The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

A Greater Wrong

03/20/2009

While I am as disgusted as all those pontificating politicians about the AIG bonus issue, there is a greater issue than this additional instance of unfairness, and that is the sanctity of contracts. While contracts can be set aside for a few narrow reasons, this is not one of them. Even worse, over-turning these contracts … Continue reading A Greater Wrong

Our future leaders are impressive

03/16/2009

Last week, I spoke before 750 people for Virginia Beach’s annual “State of the City” address. It was a piece of cake! I also spoke before the 24 brightest high school seniors in Virginia Beach, who are competing for a large scholarship. That was intimidating! These kids are so bright. They asked questions about the … Continue reading Our future leaders are impressive

Jobs Report reflects long year ahead

03/08/2009

A year ago, I predicted unemployment would reach nine percent. On Friday morning, the Labor Department released the monthly “Jobs Report,” showing unemployment had already reached 8.1 percent, the worst in 26 years. If you add in the under-employed, those people who are forced to work part-time or who have given up, 14.8 percent of … Continue reading Jobs Report reflects long year ahead

Economics is not a religion

03/01/2009

Sitting at a traffic light yesterday, listening to Rush Limbaugh’s speech to the Conservative Political Action Committee, I saw pick-up trucks go by, helpful for small cargoes. I saw 18-wheelers go by, helpful for large cargoes. I saw cement trucks, refrigerated trucks, and even a fire engine — all helpful tools for specialized missions. Some … Continue reading Economics is not a religion

Job loss mounts worldwide

02/06/2009

The Jobs Report this morning showed another 598,000 Americans lost their jobs, the most in 35 years. The unemployment rate jumped from 7.2% to 7.6%. Totally heart-breaking! Don’t look for foreclosures to slow down . . . So far in this recession, 3.5 million of us have lost our jobs. But, that pales in comparison … Continue reading Job loss mounts worldwide

G-20 meeting filled with intrigue

11/16/2008

If the journey of a thousand miles begins with a single step, this weekend was probably a good first one. Albeit reluctantly, the U.S. convened a special meeting of the 20 most economically important nations in D.C. this weekend, which was described as the “Platitude Summit.” The nine-page closing press release contained a pledge of … Continue reading G-20 meeting filled with intrigue

Was today the bottom?

11/13/2008

Long time veterans of Wall Street believe it is not safe to say the bottom has been reached until the market touches closing price on the worst day a second time and bounces back up. Today, the market did that and ended with a huge 552 bull run. Does that mean the bottom is here … Continue reading Was today the bottom?

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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