The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Paging Willie Nelson

02/28/2014

We’ve previously discussed the problem of the Labor Force Participation Rate.  Fewer people are working.  Conversely, more people are not working.  Take a look at this graph and ask yourself why?Republicans say this is a normal result from overly-generous worker’s compensation and other entitlement programs.  Democrats allege that half of the decrease is due to … Continue reading Paging Willie Nelson

Sorry, Max!

02/27/2014

I get about $30 thousand annually from Social Security, and I’m grateful to the kids & grand-kids of America for it. We like to think of Social Security as an annuity, because we “paid into it.”  (Indeed, I paid the maximum amount into it for many years.)  But, just try to buy such an annuity … Continue reading Sorry, Max!

The Ugly Side of Mirrors

02/26/2014

The ugly step-sister of economics is politics, unfortunately.  I go to great lengths not to discuss politics, just as my father taught me.  Indeed, I can remember my first etiquette teacher telling me “in polite company, it is less unseemly to speak of bowel movements than political ones.”  A bit graphic, perhaps, but a point … Continue reading The Ugly Side of Mirrors

News From The Marquee

02/25/2014

Focusing just on the well-known speakers or marquee names of yesterday, here are some thoughts: Larry Summers – this former Secretary of Treasury, who has never been known as a “warm & fuzzy” person, gave the most “academic” or boring speech.  He thinks the world has indeed changed, with equilibrium interest rates apparently stuck at zero, … Continue reading News From The Marquee

In Pursuit of CE Hours

02/25/2014

With several certifications to maintain, I am always in search of more Continuing Education (CE) hours and normally attend three different conferences each year. First, there is the conference of the Investment Management Consultants Association (IMCA), which is a large number of aggressive young men dressed in very fitted Brooks Brothers suits.  The subject matter … Continue reading In Pursuit of CE Hours

An Intellectual Feast

02/22/2014

One of the great intellectual feasts I attend each year is the annual Policy Conference of the National Association of Business Economists in Washington, and we leave tomorrow.  Our speakers include Alan Greenspan, Alice Rivlin, Larry Summers, and Jean-Claude Trichet.  I’m always excited by this conference. So, it is with some irony that I’m currently … Continue reading An Intellectual Feast

A Tax By Any Other Name

02/21/2014

All taxes are hated, and I expect no tax is hated more than the “death tax.”  After all, death is certainly something we hate, especially if our loved ones might be taxed on it.  Indeed, it has been a common misconception that the death tax burden could force the sale of the family farm, leaving … Continue reading A Tax By Any Other Name

Embracing Squid

02/20/2014

A few years ago, Rolling Stone magazine described Goldman Sachs as a vampire squid on the face of mankind, sucking the life out of it.  I thought there was so much truth to that statement that it must certainly appear somewhere in the Bible??  As a result, I am intellectually unable to stop using it.  However, … Continue reading Embracing Squid

U-shaped Asset Allocation

02/16/2014

Freshly-minted financial planners invariably are taught that a worker should begin saving for retirement by heavily weighting stocks, not bonds . . . 80% stocks/20% bonds. As they approach middle age, workers should remove some equity risk from their portfolios by reducing their exposure to stocks . . . say, 60%/40%. As they approach retirement, … Continue reading U-shaped Asset Allocation

Historical Un-Cycles ?

02/16/2014

One of the books I read last week was Next Time Will Be Different:  Why Economists Can’t Predict Financial Panics and Crisis written by Brendan Moynihan, who is an executive with Marketfield Asset Management.  Obviously, I HAD to read this book! Economists can predict almost nothing, because they are always looking for a model or a … Continue reading Historical Un-Cycles ?

82 Degrees of Guilt

02/13/2014

It is with mild existential amusement whenever I listen to my Baptist friends compete with my Catholic friends over which faith requires the greatest guilt.  However, this concept of guilt is seldom helpful.  Unless there is an object lesson involved, the mere carrying of guilt is absurd. Nonetheless, my inner hypocrite is feeling guilty this … Continue reading 82 Degrees of Guilt

Where Did We Fail Them?

02/12/2014

Some colleges are now offering an interesting new major called generational studies, which obviously looks at the differences between generations.  Frankly, it strikes me more as an amusement than anything of serious study. The generation before me and the one after me have different tastes in music and style, which is fine.  They also have … Continue reading Where Did We Fail Them?

Thru The Looking Glass

02/11/2014

Warren Buffett has said the second most important man in his life, after his father, was Benjamin Graham, who is also known as the father of securities analysis and even wrote the definitive first work on the subject, appropriately titled Security Analysis.  He believed in the exhaustive analysis of financial statements, including detailed study of … Continue reading Thru The Looking Glass

Opening The Cover

02/08/2014

For once, Wall Street did not make the mistake of judging a book by its cover, when the Jobs Report was released Friday.  Expecting that approximately 170-180 thousand jobs were created in January, the stock market promptly dropped when the Bureau of Labor Statistics announced only 113 thousand jobs had been created.  This follows the … Continue reading Opening The Cover

The Problem With Economics

02/07/2014

I’ve been in Tarpon Springs, Florida, this week, which has a very strong Greek population.  Several stores bragged about being part of a 1953 movie called Beneath the 12 Mile Reef, which I saw as a boy.  What I remember about the movie was the remarkable underwater photography.  (Indeed, it led to a 30-year love … Continue reading The Problem With Economics

Monthly Spring-Loaded Drama

02/05/2014

Easily, the most watched economic report each month is the “jobs report” issued by the Bureau of Labor Statistics on the first Friday of each month, which would be this Friday.  It can actually move markets. Last month, the report showed only 74 thousand jobs had been created in December, even though 200 thousand jobs … Continue reading Monthly Spring-Loaded Drama

The Old One-Two Punch

02/04/2014

The stock market certainly took a drubbing yesterday.  Of course, as an investor who embraces such corrections as good for the long-term health of the market, I’m not losing any sleep at all. But, I have been thinking about the depth of this correction.  Technically, it is not a correction until the market has fallen … Continue reading The Old One-Two Punch

China Rising . . . more slowly

02/03/2014

One of the reasons the stock market has been lackluster so far this year is fear of a slowdown in China, having a ripple effect on other emerging markets.  Their PMI (Purchase Managers Index) has been signaling a mild slowdown.  The world is afraid of a big slowdown.  I don’t think that will happen.  Take … Continue reading China Rising . . . more slowly

The January Effect ?

02/01/2014

The old Wall Street adage is that “as January goes, so goes the year.”  In other words, 2014 will be a losing year because January was a losing month.  Let’s hope that was not true, as the S&P 500 lost 3% this January, which was the first January loss since 2009 and the largest decrease … Continue reading The January Effect ?

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