{"id":75288,"date":"2022-10-22T02:15:56","date_gmt":"2022-10-22T09:15:56","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=75288"},"modified":"2022-10-25T08:56:34","modified_gmt":"2022-10-25T15:56:34","slug":"black-coffee-22-oct-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id75288-black-coffee-22-oct-2022.html","title":{"rendered":"Black Coffee: Something Evil Is Stirring"},"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 a wonderful week. And with that, let’s get right to this week’s commentary, shall we?<\/p>\n

People will buy snake oil from anybody who seems to be selling it in a persuasive way.<\/em><\/p><\/blockquote>\n

– Frederick Buechner<\/strong><\/p>\n

There was money to be made giving all these people what they thought they wanted.<\/em><\/p><\/blockquote>\n

– Robert Shiller, Animal Spirits<\/em><\/strong><\/p>\n

Three groups spend other people’s money: children, thieves, and politicians. All three need supervision.<\/em><\/p><\/blockquote>\n

– Dick Armey<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? As of May 13th, there were approximately 6281 common stocks from A to ZYXI listed in the US. Now for the punchline: Not counting delisted stocks, mergers or name-changes, nearly 1 in 6 of those stocks is at least 80% off<\/a> its high. That’s an astounding statistic. Then again, I’m sure it’s probably nothing.<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> It’s not just stocks that are struggling. Bloomberg<\/em> reports that, “Everywhere you turn, the biggest players in the $24 trillion US Treasuries market are in retreat<\/a>.” Uh huh. It’s so bad that entities that were once lining up to get their hands on US government debt – such as Japanese pensions and life insurers, foreign governments, and US commercial banks – are no longer interested. In fact, demand for Treasuries is so depressed that even the Fed is now offloading them from its bloated $9 trillion balance sheet – to the tune of $60 billion a month. Even so, that’s hardly put a dent in it. See for yourself:<\/p>\n

\"\"

(h\/t: GoldSilver.com)<\/p><\/div>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> Meanwhile, over on the other side of the pond … the United Kingdom is still trying to recover from their recent gilt crisis<\/a>; ‘gilts’ are the name given to UK government bonds. Unfortunately, the crisis directly impacted the UK’s pensions. How bad was it? Believe it or not, many financial experts are saying it was nearly catastrophic. But was it really? Well … as macroeconomist Daniel Oliver points out, “It seems incredible, but a large chunk of UK pensions was just hours from being completely vaporized.” Yeah, that would definitely<\/strong><\/em> be catastrophic.<\/p>\n

\"\"

(h\/t: @tombostocks)<\/p><\/div>\n

Credit:<\/strong><\/span> For those who are tempted to pooh-pooh the recent UK gilt crisis as hyperbole from the tin foil hat crowd, financial commentator Franklin Sanders reminded everyone this week that, globally, “bond markets are far, far<\/em><\/strong> bigger than stock markets – and more important. Government securities are supposed to be the ‘safest’ possible investment, so when they begin to go bad, governments, currencies and financial systems fail<\/a>.” Sanders then concluded with this: “Something evil is stirring in Mordor.” There sure is. Thankfully, the good guys are coming to save the day. Er … or maybe not:<\/p>\n