The most frequent question I get is “So what? Jim, your analysis is interesting, but you don’t say what we should do now.” The reason is that I am not permitted to give investment advice to anybody who is not a client, as well any anybody whose investment needs are not clearly understood. That is … Continue reading One More Time . . .
The Flinchum FileThoughtful Economic Analysis and Existential Opinions
When the financial markets didn’t behave the way he expected, President Clinton famously said “You mean to tell me that the success of the economic program and my re-election hinges on the Federal Reserve and a bunch of xxxxing bond traders?” He was complaining about the bond market, often considered wiser and more exacting than … Continue reading The Real Money Boss . . . maybe the only one?
One of my favorite bureaucrats is Sheila Bair, Chairman of the FDIC. She just wrote an excellent editorial in The Washington Post, asking “Will the Next Fiscal Crisis Start in Washington?” That’s a fair question. The fair answer is that the next one might start somewhere else but one is certainly coming out of Washington, … Continue reading Politicians . . . Step Aside . . . Please!
Yesterday morning, the Commerce Department looked in their rear-view mirror and raised their estimate of this year’s third quarter GDP growth rate. We did better than expected. Yesterday afternoon, the Fed looked thru their windshield and lowered their estimate of GDP growth next year, saying the economy is doing worse than they expected previously. Conflicting … Continue reading Two Steps Forward and One Step Backward
The stock market is always trying to climb a Wall of Worry. Today, the Wall was very tall, indeed! The day began with North Korea rattling a very loud saber. It continued with lots of unrest in Ireland about the pending, distasteful austerity package they have to swallow. It finished with conflicting economic data in … Continue reading The Wall of Worry
How will you know if you deserve a better car? When it leaves you standing beside the road in a bad neighborhood! How will you know if you deserve a better form of government? No, it is NOT un-American to ask! No, the question is NOT what should replace it. No, the question is NOT … Continue reading The Value of Rhetorical Questions
Over the weekend, we learned the SEC was launching a major crackdown on insider trading. On Monday, they raided the offices of three hedge funds. Good! After the Global Financial Crisis, the 52% drop in the stock market, and the mysterious Flash Crash in May, it is no wonder that retail investors are distrustful and … Continue reading Attack of the G-Men
The Fed is justifiably worried about deflation,which is more worrisome and tenacious than inflation. That is the reason they launched the latest round of quantitative easing. Many people don’t see the danger. Even the most recent data shows no serious indication of either inflation or deflation. Yet, if you look deeper, you see the U.S. … Continue reading The Hidden Inflation
If you do nothing else today, read the article titled “China’s State Capitalism Sparks a Global Backlash” on the front page of The Wall Street Journal. It is the secret to China’s success and the reason we should be afraid, not merely worried. China has the ability to put the entire force of their nation … Continue reading The Grim Reaper
As I sit here on the shore of the Chesapeake Bay, I know there will be a high tide twice a day. If I watch TV, I will know the exact times of the tide. It is so predictable. As I watch the stock market, I recognize the same tidal changes, as the level of … Continue reading The Unpredictably Predictable Tide
It has never happened before. The credit of the United States was downgraded yesterday. While this is considered inevitable if we continue to run such deficits, it was nonetheless a surprise yesterday. But, the timing was interesting. It is not unusual for lots of acrimony before a G-20 Summit. This one is worse than usual. … Continue reading In Your Eye, Mr. President
Regardless of who the President is, he needs a thick skin. Certainly, President Obama does as he begins the G-20 Summit in Korea. It may even be deserved. For years, we have criticized China for maintaining an artificially cheap currency, which helps their exporters. With QE2 or quantitative easing, we are greatly increasing the supply … Continue reading Don’t Call My Kettle Black!
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