When I was a boy or young man and did something stupid, as boys and young men are prone to do, my father would console me with the reminder that “there was only one perfect man, and look what happened to him,” referring to Jesus being crucified. His point was that being perfect is over-rated … Continue reading Be It Resolved . . .
The Flinchum File
Thoughtful Economic Analysis and Existential Opinions
By a large margin, most economists and strategists agree that the economy is doing much better. Yet, according to the latest poll by CNN, 68% of Americans think the economy is doing poorly and 38% think the economy will still be doing poorly in another year. I think this difference in perspective shows how much … Continue reading Economists vs. Americans
Sometimes, there is a long wait before something appears in the newspaper. This is especially true for “feature” articles. Inside Business is currently preparing such a feature article, compiling 2014 forecasts from various business leaders for publication in early January. For loyal readers, here is the forecast I submitted on December 19th: Behavioral economists always warn … Continue reading 2014 Forecast
Goldman Sachs has delivered their “Ten For 2014, ” and here they are: 1. GDP growth will improve as the fiscal drag from reduced government spending falls from 1.5% to only 0.5%, which is a full point of additional GDP growth. It sounds small but is a big deal! 2. Unemployment will drop to 6.5% … Continue reading Ten Predictions From The Vampire Squid
Most religions and cultures enjoy some early winter celebration, in preparation for the long, dreary winter weather. So, Merry Christmas and Happy Hanukkah and Blessed Kwanzaa and Warm Winterfest to each and everyone of you! Spring will be here soon . . . ??
In a predictable world, we know that the stock market usually weakens in the first half of December as the hedge funds sell out to “lock-in” their investment gains (read: bonuses) for the year and enjoy the holidays. Mutual funds do not have that option. During the latter half of December, mutual funds needs to … Continue reading Here Comes Santa Claus?
In Army Basic Training, we were taught that, if we were ever captured by the enemy, we can only release our name, rank, and serial number. In Officer Candidate School, we were taught to choose death over dishonor. In Special Forces, we were taught techniques to better withstand torture, such as deep breathing and the … Continue reading Improbable But Appropriate
Sometimes, the stock market is like The Prodigal Son that comes from a good family, then becomes foolish, asinine, and unreasonable for awhile, before finally returning to their House of Reason. Twice, the stock market has suffered from a “taper tantrum,” losing billions of dollars of investor money, because it was afraid the Fed would … Continue reading Welcome Home, Prodigal Son!
Sometimes, I have trouble getting my nose out of books and looking out the window instead. The classical school of economics makes it clear that any increase in the cost of unskilled labor will cause a decrease in the demand for that type of labor. Therefore, increasing the minimum wage will cause unemployment to increase. … Continue reading No Dog In This Fight
Because commission-based salesmen are typically not reliable sources of good information, I seldom study any analysis by stockbrokers. However, Merrill Lynch has just released an interesting analysis, entitled A Transforming World. Instead of focusing on what the economy and the stock market will do next year, it focuses on three major transformations in the world … Continue reading Distant Thunder
Wells Fargo was never known as a powerhouse economics shop, but that changed when the giant bank bought and absorbed Wachovia, whose economics department was highly respected. Here is a peek at their “combined” forecast for next year: 1. GDP will continue to increase next year and into the following year as well — yea, … Continue reading Same Song, Different Chorus
I have one friend who is a very senior hospital administrator and another friend who has spent his whole career in health insurance. Both are lifelong Republicans, and both opposed Obamacare. In separate conversations, they both said that healthcare is now so hopelessly complex that it will certainly fail. Both said the only way out … Continue reading Disconcerting Conversations
My mother taught me that hate is a four-letter curse word that should never be used. Therefore, I cannot say that I hate Google! The reason is that I greatly resent their 24/7 snooping of our private lives, especially the granularity of their snooping. For example, they know whether you need a blue shirt or … Continue reading Harder To Hate
The National Association of Business Economists annually surveys members on their outlook for the next year. Their 2014 economic outlook has just been released, and here are some of the more salient points: 1. GDP growth will accelerate, with a full year growth of 2.8%. This is lower than Q3 of this year but indicates … Continue reading Now, A Word From The Pros
A few months ago, the budget talks in Congress were page one news, until the can was kicked down the road once again. However, we should get some idea of any budget deal late this week. But, where is the news coverage? Normally, that is a good sign – a sign that things were going … Continue reading Page Three News
Economists did a good job predicting today’s all-important “Jobs Report.” They predicted 185-200 thousand jobs were created in the private sector during November, and the report showed . . . drum roll, please . . . 196 thousand. The futures market immediately spiked but then dropped back to exactly where it was. Actually, this is … Continue reading A Plain Vanilla Jobs Report
Following the destruction of World War II the Allies in general and America in particular were in a position to re-make much of the world, including international trade. Meeting in Geneva, it was no accident that the official language of such trade and international contract law became English. As the dollar was then backed by … Continue reading Not A Birthright
Last month, the ADP estimated 130 thousand jobs were created in our country during October. Economists expected a improvement in November, with maybe as many as 170 thousand jobs being created. Instead, ADP says 213 thousand jobs were actually created. Economists cheered! Americans cheered! Investors didn’t cheer . . . in fact, Dow futures immediately … Continue reading Americans versus Investors