{"id":79300,"date":"2023-07-01T01:15:05","date_gmt":"2023-07-01T08:15:05","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=79300"},"modified":"2024-06-21T12:01:32","modified_gmt":"2024-06-21T19:01:32","slug":"black-coffee-1-july-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id79300-black-coffee-1-july-2023.html","title":{"rendered":"Black Coffee: Are We Having Fun Yet?"},"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’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …<\/p>\n

Be patient and tough; someday this pain will be useful to you.<\/em><\/p><\/blockquote>\n

– Ovid<\/strong><\/p>\n

The waiting is the hardest part.<\/em><\/p><\/blockquote>\n

– Tom Petty<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? While the government continues to insist the US economy is booming, there are many economists who say we’re in a recession. The first sign occurred last year, when US GDP fell for two consecutive quarters. In the past, that was the broadly-accepted official indicator; but like many other things nowadays, those in charge unilaterally changed the textbook definition to suit their narrative. Even more glaring is the Treasury bond yield curve, as every inversion has predicted a recession with 100% accuracy. The current \u201c10\/2\u201d curve has been inverted since early 2022<\/a> and is the worst since 1980. But, hey \u2026 the thought police says “nothing to see here.”<\/p>\n

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\"\"Debit:<\/span><\/strong> Digging into the numbers, I see that all-cash US home sales plunged 18% year-over-year in May 2023. This is regardless of how they were purchased, as sales plunged 26% in the West, 21% in the Midwest , 25% in the Northeast and 17% in the South. Despite those figures, last month the median year-over-year price of previously-owned US homes fell just 3.1% to $396,100. That’s the fourth consecutive month<\/a> of year-over-year declines, and the largest since December 2011. So … is the housing market finally beginning to crack? If it is<\/strong><\/em>, the usual suspects sure seem to be doing their best to hide it.<\/p>\n

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Source: longtermtrends.net<\/p><\/div>\n

Debit:<\/strong><\/span> Of course, homes are still unaffordable. In fact, despite falling prices, the median American household needs to spend more than 40% of their income to afford the median priced home –\u00a0 that’s up from 28% three years ago, which is actually a bit lower than the traditional 30% rule of thumb. It’s also just below the 2006 peak of 42% that signaled the popping of the last big housing bubble<\/a> and follow-on housing-market downturn that ran through 2011. Don’t tell that to realtors though; most of them insist that despite higher interest rates and prices still near all-time highs, it’s the best time ever to buy a home.<\/p>\n

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(h\/t: r\/WallStreetSilver u\/BoatSurfer600)<\/p><\/div>\n

Credit:<\/strong><\/span> By the way, there’s a growing number of people beginning to wonder why, as Wall Street on Parade<\/em> points out, “every trading veteran on Wall Street (isn’t) scratching their head and asking themselves the same question: Why aren’t we hearing about interest rate derivatives blowing up<\/a> and taking down either a US mega bank or its counterparty on the wrong side of the trade?” Well … it’s quite simple, really: accounting fraud. And if you’re wondering why the banks responsible for perpetuating this fraud aren’t being punished, that answer is quite simple too: the government is in on it. But that’s par for the course these days …<\/p>\n

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Debit:<\/strong><\/span> Speaking of accounting, the number of weekly corporate bankruptcy filings has been spiking since the start of the year. Must be the “booming” economy. Heh. And on a related note, federal debt is surging too. In fact, the $32 trillion National Debt<\/a> is $700 billion higher today than it was just three short weeks ago<\/strong><\/em>. No, really. And if you toss in unfunded liabilities – including Medicare, Social Security, and federal employee benefits – that number is almost $200 trillion<\/strong><\/em>. With that in mind, here’s a quick pictorial representation that perfectly illustrates just how big a trillion dollars really<\/strong><\/em> is:<\/p>\n

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Debit:<\/strong><\/span> Needless to say, if you couple more than $200 trillion of debt on – and off<\/strong><\/em> – the books with America’s decision to weaponize the USD against nations that fail to kowtow to US policies, then it’s easy to see why more and more countries are beginning to recognize that the USD-centric debt-based monetary system is no longer in their best interests<\/a>. Not that the powers-that-be really care …<\/p>\n