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.

Is Good Bad ?

There has never been a time when Wall Street was NOT “climbing a wall of worry.”  Today, there is considerable angst, because interest rates are TOO low.  There are lots of interest rates but the benchmark that everybody watches is the rate on U.S. Treasury bonds that have a ten year maturity.  Those rates began the year at 3% and actually touched 2.4% yesterday before…

A Perma-Bull To The End

A perma-bear is someone who always thinks the glass is half-empty and that the stock market is going down.  A perma-bull is someone who always thinks the glass is half-full and that the stock market is going up.  My favorite professor from Wharton, Dr. Jeremy Siegel, is a perma-bull.  (However, his 2013 forecast was THE most accurate forecast last year, not second or third, but…

Losing National Treasures . . . Every Day

It is pretty well-known that one active-duty service member commits suicide almost every day.  It is less well known that 22 veterans commit suicide every day.  It is believed that half kill themselves so their families can receive the insurance money.  Veterans are extremely vulnerable to high-pressure, commission-driven salesmen.  Frankly, they have no financial education and are easily preyed upon! At our convention of the…

A Walking GPS ?

My wife assures me that it is true, i.e., men are overly reluctant to stop the car and ask for directions.  Huh? But, a new study by Genworth points out that women are overly reluctant to ask for financial advice.  61% of men want financial advice, whereas only 34% of women do.  The other big difference is 48% of women say the biggest roadblock to…

Memorializing the VA

Since the press focus this Memorial Day weekend is on the troubles in the Veterans Administration system of healthcare, I thought I would add my observations. I was discharged from the Army in 1970.  The following year, the VA determined I was 20% disabled due to my injuries and started paying me $61 monthly.  While that amount has increased over the decades since then to…

Squid-In-Chief

The CEO of Goldman Sachs once famously said the firm was doing “God’s Work.”  That may or may not be true, but I am confident the highly-respected research department of that firm would never make such a comment. For example, here are some of their more useful comments: 1.  The first quarter was worse than expected, with the economy actually shrinking, due to weather.2.  They…

TSA Absurdity

Flying out of Norfolk last week, the steel shank in my shoes set up the METAL detector.  Instead of checking whether I was carrying a gun, they swabbed my hands for explosive residue.  Flying out of San Francisco yesterday, the same steel shank in the same shoes did NOT set off the metal detector.  However, I forgot to remove a comb from my back pocket,…

Great Idea . . . Lousy Timing

I keep thinking about one particular lecture last week.  The speaker began by saying his parents told him that some things should never be discussed in mixed company, i.e., sex, religion, and politics.  Today, he is adding a fourth subject, i.e., healthcare.  That term is now too politicized. If you say something positive about healthcare, then you are a supporter of Obamacare and therefore an…

A Hint From Heloise

She always asked the rhetorical question of, when you drop a piece of toast, why does it land with jelly-side down, making the floor more difficult to clean up?  Why cannot toast land jelly-side up? The same is true with market data.  Yesterday, the benchmark interest rate on 10-year Treasuries dropped below 2.5%, the lowest in over six months.  Most Americans would find it comforting…

Too Clean or Too Wholesome?

I have been to South America once, Asia three times, and Europe at least twenty times, but the cleanest city I’ve ever seen is Salt Lake City.  It is almost scary-clean.  Even though it has undergone substantial redevelopment since I was here two years ago, the construction sites are even clean, which is hard to comprehend.  There is virtually no litter! It is a city…

A Sage Old Pro

This morning, I enjoyed listening to an older Registered Investment Advisor.  He pointed out that all NAPFA-Registered Financial Advisors get into the business because they want to do good things for our clients.  And, because the demand for objective, experienced financial advice is strong and growing, he pointed out that most of us are doing well by doing good.  But, it is important that we…

Gyrating Traders

Early Wednesday, the futures market indicated an up day for the market.  Then, the Producer Price Index was released, showing a troubling surge in inflation.  In fact, it was the highest reading in 16 months, with food prices leading the surge. To a trader, this implied that the worries about deflation were over, which means the Fed will no longer have to “prime the pump”…

Flying The Friendly (and/or Safe) Skies

One of the most disgusting experiences in my life was one night shortly before graduation from Infantry Officer Candidate School in Fort Benning, Georgia, when we were ordered to crawl across a sewage drying bed — about 100 yards of yuck!  The object was to demonstrate we had the self-discipline to accomplish the mission — no matter how disgusting.  To me, it was simply absurd!…

A Little Mystery

The conventional wisdom is that the stock of small companies, called small caps, increases faster than the stock of large companies, called large caps, during a bull market but falls faster during a bear market.  The obvious underlying assumption is that the stock of both large and small companies always move in the same direction.  Small caps just move more. Did you notice that the…

Business News

A common question is which business news channel is best.  Like all good answers, it depends . . . If you are a short-term trader, instead of an long-term investor, you might like the frenetic pace of CNBC.  (This is channel 25 on the Cox line-up.)  I find they are consistently reliable and good business journalists.  However, if I’m having a busy day and need…

Demographics = Destiny ?

Remembering that a small rat can become a vicious creature when cornered, there were some fascinating factoids about Russia in Thursday’s Wall Street Journal.  Here are a few: Birth Rate:  After falling each year since the collapse of the Soviet Union, it has now stabilized at 20% below the replacement rate.  However, women of Russian ethnicity are not replacing themselves, while Muslim women have an…

You Go Girl !

I watched the new Fed Head, Janet Yellen, testify Wednesday before the joint economic committee of Congress.  She must have done a good job, as she annoyed both Republicans and Democrats. The Republicans of the Ayd Rand/Libertarian wing think the Fed should be abolished (read:  The Creature from Jekyll Island) and kept asking questions they knew would backfire on the Fed, primarily along the lines of…

A Ray of Hope

When Congress was debating or yelling at each other about the Dodd-Frank Bill, which re-regulated large chucks of the financial services industry, one argument against passage was that regulation would chase the derivatives business out of the U.S. and into Europe.  My thought was . . . that’s bad?? The derivatives market is estimated at $700 TRILLION worldwide, of which over $300 TRILLION is held…

Thank You, Mr. Putin

Economics is all about the allocation of scarce resources, loosely described as land, labor, and capital.  If you are trying to defeat an opponent, it takes less labor and capital to let him escape defeated than to continue spending resources to simply pound him.  Giving your opponent a face-saving exit may not be as satisfying, but it is certainly a better allocation of resources. On…

What Goes Down Must Come Up

Yesterday, we learned that the Gross Domestic Product (GDP) for the first quarter of this year was a pathetic 0.1%.  Does that mean the economy is going over the cliff?  No! Take a look at this chart and you will notice how volatile this number is: The primary reason for this is obviously the awful weather we experienced, which should give some stimulus to the…