The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
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Welcome to The Flinchum File

I am an Accredited Investment Fiduciary at Bay Capital Advisors, an investment firm headquartered in Virginia Beach, VA. After retiring from Truist Bank, I started this firm to work more closely with a smaller number of clients, and it has been great! Our client load is about 25% of the national average.

Writing is not for the shy or the meek. It exposes a person’s mind and character. I hope you enjoy the view.

One – Two Punch

Last week, the stock market got pounded when Ben Bernanke repeated his plan to begin withdrawing quantitative easing.  This means the Fed would buy fewer government bonds than the $85 billion they are buying each month . . . like, say, $84 billion.  In other words, no big deal!  Still, the market did what it does best . . .  over-react. This week, more attention…

Another Giant Sucking Sound

Wall Street’s infamous Vampire Squid, AKA Goldman Sachs, has issued their latest quarterly assessment.  I take their thoughts seriously, even though I don’t trust anything they say.  Here are some of their current thoughts: 1.  “Global markets have started to worry that the US economy is moving a bit too nicely over the hump of fiscal contraction.”  Paging Congress — are you listening?  Never mind .…

Welcome to the Twilight Zone

Republicans use the word “taxes” too much.Democrats use the word “fairness” too much.Existentialists use the word “absurd” too much. Thursday’s market convulsion was absurd, losing 354 points!  Yes, yes, it was partially due to bad data coming out of China, but it was primarily due to the absurd reaction of U.S. traders (not investors) to Ben Bernanke’s press conference on Wednesday. In the real, rational…

The Tragedy of Traders

It takes thousands of hours studying economic textbooks and decades of experience to be even a fair economic forecaster.  Last week, a noted hedge fund operator, whose expertise was forecasting, said his skills were irrelevant in this market.  His argument was that Ben Bernanke, Chairman of the Federal Reserve System, has suspended the laws of economics.  He said the trading game is now fixed .…

Work Is Not Evil

I have a relative whose only ambition in life was NOT to work.  It was a negative ambition that I never understood. Sadly,it is also a “luxury” that fewer and fewer people have.The Great Recession has many older Americans considering the prospects of staying in the workforce past their normal retirement age. But, working past your normal retirement age is not a new necessity. According…

The Second Time Around

I just re-read one of the best investment books ever written:  Unexpected Returns:  Understanding Secular Stock Market Cycles, written by Ed Easterling in 2005.  When I read it the first time, the most interesting lesson was what he styled the “Y-curve effect.”  He demonstrated pretty clearly that PE multiples decrease whenever there is a change in the rate of inflation.  In other words, investors will…

The Sky Is Falling . . .

Yes, yes, I know the sky really is falling this time! Europe still tries to maintain one currency with seventeen different fiscal policies.  Derivatives still present a clear and present risk to both the market and the economy.  Still, nobody knows what caused the infamous Flash Crash on May 6, 2010 or how to prevent another one.  And, we just learned that traders can buy…

The Ingrate Gatsby

Years ago, I realized that I was working for a crook.  After carefully nailing down the details, I went to the FBI and later testified against him.  Although he is probably out by now, the last I heard, he was serving time in a Federal prison in California. During the infamous Savings & Loan crisis in Texas, the Governor appointed me to the Texas State…

The Joy of Aloneness

When I was a boy, there was a turnip farm about an hour’s walk away.  In those pre-citified days before I learned fancy ways, it was not unusual for me to simply pull a turnip out of the ground, brush the dirt off with my pants and eat it raw.  But, the reason I went to this little farm was that there was a small,…

Watching Glaciers Move

The economy is clearly showing signs of recovery, albeit a weak one.  Investment pundits on Wall Street are mostly enthusiastic about a continued bull run.  Yes, the market over-reacts to any comments about quantitative easing (QE), forgetting that reduced QE means the economy is getting better.  But, of course, that’s what the market always does:  it over-reacts. Against this generally bullish environment, I have feared…