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 hope everybody is having a great weekend! Okay, away we go …
While boasting of our noble deeds we were careful to conceal the ugly fact that by an iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery.
— Horace Greeley
The future ain’t what it used to be.
— Yogi Berra
Credits and Debits
Credit: Did you see this? A woman won $10,000 after discovering a hidden contest in the often-ignored fine print of a travel insurance contract. No, really. However, as one commenter on the story wryly observed: It’s one thing to read the contract; but getting an insurance company to honor it is a completely different story. (h/t: Thom Paine)
Debit: In other news, thanks to elevated mortgage interest rates, the house-flipping industry continues to get dicier by the day, as profits from housing-market speculation fell to their lowest level in seven years. And for those who are wondering if all of those home flippers who have been riding the Fed-induced decade-long low-interest-rate gravy train have finally started heading for the exits, well … see for yourself:
Debit: By the way, housing isn’t the only industry facing smaller profits. After several years of American auto sales at or near all-time highs, the annualized February vehicle sales rate drove off a cliff, with its worst reading in 18 months. See what I did there?
Credit: Anyway … if declining auto and home sales weren’t signs that we’re heading for a recession, maybe this observation from David Rosenberg regarding February’s US retail sales will convince you:
What a retail sales report! 4 months in a row of decline in furniture/home furnishings; 5 months of decline in electronics/appliance sales; clothing at a 10-month low; gas sales at a 15-month low; electronics at an 18-month low; furniture at a 20-month low. All shutdown related?
David Rosenberg (@EconguyRosie) March 11, 2019
Debit: Meanwhile, the millennial generation is deeper in debt than any other generation that has come before them — at least when compared to a similar point in time. In fact, millennials are more than $1 trillion in debt. Compared to Gen X, millennial mortgage debt is about 15% lower, and their credit card debt is 33% less. However, their student loan debt is 300% higher; and, sadly, most of those degrees won’t provide a decent ROI.
Credit: So with more fresh currency being conjured out of thin air worldwide than ever before, why is the Main St. economy beginning to sputter? Well … last week Rick Rule eloquently explained it in a single sentence: “Our ability to continue business as usual is beginning to be constrained by arithmetic.” Yes it is, although “strangled” is a much better term — and the noose is quickly tightening.
Credit: Focusing the spotlight on the Fed’s QE program, Tom Luongo notes that money printing is a failure “because when you paper over reality you don’t fix the underlying problems. The losses are still there, hidden in plain sight, held at mark-to-model prices, on central bank balance sheets.” But I’m sure Tom will change his tune after he learns about the magic money tree (MMT) that everybody is raving about. Or not.
Credit: Economist Jeff Diest has a modest proposal for the Fed: “Return the country to ‘ordinary’ monetary policy. If in fact QE saved the country and wasn’t merely an artificial process of juicing the economy and monetizing debt, it can and must be fully unwound. Until then, we can’t know if economic growth is real or artificial.”
Credit: Of course, after initially implementing QE, the Fed promised they would unwind their balance sheet “at the appropriate time.” That was way back in 2010 — so why aren’t they doing it now, a full decade after the economic crisis supposedly ended? Could it be they’re afraid if they do unwind it fully, this would be the result?
Debit: Speaking of economic crises, you can add the Big Apple to the list of US cities careening toward bankruptcy. Economist Milton Ezrati warns that, “New York City is running a deficit and could be in a difficult spot if we have a recession, or a further flight of (wealthy) individuals because of tax reform.” I know; the odds of those things happening are slim and none … at least according to everybody who still believes in the tooth fairy.
By the Numbers
In case you weren’t paying attention, Sunday is St. Patrick’s Day. Here’s a few facts on this happy holiday:
55% The percentage of Americans who plan on celebrating St. Patrick’s Day this year.
81% The percentage of people who say they plan to wear green.
40 Pounds of dye required to tint the Chicago River green.
3 St. Patrick’s Day’s ranking among the most popular drinking days, after Mardi Gras and New Year’s Eve.
4.2 The average number of drinks consumed per person on St. Patrick’s Day.
13,000,000 Pints of Guinness that will be consumed on St. Patrick’s Day this year worldwide. That’s 819% more than usual.
153% The percentage increase in total beer sales on St. Patrick’s Day.
70% The percentage increase in cabbage shipments during St. Patrick’s week.
32,600,000 The number of Americans who claim Irish ancestry.
1737 The year of the first St. Patrick’s Day parade, held in Boston.
The Question of the Week
Last Week’s Poll Result
What is your credit score?
- 800 or higher (51%)
- 740 to 799 (25%)
- 670 to 739 (12%)
- Less than 670 (10%)
- I’m not sure (3%)
More than 1500 Len Penzo dot Com readers answered last week’s survey question and it turns out that, slightly more than 3 in 4 of them have a credit score classified as good or excellent. Hooray! Another 1 in 10 are considered subprime borrowers, with credit scores of 669 or less. The good news is, the fact that those folks are perusing personal finance blogs suggests that most of them won’t be considered subprime borrowers for very long.
If you have a question you’d like to see featured here, please send it to me at Len@LenPenzo.com and be sure to put “Question of the Week” in the subject line.
Useless News: Small Talk
As the trip was a long and quiet one, a lady stopped the car and asked an old Navajo woman who was walking if she would like a ride.
With a silent nod of thanks, the woman got into the car.
Resuming the journey, the lady tried in vain to make a bit of small talk with the Navajo woman. The old woman just sat silently, looking intently at everything she saw, studying every little detail, until she noticed a brown bag on the seat next to the lady.
“What’s in bag?” asked the old woman.
The lady said, “It’s a bottle of wine; I got it for my husband.”
The Navajo woman was silent for another moment or two. Then speaking with the quiet wisdom of an elder, she said, “Good trade.”
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. Saskatchewan (5.95 pages/visit) !!!!
2. Nova Scotia (1.78)
3. British Columbia (1.56)
4. Newfoundland and Labrador (1.55)
5. Quebec (1.52)
9. Ontario (1.39)
10. New Brunswick (1.37)
11. Yukon Territory (1.33)
12. Alberta (1.31)
13. Nunavut (1.00)
Whether you happen to enjoy what you’re reading (like those crazy canucks in Saskatchewan, eh …) — or not (ahem, 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!
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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
After reviewing several of my blind taste test articles, including the ice cream comparison I published earlier this week, Mister wrote in to express concerns about one of the panelists; specifically, my dog, Major:
I’ve read several of your product surveys and I notice a trend with all of the dog’s evaluations. I suspect he’s lost his sense of taste or smell.
Well … that would certainly explain why he considers cat poop to be such a delicacy.
If you enjoyed this, please forward it to your friends and family. I’m Len Penzo and I approved this message.
Photo Credit: (coffee) brendan-c