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

Little Courage

The President has signed the annual Federal budget on Tuesday, preventing yet another government shutdown for the next two months.  Keep in mind that over 60% of that budget is non-discretionary, which means Congress is already legally required to spend certain monies, like paying interest on the national debt or entitlements like Social Security, which is truly a “third-rail” of budgetary politics, killing any politician…

Not More Debt . . . Again?

Larry Summers is a former Secretary of the Treasury and a former President of Harvard.  Republicans don’t like him, even though he agrees with President Trump that current interest rates are too high.  Democrats don’t like him, because he is as arrogant as the President. But, he has been discussing an interesting new concept – a monetary black hole.  The idea is that very low…

Now More Debt . . . Again??

Larry Summers is a former Secretary of the Treasury and a former President of Harvard.  Republicans don’t like him, even though he agrees with President Trump that current interest rates are too high.  Democrats don’t like him, because he is as arrogant as the President. But, he has been discussing an interesting new concept – a monetary black hole.  The idea is that very low…

Very Poor Taste

By the time I finished my first course in international economics years ago, I was excited about the ability of globalization to lift our nation and the world to greater wealth and prosperity.  When President Trump referred to us an “globalists,” I thought that was benign and mildly amusing.  Later, he started dividing thoughts between globalists and nationalists.  That bothered me a little, as it…

Please Don’t Do It !!

I was opposed to the impeachment of Bill Clinton, and that didn’t make me a Democrat. I am opposed to the impeachment of Donald Trump, and that doesn’t make me a Republican. Negating an election because somebody lied about a sex act was stupid and nonsensical. Negating an election when the charges are too nuanced to be understood by most voters is equally nonsensical. While…

Please Don’t Do It

I was opposed to the impeachment of Bill Clinton, and that didn’t make me a Democrat. I am opposed to the impeachment of Donald Trump, and that doesn’t make me a Republican. Negating an election because somebody lied about a sex act was stupid and nonsensical. Negating an election when the charges are too nuanced to be understood by most voters is equally nonsensical. While…

What Would _______ Do?

For decades, the Fed controlled the economy primarily with interest rates.  Decrease rates to pump up the economy and employment.  Or, increase rates to tamp down the economy and inflation.  That was sufficient until the global financial crisis of 2008/9.  Fed chief Ben Bernanke introduced the technique of controlling the economy with the Fed’s balance sheet, called quantitative easing/tightening/twisting etc.  It was very successful at…

The Hassle of Caregivers

Financial planners often help clients prepare for retirement by preparing a retirement budget.  In a perfect world, every person would have the original type of long-term care insurance, you know, the type that doesn’t have rapidly rising premiums when you are elderly.  In the real world, we plan for caregivers in the home of the retirees.  That is expensive enough, with prices starting at $15-20…

The Inverted Fed

There has been much recent discussion on the “interest rate inversion,” meaning short-term interest rates are higher than longer-term interest rates.  When you buy a bond, you are lending money to a borrower.  If the borrower has to repay you in ten years, there are many things that can go wrong, making him unable to pay.  If a borrower has to repay you next week,…

An Improving Cost-Benefit Ratio

Most people agree that the benefits should be greater than the costs.  For example, I will pay $10 for something that is worth $11.  The problem is often that the costs are clearly known, while the benefits are only vaguely estimated.  If you’re spending $100 million to build a dam, how do you know if the benefits of cheaper electricity and water control over the…

Anti-Partisan

Most people recognize that physical health, mental health, and emotional health are three quite different types of health.  We learn about physical health in elementary school, learning the importance of exercise and good nutrition.  Later in life, we learn about mental health, learning the importance of stimulation and sleep.  Since the 1995 publication of Emotional Intelligence by Daniel Goodman, we have started learning about emotional health,…

Differential Sweating

It is not unreasonable to think of general recessions as hurricanes.  They can be strong or week.  Some are fast, and some are slow.  “Experts” usually predict their strength and path well in advance. Likewise, you can think of a financial crisis or financial recession as a tornado.  Likewise, few are ever weak.  Few are ever slow, but they are always loud.  “Experts” seldom predict…

Weighing Economic Data

It is no longer a question of whether we’re heading into a recession or not.  We are!  The important question is whether it is a bad recession or merely a slowdown, which is known as a “growth recession.” GDP growth has slowed from 3.1% in the first quarter to 2.0% in the second.  Business spending has dropped 5.5%, the biggest drop in five years.  Small…