There is a lot of noise out there! Inflation is running wild. Shortages are everywhere, from cars to baby formula. The sky is falling?? Why aren’t you more worried?? Of course, curbing inflation is critical, but I’m optimistic it will be largely controlled by year-end for several reasons. First, the Fed may have been late starting, but they are now raising interest rates rapidly —…
This is NOT an “I told you so” blog entry! Last week’s crash of crypto values was terrifying, with some losses as much as 90%. There was a real human-dimension to this, with multiple bankruptcies. Let us not be insensitive to their losses. When Bitcoin and other crypto-currencies became newsworthy some years ago, I was not impressed. Frequently, I wrote “tell me one thing –…
Another fuzzy-faced delusional punk shot up a bunch a innocent people in Buffalo this weekend. As is normal, his parents were shocked and heartbroken. You can blame the parents, the kid, his guns, even the spineless, soul-less politicians who accept money from the National Rifle Association (NRA). As a former member of the NRA, I blame the NRA. In its mindless defense of the Second…
Keynesian economists see recessions as a failure of demand. Consumers don’t want to buy or cannot buy the goods that are produced. Deficit spending by the government covers that shortfall in demand, thus avoiding recession. Inflation only happens when demand increases more or faster than supply. This is called fiscal policy and is governed by Congress and the President. Monetarists see inflation as “always and…
Republicans tend to look at the flow of illegal immigrants on our Southern border and see scruffy dope-pushers with no respect for American laws nor American values. Democrats tend to look at the flow of undocumented workers on our Southern border and see wretched refugees fleeing persecution from gangs and corrupt politicians. Economists, however, see one of the “Four Factors of Production” being squandered and…
Have you ever said . . . there is nothing to worry about? Ever?? Worrying is what humans do, especially investors. We worry . . . a lot! Pundits joke that Wall Street is ALWAYS trying to climb a Wall of Worry. Sometimes, the Wall is tall. Sometimes, it is short. There was a time, a mere 25 months ago, when we had no worries…
For many years, the traditional but unofficial definition of a recession has been two consecutive quarters of negative GDP growth. Since the first read on GDP in the first quarter was a negative 1.4%, does that mean a negative number in the second quarter will show us in a recession? No! The fourth quarter of last year was a tremendous 6.5%. The drop from a…
In the classical world of economics, Earth is little more than a glorified auction house. If more people want something, they will bid up the price to get what they want. However, when supply increases more than demand, buyers will demand lower prices. Fewer buyers = less demand = lower prices. After Putin invaded Ukraine, there was an impressive unified boycott of the Russian economy. …
When I agree with a Republican position, I often get complaints from Democratic readers. When I agree with a Democratic position, I often get complaints from Republican readers. The most vociferous complaint was a few years ago, when I wrote that social media was a “clear & present danger” to our democracy. He even said I was too dumb to manage money, even for a…
Imagine a kid with a belly full of jelly beans plus a can of Mountain Dew, who is complaining about a bellyache but cries when given a tablespoon of Pepto-Bismol or other medicine. That’s how I see the current stock market. After riding high thorough a pandemic with a belly full of deficit spending and cheap money, it complains about inflation but cries when given…
If it is true that the best protection from a bad guy with a gun . . . is a good guy with a gun, then shouldn’t we encourage or even require good guys to carry guns? When some pathetic sicko shows up and shoots ten people on a subway platform, why didn’t nine of those people return fire, shooting the sicko? In fact, wouldn’t…
My regular quarterly column for Inside Business can be found here: https://www.pilotonline.com/inside-business/vp-ib-expert-flinchum-0411-20220412-al76rpfrpjgw5f5hykpjpkplv4-story.html
Bitcoin and cryptocurrencies are misnamed. Those names give the impression that they are actual currencies and can therefore be valued the same way as traditional currencies, like the dollar, the euro, the yen, etc. Of course, the ever-present supply & demand for the cryptocurrencies is the final determinant of their value, but it doesn’t reflect balance of trade, balance of accounts, reserve status, trade treaties,…
Last December, I was talking with a young financial advisor wannabe and mentioned that my goal for the new year was to become more conversant about bitcoin and other digital assets. He joked . . . “Dude, you already have grey hair and can never learn that stuff.” First, I thought a dude was a “momma’s boy.” Second, what difference does the color of my…
There is much to learn from the embarrassment of Russia for their poor performance against the much weaker Ukraine. The Russians didn’t understand the “enthusiasm gap” between their conscripts or draftees, compared to the Ukrainians who were fighting for the country and their families. Enthusiasm matters! When discussing immigration, my Democratic friends dismiss my Republican friends as merely being racist. That’s not true! It is…
Dr. Joseph Stiglitz is a Nobel Prize winning economist, who has opened discussion on a number of interesting subjects. One is how to measure the cost of war. There are direct costs, such as the price of bullets and other armaments, plus transportation costs of soldiers & equipment to the war zone, plus the salaries of the soldiers, plus any survivor benefits to families of…
Economists are a cantankerous lot. Most don’t even like each other, but there is one thing they agree on: Presidents — ALL presidents — get too much credit when things are good and too much blame when things are bad. Like aircraft carriers, the economy is huge and changes directions slowly . . . very slowly!
