{"id":80038,"date":"2023-09-02T01:15:59","date_gmt":"2023-09-02T08:15:59","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=80038"},"modified":"2024-05-28T11:26:21","modified_gmt":"2024-05-28T18:26:21","slug":"black-coffee-2-sept-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id80038-black-coffee-2-sept-2023.html","title":{"rendered":"Black Coffee: They Know That We Know"},"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

We know they’re lying. They know they’re lying. They also know that we know they’re lying – and yet they still lie. In our country, the lie has become not just moral category, but the pillar industry.<\/em><\/p>\n

– Aleksandr Solzhenitsyn<\/span><\/strong><\/p>\n

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

Debit: <\/strong><\/span>Did you see this? According to Warren Buffett’s Berkshire Hathaway second-quarter earnings, the company were net sellers of close to $8 billion<\/a> worth of shares. Hmmm. As Buffett is considered one of the greatest investors of all time – and typically extremely<\/strong><\/em> bullish on the stocks – some financial prognosticators view the move to increase his cash holdings as a dark omen for equities and the markets in general. Stay tuned … October – a month that has historically been very cruel to stock holders – is right around the corner.<\/p>\n

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Debit: <\/strong><\/span>In other news, I see that applications for home purchase mortgages dropped to their lowest level<\/a> since April 1995, thanks to a combination of the highest mortgage rates in more than 20 years and eroding household purchasing power thanks to chronic inflation. Meh. It’s probably nothing; the housing market is strong as nails. Besides, there’s always the lottery \u2026<\/p>\n

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\nCredit: <\/strong><\/span>Maybe those ridiculous housing prices are why the latest data from the Fed shows that American workers’ minimum salary expectations hit an all-time high<\/a> of $78,645 last month. This marks a notable jump from last year’s figures, which hovered around $72,900 and $69,000 in July 2022. The year-over-year increase was most pronounced for respondents older than 45, and men wanted on average $91,048. The question is: Are those expectations due to a booming economy – as the government insists – or higher inflation?<\/p>\n

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Debit: <\/strong><\/span>One person who isn’t<\/strong><\/em> in the “booming economy” camp is, John Stenderup, vice president of sales and marketing for California-based Vektor Logistics. He noted this week that the trucking “market is so incredibly depressed<\/a> right now that we’re getting winter rates in the middle of summer – (although) there are still some lanes that can demand a higher rate.” The lack of demand has resulted in prices falling up to 35% year-over-year before rebounding a bit due to Yellow Trucking going into liquidation. And it’s not just the trucking industry that’s struggling – so are people with college degrees. Well \u2026 at least some<\/strong><\/em> college degrees.<\/p>\n

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Debit: <\/strong><\/span>Then again, those in the inflation camp are pointing out that in 2021 the federal government increased food stamp spending<\/a> by 27%; that’s the biggest increase ever. As a result, Supplemental Nutrition Assistance Program (SNAP) spending hit a record high of $119 billion last year – that’s a six-fold increase over 20 years. Even more remarkable, despite this so-called “booming” economy, the taxpayer bill for food stamps has climbed more than 150%<\/strong><\/em> in the last two years alone – from $4.5 billion per month to $11 billion. Not surprisingly, many economists cite this as a big reason for the huge spike in grocery store prices over the same period.<\/p>\n

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Debit: <\/strong><\/span>Meanwhile, Zillow Home Loans has launched a new program to help people who want to buy homes but are being squeezed out of the market by surging interest rates. The company is offering mortgages with just 1% down<\/a> for eligible homebuyers looking to own property in Arizona, and they will also contribute an additional 2% at closing. The lender plans to expand the program to other markets. If you’d like to know how this movie ends, well \u2026 similar stories have been done before. Anybody remember NINJA home loans? That is: no income, no job, no assets. Yes; I know that’s “NINJNA.” But NINJNA ain’t sexy.<\/p>\n

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Debit: <\/strong><\/span>Of course, nobody should count on the Fed to get America out of the fiscal and monetary predicament in which it’s mired. In fact, in a rare bit of candor, Fed Chair Jerome Powell admitted last week that “we are navigating by the stars<\/a> under cloudy skies.” Right. But that’s par for the course. Oh well, there’s always retirement. Heck, maybe Mr. Powell can even try to follow Alan Greenspan’s footsteps and find a lucrative side hustle.<\/p>\n