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.
Happy holidays, everyone! We’re in the home stretch; less than four shopping days until Christmas.
Okay, off we go …
Credits and Debits
Debit: This week’s public service announcement is a reminder that Obamacare fines are going up in 2015. That means you audacious scofflaws out there who fail to buy healthcare insurance next year will be fined $325 or 2% of household income, whichever is greater.
Credit: So … if Obamacare is truly the awesome financial deal for Americans that its advocates insist it is, then why did the Grubers who wrote this dubious law feel the need to impose fines in order to coerce people into buying it? Hello? Is this thing on?
Credit: If you’re unsure of the answer, just ask somebody like Vermont governor Peter Shumlin, who is shelving his plans for single-payer healthcare — a.k.a. Obamacare on steroids — in the Green Mountain State because it’s economically unfeasible. How refreshing; he’s a realist. I guess utopia will have to wait.
Credit: In other news, Airbus stock hit a 52-week low on Tuesday after the company hinted that it may finally stop production of its ill-conceived money-losing A380 superjumbo jet due to lack of demand. Just more proof that bigger is not always better.
Credit: Despite Airbus’s woes, the markets were on fire this week. West Texas crude saw its best day in more than a year, it was the S&P 500’s second-best week in two years, and the Dow had its best three-day run in three years, climbing more than 800 points during that span. Wow.
Debit: Of course, the phenomenal turn-around in the markets was all because the Fed announced this week that it wouldn’t raise interest rates — at least in the near future. Okay — but why not? After all, we’re more than five years into an economic recovery now. Or are we?
Debit: As the markets climb, so do the risks. As CNBC notes, this week: “Congress loosened regulations on high-risk investments that ignited the 2008 crisis, regulators cut minimum down payments on home loans, and global indebtedness, as a share of world economic output, reached record levels.” Why? Because it’s necessary to keep this Fantasy Island illusion going.
Debit: And it is all an illusion. It strains credulity to believe that the economy is healthy enough to justify record stock prices when 65% of American children live in households on federal aid programs, 20% of Millennials live in poverty, and 46 million Americans are on food stamps.
Debit: Actually, there are more than a few people who believe the financial markets haven’t crashed yet only because of what has become almost-daily massive interventions by the US government’s so-called plunge protection team.
Debit: In fact, the manipulation is so obvious now that they don’t even bother to hide it anymore. Eventually — some say soon — the illusion will be broken and reality will reassert itself. Unfortunately, that will immediately lead to a sharply reduced standard of living for most Americans.
Credit: Thankfully, there’s a silver lining: After the collapse, America will no longer be able to consume more than it produces — at least not without real financial repercussions — and that will eventually lead to a renaissance of domestic manufacturing that will, once again, allow the US to regain its status as an honest economic powerhouse.
Credit: Of course, I’m talking about the good ol’ days: Before the nation — and its financial system — was completely corrupted by greedy politicians in Washington and their Wall Street cronies.
By the Numbers
The Airbus A380: by far, the largest commercial passenger airplane in the world. It’s also a commercial flop.
853 Maximum passenger seating capacity of the superjumbo airliner.
261.75 The plane’s wingspan, in feet.
0 Airports in Brazil with taxiways big enough to accommodate the A380.
2007 Year the first A380 was delivered. (Singapore Airlines)
$25,000,000,000 Airbus’s cost to develop the A380.
11 Airlines that have bought Airbus’s superjumbo plane so far.
0 Number of A380 buyers from the United States.
0 Airlines in India, Japan, South America, and Africa that have bought the plane.
$400,000,000 List price of an A380. Market pressure is forcing Airbus to offer a 50% discount.
725 Number of A380s Airbus estimated it would sell.
420 Superjumbos Airbus estimated in 2006 that it had to sell in order to recover its A380 investment. (That number is arguably higher now.)
318 A380s ordered so far. (Only 138 have been delivered.)
Sources: New York Times; BBC
The Question of the Week
[poll id="39"]
Last Week’s Poll Result
How much was the most expensive Christmas gift you ever purchased for somebody (other than yourself)?
- $100 – $499 (44%)
- $500 – $999 (25%)
- $1000 – $2499 (14%)
- Less than $100 (10%)
- $5000 or more (6%)
- $2500 – $4999 (1%)
More than 300 people answered this week’s survey question and more than half of all respondents have never spent more than $499 for a Christmas gift. On the other hand, fully 6% opened up their wallets for a gift that cost at least $5000. Wow! If that applies to any of you who are reading this edition of Black Coffee, I’d love to hear what you bought! Oh … and please add me to your 2015 Christmas list too.
Other Useless News
Here are the top — and bottom — five 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. Ontario (2.10 pages/visit)
2. Prince Edward Island (1.95)
3. Alberta (1.92)
4. Saskatchewan (1.85)
5. Manitoba (1.83)
9. British Columbia (1.53)
10. Newfoundland (1.38)
11. Yukon Territory (1.25)
12. Northwest Territories (1.13)
13. Nunavut (1.00)
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 me at: Len@LenPenzo.com
tjjunkmess had this to say regarding last week’s debate at Len Penzo dot Com on the pros and cons of giving to charity:
Perhaps if my pay wasn’t taxed at 30% or more, I’d have more money left to give to charities that I actually support.
I feel your pain, tj.
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c
Tricky question after all the info on the A380. I first thought you were asking if I had flown on a 2 deck airplane before.
Correct me if I am wrong, Michael, but I believe not all two-aisle passenger planes have two decks, but all two-deck planes have twin aisles.
We give to charity, but not 10%. That’s a lot.
I’ve never spent $5000 on a gift. I think our max would have to be this year, when we bought “each other” a new mattress at $1400.
We’ve had the old mattress for 20 years. It’s still in good condition, and firm, but our 40-something backs need something less firm now.
The last several years our gifts to each other have been house related (new toilet, new sink in bathroom, new washing machine…so romantic!)
I agree, Marcia. I think 10% is a lot to give to charity too. However, I know quite a few people who give 10% to their church every year.