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

The Joy of Labor

Congress created the annual labor day holiday in 1894 to honor the nobility of work.  It was also meant to remind the indolent rich of a nobility they will never have. An important part of my financial planning practice is retirement planning — that is, developing a plan to retain your dignity and nobility after working many years. The most common mistake I see is…

What, me worry??

I like steaks – big, medium-rare, slabs of beef, along with a bottle of delicate Merlot.  But, I don’t like climate change.  Most everyone admits the climate is changing but argue whether mankind is responsible for that change.  My thought is that mankind is partially responsible for some portion of climate change, and I’m willing to reduce my carbon dioxide and methane footprints.  My wife…

Thoughts on Recessions

Sometimes, a recession can be a self-fulfilling prophecy.  If everyone believes a recession is imminent and stops spending, a recession becomes certain.  Of course, public opinion can get ahead of economic data, and that may be happening now.  The mass media blankets consumers with worry, which helps the media and annuity salesmen.  (I cannot call it “fake news” but can call it “un-news” as it…

Semi-Rational

One so-called market indicator of a recession in six to twelve months, is called interest rate inversions, and it means nothing.  The economic data does not indicate a high-probability of recession, although it does suggest a minor slowdown, which is called a “growth-recession.”  A regular recession produces a decrease in GDP.  In a growth-recession, GDP continues to increase albeit at a slower rate.  A growth-recession…

The Designated Fall-guy

When the Fed raised interest rates last December, the weight of economic data justified it, although I wrote then that the increased quantitative tightening (QT) was unnecessary.  Hindsight is a wonderful thing!  While I was right about QT, raising the interest rate was clearly a mistake.  Last month, the Fed admitted their error and reversed course.  After all, they are human.  Unfortunately, that error legitimized…

Unintended Consequence

Traditionally, American politicians jump on a soap box, rip their shirt off, and pound their chest about a “strong dollar.”  It is a “flag, motherhood, and apple pie” kind of thing.  Every President has wanted a strong dollar, until President Trump.  That is one reason he has been so critical of the Fed.  He has a good point, as the dollar is up 11% over…

Return of the Honey Badger

The American Institute of Economic Research has never been confused with the Institute of Comedy Research.  However, their current issue contains an amusing article by its Editorial Director Jeffrey Tucker.  He states two “gangs” are ruining the world, by ignoring “real” economics.  The Gang of the Right says the road to redemption is lined with tax cuts, while the Gang of the Left says the…

Hiding In Plain Sight

During my education years, I learned to use the “scientific method” in reasoning.  During my marriage years, I developed a grudging respect for “feminine intuition.” On a recent car trip, we were passing thru some no-name place and pulled off the Interstate for gas.  When I got back into the car, my wife asked “Did you see her?”  Like all husbands, I responded with “Huh?” …

One-Handed Clap

I applaud President Trump for — finally — dealing with the trading abuses of China.  However, as I’ve written many times, I wish we did not negotiate three different trade problems at one time.  Contrary to popular belief, NAFTA II is still not complete, as Mr. Trump has not negotiated with the House to pass the bill.  The nascent European negotiation has focused on cars…

Still Dismal ??

The nation of Argentina has been circling the drain since 1946, when Juan Peron became president.  Since then, I’ve lost track of how many crisis the nation has endured, such as depressions, devaluations, and defaults.  Their stock market dropped 38% on Monday, which is not surprising since interest rates have jumped to 74.8% from 63.7%, and their currency has dropped 30%.  Their budget deficit each…

Crazy Talk

How often have you heard someone say “I can’t wait until I turn 65 and retire.”  That’s crazy talk! First, age 65 as a retirement age was set long before we enjoyed greater life expectancy. Second, with unemployment at 3.6%, the sun is shining, and it’s time to bank more money. Third, you can no longer receive Social Security at age 65.  It is 66…

Quick Manufacturing Update

President Trump made improvement in manufacturing a campaign priority in 2016.  For two years, that sector did improve but has started to falter.  It would easy to say this is entirely due to the Trump’s trade war, but that doesn’t tell a fair story.  Worldwide, manufacturing is slipping, for reasons unrelated to the trade war, and that worldwide slippage is weighing on our U.S. manufacturing…

Agriculture Update

Farmers have long been respected as tough and scrappy, working hard and facing constant hardship — true American heroes.  Today, farming is just another industry, albeit an important one.  I just read an analysis of the agricultural industry that is too dense to summarize.  However, here are some of the factoids I found interesting: The industry is not hurting as much from the tariffs as…

False Alarm

If you loan me money and want repayment in one year, there are few things that can go wrong over that year, which would make me unable to pay.  If you loan it to me for thirty years, there are many more things that can go wrong, making me unable to pay, especially inflation over such a long period.  As the time to repayment increases,…

A Soft Number

Sociologists have marveled about the increasing divorce rate for the over-60 age group.  One consequence of our increased life span is that we’re out-living our marriages. As a financial planner, people come to me for hard numbers and are disappointed when I remind them there is more to retirement planning than finding “the magic number.”  Men in particular are prone to think that the hard…

Walk and Chew Gum

Not too many years ago, I listened to a native of Fort Worth, Texas, discussing food with a person from Liverpool, England.  It was a good-natured discussion of who had the best food.  Actually, it was hilarious, because they couldn’t understand each other.  They were both speaking English, that is the English they are used to, and they still could not understand each other.  Their…

Dancing Monkeys

I couldn’t bear watching more than 15 minutes of the Democratic debates.  It was painful.  While I’m sure they are all very nice people, this process morphs them into dancing monkeys, answering questions designed to entrap and defending proposals that will never be heard again.  It is little different than the equally stupid process used by the 16 candidates for the Republican nomination in 2016. …

World’s Fed

Yesterday, the Federal Reserve System of the United States of America did two things.  First, they decreased interest rates by a quarter point (25 bps).  The stock market however wanted a half point (50 bps), and the Dow promptly dropped 333 points.  The market also wanted the Fed to promise that this was only the first decrease in a series but were disappointed by that…