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.

Economic Oceanography

As I look out my window, I see the beautiful Chesapeake Bay, where it enters the Atlantic Ocean.  Even though it normally looks placid and peaceful, I know there are many currents I cannot see.   Millions of gallons of water flow by every day, slipping beneath the surface of the Atlantic Ocean as the water drops into the Norfolk Canyon, falling to greater depths.  I…

Buying Happiness

A recent study found that people experienced greater happiness as their income rose, which is not  surprising.  But, it also found that rate of growth in happiness slows down when income reaches about $75,000 annually.  More money increases happiness less and less. At that point, spending has a greater impact on happiness than income.  But, the type of spending must fit the personality type.  Some…

Loved To Death

In 1919, Congress passed the 18th Amendment to the Constitution, beginning the Era of Prohibition.  None of the earlier 17 amendments were ever as unpopular with the American people as that one.  Fourteen years later, that amendment was repealed.  Yes, an amendment can be repealed. Former Supreme Court Justice John Paul Stevens has now opined that the Second Amendment should also be repealed, especially since…

Reverse Income Averaging

Many novice investors think investing is easy.  All you have to do is stay invested in stocks when the market is rising, but move to cash when the market is falling.  Simple, right?  The stock market is predictable, right? Numerous studies have found that “market timing” should be left to the hedge fund techies, not the average retail investor.  Those studies have concluded the average…

Good Wars ?

Most people fear trade wars, because they know a trade war can easily become a real-killing-people kind of war.  Most economists fear trade wars, because it destroys the principle of comparative advantage, reducing the standard of living on all sides.  Fortunately, on March 1st of this year, the President assured us that “trade wars are good, and easy to win.”  Let us pray . .…

Backsliding

For years, I have worried about the impact of too much news-watching.  It can drain a person emotionally and suck them into a “group-think.”  It can also make a person very boring.  So, I have practiced a “news-celibacy” day — voluntarily not watching any news for 24 hours.  In my case, it was Saturday. Then, I got interested in Michael Smerconish, who is a lifelong…

Selling My Vote ?

Imagine . . . a loved one has gone missing, when you hear a rumor they may still be alive.  Imagine that surge of hope and gratitude that floods your heart.  I’m feeling that way!  There is a rumor that Americans are suddenly indignant about their loss of privacy.  Is that too good to be true? Personal data Goliath AKA Facebook just disclosed (involuntarily) that…

Stockbrokers Win, Americans Lose

Historically, stockbrokers have been mere salesmen, pushing high commission or hidden commission products onto their unsuspecting clients.  Out of that swamp, Registered Investment Advisors emerged.  They embraced the Fiduciary Standard, which requires no hidden fees and full disclosure of any conflicts of interest.  Stockbrokers were held to a mere “suitability standard” which is virtually no standard at all. Congress instructed the Securities and Exchange Commission…

Ten Year Facelift ?

It is hard to believe it has been ten years since the stock market began crashing into the worst recession since the Great Depression.  The key event was the collapse of Bear Stearns, a well-respected investment house.  In the aftermath, amidst cries of “Never Again,” a well-intentioned Congress produced the Dodd-Frank legislation. Like any complex legislation, it had bugs to work out.  Like any complex…

Bravo, Mr. President

Yesterday, the President announced the appointment of his old friend, Larry Kudlow, as his new chief economic advisor.  I applaud this appointment! Larry is not a traditional economist, lacking any graduate degrees in the subject.  But, he has been a serious student, especially of Supply-side economics and even worked for Arthur Laffer, the father of Supply-side economics.  Consequently, I doubt he has ever seen a…

Smokescreen!

In 2011, Putin was running for “re-election” in Russia, when the American Secretary of State Hillary Clinton sparked mass demonstrations of Russians by her rhetoric against the phony election.  Putin was furious with Hillary for her interference in Russian elections. In 2016, he returned the favor by interfering with American elections — employing technology as never before.  While he undoubtedly favored Trump over Clinton, he…

Shifting Gears

The stock market has moods.  Sometime, it is in a bad mood and frets excessively about everything, especially political antics.  Sometimes, it is in a good mood and ignores political antics.  I think the market is in a good mood.  It dropped temporarily last week when Gary Cohn resigned but barely moved today when Rex Tillerson was fired.  It was buoyant this morning when the…

Same News, Different Reactions

The February “Jobs Report” showed the the U.S. economy produced more jobs than expected, and the stock market tanked.  Yesterday, the March report again showed the U.S. economy produced more jobs than expected, and the stock market soared.  Why the different reactions to the same report? The February report showed that average hourly earnings were up 2.9% over the same month last year.  This suggested…

Framing

For honest intellectual inquiry or for mere debate, it is vital that discussion be framed correctly.  I recently wrote about the problem of thinking about gun violence with a rifle approach instead of a shotgun approach.  In other words, there is no one action or “silver bullet” that will solve such a difficult problem like gun violence.  Just because one suggestion will not solve all…

Ready, Fire, Aim!

President Trump has been understandably concerned about our international trade deficit, which rose from $53.9 billion in December to $56.6 billion in January – the highest in almost ten years.  Indeed, it has been getting worse since Trump’s election. But, it is easy to attach too much significance to this.  The U.S. both imports and exports different types of oil.  In January, our imports rose…

Sorry, Mom !

Teddy Roosevelt was the 29th President, serving from 1901 to 1909.  A Republican, he is widely regarded as one of the five best presidents in our history.  He was a war hero, as leader of the “Rough Riders” during the Spanish-American war in 1898,  He began construction of the Panama Canal.  He was a nature-lover and a conservative conservationist.  He was the first real “trust-buster”…

The Joy of Inflation

Remember inflation during the 1970’s?  It was a scary time, with prices rising so much faster than income.  The Fed had to intentionally throw us into a nasty recession in 1980, before taming inflation with record high interest rates.  If you can remember that, your hair is now gray.  Yet, inflation teaches a lesson to be remembered.  Inflation can be crushed. There are many ways…

Bone-Headed

President Trump’s regulatory policy is that two regulations must be scraped anytime a Federal agency wants to issue one new regulation, and that is a great policy.  The benefits will slowly seep into the economy for a long time.  I applaud him! However, he announced his policy yesterday on tariffs, particularly on imported steel and aluminum.  The stock of steel companies rose $2.2 billion, while…