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.
Okay, let’s get right to it this week …
‘How did you go bankrupt?’ Bill asked.
‘Two ways,’ Mike said. ‘Gradually and then suddenly.’
― Ernest Hemingway, The Sun Also Rises
Credits and Debits
Debit: Uh oh. Don’t look now, but next month United Airlines will begin charging some customers who use their overhead luggage bins. No, really. Don’t blame United for starting this, though. Budget carrier Spirit has been charging $30 to use overhead storage since 2010. Sheesh. What’s next?
Debit: I know what you’re thinking: When will they start charging to use the lavatory? Try seven years ago — at least that’s when Ryanair floated a trial balloon about charging their customers to pee. Needless to say, after hearing from lots of, well … pissed-off customers, the airline wisely backed off that “money-making” idea.
Credit: Speaking of pissed-off clientele, shoppers in the People’s Socialist Paradise of VenezuelaTM now have to stand in six different ATM lines to accumulate enough of their hyperinflating bolivars just so they can buy approximately a dollar’s worth of rice. Adelante!
Debit: Ya know … those Chavistas should be thankful they don’t live in Belgium, where revenue-starved government officials recently reinstituted a 40-cent dance tax on anyone who chooses to cut the rug at local cafes and other nightspots. To pay a similar tariff in Venezuela using bolivars, somebody without any cash would have to stand in at least two ATM lines before they would have enough currency.
Credit: Meanwhile, here in the US, the euphoric stock market rally continues, as the major indices set new all-time highs. For the week, the S&P surged another 3.1%, and the Dow gained 2.7%. In fact, the Dow appears to be on pace to log its fastest 1000-point rally since a 24-day trading period in 1999 when the Dow jumped from 10,000 to 11,000. Now if we only knew why.
Credit: For Wall St. analyst Michael Block, the rally is unjustifiable: “Everything is a buying opportunity. Brexit? Bullish. Trump winning? Bullish. Italy rejecting the referendum and the Prime Minister resigning? Bullish. Heck, all we need is a coup in India and the Belgian banking system to go kablooey and the S&P will be at 3000 by Christmas.” Forget fundamentals, Mike. Just shut up and buy!
Credit: Then again, magnifying the apparent insanity, gold and silver prices continue to plummet despite soaring demand. Yes, it’s senseless — but, unlike the stock market where the general public enjoys chasing higher prices, economic rationality exists in precious metals — at least for the moment — where physical bullion buyers have been taking advantage of the low prices to buy more.
Debit: Of course, earlier this year Deutsche Bank admitted to rigging gold and silver prices. And this week, documents it disclosed as part of the settlement clearly suggest that UBS Group AG, HSBC Holdings Plc, Bank of Nova Scotia and other firms have been manipulating the silver market too. You can bet the continuing inexplicable price action in both silver and gold means it’s still underway.
Credit: As Avery Goodman observes, “If natural market forces were permitted to run free, naive folks would win the game, and insiders would lose a fortune.” The good news is, truth always prevails. True, it may take awhile — but all Ponzi schemes and financial frauds eventually self-destruct.
Debit: Sadly, this scam is so big it’s going to financially decimate almost everyone who isn’t insured with physical gold or silver. The good news is precious metals are on sale — at least while the banking industry has its thumb on the scale.
Credit: Finally … the Dallas Police and Fire Pension Board ended a run on its failing retirement fund, stopping $154 million in withdrawals — but not before newly-retired police and firefighters trying to “get theirs” ahead of any potential bankruptcy managed to walk off with more than $500 million. That kind of gives new meaning to the term “first responders,” doesn’t it?
Debit: In the end it doesn’t matter; almost all government pensions are de facto Ponzi schemes — look no further than the one in Dallas, which guaranteed pie-in-the-sky 8% returns plus a 4% annual inflation benefit, so its no wonder their fund is broke. If you don’t think this is a sign of what’s coming to all government pensions, you best think again.
Credit: Remember, even though the stock and bond markets are at or near all-time highs, a shocking number of state and local pension funds are struggling to stay solvent — not just the one in Dallas. With that in mind, it’s not hard to imagine how quickly they’ll melt away when the stock and bond bears finally reassert themselves.
By the Numbers
Wednesday was the 75th anniversary of the attack on Pearl Harbor. Here are a few numbers regarding that fateful day:
4000 Miles between Japan and Hawaii.
353 Aircraft used by Japan during the attack.
75 Minutes that the attack lasted.
2403 US personnel killed. Another 1178 were wounded.
1177 Sailors who were killed instantly on the USS Arizona when an 1800-lb bomb struck the ship.
5 Number of midget “suicide” submarines used by the Japanese during the attack.
68 Number of US civilians who were killed during the attack.
19 US Navy ships destroyed, including eight battleships.
0 Aircraft carriers destroyed. They were all practicing maneuvers on the open ocean.
Source: St. Louis Today
Last Week’s Poll Result
How much is your Christmas gift budget this year?
- $101 to $500 (53%)
- More than $500 (29%)
- $100 or less (18%)
More than 1300 people participated in last week’s poll and nearly 3 in 10 of them have a Christmas budget that’s more than $500. Mine is more than five benjamins too — but not too much more than that. And a good chunk of that is going towards our kids — as it should.
The Question of the Week
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. Vermont (1.81 pages/visit)
2. Nevada (1.68)
3. North Dakota (1.61)
4. South Dakota (1.55)
5. Delaware (1.52)
46. Utah (1.21)
47. Hawaii (1.18)
48. Oklahoma (1.17)
49. South Carolina (1.16)
50. Arkansas (1.14)
Whether you happen to enjoy what you’re reading (like my friends, Ben and Jerry, in Vermont) — or not (ahem, Arkansas) — 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!
3. Subscribe via email too!
And last, but not least …
4. Consider becoming a Len Penzo dot Com Insider! 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! You can reach out to me at: Len@LenPenzo.com
Hi, Len! I want you to know that I found your wonderful blog by mistake.
Welcome to Misfit Island. That’s how most of us got here — including me.
I’m Len Penzo and I approved this message.
Photo Credit: breweddaily.com