{"id":38509,"date":"2016-07-30T05:15:15","date_gmt":"2016-07-30T12:15:15","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=38509"},"modified":"2016-08-02T09:42:00","modified_gmt":"2016-08-02T16:42:00","slug":"black-coffee-wall-street-vs-main-street","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id38509-black-coffee-wall-street-vs-main-street.html","title":{"rendered":"Black Coffee: Wall Street vs. Main Street"},"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 this week …<\/p>\n

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

Debit:<\/strong><\/span> Although restaurant sales are up 5% for the year, they’ve fallen during three of the last six months. If so, analysts say that could be signaling tough economic times ahead<\/a>. Hey … Don’t blame me — I’ve dined out a lot<\/em> this year. Just ask my bathroom scale.<\/p>\n

Debit:<\/strong><\/span> Judging by the latest durable goods data, there’s little doubt the tough times are already here. Yep. Orders for things like washing machines, furniture, and household electronics saw their biggest drop in two years<\/a>.<\/p>\n

Debit:<\/strong><\/span> Meanwhile, the homeownership rate is now at its lowest level since 1965<\/a>. Then again, I guess it’s hard for anyone to buy a home when the majority of jobs being produced in today’s economy are low-paying service industry positions.<\/p>\n

Credit:<\/strong><\/span> With fewer and fewer good-paying jobs being created it really shouldn’t be much of a surprise to hear that the subprime auto loan bubble just popped<\/a>. The good news is, the demand for repo men<\/a> will soon be going through the roof. Well … it’s good news if you need a job that pays more<\/a> than the minimum wage.<\/p>\n

Debit:<\/strong><\/span> Needless to say, non-performing loans are never<\/em> good news for the banks. And it certainly isn’t good for struggling Deutsche Bank; on Wednesday they announced that their profits fell 98%<\/a> last quarter. Uh oh.<\/p>\n

Debit:<\/strong><\/span> Believe it or not, banks don’t like negative interest rates either — partly because their customers hate them. Even so, English bank NatWest is now threatening to charge depositors<\/a> on cash held in their accounts. It’s not just NatWest; the Royal Bank of Scotland is too<\/a>. You know what that means, don’t you? The rest of this year should be very good for mattress sales. And gold<\/a>.<\/p>\n

Debit:<\/strong><\/span> The central banks’ negative interest rate policy is why US public pension long-term returns are expected to drop to the lowest levels ever recorded<\/a>; they’ve fallen almost 40% since 2001. According to the Wall Street Journal: “The dip is intensifying a national debate over whether states and cities can continue to afford pension obligations.” What<\/em> debate? The answer is “no.”<\/p>\n

Debit:<\/strong><\/span> The current economic dysfunction we all find ourselves in became inevitable after the US dollar lost its anchor to gold<\/a> in 1973. Since then, America has transformed itself from an industrial economy to one dependent on financialization. That’s great for Wall Street — but bad for Main Street.<\/p>\n

Credit:<\/strong><\/span> Eventually, however, it will be bad for Wall Street<\/a> too. At that point, the free lunch era in America will finally be over — and Main Street will rise from the ashes. No, really.<\/p>\n

Debit:<\/strong><\/span> For now, Main Street will continue on its gradual terminal descent until the dollar finally falls victim to something that most Americans are unable to comprehend: a currency collapse<\/a>.<\/p>\n

Debit:<\/strong><\/span> Of course, the People’s Socialist ParadiseTM<\/sup> of Venezuela knows all about collapsing currency. Food shortages there are so severe that soldiers are now forcing citizens to work on farms<\/a> and grocers to sell their merchandise at a huge loss. How can so<\/em> many people be so<\/em> utterly clueless?<\/p>\n

Credit:<\/strong><\/span> Somebody really needs to whisper in President Maduro’s ear that without profits, there’s no incentive<\/a> for producers to put food on store shelves. On the other hand, being the ideologue that he is, those words of wisdom will go in one ear and out the other. (Sorry; I couldn’t resist.)<\/p>\n

Debit:<\/strong><\/span> In fact, a butcher in Caracas told the Financial Times that soldiers forced him to sell his beef<\/a> at $0.11\/lb. — even though his suppliers charged him $1.32\/lb. According to the poor merchant, “They told me the beef ‘belonged to the people’ and stayed seven hours as a huge queue formed outside.” Ain’t socialism grand?<\/p>\n

Debit:<\/strong><\/span> On a related note, I see Cloverdale, California, is being stiffed<\/a> by the Bernie Sanders campaign. Apparently, they skipped out on a $23,000 invoice after a rally there earlier this year. Meh.<\/p>\n

Credit:<\/strong><\/span> Frankly, Cloverdale city officials should know better. After all, by his own admission<\/a>, Bernie is<\/em> a socialist — they always<\/em> stick others with the bill. Forward!<\/p>\n

By the Numbers<\/strong><\/p>\n

It’s been a hot week across the US — but especially in the American heartland. Read on to see how hot — or perhaps not so hot:<\/p>\n

97 F<\/strong><\/span><\/span> High temp in Minneapolis, this week.<\/p>\n

83 F<\/strong><\/span><\/span> Average temp, historically, in Minneapolis over same period.<\/p>\n

109 F<\/strong><\/span><\/span> Wednesday’s high in Pierre, South Dakota.<\/p>\n

100 F<\/strong><\/span><\/span> Temp in Dallas on July 22 — the first triple-digit temp of the year there. It came 21 days later<\/em> than average.<\/p>\n

105 F<\/strong><\/span><\/span> High temp in Little Rock, Arkansas, on July 22.<\/p>\n

114 F<\/strong><\/span><\/span> All-time high temp in Little Rock. (August 3, 2011)<\/p>\n

Sources: AccuWeather<\/a><\/em><\/p>\n

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

[poll id=\"122\"]<\/code><\/p>\n

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

Do you have Pokemon GO on your smartphone yet?<\/p>\n