{"id":47307,"date":"2018-02-10T04:15:05","date_gmt":"2018-02-10T12:15:05","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=47307"},"modified":"2018-02-12T20:49:12","modified_gmt":"2018-02-13T04:49:12","slug":"black-coffee-late-night-notes-from-a-lonely-airport-terminal","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id47307-black-coffee-late-night-notes-from-a-lonely-airport-terminal.html","title":{"rendered":"Black Coffee: Late Night Notes from a Lonely Airport Terminal"},"content":{"rendered":"

\"black<\/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

It’s a little past midnight. I’m writing this edition from Gate 21, Terminal B, at Phoenix Sky Harbor Airport. Unfortunately for me, I’m stuck here — forced to spend the night after a missed connection.<\/p>\n

I certainly won’t be sleeping much, and I have a deadline — so why not take advantage of the free time? That being said, this is going to be an abbreviated edition because, quite frankly, I’m pretty darn tired. So please excuse any typos; it’s been a long<\/em> day.<\/p>\n

And with that, let’s get right to it …<\/p>\n

“Anyone with a pension or retirement fund is an investor in the stock market.<\/em>“<\/p><\/blockquote>\n

— Brad Katsuyama<\/strong><\/p>\n

“The difference between playing the stock market and the horses is that one of the horses must win.<\/em><\/p><\/blockquote>\n

— Joey Adams<\/strong><\/p>\n

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

Credit:<\/strong><\/span> The biggest interest rate jump in bond markets since March has bullish traders questioning the staying power of the second-longest equity advance ever. Sniff, sniff.<\/em> Hey … Is that the scent of fear<\/a> in the air?<\/p>\n

Debit:<\/strong><\/span> Until last week, the acceleration in the S&P 500 had been on an upward parabolic trajectory<\/a> — which sounds great, until you realize that a parabolic trajectory has two components: up and<\/em> down.<\/p>\n

Credit:<\/strong><\/span> As Graham Summers notes, the stock market’s parabolic trajectory was a direct result of the Fed’s extremely loose financial policies. Stocks waited to begin their plunge only after US Treasury bonds began to collapse<\/a>, pushing yields higher.<\/p>\n

Debit:<\/strong><\/span> Then on Monday, the stock market got a very<\/em> small taste of reality when the 410-day record streak without a 5% correction finally ended<\/a>, as the S&P 500 lost 4.1%, the Nasdaq dropped 3.8%, and the Dow plunged 1177 points for a one day loss of 4.6%. Huh. Apparently, it’s not<\/em> an old wives’ tale — markets actually do<\/em> go down.<\/p>\n

Credit:<\/strong><\/span> The following day, Carl Icahn issued an ominous warning when he said, “This is a manifestation of a real deep problem we have in our markets. The market will bounce back but these are the rumblings before the earthquake<\/a>.”<\/p>\n

Debit:<\/strong><\/span> Then again, try telling that to the trader who lost $4 million<\/a> on Monday — cash that he had accumulated in just three short years of trading after starting with a $50,000 bankroll. Ouch.<\/p>\n

Credit:<\/strong><\/span> The “good” news was that the markets reversed course on Tuesday — the Dow scratched back about a third of its losses from the day before — but then they wobbled on Wednesday, finishing the day essentially unchanged. On Thursday, however, the market lurched downward again, as the Dow plunged more than 1000 points<\/a> for the second time in four days.<\/p>\n

Credit:<\/strong><\/span> Then came Friday — the Dow ended the final session of the week up more than 300 points, ending the most turbulent week on Wall St. in a long time, and leaving stocks with their steepest weekly slide in two years<\/a>. Clearly, volatility is back. Unfortunately, the early trend appears to be one of lower highs and lower lows — which suggests that, after 9 years, a new bear market may be finally coming out of hibernation.<\/p>\n

Debit:<\/strong><\/span> I know what you’re thinking: Okay, Len … So our stocks may be tanking<\/a> but at least we still have Social Security and our pensions.<\/em> If you say so, folks.<\/p>\n

Debit:<\/strong><\/span> Frankly, if you think your Social Security and government pensions are set in stone because they are “guaranteed” by the government — or via Constitutional law — think again<\/a>. As Simon Black points out, “The First Circuit Court affirmed last week without a doubt that government promises aren’t worth the paper they’re printed on.” Imagine that.<\/p>\n

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

[poll id=”201″]<\/p>\n

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

How many residences have you had during your lifetime?<\/p>\n