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 …
“Bulls make money, bears make money, pigs get slaughtered.”
“We live in a fantasy world, a world of illusion. The great task in life is to find reality.”
— Iris Murdoch
Credits and Debits
Credit: As Northman Trader observes, “No period is worse for bears than when it’s the best time to sell stocks. It’s the polar opposite of when conditions are worst for bulls: when it’s the best time to buy, as it was in March 2009. November’s close marked the 13th consecutive month straight up for global markets.” Thank you. Now I know why I’m so miserable at the moment.
Debit: You have to admit, technically speaking, the current bull market is absolutely crazy. When one digs down and examines the fundamentals, there’s absolutely no reasonable justification for the latest run-up. At all.
Debit: If you’re wondering why stocks and bonds rarely have a down day anymore, you can thank the world’s central bankers. According to Bank of America: “In every major market shock since the 2013 Taper Tantrum, central banks have stepped in to protect markets.” And since Brexit, markets now rebound so quickly that central banks no longer need to respond. In other words, investors have become utterly fearless.
Debit: Evidence that bitcoin is in bubble territory continues to mount too. If it pleases the court, I’d like to present Exhibit 73: stripper Dee Heath, who is now advising would-be bitcoin investors on how to navigate the cryptocurrency world. In fact, she now has her own website that teaches bitcoin investing basics. I know. (Insert your own joke here.)
Credit: Frankly, I’ve never believed in the “wisdom” of the crowd; in fact, it seems like the crowd is more often wrong than right. On Thursday, the crowd managed to push bitcoin past the $19,000 milestone — only to see the price promptly plunge $4500 in less than an hour. No, I didn’t forget a decimal point.
Debit: If you believe the current lot of investors, one ethereal bitcoin at the current market price, is now worth more than 13 troy ounces of physical gold. Uh huh. Sure it is. Then again, during the peak of Tulip mania in the 17th Century, the crowd was actually willing to exchange a single tulip bulb for the equivalent of 281 troy ounces of gold. So maybe this bitcoin craze still has a long way to go.
Debit: Meanwhile, the banksters’ war on precious metals is intensifying, with market manipulation more blatant than ever. If there’s a … ahem, silver lining to any of this, it’s that the price suppression is giving everyone a chance to purchase a little wealth insurance at sale prices. And who doesn’t love a good sale?
Debit: According to Paul Craig Roberts, “What we are witnessing in the US, and throughout the western world, is the total failure of capitalism. Capitalism is now merely a looting machine. The financial sector no longer supplies capital for production — (it) turns discretionary consumer income into interest and fee payments to banks.” Actually, capitalism isn’t the problem, Paul — it’s crony capitalism.
Credit: Of course, “capitalism” is also failing because our debt-based international monetary system is a Ponzi scheme that’s dependent upon perpetual growth to stay solvent. But, as Chris Hamilton notes, a debt-saturated populace, coupled with negative fertility rates and waning immigration, means America’s consumption-based economy is running on vapors. One day, even the stock and bond markets will figure that out.
Debit: Finally … Check out this textbook example of 1984-style newspeak from the MarketWatch opinion page entitled: “Janet Yellen’s true legacy is her focus on middle-class wages.” What???? Black is white. Down is up. War is peace. Slavery is liberty. And debt is money. Yes, it’s extremely frustrating — but this, too, shall pass. I just hope it happens during my lifetime.
The Question of the Week
Last Week’s Poll Result
Do you think bitcoin is in a bubble?
- Yes (70%)
- What’s a bitcoin? (18%)
- No (11%)
Who knew? More than 1400 people responded to last week’s question and 7 in 10 believe bitcoin is in a bubble. Nearly 1 in 5 folks apparently still haven’t heard of it. At this point, that’s probably a good thing.
By the Numbers
How high will bitcoin get before the bubble finally bursts? Here’s the latest rundown on how long it took the cybercurrency to reach each $1000 milestone on its march to $19,000:
4.9 Years to reach $1000
3.5 Years to reach $2000
0.7 Months to reach $3000
2 Months to reach $4000
2 Months to reach $5000
8 Days to reach $6000
13 Days to reach $7000
14 Days to reach $8000
9 Days to reach $9000
2 Days to reach $10,000
1 Days to reach $11,000
6 Days to reach $12,000
17 Hours to reach $13,000
4 Hours to reach $14,000
10 Hours to reach $15,000
5 Hours to reach $16,000
2 Hours to reach $17,000
10 Minutes to reach $18,000
3 Minutes to reach $19,000
24 Hours to fall from $19,000 to $15,000
Source: Zero Hedge
Useless News: Engineers
A priest, a doctor, and an engineer were waiting one morning for a particularly slow group of golfers. The engineer fumed, “What’s with those guys? We must have been waiting for fifteen minutes!”
The doctor chimed in, “I don’t know, but I’ve never seen such inept golf!”
The priest said, “Here comes the green-keeper. Let’s have a word with him.”
He said, “Hello George, what’s wrong with that group ahead of us? They’re rather slow, aren’t they?”
The green-keeper replied, “Oh, yes. That’s a group of blind firemen. They lost their sight saving our clubhouse from a fire last year, so we always let them play for free anytime.”
The group fell silent for a moment.
The priest said, “That’s so sad. I think I will say a special prayer for them tonight.”
The doctor said, “Good idea. I’m going to contact my ophthalmologist colleague and see if there’s anything he can do for them.”
The engineer said, “Why can’t they play at night?”
(h/t: RD Blakeslee)
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. South Dakota (3.11 pages/visit) (!)
2. Arkansas (1.70)
3. Montana (1.63)
4. Hawaii (1.62)
5. Maine (1.61)
46. New Mexico (1.23)
47. South Carolina (1.21)
48. Wyoming (1.13)
49. Vermont (1.12)
50. Missouri (1.11)
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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 my article explaining why waterbeds are for suckers, Trisha explained why she disagrees:
“Best. Sex. Ever. The water is a huge assistance in getting the groove right …”
Frankly, you can get the exact same results by playing a few Barry White tunes.
I’m Len Penzo and I approved this message.
Photo Credit: breweddaily.com