The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

ISM Report Is Telling

11/10/2008

The S&P fell 3.9% last week. One of the primary reasons was the latest ISM Report by the Institute of Supply Management. A score of 50 indicates no growth. A score of 40 indicates a serious recession. This week, it was 38.9, which is the lowest since September 1982. Look at this graph. The rapid … Continue reading ISM Report Is Telling

Leadership shifting to Europe

10/23/2008

While we have been through many recessions in the past, there is one thing very different about this one. It is the first one in a truly globalized world. There are reasonable arguments on both sides as to whether globalization will make the recession better or worse. While it is far too early to have … Continue reading Leadership shifting to Europe

Markets looking tasty again

10/13/2008

It has been a long time since I was a kid in a candy store who wanted everything he sees, but I’m starting to feel that way when I look at the stock market now. There are so many good companies to buy, and they’re 40% off. It may be time to start nibbling again!!

Sept. 30 statements caused havoc

10/10/2008

With stock markets crashing around the world, it is important to understand who is selling, besides the routine panic-seller. Two other things are also pushing the markets down strongly. First, the stock markets are the only source of new liquidity right now, as the credit markets are frozen. If you think you’ll need cash to … Continue reading Sept. 30 statements caused havoc

Credit derivatives gone wild

10/07/2008

Long-time readers know I have railed about the potential problems from credit derivatives, such as credit default swaps. They must have been designed by financial engineers gone wild! Because they are not regulated nor traded on any exchanges, there is far too little information to evaluate the problem. On Sunday, I talked with the Fed’s … Continue reading Credit derivatives gone wild

Sheila Bair is shining

10/07/2008

Someday, the United States will have a female President, and her name may be Sheila Bair. Mentored by retired Senate Majority Leader Bob Dole, she has been masterful as Chairman of the FDIC, winning praise for her handling of IndyMac, the largest bank failure in history, as well as deftly protecting the taxpayers in the … Continue reading Sheila Bair is shining

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