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.

The opinions expressed in The Flinchum File are those of the writer, Jim Flinchum, and do not necessarily reflect those of Bay Capital Advisors, LLC

Be It Resolved . . .

When I was a boy or young man and did something stupid, as boys and young men are prone to do, my father would console me with the reminder that “there was only one perfect man, and look what happened to him,” referring to Jesus being crucified.  His point was that being perfect is over-rated and that you can forgive yourself for your mistakes. On…

Economists vs. Americans

By a large margin, most economists and strategists agree that the economy is doing much better.  Yet, according to the latest poll by CNN, 68% of Americans think the economy is doing poorly and 38% think the economy will still be doing poorly in another year. I think this difference in perspective shows how much more important the jobs market is to Americans than to…

2014 Forecast

Sometimes, there is a long wait before something appears in the newspaper.  This is especially true for “feature” articles.  Inside Business is currently preparing such a feature article, compiling 2014 forecasts from various business leaders for publication in early January.  For loyal readers, here is the forecast I submitted on December 19th: Behavioral economists always warn about “recency bias,” which is the natural tendency to predict…

Here Comes Santa Claus?

In a predictable world, we know that the stock market usually weakens in the first half of December as the hedge funds sell out to “lock-in” their investment gains (read:  bonuses) for the year and enjoy the holidays.  Mutual funds do not have that option. During the latter half of December, mutual funds needs to “window-dress” their balance sheets before the year-end statements are prepared.…

Improbable But Appropriate

In Army Basic Training, we were taught that, if we were ever captured by the enemy, we can only release our name, rank, and serial number.  In Officer Candidate School, we were taught to choose death over dishonor.  In Special Forces, we were taught techniques to better withstand torture, such as deep breathing and the mental game of disassociation.  If that failed, remember the pain…

Welcome Home, Prodigal Son!

Sometimes, the stock market is like The Prodigal Son that comes from a good family, then becomes foolish, asinine, and unreasonable for awhile, before finally returning to their House of Reason. Twice, the stock market has suffered from a “taper tantrum,” losing billions of dollars of investor money, because it was afraid the Fed would begin tapering or reducing the amount of its monthly purchases…

No Dog In This Fight

Sometimes, I have trouble getting my nose out of books and looking out the window instead. The classical school of economics makes it clear that any increase in the cost of unskilled labor will cause a decrease in the demand for that type of labor.  Therefore, increasing the minimum wage will cause unemployment to increase.  Of course, the U.S. economy is too complex to be…

Distant Thunder

Because commission-based salesmen are typically not reliable sources of good information, I seldom study any analysis by stockbrokers.  However, Merrill Lynch has just released an interesting analysis, entitled A Transforming World.  Instead of focusing on what the economy and the stock market will do next year, it focuses on three major transformations in the world economy and stock markets over the next few decades. “First,…

Same Song, Different Chorus

Wells Fargo was never known as a powerhouse economics shop, but that changed when the giant bank bought and absorbed Wachovia, whose economics department was highly respected.  Here is a peek at their “combined” forecast for next year: 1.  GDP will continue to increase next year and into the following year as well — yea, no recession.2.  Inflation will remain tame, ending next year at…

Disconcerting Conversations

I have one friend who is a very senior hospital administrator and another friend who has spent his whole career in health insurance.  Both are lifelong Republicans, and both opposed Obamacare.  In separate conversations, they both said that healthcare is now so hopelessly complex that it will certainly fail.  Both said the only way out of this mess will be a single-payer system, like Europe…

Harder To Hate

My mother taught me that hate is a four-letter curse word that should never be used.  Therefore, I cannot say that I hate Google! The reason is that I greatly resent their 24/7 snooping of our private lives, especially the granularity of their snooping.  For example, they know whether you need a blue shirt or a white shirt, because you clicked on a website selling…

Now, A Word From The Pros

The National Association of Business Economists annually surveys members on their outlook for the next year.  Their 2014 economic outlook has just been released, and here are some of the more salient points: 1.  GDP growth will accelerate, with a full year growth of 2.8%.  This is lower than Q3 of this year but indicates their belief in slow growth . . . but still…

Page Three News

A few months ago, the budget talks in Congress were page one news, until the can was kicked down the road once again.  However, we should get some idea of any budget deal late this week.  But, where is the news coverage?  Normally, that is a good sign – a sign that things were going well.  Then again, I always see a half-empty glass as…

A Plain Vanilla Jobs Report

Economists did a good job predicting today’s all-important “Jobs Report.”  They predicted 185-200 thousand jobs were created in the private sector during November, and the report showed . . . drum roll, please . . . 196 thousand.  The futures market immediately spiked but then dropped back to exactly where it was.  Actually, this is also the three month average of jobs being created, which…

Not A Birthright

Following the destruction of World War II the Allies in general and America in  particular were in a position to re-make much of the world, including international trade.  Meeting in Geneva, it was no accident that the official language of such trade and international contract law became English.  As the dollar was then backed by gold, it was natural that the world also gravitated to…

Americans versus Investors

Last month, the ADP estimated 130 thousand jobs were created in our country during October.  Economists expected a improvement in November, with maybe as many as 170 thousand jobs being created.  Instead, ADP says 213 thousand jobs were actually created.  Economists cheered!  Americans cheered! Investors didn’t cheer . . . in fact, Dow futures immediately dropped 25 points.  Why? Investors expect the Fed will start…