Black Coffee: More Funny Business

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’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …

A caricature is putting the face of a joke on the body of a truth.

– Joseph Conrad

The hardest thing to explain is the glaringly evident which everybody has decided not to see.

– Ayn Rand

Credits and Debits

Credit: Did you see this? American shoppers used their mobile phones, laptops, desktops and other devices to make roughly $11 billion in purchases online on Black Friday. That’s up more than 10% from last year. As for Mastercard, they reported consumers charged 3.2% more on their credit cards on the day after Thanksgiving. On the other hand …

Debit: While they have yet to report holiday revenue, the increased sales is good news for stores like Macy’s and Kohl’s, which has seen their stock drop 19% and 46%, respectively, this year due to declining revenue. Even so, both retailers are bracing for muted sales this season because it is 26 days shorter due to Thanksgiving falling on the 28th of November. Then again, we can’t deny that the final totals often depend on the “talent” of their sales staff:

Credit: On the other hand, not all shareholders are feeling like they’ve been scrooged this year. That’s because the S&P 500 (SPX) hit its 57th all time high of 2024 on Friday and is currently up more than 27% this year. The only years with more all-time highs: 1995 (77), 2021 (70), 1964 (65), and 2017 (62). As for the reason why stocks continue to soar despite several years of anemic economic data, there is no shortage of people who are claiming credit. Ironically, the agency that is most responsible continues to take a much different tack:

Credit: By the way, since 1928, the S&P 500 has been positive in December 74% of the time – that’s the best performance for any month. That’s almost a sure thing. Well … at least it is compared to other investment options:

Debit: In other news, the media is now warning that beer drinkers may see the price of their favorite beverage rise as much as 4.5% if tariffs are imposed on Mexico and/or Canada next year. What they didn’t say is that prices have climbed more than 20% without tariffs over the past four years. They also didn’t mention that beer drinkers who find the increase too much for their wallets can always pivot to domestic alternatives – or even other foreign beers not brewed in Canada or Mexico. Either way, both suggestions are good advice. And so are these:

Debit: Meanwhile, coffee drinkers are already feeling the pinch of higher prices as the brown bean’s price has soared to a level not seen since 1977. The good news is the higher prices are not being driven by tariffs or unfettered currency printing. This time. Instead, severe drought in Brazil and unfavorable weather conditions in Vietnam have disrupted supply chains, prompting companies like Nestle to announce price increases and reduced package sizes.

Debit: On a related note, for the first time since February 2022, Core CPI, PCE and PPI inflation are all rising at the same time. Did the Fed’s printing press spark a new wave of inflation? It sure looks that way. On the other hand, the Fed’s monetary hocus pocus isn’t the only way to quickly conjure lots of currency out of thin air:

Debit: Speaking of the Fed, a new report from the central bank warned that a lending practice in the commercial real estate (CRE) market known as “extend and pretend” is masking an increasing system risk. The Fed report worries that, in many cases, CRE lenders seemed to be offering loan modifications and other breaks to property borrowers for the sole purpose of delaying a write-off, resulting in a distortion of the CRE loan market. The moral of the story: Sometimes you really can be too clever. Unlike this guy:

Debit: Then there’s this: Interest payments now consume nearly 40% of all federal government tax receipts. Heh. Nothing to see here, folks. Or here for that matter:

Credit: In other news, we noticed that last month Sotheby’s resold the banana that was duct-taped to a wall for $6.2 million – yes, the same one that sold for $120,000 in 2019. But as Nicole Gelinas points out, “The creator considers the artwork – called ‘Comedian’ – a joke. But the joke is on us: We’re stuck in an economy fueled by speculation, with the price of everything from stocks to real estate barely this side of nonsensical, (thanks to) cheap money sloshing around an economy (that’s) unable to soak it up.” She’s correct, of course. But such expenditures become more common as the purchasing power of the USD continues to plunge. Meanwhile, back in SoHo …

Debit: By the way, the $20,000 Cheeto “art” referred to in the previous tweet actually occurred too. For the record, the Cheeto was the puffed variety; not fried. In fact, you can real all about it here. But the absurdity underlying both of those “art” sales arguably pales in comparison to this: Last week, the cryptocurrency known as “dogecoin” officially surpassed Ford Motor Company in total market capitalization. And, yes … this is the very same digital “coin” that started life purely as a joke, mocking the cryptocurrency market folly.

Credit: Unfortunately, the US government is going to continue to debauch the USD if only because the math underpinning the current debt-based fiat monetary system requires that debt to grow at an ever-increasing pace. Thankfully, over the past three months gold is up 7%. Oh … and it is also up 51% since 2021 – and 600% since 1994. Why? Well … because gold is wealth insurance, par excellence; that’s why. And the yellow metal is quickly becoming one of the few sure ways to maintain some semblance of monetary insanity in an increasingly insane world.

By the Numbers

With the stock market hitting new all-time highs almost every week, we thought it would be appropriate to look back to when the Dot Com bubble popped in 2000. Here were the top grossing movies that year. How many of these have you seen?

10. Erin Brockovich (box office gross: $125 million)

9. Dinosaur ($138 million)

8. What Lies Beneath ($155 million)

7. Scary Movie ($157 million)

6. X-Men ($157 million)

5. Meet the Parents ($161 million)

4. The Perfect Storm ($183 million)

3. Gladiator ($187 million)

2. Mission: Impossible II ($215 million)

1. How the Grinch Stole Christmas ($251 million)

Source: Box Office Mojo

The Question of the Week

Last Week’s Poll Results

Has an insurance company ever chosen to cancel or not renew your policy?

• No 79%
• Yes 21%

More than 1900 Len Penzo dot Com readers responded to last week’s question and it turns out that almost 4 in 5 of you have never had the “pleasure” of having an insurance policy cancelled by your insurance company – or otherwise given notice that they wouldn’t renew it. As I mentioned last week, since 1998 my homeowners’ policy was not renewed on three separate occasions, forcing me to scramble to provide another insurer. Not fun, folks!

If you have a question you’d like me to ask the readers here, send it to me at Len@LenPenzo.com and be sure to put “Question of the Week” in the subject line.

Useless News: The Daily Special

A Texan, a Russian, and a New Yorker go into a restaurant in London. The waiter walks up to their table and says, ”Excuse me, gentleman. The chef says if you wanted the steak it’s not available because there’s a shortage due to Mad Cow Disease.”

The Texan says, ”What’s a shortage?”

The Russian says, ”What’s a steak?”

The New Yorker says, ”What’s excuse me?”

(h/t: Cowpoke)

Buy Me a Coffee? Thank You!

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More Useless News

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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

Ted wrote in to the Len Penzo dot Com Complaint Department to say he’s had enough bad news about the economy. He then signed off with this:

But I’m wasting my time telling you this because people like you never think you’re wrong.

Now hold on, Ted. When I finally get something wrong, I promise I’ll admit to it.

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: public domain