The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Old Story


I was a thirteen-year-old paperboy, riding my heavy-duty bicycle with a huge basket on my front handlebars, where I carried the newspapers.  One cool morning, I had delivered all the papers and was returning home, when an pickup truck slowly passed me.  The back of the truck was full of walnuts and four young blacks, … Continue reading Old Story

A Crack In The Dam ?


Normal or “retail” investors are not permitted to invest in some of the most profitable/risky opportunities.  Those opportunities are normally referred to as private placements and were limited to investors with a net worth (excluding home value) of $1 million or annual income above $200 thousand ($300K for couples).  These investors are called Accredited Investors.  … Continue reading A Crack In The Dam ?

Gold Advice


Goldman Sachs has been a legendary investment firm since 1869. There is no firm on Wall Street that I respect more and trust less. The quality of their research definitely deserves respect! Last week, they announced that market conditions were too similar to 2007 and recommended investors rotate out of stocks.  In other words, dump … Continue reading Gold Advice

Penalizing Charity


The current economy is doing great, and the stock market keeps setting new record highs.  So, why are charitable contribution by individuals down by 3.8%? The Trump Tax Cut doubled the standard deduction to $24,400 for married couples.  Unless regular itemized deductions plus charitable deductions exceed that amount, a taxpayer is better off taking the … Continue reading Penalizing Charity

Advertising Death


How does an economist entertain himself, when his wife is travelling?  They study weird stuff, of course. I noticed the Obituary section of our local newspaper was larger than normal and deserved a little analysis.  There were 44 deaths to report.  Of those, only 31 reported their age or year of birth.  Their average age … Continue reading Advertising Death

Fake Argument


The President has been arguing that China needs a trade deal more than the U.S. needs a deal.  He correctly pointed that that China’s external debt has increased dramatically from $1.3 trillion to $2.0 trillion in only three years.  That is not a “fake fact” but can be misinterpreted.  However, because most financial crises begin … Continue reading Fake Argument

Dear Santa,


All I want for Christmas . . . is an end to all this impeachment coverage on the news.  Of course, it is important, but it is not the only important news.  Whatever happened to the Kurds?  Why did the French president call NATO “brain-dead”?  Why has the Russian economy NOT collapsed?  Is there life … Continue reading Dear Santa,

109 Straight Months


Like a hot shower at the end of a long day, Friday’s monthly report on the labor market was simply refreshing.  Following the slow drain of a lingering trade war, declining GDP growth, a badly weakened manufacturing sector, a major strike at GM, falling consumer confidence, and slowing job creation, our country still produced 128 … Continue reading 109 Straight Months

Negative Partisanship


I love reading anything by George Will.  He neither thinks nor writes in cliches.  He has long been a serious conservative thinker and was a frequent contributor on Fox News, back when it was a reliably conservative news network. His most recent column is “What if hate is stronger than party affiliation?”  He discusses the … Continue reading Negative Partisanship

2 + 2 = 3


Something doesn’t add up?  Generally speaking, when people put more money into the stock market, it goes up.  When people take money out of the stock market, it goes down.  According to Bank of America, investors are now the most bearish they’ve been since 2008.  In fact, they’re withdrawn $322 billion from the market in … Continue reading 2 + 2 = 3

A Real Hero


Because I have such great respect for General Jim Mattis, a good friend bought me a copy of Mattis’ latest book, Call Sign Chaos.  He was the first Secretary of Defense under President Trump, lasting almost two years before resigning in protest.  The title of this book comes from the humorous acronym given to him … Continue reading A Real Hero

Boorish Behavior


I found myself having dinner with five other men one night last week.  Five of us had gray or white hair.  One had long, oily blonde hair that curled over his collar.  His expensive but too-large clothes reeked of cigarette smoke.  He offered up a bottle of Napa red by VGS that was indeed very … Continue reading Boorish Behavior

Stock Buybacks


What should corporations do with their profit?  They can use it to increase cash on their balance sheet, which increases the book value per share.  Or, they can use the cash to reduce debt, which also increases the book value of their stock.  Or, they can use it to pay bonuses to executives and employees.  … Continue reading Stock Buybacks

More Precise Questions


The most common question asked of economists is . . . “are we going into a recession?”  The answer is yes, of course — because there is always a recession somewhere in our future.  The question they’re really asking is . . . “when will we feel the pain of a recession.” Economists have very technical … Continue reading More Precise Questions

Bad Choice


I have often agreed with the actions of President Trump. Often with joy, if never delirious with joy. Then, he betrayed the Kurds. My stomach is sick, and my heart hurts. Imagine the Special Forces betraying the Monteyards of Vietnam. I don’t know whether to vomit or to cry . . .

