{"id":73967,"date":"2022-07-30T02:15:47","date_gmt":"2022-07-30T09:15:47","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=73967"},"modified":"2022-08-02T06:41:14","modified_gmt":"2022-08-02T13:41:14","slug":"black-coffee-30-july-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id73967-black-coffee-30-july-2022.html","title":{"rendered":"Black Coffee: The Ministry of Truth"},"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

Don’t you see that the whole aim of Newspeak is to narrow the range of thought? In the end we shall make thoughtcrime literally impossible, because there will be no words in which to express it.<\/em><\/p><\/blockquote>\n

— George Orwell, 1984<\/em><\/strong><\/p>\n

In our country the lie has become not just a moral category, but a pillar of the State.<\/em><\/p><\/blockquote>\n

— Aleksandr Solzhenitsyn<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? According to a new survey, the average American says they need to earn at least $128,000 per year<\/a> to feel financially secure. Wow. When you consider that’s nearly double the median US household income, that six-figure income milestone is more than a bit problematic. Then again …<\/p>\n

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Debit:<\/strong><\/span> In other news, it turns out that there’s never been a worse time in the last 30 years to buy a vehicle, as cars have gone in the last two years from being the largest depreciating asset one can own, to a moneymaker that has outperformed most stock portfolios. The good news? Prior to 2020, when the car market was sane, auto loan delinquencies hovered around 2.5%; but today it\u2019s 8.7% in California, 10% in Texas, and 23% in Washington, DC – which means if we continue on the same trajectory, we could see an 18% decline<\/a> in used car prices next year. And a lot of crying by those who should have never got a car loan in the first place …<\/p>\n

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Debit:<\/strong><\/span> Speaking of rising car loan delinquencies, the Los Angeles Times<\/em> reports that, nationwide, the number of auto loans that were more than 60 days late were 30% higher in May compared to a year earlier. Even more shocking: The auto market is so twisted now that cars are being repoed and immediately resold<\/a> – for more than the balance of the previous loan. Wait … what?<\/strong><\/em><\/p>\n

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Debit:<\/strong><\/span> Meanwhile, on Thursday the Commerce Department announced that US GDP contracted for the second consecutive quarter in 2022, signaling that the nation is now in its second economic recession in the past two years. More specifically, the data showed a 0.9% annualized decline<\/a> in economic growth for the three-month period that ended on June 30. If that’s got you depressed, you’ll be happy to know that my local realtor assured me that it’s still<\/strong><\/em> the best time ever<\/a> to buy a new home! And apparently, she’s not the only one …<\/p>\n

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Debit:<\/strong><\/span> By the way, the generally-accepted definition of an economic recession has been set in stone for decades. That definition is: A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. Well … at least it was until this week, when the White House proclaimed that<\/strong><\/em> definition to be officially null and void<\/a>. And so, just like that, an economic recession has been avoided. Hooray! Heck … that was so easy, I don’t see why the National Debt can’t be “eliminated” in short order too. Now where are<\/strong><\/em> those ruby slippers?<\/p>\n

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Credit:<\/strong><\/span> For his part, famed economist Nouriel Roubini said that not only are we indeed in<\/strong><\/em> a recession, but also that those who think the downturn is going to be mild<\/strong><\/em> are – to put it nicely – guilty of wishful thinking<\/a>. Why? Because, according to Roubini, the current Fed policy of tightening its monetary policy into the face of a slowing US economy makes a hard landing inevitable. “We have no fiscal space,” he warned, “so the idea that this is going to be short and shallow is totally delusional.” Maybe so – but that doesn’t mean when space is tight, you can’t get creative …<\/p>\n