{"id":68622,"date":"2021-09-11T02:15:48","date_gmt":"2021-09-11T09:15:48","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=68622"},"modified":"2021-09-14T08:49:29","modified_gmt":"2021-09-14T15:49:29","slug":"black-coffee-11-sep-20","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id68622-black-coffee-11-sep-20.html","title":{"rendered":"Black Coffee: More Cowbell"},"content":{"rendered":"

\"\"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

I hope everybody had an enjoyable week. Without further ado, let’s get right to this week’s commentary …<\/p>\n

No man’s credit is as good as his money.<\/em><\/p><\/blockquote>\n

— EW Howe<\/strong><\/p>\n

The worst hunger is the hunger for more.<\/em><\/p><\/blockquote>\n

— Bert McCoy<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? According to the Wall Street Journal<\/em>, state and local governments have borrowed $10 billion<\/a> to shore up pension funding this year, which is more than in any of the previous 15 full calendar years. Keep in mind that this occurred despite record bull markets in both stocks and<\/strong><\/em> bonds. It makes you wonder how much trouble these pension funds would be in during a bear<\/strong><\/em> market.<\/p>\n

Debit:<\/strong><\/span> Here’s the logic: Typically, a city or county issues pension obligation bonds<\/a> to cover its missed pension payments and then invests the remainder to bolster the pension fund. In a perfect world, those investment returns will be higher than the bond rate, and the resulting investment gains are then used to lower the city or county’s pension contribution obligations. Yep. Easy peasy!<\/p>\n

Credit:<\/strong><\/span> Then again, we don’t live in a perfect world, do we? And here’s another pearl of wisdom for those who are willing to listen: Responsible investors don’t borrow money to buy stocks and other securities — that’s what speculators and gamblers<\/a> do …<\/p>\n