As if today’s government shutdown was not enough bad news, watch out for Italy. Sore-loser Silvio Berlusconi, who hasn’t been funny since his famous “boom-boom” comments, looks like he is pulling out of the ruling coalition. He just ordered five cabinet ministers to resign, who promptly did as told. This is just what Italy and … Continue reading Another 1 – 2 Punch
The Flinchum File
Thoughtful Economic Analysis and Existential Opinions
Imagine sitting in a high-powered car in the parking lot of a school when classes are dismissed for the day and putting the car into Drive just before jumping out. Imagine giving Roman Candle fireworks to teenagers living in a shantytown. Imagine being in a large crowd and firing hundreds of rounds from an AK-47 … Continue reading What Shutdown?
“The primary function of sports is to provide advertisers a way to sell beer and unhealthy stuff to losers who go to sports bars and pretend they have friends.” OK, that’s definitely an ouch! But, it does hint at the importance of advertising, which is widely ignored in economic theory. Economists like to talk about … Continue reading Wish I Had Said That . . .
Long ago and far away, I used to teach a junior level course at the University of Texas at Arlington called “Economics of Money and Banking.” During that course, I would teach that the risk/reward principle (higher risk deserves higher reward) applies to the pricing of loans as well. That explains why a successful … Continue reading In Praise of Imperfection
President Reagan never referred to Goldman Sachs as “the evil empire” but some of us think he could have. He was referring to the old Soviet Union, not the giant investment banking firm that is too-big-to-fail, unfortunately. Nonetheless, their research is good, and here are their most recent predictions: 1. GDP growth will be 1.6% … Continue reading Not Evil ?
Missing another bullet, the stock market is relieved that Angela Merkel’s political party did slightly better than expected in the German elections, maintaining a steady hand at the top for another four years. If she had been repudiated by the German voters, the market would be suffering badly today. The only hiccup is that her … Continue reading Less European Uncertainty
I like guns. I own several. I even have my father’s old shotgun. I am very experienced with them. I also have a concealed weapons permit and usually carry one in my car with me. I feel safer with guns than without them. And, I genuinely think other people around me are safer because I have … Continue reading Guns and Lunatics
That was the date the House voted down TARP, a $700 billion nation-saving economic bailout (which was fully repaid with interest). As the House voted, I watched the Dow lose a heart-stopping 777 points. I thought about that yesterday as the House voted on the budget to kill ObamaCare. The futures market indicated the … Continue reading September 29, 2008
Marshall Gore woke up in the cell on death row in Florida earlier this month, knowing it was his last day on Earth, as he would be executed that night. Imagine the absurdity he felt when he learned he would be allowed to live one more day, so that the state Attorney General Pam Bondi … Continue reading Spare The Rod . . . For What??
For the last three months on Wall Street, the most important guessing game has been — when will the Fed reduce quantitative easing (QE) and by how much? The guessing game started immediately after the Fed’s Open Market Committee (FOMC) last quarterly meeting, when Bernanke used a press conference to telegraph their intention to “take … Continue reading A Fat Lady Sings Tomorrow
Names are not important. Thoughts, words, and policies are. The surprise announcement that Larry Summers was withdrawing his name as a candidate for Chairman of the Federal Reserve, replacing Ben Bernanke, leaves the door open now for Janet Yellen to become the first female Fed head. Appointing the head of the Federal Reserve is one … Continue reading Larry Yellen or Janet Summers
Yesterday’s blog noted the list of serious worries has dwindled over the past year. One reader questioned why there was no mention of the tapering problem. Briefly, the Fed is now buying $85 billion worth of Treasury and housing bonds each month. This has been very good for the stock market, obviously. Three months ago, … Continue reading Reader Reactions
Every Wall Street analyst knows the stock market normally falls during the Fall, with Septermber/October being particularly ugly before rising at year-end. This year, however, history may not be a reliable guide to the future. After a lousy August, September has already gotten off to a great start. Why? Have corporate earnings suddenly improved dramatically? … Continue reading Whittling Worries Away
I love my wife! Yes, I know that is a bizarre way to begin a blog. Of course, after the next sentence, every husband knows why I opened with . . . “I love my wife.” When she informed me she was going to Houston to see family, my first thought was serenity, and I … Continue reading Sound of Silence
Have you heard the joke about the existentialist who says to his doctor “I have liver disease.” The doctor asks “how can you know that, since there is no discomfort of any kind with liver disease?” The existentialist replied “I know, I know, those are my exact symptoms!” OK, OK, nobody ever said that existential … Continue reading Over-Thought And Over-Wrought . . . over nothing
Friday’s Jobs Report was widely anticipated. Wall Street was holding its breath. It has been tying itself into knots worrying that the Fed was about to “take the punch bowl away” or start tapering quantitative easing (QE). A good Jobs Report will be the trigger to start this tapering or reducing the amount of QE … Continue reading Certainty Denied !
Interestingly, I have received a surprising amount of feedback that yesterday’s blog, which listed my concerns for the market this Fall, did not include anything about Syria. The reason is that I don’t expect anything to happen, i.e., that the U.S. will not attack Syria. I wish the President had immediately lobbed a couple of … Continue reading Losing Sleep Over Syria ?
Readers know I have been concerned about the market over-reacting this Fall to the rising uncertainty. The primary cause of this uncertainty is the impact of the Fed tapering its quantitative easing (QE3). We will know much more about it on Friday when the monthly “Jobs Report” is issued. If the economy created over 200 … Continue reading Decreasing Uncertainty ?
Thank you, Mr. President, for the early Christmas present! As someone who had come to the reluctant conclusion that Congress was a failed institution that needed to be “repealed and replaced,” it was refreshing to witness the behavior of our Elected Children — after you tossed Syrian question to them. They actually acted like adults, … Continue reading Barack O’Claus
Republicans probably think these numbers are too low. Democrats probably think these numbers are too high. Because these numbers can be spun by politicians on both sides endlessly, they must be “in the ballpark.” So, here are the numbers: The economic nerds at the San Francisco Federal Reserve Bank have estimated that the economic cost … Continue reading Loving To Hate . . . or, just hating to love?