{"id":80872,"date":"2023-11-11T01:15:59","date_gmt":"2023-11-11T09:15:59","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=80872"},"modified":"2023-11-15T07:37:49","modified_gmt":"2023-11-15T15:37:49","slug":"black-coffee-11-nov-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id80872-black-coffee-11-nov-2023.html","title":{"rendered":"Black Coffee: Haves & Have-Nots"},"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 an enjoyable week. Without further ado, let’s get right to this week’s commentary …<\/p>\n

Let us all be happy, and live within our means — even if we have to borrow the money to do it.<\/em><\/p><\/blockquote>\n

— Charles Farrar Browne<\/strong><\/p>\n

If you think nobody cares if you’re alive, try missing a couple of car payments.<\/em><\/p><\/blockquote>\n

— Earl Wilson<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? There is a growing identity-theft trend in the US although the cause may surprise you. It turns out that the number of parents who are stealing their children’s identities<\/a> to access debt is on an upswing and, sadly, that parental theft is destroying their kids’ credit scores in the process. Needless to say, children in this position face a unique dilemma: Report their parents for committing a crime, or be held responsible for their parent’s fraudulent spending. The good news is the economy is as strong as ever. Oh, wait …<\/p>\n

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Debit:<\/strong><\/span> As if young people didn’t have enough trouble, the National Association of Realtors’ national median-price index for deals that closed in September fell for the third month in a row<\/a> and is down 4.7% from its peak last year, which occurred in June 2022. This makes 2023 the first year since the 2008 Housing Bust that the seasonal peak in June was below the peak in the prior year. And it’s not much better in commercial real estate. Okay … actually, CRE is a total disaster:<\/p>\n

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Debit:<\/strong><\/span> On a related note, I see higher mortgage rates are causing homebuyers to back out of deals<\/a> at the highest rate in nearly a year. Roughly 53,000 US home purchase agreements fell through in September – that’s equal to 16.3% of homes that went under contract that month. That’s the highest percentage of canceled contracts since October 2022 when mortgage rates surpassed 7% for the first time in two decades. The share is also up from 15.2% a month earlier and 15.8% a year earlier. You know what all this means – plenty of adult kids living at home will have to endure living with their corny parents for a little while longer:<\/p>\n

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Debit:<\/strong><\/span> Speaking of interest rates, the rapid rise in US yields to 5% portends the federal government’s annual interest-rate bill rising to $1.7 trillion annually<\/a> – that’s equivalent to the entire annual GDP of Australia. Now for the punchline: According to Bloomberg macro strategist Simon White, “Independent monetary policy becomes increasingly difficult when the equivalent of 6% of US GDP is being diverted towards interest payments each year. The Fed has little or no say over any of this – as such, monetary policy will become increasingly overwhelmed in such an environment.” Uh huh. But that won’t stop the Fed from printing the USD to oblivion anyway.<\/p>\n

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Nothing to see here.<\/p><\/div>\n

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Credit:<\/strong><\/span> Of course, most people will pull out their violins to show their sympathy for the government’s high debt-service costs. In fact, NFL linebacker Arik Armstead – who earns $17 million annually – recently shared one of his paychecks<\/a> to complain about the taxes taken out of it. It turns out that for each pay period, Armstead earns $393,055. However, after taxes, that number shrinks to $194,085. For those not counting at home, that’s 49.3% of his paycheck confiscated by the government. In fact, the government thievery has gotten so bad that even gold bugs are suddenly scurrying to hide their valuables …<\/p>\n