Hospice Misconceptions


I served on the regional board for the National Association of Personal Financial Advisors (NAPFA) with Holly Donaldson and have great respect for her.  Below, I have copied her excellent latest article in LinkedIn on a very difficult subject. The Hospice Decision: Sooner, or Later? 4 Misconceptions Published on October 14, 2019 Holly Donaldson, CFP®, … Continue reading Hospice Misconceptions

I Was Wrong


It was March 21, 2017 that I predicted Donald Trump would not serve a full 4-year term.  I didn’t expect him to leave by impeachment, but by resignation, like Richard Nixon.  That opinion reflected the thinness of his skin, but I was wrong.  Constant attack normally encourages resignation.  However, the chaos around him only seems … Continue reading I Was Wrong

Inside Baseball


I like Exchange-Traded-Funds (ETFs).  (In fact, I’ve attended the “Inside ETFs” conference in Florida many times.)  Unlike mutual funds, which only trade at closing, you can trade ETFs anytime the market is open.  There are no tax bombs, like in some mutual funds.  With ETFs, you can make more targeted bets.  For example, I believe … Continue reading Inside Baseball

Situational Morality


Long before the British and the French designed the national borders in the Middle East following World War I, it was well known that the Kurds of Kurdistan were tough and tenacious fighters.  Not wanting to leave behind a strong, united Kurdistan, it is decided that the nation would be divided between Iraq, Syria, and … Continue reading Situational Morality



There is a convenient myth that rich people are not happy.  It is convenient to the non-rich, as it justifies being non-rich.  After all, who wants to be unhappy? During my decades of exposure to both groups, I have found no difference in the happiness level of either group.  An exception might be those rich … Continue reading Pursy

Thinking About Recessions


Most people think of an economic recession as a big, bad Boogie-Man.  Economists have conjured up precise definitions of a recession, but the only one that matters to the stock market is the conventional “two consecutive quarters of negative GDP growth.”  Right now, we have precisely zero quarters of a shrinking GDP, and this quarter … Continue reading Thinking About Recessions

Skinning A Cat


Most online brokers, like Schwab, TD Ameritrade, and E-Trade, just reduced their trading commissions to zero, down from the $3-$6 per trade and way down from “the good old days” when trading commissions averaged $30-$50.  The stocks of these online brokers immediately dropped about 25% Don’t feel too sorry for them! The brokerage business is … Continue reading Skinning A Cat

What, Me Worry?


I worry about my 96-year-old father. I worry about my family and friends. I worry about our combat soldiers. I worry about our elected leaders. I worry that some people still smoke. I worry about ebola and other contagious diseases. I worry about high drug prices, especially for the poor. I worry about sea level … Continue reading What, Me Worry?

Inside the Fed Box


For those who want to read my latest quarterly column for Inside Business, please click here:

Art of the “Hollow” Deal


Yesterday was a bad day in the stock market, with the Dow falling over 340 points.  It was also a bad day for the President’s re-election probability.  The latest ISM Manufacturing report was released, showing a continuing drop in manufacturing.  In fact, it is firmly in contraction territory at 47.8, which was worse than economists … Continue reading Art of the “Hollow” Deal



Yes, we are headed into a recession.  Of course, there is ALWAYS a recession coming, but I think the next one will become visible early next year. Yes, the stock market will suffer.  History suggests the market will drop 25% over a 13-month period, before rebounding. Yes, you should sell all your stocks at the … Continue reading Yes



Yes, we are headed into a recession.  Of course, there is ALWAYS a recession coming, but I think the next one will become visible next year. Yes, the stock market will suffer.  History suggests the market will drop 25% over a 13-month period, before rebounding. Yes, you should sell all your stocks at the market … Continue reading Yes

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 … Continue reading Little Courage

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 – … Continue reading Not More Debt . . . Again?

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 … Continue reading Very Poor Taste

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 … Continue reading Please Don’t Do It !!

Does It Matter?


If you have 100% agreement with the President’s – any President’s – foreign policy, and . . . If you have 100% agreement with the President’s – any President’s – domestic policy, then . . . Does character or decency even matter?

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 … Continue reading What Would _______ Do?

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 … Continue reading The Hassle of Caregivers

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 … Continue reading The Inverted Fed

Enough Debt Already!


I only have one grandchild. He lives in Texas and has not had an easy childhood. The smallest boy in his class, he had to learn to protect himself. He did! I love that boy! That’s why I’m opposed to the President’s new proposal to cut middle-class taxes.

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 … Continue reading An Improving Cost-Benefit Ratio

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 … Continue reading Differential Sweating

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 … Continue reading Weighing Economic Data

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 … Continue reading The Joy of Labor

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 … Continue reading What, me worry??

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 … Continue reading Thoughts on Recessions



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 … Continue reading Semi-Rational

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 … Continue reading The Designated Fall-guy

As a former NRA member . . .


I believe the National Rifle Association has caused more harm to our country than the American Communist Party AND the American Nazi Party, combined!

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 … Continue reading Unintended Consequence

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 … Continue reading Return of the Honey Badger

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 … Continue reading Hiding In Plain Sight

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 … Continue reading One-Handed Clap


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