{"id":33886,"date":"2015-10-10T03:30:33","date_gmt":"2015-10-10T10:30:33","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=33886"},"modified":"2023-06-02T17:30:19","modified_gmt":"2023-06-03T00:30:19","slug":"black-coffee-10-october-2015","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id33886-black-coffee-10-october-2015.html","title":{"rendered":"Black Coffee: The Ripley’s ‘Believe It Or Not’ Edition"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe …<\/em><\/p>\n

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.<\/p>\n

Let’s get right to it …<\/p>\n

Credits and Debits<\/strong><\/p>\n

Debit:<\/strong><\/span> This just in: An audit has found that, during the first six months of 2012, Medicare paid out $30 million to ambulance companies for rides to destinations which have no records<\/a> indicating the transported patients received medical care. Strange.<\/p>\n

Debit:<\/strong><\/span> You know what else is strange? This week, for the first time ever, the US Treasury sold 3-month bills that offered a yield of 0%<\/a>. Why would anybody lend the government cash for three months with zero return?<\/p>\n

Credit:<\/strong><\/span> Yes; yes. Those who hold gold and silver don’t receive any nominal interest either — but here’s the thing: Unlike T-bills, at least precious metals have zero counterparty risk<\/a>. Nada<\/em>. Zilch. Zippo. So there.<\/p>\n

Debit:<\/strong><\/span> Actually, one could argue that people who entrust their savings to the banks today are making the same mistake<\/a> as those who are willing to buy T-bills at 0%. No, the FDIC won’t protect you from systemic collapse — it has just $25 billion to cover more than $9 trillion<\/a> of eligible deposits.<\/p>\n

Debit:<\/strong><\/span> By the way, when lenders are willing to loan money at 0% interest, borrowers will recklessly gamble with the proceeds — and that leads to plenty of malinvestment, not unlike those infamous Chinese ghost cities and, now … ghost amusement parks<\/a>. No, really.<\/p>\n

Debit:<\/strong><\/span> Speaking of malinvestment, check out the 765 square-foot home<\/a> that is on the market today in San Francisco for $350,000. Nope, there’s no bubble in the Bay Area. True, it’s not “turn-key” — but it does<\/em> have rustic charm. Okay, maybe not.<\/p>\n

\"sf<\/a><\/p>\n

Credit:<\/strong><\/span> The preposterous price for that San Francisco, um, “fixer-upper,” is yet another reason why it may just be two outs in the bottom of the ninth<\/a> for the US housing market. And I know what you’re thinking — but this is the second game of a season-ending twi-night double header.<\/p>\n

Debit:<\/strong><\/span> The last thing city and state governments need is plunging housing prices. Just ask Chicago’s budget director, Alexandra Holt — even at these inflated prices, she says a proposed $543 million property tax hike may not be enough<\/a> to resolve the Windy City’s pension debt. Incredible.<\/p>\n

Credit:<\/strong><\/span> Of course, when it comes to unsustainable government pensions<\/a>, they can always consider Plan B: scale back the original gold-plated promises. I know. I’ll wait for the laughter to die down before I move on.<\/p>\n

Debit:<\/strong><\/span> You can bet Chicago municipal employees will get no sympathy from the Teamsters — 400,000 of them just learned they’re facing pension cuts because their fund will run out of cash<\/a> in the next 10 years or so.<\/p>\n

Debit:<\/strong><\/span> If you think government pensions are generous, check this out: A recent study found that federal employees now earn 78% more<\/a> in salary and benefits than private sector workers. You know … the folks whose taxes provide the funds that support those very same federal employees.<\/p>\n

Credit:<\/strong><\/span> In other news, I see the Dow, Nasdaq and S&P 500 all ended this past week on another up note. In fact, the S&P rose 3.3% for the week — which is its best weekly performance<\/a> of the entire year. Imagine that.<\/p>\n

Debit:<\/strong><\/span> Then again, to show you just how absurd these “markets” are — Zero Hedge notes that the Dow has miraculously skyrocketed more than 1000 points<\/a> since “the worst jobs data in years” was released last week. Bah. It’s all a sham. Believe it — or not.<\/p>\n

Debit:<\/strong><\/span> Finally … Did you see this? Clemson University apologized to “offended” students after the school sponsored a campus “Maximum Mexican” food day celebration. Frankly, I don’t know who is more pathetic: the hypersensitive boobs<\/a> who complained, or the spineless university officials<\/a> who offered the mea culpa<\/em>.<\/p>\n

The Question of the Week<\/strong><\/p>\n

[poll id=”83″]<\/p>\n

Last Week’s Poll Result<\/strong><\/p>\n

If you could travel through time, where would you go?<\/p>\n