A longtime investing principle is that only a fool invests his money based on market-timing. The number of unknowables is infinite. A market-timer cannot know what he doesn’t know that will ruin his expectation. That said, why does everybody keep asking if “this” is the bottom? In a word . . . No! I cannot … Continue reading “Bottom Fishing?”
The Flinchum FileThoughtful Economic Analysis and Existential Opinions
As I look out the window from my hotel and see the dreary weather in Dallas this morning, I suspect it looks just as dreary on Wall Street, as well as all-across Europe, regardless of the weather. In Europe, five governments have now fallen as a result of their debt crisis, with Spain being the latest. The … Continue reading Thanksgiving Week
Losing a client is bad enough, but losing a friend hurts far worse. I lost one last month in Dallas. His widow asked that I skip his funeral, in order to help her with all the estate issues later. Early tomorrow, I will leave to help her, returning late Monday. I have been thinking about … Continue reading Bittersweet
Who worries about running off a cliff . . . when a grizzly bear is breathing down your neck? At a meeting yesterday, I was asked why I was not more concerned about America running off a cliff if the SuperCommittee doesn’t produce a deal one week from today and Congress doesn’t approve it by … Continue reading Between the Devil and the Deep Blue Sea
It was three years ago that Bernie Madoff was exposed and sentenced to 150 years in jail. That only took a few months. However, it has taken the Securities and Exchange Commission three YEARS to investigate themselves and discipline eight of its employees for lousy work in auditing Madoff, despite having proof delivered to them … Continue reading Protecting the Investor?
Yesterday, the Dow dropped about 76 points. The futures market suggests it will lose another 70 points this morning, following the pattern of Europe, where Germany and France are both down about 2%. It is easy to think the world is just waiting to hit the SELL button as soon as the market opens. Actually, there are … Continue reading Thank God for the Tea Party and “Occupy Wall Street”
I participated in a Veteran’s Day Parade this weekend and found it a little hollow. As society has tried to overcome its shameful treatment of Vietnam veterans, it has now become almost too effusive. I listened to a lot of pretty words about service and protecting families back home and making the world “safe for … Continue reading Thoughts on Veterans Day
U.S. banks are required to have a certain amount of capital for each investment. European banks are not required to have capital in order to hold certain investments, such as sovereign bonds of European governments. That means a European bank can take in funds from depositors and buy bonds of some European government. They pay … Continue reading “Smart Money” and Interest Rates
On Wednesday, the sky was falling, and the Dow lost 389 points. Europe was killing us. Then, Greece elected an economist as Prime Minister to take the place of the third-generation professional politician. Then, Italy made real progress in passing a budget, when uber-politician Berlusconi will resign. It is widely reported his replacement will also … Continue reading Mr. President, That’s My Chair
Most of my public speaking for the last few years has been on the subject of globalization, which fascinates me. One of the primary thought leaders on the subject is Pulitzer-winning Tom Friedman. Anything written by him is required reading. His latest book, co-written with Michael Mandelbaum, is That Used To Be Us. It is … Continue reading A Good View from 35,000 Feet
I enjoy reading the economic forecast from Wells Fargo, which inherited the highly-respected Economics Group of Wachovia when that bank failed. In short, they expect to see continued slow growth in the U.S. with no recession. However, they point out that Europe is already entering recession. Several months ago, I predicted there was only a 33% … Continue reading The View from Wells Fargo . . . and Europe
Late yesterday, Berlusconi promised to resign. U.S. markets started to rally, with the Dow closing up 101 points. Overnight, the Asian markets also rallied. Then, the European bond markets opened, and interests rate on Italian bonds promptly shot well above 7% for ten-year bonds, a critical level historically. (Short term interest rates rose even more, inverting the … Continue reading Wear Your Neckbrace
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