{"id":80313,"date":"2023-09-23T01:15:43","date_gmt":"2023-09-23T08:15:43","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=80313"},"modified":"2023-09-27T09:33:29","modified_gmt":"2023-09-27T16:33:29","slug":"black-coffee-23-sep-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id80313-black-coffee-23-sep-2023.html","title":{"rendered":"Black Coffee: It Ain’t What It Used to Be"},"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

A million dollars isn’t what it used to be.<\/em><\/p><\/blockquote>\n

– Howard Hughes (1947)<\/strong><\/p>\n

A billion dollars ain’t what it used to be.<\/em><\/p><\/blockquote>\n

– Bunker Hunt (1980)<\/strong><\/p>\n

A trillion dollars ain’t what it used to be.<\/em><\/p><\/blockquote>\n

– Edmund C. Moy (2013)<\/strong><\/p>\n

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

Debit: <\/strong><\/span>Did you see this? A recent survey of Americans with investable assets of at least $1 million found that one-third of them are worried<\/a> that they may outlive their retirement savings because they’re unsure about the future. Ironically, the same survey found that 84% of those same wealthy people say they have a long-term financial plan that factors in both rising and falling economic cycles, compared to 51% of the general population. Huh. If true, at least half of those worried millionaires need a better long-term financial plan. Then again, a million in the bank isn’t that<\/strong><\/em> impressive these days. And speaking of unimpressive …<\/p>\n

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Debit: <\/strong><\/span>Remember when we were promised that those new IRS auditors we’re paying for – (eventually) all 80,000+ of them – wouldn’t go after anybody with incomes below $400,000? Heh. Well \u2026 somebody forgot to tell the IRS. The government announced this month that the IRS is not<\/strong><\/em> going to limit audits<\/a> to taxpayers with incomes over $400,000 after all. That’s right; everybody<\/strong><\/em> is fair game, regardless of income – so pucker up, bend over and grab your cheeks. Let’s hope the suckers who actually fell for that bullshit promise not only get it good and hard, but are also first in line – well … assuming they still have a job:\"\"<\/p>\n

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Debit: <\/strong><\/span>If increased prospects of the taxman knocking on your front door in the coming years doesn’t brighten your day, there’s also this: Cocoa hit a 44-year high<\/a> this week amid concerns about global cocoa production. Stay tuned. It’s very possible that if prices get any higher the federal government may have to cancel Halloween. Oh … and on a related note:\"\"<\/p>\n

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Debit: <\/strong><\/span>Then again, cocoa isn’t the only<\/strong><\/em> product plagued by rising prices, as anybody who doesn’t have a personal shopper – or drives a car – already knows. Prices at the pump are at a record high for this time of year, surpassing prior seasonal highs in 2022, 2012, and 2008. In fact, at least a dozen states<\/a> now have gas prices averaging $4 a gallon or higher, including Colorado, North Dakota, and California. We can attest that local pump prices here in the Golden State are now less than a dime away from regular gasoline crossing the $6 benchmark – and diesel crossing $7. Hmm. I wonder why …<\/p>\n

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Debit: <\/strong><\/span>Of course, rising consumer prices is a big reason why real median household income after taxes fell 8.8%<\/a> to $64,240 over the past year. And during the same period, the poverty rate after taxes increased 59% to 12.4%. In other words: The lower half of the income spectrum in the US is being systematically eviscerated. The good news is, a “Nobel Prize winning economist” insists that inflation has been vanquished – which tells you exactly<\/strong><\/em> what kind of credibility the Nobel Prize has these days.<\/p>\n

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Debit: <\/strong><\/span>Needless to say, falling real income is especially bad news for first-time homebuyers as mortgage rates have exceeded 7% for the sixth straight week<\/a> – and there’s no relief in sight. On Friday, Bankrate noted that the average rate on a 30-year fixed mortgage in the US increased to 7.75% – that’s the highest average 30-year home loan rate since November 2000. Meh. Yes, it makes us wondering how the housing market continues to hold up. Then again, those who are truly<\/strong><\/em> industrious know that housing affordability becomes moot when you have a profitable side hustle like, say, writing a book:<\/p>\n

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Debit: <\/strong><\/span>Meanwhile, the banking system is teetering again too. Remember that three of the four largest bank failures in US history occurred in March. Now, Republic Bank is wobbling too. Last quarter the bank held $6 billion in assets across 35 branches in Pennsylvania and New Jersey. But get this<\/strong><\/em>: More than half of its deposits are uninsured<\/strong><\/em><\/a>, with its 100 largest depositors holding 16% of its assets. Yes, that makes it extremely vulnerable to a bank run. Maybe that’s why Republic Bank’s stock has fallen 96% in the past year and was delisted from NASDAQ last week. But no worries, folks! I hear the Fed is racing to the rescue:<\/p>\n