{"id":69406,"date":"2021-10-30T02:15:54","date_gmt":"2021-10-30T09:15:54","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=69406"},"modified":"2021-11-02T10:39:44","modified_gmt":"2021-11-02T17:39:44","slug":"black-coffee-30-oct-2021","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id69406-black-coffee-30-oct-2021.html","title":{"rendered":"Black Coffee: Back in the USSR"},"content":{"rendered":"

\"hurricane-flags\"<\/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

Another busy week is crossed off the list. So without further ado, let’s get right to the commentary …<\/p>\n

In the Soviet Union, no industry went under until they all did.<\/em><\/p><\/blockquote>\n

— PJ O’Rourke<\/strong><\/p>\n

What killed the Soviet Union was the Soviet Union.<\/em><\/p><\/blockquote>\n

— Robert Dallek<\/strong><\/p>\n

Whoever doesn’t miss the Soviet Union has no heart. Whoever wants it back has no brain.<\/em><\/p><\/blockquote>\n

— Vladimir Putin<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? Modern Land China, a Chinese developer that uses green-tech for real estate projects became the fourth builder to default<\/a>, joining Fantasia Holdings, Sinic Holdings, and China Properties which have already defaulted on offshore bonds this month, and Evergrande, which is in a state of technical default. If this is what the Chinese property sector looks like when everything is under control, I’d hate to see it when the wheels finally come off.<\/p>\n

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Credit:<\/strong><\/span> Meanwhile, in a new twist on how China may soon conduct corporate bankruptcies, Chinese authorities told Evergrande founder Hui Ka Yan to use his personal wealth<\/a> to ‘alleviate’ Evergrande’s deepening debt crisis. After all, Hui has amassed a fortune of more than $42 billion. Unfortunately for him, Evergrande is underwater to the tune of more than $300 billion. Well … as Confucius famously said, “easy come, easy go.” At least I think that was him.<\/p>\n

Debit:<\/strong><\/span> In other news, just when you thought the insanity couldn’t get any worse, it appears that there is now enough support<\/a> in Congress to actually institute a tax on unrealized gains on assets such as stocks and home values. And while the pols insist the tax will only be applied to the very richest people in America, the very same promise was made when the original income tax law was enacted. How did that work out for the average middle-class American?<\/p>\n

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Debit:<\/strong><\/span> The absurdity of a tax on unrealized capital gains is absolutely breathtaking<\/a>. For example, how will this work exactly? Will unrealized gains affect retirement plans? And can unrealized gains be offset by unrealized losses? In the meantime, here’s hoping Congress will consider letting everybody pay their taxes with their unrealized income<\/em><\/strong>. Yeah … I’m a dreamer.<\/p>\n

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Debit:<\/strong><\/span> Hey … if you think that’s<\/strong><\/em> crazy, the White House’s current nominee to head the Office of the Comptroller of the Currency, which regulates our nation’s largest banks, is a woman named Saule Omarova. Did you know that she’s in favor of – among other things – moving all<\/strong><\/em> commercial bank deposits into accounts at the Fed, and then allowing the Fed to confiscate those deposits<\/a> in ‘extreme circumstances’? She is. Did you also know that she was born in the Soviet Union and attended Moscow State University on a Lenin Personal Academic scholarship? Well … she was, comrade.<\/p>\n

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Credit:<\/strong><\/span> On a related note, this week Zero Hedge pointed out that, “Retailers are creating the appearance that everything is fine so empty store shelves don’t spark buying panic<\/a> that would strain supplies even more. It’s okay if stores run out of PlayStations and Nerf Blasters – but if food shelves start going bare, this could be problematic. Remember what happened in the Soviet Union right before it collapsed?” I do. But for those who don’t, here’s a reminder:<\/p>\n

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(click to enlarge)<\/p><\/div>\n

Debit:<\/strong><\/span> Then again, in a Washington Post<\/em> op-ed, Micheline Maynard says that although “Americans’ expectations of speedy service and easy access to products have been crushed, (it’s) time … we do ourselves a favor by lowering expectations<\/a>.” What?<\/strong><\/em> Yes; it’s a ridiculous sentiment. More to the point: It’s a claim that’s more suited for the pages of old Soviet rags such as Pravda<\/em> or Izvestia<\/em> … as this guy would surely attest:<\/p>\n