Black Coffee: Up, Up and Away!

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.

Well … another busy week is behind us. So with that in mind, let’s get this party started …

My gas bill is beginning to look like my grocery bill. My grocery bill is looking like my old Costco bill, which now looks like my mortgage bill.

– Anonymous

Credits and Debits

Credit: Did you see this? A Michigan man who recently won nearly $800,000 in the state’s Fantasy 5 lottery daily drawing also won $100 the previous day playing the same game, missing the jackpot by one number. What we don’t know is how much this guy spent on lottery tickets in the years prior to winning “the big one.” And on a related note …

Debit: Meanwhile, the median sale price of a New York City home is now $776,100, according to realtor.com figures, the Big Apple stands out as one of the most expensive and competitive markets in the nation. That’s a 26% increase since January 2019 when the median sale price stood at $615,000. Then again, the Big Apple is a bargain compared to the 100 US cities where the price tag of a starter home is now over $1 million.

 

Credit: On the bright side, the average rate for a 30-year mortgage has dropped to 6.47%, the lowest in over a year, providing a boost for prospective homebuyers and homeowners looking to refinance. That being said, economists predict that mortgage rates will stay above 6% this year. While the rate reduction could improve homebuyers’ purchasing power, high housing prices remain an obstacle for them … among many other things:

Debit: Speaking of high prices, Cadbury doubled the price of its signature candy bar this month; it’s their first price increase in ten years. Thankfully, while prices are still increasing, inflation has moderated to somewhat manageable levels – well … assuming you believe the data.

Debit: Regardless, wages have a long long way to go undo the damage done to consumers’ standard of living during the past three years. And the latest inflation data for July shows that inflation has now increased on a month-over-month basis for 50 consecutive months. You know what will fix this? More gaslighting propaganda from the mainstream media!

Credit: Then again, if you think your grocery bill is high, just be glad you aren’t a prisoner. prisoners working regular jailhouse jobs – which include maintenance or working the kitchen – currently need to work more than an hour to afford one packet of the most commonly offered state-wide ramen variant. For a cup of mac & cheese, inmates have to work more than a half-day on average. That’s not to say that anybody expects prison to be a picnic …

Debit: In other news, PPG Macro Strategy reports that US U6 unemployment rose to 7.8% in July. And when using the far-narrower U-3, the number of unemployed Americans is now 21.3% higher than it was during the same time last year. Now for the punchline: When looking back at the unemployment data going all the way back to 1949, that data signaled a recession every time unemployment has increased that quickly. Imagine that.

Debit: Of course, one of the federal government’s favorite tools for fighting a recession is to print more currency in order to stimulate the economy. Unfortunately, when you consider that, after including their individual share of the National Debt, US unfunded liabilities, and personal household red ink, Americans’ total debt burden adds up to roughly five times the net worth of the median US family, that little trick now threatens to do more harm than good.

Debit: On a related note, the federal government has amassed a staggering $142 trillion in debts, liabilities, and unfunded obligations, which equals 93% of Americans’ entire wealth holdings. Hey … maybe we Americans can just put our portion of the debt on our credit cards. Or not …

Debit: Speaking of credit card debt, more than 10% of all credit card accounts are more than 90 days delinquent – that’s the highest percentage in 12 years. Somebody should probably write a song about this. Oh, wait …

Credit: This week, sagacious macro commentator Franklin Sanders observed that US federal government “interest payments on its debt are nearing 40% of the yankee government’s budget. I couldn’t run a household like that, let alone a business. Rest assured that they’ll issue more debt to pay the interest on the old debt like Ouroboros, the snake that eats his own tail. At what point can the interest no longer be paid?” It’s a very good question – but I strongly suspect the answer is sooner, rather than later.

Debit: So years of mismanagement has finally painted the Fed into a box that it can’t escape; as such, a currency crisis is inevitable. If rates stay up, they kill an economy built on debt and create a sovereign debt crisis with the world reserve currency. On the other hand, if they lower rates, they may reignite a stalling economy, but we get continuously accelerating inflation until collapse. Pick your poison. Luckily, there is an antidote …

By the Numbers

Collection accounts can greatly damage a person’s credit score and remain on their credit report for seven years, and increases in collection accounts in a city indicate that people are experiencing difficulty paying their bills. With that in mind, a new study reveals the ten cities that currently have the most collection accounts.

10 New Orleans, LA

9 Dallas, TX

8 Austin, TX

7 Henderson, NV

6 Omaha, NE

5 Irving, TX

4 Plano, TX

3 Irvine, CA

2 Corpus Christi, TX

1 Laredo, TX

Source: Wallet Hub

The Question of the Week

[poll id="549"]

Last Week’s Poll Result

What is the minimum annual income you need to be truly happy?

• $75,000 (48%)
• $100,000 (25%)
• $150,000 (13%)
• $50,000 or less(7%)
• $200,000 or more (6%)

More than 1700 Len Penzo dot Com readers answered last week’s poll question and it turns out that 55% of you say they can be truly happy with an annual income of less than $75,000 annually. When I asked that same question in March 2021, 74% said they could be truly happy with an income of $75,000 or less. You can almost certainly blame the difference on inflation, folks.

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: Facing Reality

Finding one of her students making faces at others on the playground, Mrs. Smith stopped to gently reprimand the child. Smiling sweetly, the Sunday school teacher said, “Bobby, when I was a child, I was told that if I made ugly faces, it would freeze and stay like that.”

Bobby looked up at her and replied, “Well, Mrs. Smith … you can’t say you weren’t warned.”

(h/t: Sharon)

Buy Me a Coffee? Thank You So Much!

For the best reading experience, I present all of my fresh Black Coffee posts without ads. If you enjoyed this week’s column, buy me a coffee! (Dunkin’ Donuts; not Starbucks.) Thank you so much!

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More 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. Manitoba (2.17 pages/visit)
2. British Columbia (2.15)
3. Prince Edward Island (2.11)
4. Alberta (1.89)
5. Saskatchewan (1.76)

9. Yukon (1.50)
10. Ontario (1.42)
11. Nunavut (1.40)
12. Quebec (1.38)
13. New Brunswick (1.41)

Whether you happen to enjoy what you’re reading (like those crazy canucks in Manitoba, eh) — or not (ahem, you hosers living on the frozen New Brunswick tundra) — please don’t forget to:

1. Subscribe to my weekly Len Penzo dot Com Newsletter! (It’s easy! See the big green box in the sidebar at the top of the page.)

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Thank you so much!!!! 😊

(The Best of) 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

For some reason, I received this rather strange request from Kate in my inbox:

Hi, Len! I’m doing a homework assignment on snakes. Do you know the most important snake?

I’m tempted to give you an answer, Kate — but I’m tired of making an asp of myself.

If you enjoyed this edition of Black Coffee and found it to be informative, please forward it to your friends and family. Thank you! 😀

I’m Len Penzo and I approved this message.

Photo Credit: stock photo