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 FileThoughtful 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
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