Historically, gold has been the asset to own during a financial crisis or inflation. Since there is a crisis in Europe, the price of gold should be increasing. The huge increases in money supply should eventually increase the value of gold. Instead, it has been crushed! Why? As the crisis in Europe has mounted, European … Continue reading The Skinny on Shiny Metal
The Flinchum File
Thoughtful Economic Analysis and Existential Opinions
The U.S. stock market is extremely sensitive to the monthly Jobs Report, which will be released tomorrow morning. In addition, the giant payroll company, ADP, always releases their estimate of private sector job growth the day before, which gives the market some expectation about the Jobs Report, along with the usual weekly unemployment claims that … Continue reading Tired of Being Europe’s Tail
One of the most defining characteristics of existentialists is a certain contempt or ridicule for death, considering the disadvantages of death being over-rated and the advantages of death being under-rated. For example, the disadvantage of death is missing life, which is over-rated . . . while the end of suffering is under-rated. That fairly describes … Continue reading A Thank You Note
Last December, the editor of Inside Business called me, asking for the one thing economists fear the most . . . an economic forecast. It was published January 15th of this year, when I predicted “2012 will be an emotional roller-coaster.” Last month, Wall Street was bullish, before turning bearish early this month. When I watched … Continue reading From Pessimism to Fear
Every quarter, the National Association of Business Economics (NABE) conducts a random sample survey of its members. Despite the fact that I’ve never been one of the 50 economists called to participate, I still enjoy reading their quarterly predictions, which were released today. Job growth averaged 254 thousand new jobs each month from December thru … Continue reading An Economic Forecast + $1 = $1
Everybody has had the sad experience of watching doctors, nurses, and ministers make a valiant but futile effort to delay the inevitable death of a loved one. Could we be watching the inevitable death of democracy? Thomas Babington Macaulay was a famous British historian and Secretary of War. Before his death in 1859, he once … Continue reading Advice for the Tea Party
Now, tell me one more time, why is it that Republicans and Democrats cannot work together: http://www.youtube.com/watch?v=IWDJEc92d38&feature=player_embedded http://www.youtube.com/watch?v=IWDJEc92d38&feature=player_embedded You may need to copy & paste this URL, but it is worth it, I promise!
Normally, I get up each day about 4:30AM, to see how the Asian markets are doing and to watch the opening of the European markets, switching between CNBC and Bloomberg TV. But, not today! Oh, I was up at the normal time, but those channels were just “un-watchable.” Today is the Initial Public Offering (IPO) … Continue reading Facebook Fatigue
Late Tuesday afternoon, my anxiety level with the market rose markedly. That was when the Greek president announced that almost $900 billion of bank deposits left the country that DAY. While not always true, a run-on-the-bank is a very strong indicator that big trouble is imminent. Since January of 2010, total bank deposits in Greece … Continue reading The Proper Role of Greece?
Although all the details are not known yet and likely won’t be known for a very long time, I have seen the basic idea of their horrible trade-gone-wild, and it simply reinforces why I’ve been so bearish on financial stocks. As a large commercial bank, they have a large portfolio of loans they have made. … Continue reading JP Morgan Trade 101
After the market closed yesterday, JP Morgan announced a huge trading loss, with estimates ranging from $2 billion to $4.2 billion. While the Wall Street bank can certainly handle the loss, it is important to note the loss occurred in their “synthetic credit portfolio” (Read: derivatives portfolio). The derivatives market is a vast, thinly-regulated set … Continue reading JP Morgan’s Stunning Announcement
Among economists, the University of Chicago has the reputation for being the home of “conservative” economics. Famed Nobel-winning economist Milton Friedman, who was the father of the Monetarist philosophy, worked here for decades. Yesterday, I attended a lecture by a current professor there, Austan Goolsbee, who is a Yale graduate and earned a Ph.D. from … Continue reading A Glum View From a Good Guy
I attended a fascinating lecture late yesterday by Carolyn McClanahan, who is both a physician and a financial planner. She has actually read the entire bill on ObamaCare and has become one of the leading experts on the subject. When she wears her hat as a financial planner, she doesn’t like the individual mandate. However, … Continue reading Throwing Out the Baby . . .
Mainstream economics is similar to mainstream religion. There is near-universal agreement that long-term sustainable economic growth is the goal. Also, there are many “denominations” or schools of thoughts about how to achieve that goal. As discussed here before, there are three mainstream economic denominations in the U.S. today. The oldest denomination is the Austrian school, … Continue reading The Day After the European Elections
I suppose every married person has a list of things or experiences they want to share with their spouse before they die. Unfortunately, one of the things on my wife’s list was a trip to the Rock-&-Roll Hall of Fame in Cleveland, which we toured Sunday. Because I care little and know even less about … Continue reading Spousal Bucket List
This morning, I enjoyed my coffee sitting on our patio, overlooking the dewy 18th green at the famed Firestone Country Club in Akron, Ohio. But, as I watched a Momma-goose and her five little gooslings waddle across the manicured green, I was thinking about the highest marginal tax rate on Federal income taxes. There has … Continue reading Wasting a Perfectly Good Sunrise
Like drinking from a fire hydrant, investors have trouble consuming economic data. There is just so much of it. If economists are good for nothing else, they do produce a flood of data. While there is honest disagreement about which economic report is the most important, it is clear that the investment markets are most … Continue reading The Over-Hyped Monthly Jobs Report
The U.S. Senate held the infamous Army-McCarthy hearings in 1954 for the purpose of finding any communists in the government. During that process, Senator McCarthy trashed the reputation of many good and decent people. Finally, one of the lawyers, Joe Welch, could no longer tolerate the abuse and confronted the Senator with “Have you no … Continue reading Have You No Decency . . . Google?