
10. New Brunswick (1.46)
11. Prince Edward Island   (1.27)
12. Yukon Territory (1.13)
13. Nunavut (1.00)

Whether you happen to enjoy what you’re reading (like the crazy canucks in the Northwest Territories, eh) — or not (you hosers living on the frozen Nunavut tundra) — 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 me on Twitter! And last, but not least…

3. Don’t forget to subscribe to my 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!

I received this question from Watkins who, I think, was actually trying to contact somebody else:

I’ve got a wart on my toe that I’ve had removed twice. Now it’s growing back (again!) with a vengeance. What kind of evil wart is this?

Beats me, Watkins. Perhaps you should ask a finance blogger who attended the, um, “Warton” School of Business.

I’m Len Penzo and I approved this message.

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  • Personal Finance Decisions: The Good, the Bad, and the UglyPersonal Finance Decisions: The Good, the Bad, and the Ugly

17 Comments March 16, 2013

Comments

  1. 1

    Mrs. Pop @ Planting Our Pennies says

    March 16, 2013 at 1:12 pm

    Thanks for mention. I think Mila Kunis should get her own label as a counter indicator of the market’s direction.

    Reply
  2. 2

    Jane Savers @ The Money Puzzle says

    March 16, 2013 at 5:39 pm

    I am dying to know what order the other 3 Canadian provinces ranked in readership.

    Are you more popular in BC, Manitoba or Quebec?

    Reply
    • 3

      Len Penzo says

      March 16, 2013 at 7:29 pm

      Hey, somebody does care about my useless news! For the record, I list the status of the Canadian provinces in my Black Coffee posts every third week of the month, Jane.

      Since you asked, the “missing 3 Canadian provinces” this past month were:

      6. Manitoba (1.72)
      7. Quebec (1.68)
      8. British Columbia (1.67)

      I never used to give updates of the provinces, just the US states, but another reader asked if I would include them — and so I do now every month. Ask and you shall receive!

      Reply
      • 4

        Jane Savers @ The Money Puzzle says

        March 17, 2013 at 5:24 am

        There are only ten provinces and 3 territories. You might as well treat us to the entire list instead of just the top and bottom 5.

        Useless news is my favourite part of news.

        Reply
        • 5

          Len Penzo says

          March 17, 2013 at 8:47 am

          “You might as well treat us to the entire list instead of just the top and bottom 5.”

          Yes, you’re not the first person to suggest that, Jane … But if I did that for the provinces and territories, then all the states would want the same treatment too. 😉

        • 6

          Volfram says

          March 17, 2013 at 9:10 am

          Just give us the top, bottom, and middle 5. That’ll get you through all of Canada and the US will get two bonus entries.

  3. 7

    KIM says

    March 16, 2013 at 7:01 pm

    “which is why the Senate, led by majority leader Harry Reid (D-Nevada), has passed a budget every year for the last four years. Oh wait …”

    Forgot the word “NOT” there Len. NO budget whatsoever…in, it feels like, forever.

    And Len, I have this blister…

    Reply
    • 8

      Len Penzo says

      March 16, 2013 at 7:23 pm

      Wait a minute, Kim. I didn’t forget. That was just one of my lame jokes!

      (One of these days I’ll figure out how to write a proper one.) 😉

      Reply
  4. 9

    Tony@WeOnlyDoThisOnce says

    March 16, 2013 at 7:04 pm

    Great breakdown and roundup! Thanks for this. Have a great weekend.

    Reply
    • 10

      Len Penzo says

      March 17, 2013 at 9:06 am

      You too, Tony!

      Reply
  5. 11

    PK says

    March 17, 2013 at 8:48 am

    Has Mila Kunis commented on the Cyprus haircut yet? (You know Paul Krugman is ready to say it’s not a big deal!)

    Reply
    • 12

      Len Penzo says

      March 17, 2013 at 9:09 am

      We’ll know if it’s a big deal if this precipitates additional bank runs in Italy, Greece and Spain this week. If I knew my savings were now at risk of an automatic 6.75% bailout “tax” at the whims of the bankers and politicians, I would pull every last penny I had out of the banking system. I mean, why would anybody risk it when they’re being paid real interest rates of less than zero? They’d be better off keeping the cash in their mattress.

      Reply
  6. 13

    Jose says

    March 17, 2013 at 9:51 am

    I guess Krugman doesn’t realize that MM accounts are pating less than .5% and that is at least one source of money propping the markets up! The fact that Mia Kunis is putting money into the market may be a clear signal to sell for the rest of us!

    Reply
    • 14

      Len Penzo says

      March 18, 2013 at 7:23 pm

      Krugman is smug now — but when it eventually all comes crashing down, he is going to have a lot of explaining to do. (Most likely from wherever his hideout bunker is located.)

      Reply
  7. 15

    Paula @ Afford Anything says

    March 17, 2013 at 3:08 pm

    “Warton” School of Business — haha!! Oh, you crack me up!!

    Poor Mila Kunis … can’t everyone stop picking on her? At her age, it’s a great idea to diversify into equities rather than take an all-cash position (she said that, until recently, she kept all her money in savings accounts and CDs). It’s a bummer that she has to become the butt of everyone’s jokes when she does so.

    Reply
    • 16

      Len Penzo says

      March 18, 2013 at 7:19 pm

      I thought you’d appreciate the “Warton” pun, Paula.

      As for Mila, I don’t mean to be cruel.

      I was just trying to infer (again, unsuccessfully) that when you’ve got movie stars talking about investing in the stock market, that may be signalling that things are getting a bit frothy.

      Reply
  8. 17

    Glen @ Monster Piggy Bank says

    March 19, 2013 at 5:41 am

    Not sure how I missed this, but thanks for the mention 🙂

    Reply

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