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.

Pity The Fool ?

One of my favorite quotes from the Rocky movies was the line by the champ (Mr. T) that “I pity the fool,” referring to challenger Rocky Stallone.  Sometimes, economists are as arrogant as the champ. This blog has discussed the problem of a strong dollar quite often.  Yesterday’s announcement that GDP growth was only 2.6% in the fourth quarter of last year is proof of the…

When Is Fast Too Fast?

For about ten years, investment strategists have been arguing that, since half of the world’s stock is outside the United States, we should invest about that much in foreign stocks.  In other words, about 50% of your portfolio should be invested internationally.  One way to do this was to buy the stock of large U.S. multinational companies, whose revenue from foreign nations already exceeds 50%…

Not This Year

Last Fall, the CNBC Fed survey of economists and fund managers showed their belief that the Fed would not begin raising interest rates until this June.  That didn’t make sense to me, and I suggested it would not happen until much later in the year.  Today, the latest survey showed their expectation that the Fed would not begin raising interest rates until this September or…

Crybaby Nation

Imagine a Shangri-La where everybody gets free medical car and everybody retires at age 60 unless they have a hazardous job, like hairdressers who must work with dangerous chemicals, you know, or disc jockeys, who are around electrical equipment, you know.  They get to retire at age 55. Imagine a national joke about paying taxes, where he who cheats the most is most respected.  Imagine…

American Hero

Clint Eastwood’s new movie American Sniper is a must-see for every lover of America. It is not about war.It is not about the Iraqi war.It is not even about warriors. It is about one particular warrior in the Iraqi war.It is about one particular American Hero, who deeply loved his country.It is a true story about a genuine “Boy Scout.” It is also about the “warrior code”…

All Eyes On Europe

This morning, the European Central Bank announced it would begin quantitative easing (QE) in March by purchasing 60 billion euros or about $70 billion of “bonds” each month until Fall of next year, if not longer.  This was more than expected, and almost as much as the $85 billion the Fed was buying before it ended QE last Fall.  Dow futures immediately jumped upwards from…

Middle-Class Economics ??

I didn’t watch the State of the Union address last night.  It was past my bedtime, plus I already knew whatever the President said would be dead-on-arrival and could already cite the reasons the Republicans would use to explain why everything was dead-on-arrival. But, apparently, the President coined a new phrase — middle class economics.  I’ve been scouring the internet looking for a definition without…

Agism

A recent editorial in Investment News began with “Despite what one may read in newspaper headlines or see on nightly television news shows, the business of providing financial advice is an honorable one — no less honorable than teaching children, taking care of the sick or keeping criminals off the street.  In fact, a person who becomes a financial adviser isn’t making a career choice:  he…

Timing Is Everything

I write a quarterly column for Inside Business which is supposed to take both a look back as well as a look forward.  The most recent column can be found here: http://insidebiz.com/news/q4-recovery-makes-its-way-main-street  Unfortunately, that column was submitted just before the Swiss National Bank unexpectedly allowed their currency to float.  That announcement may turn out to be the most significant economic event of this year.  It also…

Melancholy About “Melancholia”

We just watched Melancholia, the highly-existential 2011 movie offering by Lars von Trier, who is  seriously-talented as a writer and director but might be sadly-flawed as a person. The movie is a study of two sisters – one who is sensible and responsible and the other who is depressive and socially dysfunctional.  During the first half of the movie, the sensible sister tries to help…

Kaboom!

In the wee hours this morning, European stock markets went crazy.  Unexpectedly, the Swiss National Bank announced it was no longer supporting the cap on the Swiss franc, which immediately jumped almost 20% in value.  This was a huge unexpected jump to occur at one time. Remember that Switzerland maintains its own currency and does not use the euro.  If the Swiss franc (called the…

Squid Slime ?

Here are the latest thoughts from the highly-self-respected Wall Street investment bank, Goldman Sachs: 1.  Global economic recovery will broaden this year – not just the US.2.  GDP growth in the US will be above 3% this year and next year.3.  No inflation on the horizon.4.  “MLPs remain ideally positioned to the energy opportunity.”5.  Japan & Europe may have bottomed out.6.  Strong demand for “junk”…

Making The Sale

Years ago, a seminary student joked with me that the way to spell religion was p-a-r-a-n-o-i-a.  I suggested the correct spelling should be f-e-a-r, as in fear of going to Hell.  No, he explained, just like consumer goods are sold with sex appeal, some religions are sold with fear.  While they may “make the sale” by scaring people, it is paranoia that binds the followers…

Je Suis Charlie

There are hundreds of millions of Christians in the world.  Certainly, in a number that large, there are some crackpots.  Remember the crackpot from Topeka, Kansas, who felt God wanted him to picket the funerals of our soldiers who died in war?  Such extremism is a cancer that can grow and destroy a great religion.  Fortunately, one of the great strengths of Christianity is that…

The Sweet Smell of Black Gold

The heart-stopper du jour for the stock market has been the merciless, unexpected collapse in oil prices.  It was so severe and so sudden that the industry was totally unprepared.  But, maybe it has fallen more than is justified.  Take a look at this graph: The dramatic drop in the price of oil matches that of the Global Financial Crisis, which we are NOT experiencing right…

You Say Tomato And I Say . . .

There is much discussion currently about deflation, especially since Europe has now demonstrated some minimal lower year-over-year consumer prices.  This is not good! Everybody knows inflation means rising prices.  It is something we have experienced in our own lifetimes.  Deflation actually sounds pretty good.  After all, who doesn’t like a lower cost-of-living? Here is the problem:  we know how to stop inflation, by raising interest…

Not Your Parents Old 1-2

No, it is not a left jab to the face, followed by right roundhouse to the ear. Instead, it is two pieces of bad information, both of which raise uncertainty, something which stock markets just hate.  First, over the weekend, Germany called the bluff of Greece by saying the European Union would be just fine if Greece exited, the so-called “Grexit.”  Did Germany mean that?…

Pet Peeve #847

Full Disclosure:  I have been a loyal, enthusiastic fan of the Dallas Cowboys since 1977.  When they lose, I become sad and despondent for days.  They matter to me!  But, I don’t understand why professional sports, including the Cowboys, use superlatives continually.  Superlatives also matter. My dictionary defines “hero” as “a man of distinguished courage or ability, admired for his brave deeds and noble qualities.”…

Quantifying Risk

So, the Dow was up 7.5% in 2014 — is that good? From a historical viewpoint, that is almost average.  What is unusual is that this is the sixth straight year of a bull market, which tells us more about the severity of the Great Recession than it does about the Dow. From a technical viewpoint, analysts wonder if the Dow was still improving as…