If you lend me $100 and want repayment tomorrow, there is a near certainty you will get repaid. If you lend me $100 and want repayment in 30 years, there is the additional risk that I could die, go crazy, go bankrupt, or disappear and fail to repay you. The point is that the longer the term, the greater the risk, and you should be…
My late mother always told me it was NEVER appropriate to hit a girl. However she also said, it was okay to hit another boy, if . . .”absolutely necessary”! I am amused at the uproar over some male actor slapping another male actor at the annual Oscars award ceremony last night. Apparently, one male actor made a tasteless joke about the other male actor’s…
A few years ago, I saw an advertisement for a DNA analysis for $29.95, which I thought might be fun. You know, spit in a vial & mail it somewhere. It was interesting. Who ever suspected I was 1% African?? Later, I learned the company was sold to the Chinese, who now have my DNA. I know . . . who cares . . .…
Blackrock is the world’s largest money manager, managing well over ten trillion dollars of other people’s money. The longtime CEO is Larry Fink. He is both important and very self-important, but I would not drink beer with him. This week, he made news, when he declared globalization killed by Putin’s war on Ukraine. He is wrong. Globalization has been terminal dead for years. It was…
During that period between my retirement from the bank and my eligibility for Medicare, I looked to the Veterans Administration for my health care. After they verified my eligibility, I was told I was a Group 3 veteran. That’s nice, I thought, but what was a Group 3 veteran? I learned Group 3 vets have extra benefits. However, when I learned that Medal of Honor…
As a longtime member of NABE (National Association of Business Economics), I enjoy reading the periodic surveys of other members. The latest shows: 78% of members think the Russia-Ukraine war will make the supply-chain bottlenecks even worse. A whopping 95% think global GDP will fall, due to the war . . . but not much. To lower the price of gas, 31% think we should…
Would you take one of the world’s worse jobs for a salary of $203,500? If not, you’ll never be Chairman of the Federal Reserve Board! We’re lucky anybody would take the job, especially a person like Jay Powell. Yesterday, he led the Board in raising short-term interest rates by a quarter-point (1/4) or 25 basis points, with the stated expectation of six more similar increases…
There are no less than 200 monthly reports on the economy. Experts bicker about which reports are the most important. In normal times, the “jobs report” and the JOLTs report get the most attention. Both of those reports have been quite positive in recent months. Unemployment at 3.8% is terrific. The JOLTs Report (Jobs Openings and Labor Turnover) is also terrific, with ten million job…
Sometimes, savagery is more effective than economics. I would not disagree with anyone who believed Putin needed to be pistol-whipped, until his brains ooze down his cheeks. He is certifiably evil! However, cutting off his country’s energy exports so abruptly is a poor substitute. I’m concerned about the futures market, which tends to be even more volatile than the stock market. The London Metals Exchange…
A new survey released this week by Gallup shows that a robust 85% of Americans are happy or relatively happy with their lives in this country. At the same time, only 17% are happy with the “direction” of our country. Last Friday, the monthly “jobs report” showed job growth remained surprisingly strong, with 678 thousand new jobs created last month. Only 440 thousand new jobs…
During a crisis, one of the more delicate jobs of financial advisors is begging clients not to jump out of the market. Warren Buffet said the only time to be out of the market is NEVER. Indeed, while stocks are on sale, shouldn’t investors put more money into the market? But they say, this time is different. Bear markets are always different . . .…
There are many types of financial advisors, some certified like CFPs and some more suspect like “financial professionals”. Among the most respected advisors are “trust officers,” as they are removed from the sales process and have expertise in the mysterious world of trusts. For years, I have agreed with that distinction, because the world of trusts is so large and fascinating. Because trusts are so…
When I lived in Texas, I was both amused and gratified that the Texans still revered the loss of the Alamo and the brave men who died there. Someday, the people of Ukraine will remember the men of Snake Island. Believed to have a temple to Achilles, it is less than half a mile square and twenty miles from the Ukraine coast, near the Danube…
That’s a line from the iconic 1964 movie “Goldfinger.” My work of shepherding the assets of others requires me to watch financial networks, like CNBC, Bloomberg, etc. During a crisis, such as the Russian invasion of Ukraine, it is tempting to take advantage of CNN’s superior international coverage, but I don’t recommend that. That just encourages hysteria. Stay focused! At this hour, it looks like…
In 2001, I visited Ron Ziegler in his high-rise condo on Coronado Beach outside of San Diego. Looking out over the Pacific, we talked of many things . . . but NOT what he said on April 17, 1973, when he was the youngest-ever (age 29) Presidential Press Secretary, working for Richard Nixon. Reversing course on the endless questions about Watergate, reporters questioned him closely…
My television viewing is pretty much limited to CNBC or Fox Business. To check general news, I often alternate between the CNN and Fox apps on my phone. Some months ago, there was a short discussion on the Fox app suggesting that the hero of the iconic 1995 movie “Braveheart” was a Republican. If you recall the ending of that great movie, he screamed “Freedom”…