The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

One More Time . . .

11/30/2010

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 . . .

Two Steps Forward and One Step Backward

11/24/2010

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 Wall of Worry

11/23/2010

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

Attack of the G-Men

11/23/2010

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 Hidden Inflation

11/19/2010

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

The Grim Reaper

11/16/2010

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

In Your Eye, Mr. President

11/11/2010

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

Don’t Call My Kettle Black!

11/10/2010

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!

The N-11

11/08/2010

Did anybody see the new IMF report raising the estimated GDP growth rate for the 47 countries of Sub-Saharan Africa for the second time this year . . . from 4.5% to 5%? Those traditionally poor nations are growing more than twice as fast as the U.S. Does that bother anybody else? As an economist, … Continue reading The N-11

Enjoy the Ride . . . Again

11/07/2010

After a highly eventful week, the stock market is at a two-year high, about the same level as we were when Lehman was allowed to collapse. Nonetheless, that is some three thousand points on the Dow — below our all-time high in 2007. The market is still down 21% from those heady days. Think back … Continue reading Enjoy the Ride . . . Again

An Economist’s Lament

11/05/2010

The study of economics has always been an enjoyable intellectual pursuit. There are lots of arcane terms and inside jokes that economists enjoy discussing and sharing. But, it seems we have reached a tipping point where economics is becoming polluted by politics, and I’m sad about that. Should I parse my thoughts to support one … Continue reading An Economist’s Lament

Good Jobs Report . . . finally

11/05/2010

The most important monthly economic report each month is the “Jobs Report.” The last few months, the report has shown a sadly weak economy, producing few jobs. Voters took the President to task for that on Tuesday. Today, the Labor Department announced that the private sector created 159 thousand jobs, twice what was expected. This … Continue reading Good Jobs Report . . . finally

Political Pundit George Carlin ?

11/03/2010

I think the late comedian was the first to describe our electoral process as “political masturbation”, a very intense, focused effort to accomplish nothing. The Libertarian view is that elections merely change the Masters, with the slaves remaining the same. It is just a different set of thieves. Maybe, that’s a little cynical. OK, that’s … Continue reading Political Pundit George Carlin ?

Election Day . . . Finally!

11/02/2010

In this world of 24/7 cable news, which spin the news as well as report the news, it is easy to become both confused and depressed. Therefore, I recommend a disinterested foreign perspective to balance the right-wing Fox News and the left-wing MSNBC. Religiously, I read The Economist, a newsweekly magazine from England and recommend … Continue reading Election Day . . . Finally!

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