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.
Let’s get right to it this week …
Credits and Debits
Debit: New data shows that the US is on the verge of another recession as the economy contracted for the first time in three years last quarter; the Commerce Department reported that the GDP fell 1%.
Credit: It’s a good thing that stocks didn’t surge to record levels after they made the announcement. After all, traders would never be stupid enough to bid stocks to all-time highs on such terrible economic news. Oh wait …
Debit: If you think that’s strange, check this out: In a properly functioning financial system, Treasury bond yields tend to fall as the economy weakens. Nevertheless, the 10-year bond yield actually rose on the dismal GDP data. So what’s going on here?
Debit: The Fed’s reckless monetary policies of persistent near-zero interest rates and quantitative easing have distorted the financial system so badly that it’s impossible to identify true value anymore. As a result, price discovery is now impossible.
Credit: The markets are completely detached from reality. Eventually, the rapidly growing number of malinvestments being encouraged by the Fed’s destructive loose-money policies will eventually reach critical mass and cause the entire system to fail. Until then, this kabuki theater will continue.
Credit: The good news is that, after the implosion, we’ll then be able to start over with a new financial system that is based upon sound money, rather than our current debt-based monetary system. Hopefully.
Debit: Until then, however, the Fed will keep using those near-zero interest rates — even though real inflation is arguably pushing 10% — to steal trillions from savers and people on fixed incomes who have no choice but to tap into their principal in order to maintain their living standards.
Debit: In other news, the US Department of Transportation has fined Southwest airlines $300,000 for allegedly offering $59 fares from Atlanta to New York, Chicago, and Los Angeles that didn’t exist. Oops.
Debit: Did you see this? The government’s Consumer Financial Protection Agency has decided to discontinue employee evaluation ratings because they say they’re too “discriminatory.” So now all employees will receive the highest rating, regardless of their performance. Unbelievable.
Debit: US home sales are down 7% so far in 2014 with one notable exception, according to CNBC: “Sales of the most expensive 1 percent of homes in the U.S. are up 21%.” That’s because wages aren’t increasing fast enough to sustain rising home prices for the lower 99%.
Credit: Then again, it ain’t all bad: An anonymous Bay Area real estate magnate who has profited handsomely from those continuing high-end home sales is now dropping cash-stuffed envelopes around San Francisco and tweeting their locations on Twitter. His handle is @HiddenCash. You’re welcome.
Debit: I know a Sacramento cabbie who could use some of that cash right now. He allegedly got stiffed out of a $1200 taxi fare after driving a passenger 1500 miles to North Dakota. I know. Why he didn’t demand payment before setting off on his five-state journey is beyond me too.
By the Numbers
Speaking of taxi drivers, here are a few facts about the taxis in New York City:
50,000 The number of taxi drivers in New York City today.
236,000,000 Number of passengers who took a NYC taxi in 2013.
90.3 Percentage of all NYC taxi rides that originated in Manhattan last year.
$13.40 The average NYC taxi fare in 2013.
30 Average number of rides per 12 hour shift.
180 Average number of miles driven per 12-hour shift.
1899 Year that Jacob German, a NYC taxi driver, became the first person to be arrested for speeding in the Big Apple.
10.5 Percentage of NYC taxi license applicants in 1991 who were American. (I assume it is lower than that now.)
Sources: PBS; 2014 NYC Taxicab Fact Book
The Question of the Week
[poll id="9"]
Last Week’s Poll Results
How many personal checking and/or savings accounts do you have with a bank?
- 2 (26%)
- 3 (22%)
- 5 or more (18%)
- 1 (14%)
- 4 (13%)
- 0 (7%)
More than 300 people responded to last week’s question and almost half of the respondents have two or three personal bank accounts. A whopping 18% have five — and a surprising 7% have none. (I actually thought that last figure would have been smaller.)
Other Useless News
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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
I got this note from John who commented on my disdain for Miracle Whip:
I absolutely love the tangy taste of Miracle Whip! Sadly, I had to stop using it after they poisoned it with high fructose corn syrup.
And what were they poisoning it with before they switched to high fructose corn syrup?
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c
“New data shows that the US is on the verge of another recession as the economy contracted for the first time in three years last quarter; the Commerce Department reported that the GDP fell 1%.” This 1% is what the government has been forced to ADMIT. We in real life know the situation is much worse, the price of gas skyrocketed this week, other energy costs are headed violently upward (think the anti coal agenda on the menu for today), food prices, beef prices are all spiraling upward. The true situation, like the REAL figures of unemployment are much worse but THE GOVERNMENT ECONOMISTS LIE TO COVER FOR THE ADMINISTRATION. So folks, this is the tip of the iceberg and the economy most likely contracted 3-4% in the first quarter, but reporting false data, flat out lying to the public, and figure juggling with the cooperation of the main stream press got it down to 1%. The main stream press by the way has treated this financial tragedy for the American people as “No big deal, nothing about which to worry”. How different would the headlines have been if this was the Bush Presidency? America, we don’t have a government income problem, we have a government profligate spending problem. That means, if you can’t tell, the government spends more than it takes in from taxpayers.
“How different would the headlines have been if this was the Bush Presidency?”
Good point. The press was hounding Bush on the “bad” economy when unemployment was between 5% and 6%. Nothing but crickets, however, since Bush left office. I wonder why.