The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Annual Perspective


For faithful readers, my latest quarterly column for Inside Business can be found here:

In Praise of Ho-Hum


I enjoyed listening to pundits talking this morning about how boring the monthly “Jobs Report” was.  Compared to expectations of 160 thousand new jobs, only 145 thousand were created last month.  Big Deal!  The unemployment rate was unchanged at 3.5% — a 50 year low.  The U-6 level of under-employment dropped to 6.7% — a … Continue reading In Praise of Ho-Hum

Affable Predictions


Bob Doll is the chief equity officer for investment giant Nuveen.  For an investment strategist, he is remarkably humble and affable.  Each year, he makes 10 predictions and has a good track record.  With my comments in parenthesis, here are his 2020 predictions: The world avoids recession in 2020 as U.S. GDP grows over 2% … Continue reading Affable Predictions

The Ultimate Weapon


During my first year in the Army, I learned infantry tactics and saw the military world from a top-down perspective, as in brigade-battalion-company-platoon-squad.  However, on the very first day of Special Forces training, I was taught to take a bottom-up perspective and that the atomic bomb was NOT the ultimate weapon.   The ultimate weapon is … Continue reading The Ultimate Weapon



Wouldn’t it be great if you could buy a nice present for your friend and then send the bill to THEIR children?  Congress just did that and did it on a bipartisan basis! It has the pleasant name of Setting Every Community Up for Retirement Enhancement Act or SECURE.  It reduces the tax burden on … Continue reading Budget InSECURE

New Year’s Resolution


When I was a boy, my mother would remind me to write down my New Year’s Resolution each year and tape it to my door.  Like most kids, my resolutions were usually (1) to do ALL my homework or (2) keep my room clean or (3) feed my dog – “Pal” – before leaving for … Continue reading New Year’s Resolution

A Treatable Disease ??


Among my holiday reading was Lifespan:  Why We Age – and Why We Don’t Have To” by Dr. David Sinclair of Harvard.  He argues convincingly that “aging is a disease, and that disease is treatable.”  It is profound book, given to me by a good friend, and it is laced with one medical discovery after … Continue reading A Treatable Disease ??

Peeking Into 2020 ?


At year-end 2018, there was terrifying 17 percent drop in the stock market during the fourth quarter, then economic datapoints weakened during the first half of 2019.  To make things worse, the political atmosphere was terrible, with Brexit, Mueller/impeachment, Korea and a very real trade war.  A recession looked inevitable at that point.  An inverted … Continue reading Peeking Into 2020 ?

Believing in Something?


The Wall Street Journal runs a small cartoon in every issue, which are usually worth a chuckle or two.  One from late 2009 still hangs in my office.  It shows a sad, forlorn financial advisor looking out his window, saying “It’s hard enough accepting that I let my clients down.  It’s even worse knowing the … Continue reading Believing in Something?

Too Much Book Learning?


The “scientific method” is the process of making decisions by identifying each hypothesis and carefully testing it before determining if something is true.  Originally developed for use in science, it is taught extensively in business education as well.  It is a way-of-thinking that has worked well. One weakness of this technique is the strict delineation … Continue reading Too Much Book Learning?

R.I.P. “Tall Paul”


Another of my personal heroes has left us. Paul Volcker was a New Jersey boy with a tough mind.  Even without a Ph.D., he was appointed Chairman of the Federal Reserve Bank by President Jimmy Carter and subsequently by President Ronald Reagan.  Do you remember the WIN buttons for “Whip Inflation Now” of President Gerald … Continue reading R.I.P. “Tall Paul”

Nice Thought ?


Genworth is a huge insurance company in Richmond that has long been a leader in long-term-care (LTC) insurance.  It is to their benefit to over-estimate the monthly expense of long term care, so they can scare more people into buying LTC policies.  With that caveat, they have recently estimated the monthly cost of care in … Continue reading Nice Thought ?

Too Beat-Up To Matter ??


Last week, the biggest surprise was the November “jobs report” that 266 thousand jobs were created in November — way more than the 187 thousand new jobs that analysts expected.  Plus, we learned more jobs were created the two previous months than reported earlier.  The three-month rolling average is a whopping 244 thousand – very … Continue reading Too Beat-Up To Matter ??

Lonely Survivor


Marion Weinzweig was an 18-month-old girl in Poland when World War II began.  To survive, her Jewish parents sent her to live with Catholic friends, but the Nazis soon learned there was a little Jewish girl in that home.  So, that little girl was shipped off to a Catholic convent, to live and learn as … Continue reading Lonely Survivor

Anger in the Hills


I have long argued that globalization has tremendous benefits, although there are costs to be paid, such as retraining and relocation.  Years ago, Congress grabbed the benefits and wouldn’t pay the cost.  Instead, that price was paid by the people of lower-middle class America.  The most important book for the last ten years was Hillbilly … Continue reading Anger in the Hills

Stating the Obvious?


A common scenario is that money flows out of a falling stock market into the bond market, which drives up the price of bonds and therefore lowers interest rates.  Of course, lower interest rates usually strengthen the economy, which is good for stocks and causes money to flow back into the stock market. Faithful readers … Continue reading Stating the Obvious?

Giving Thanks


If humility was a muscle, it would be withered away and shriveled-up for most of us.  Thanksgiving is the annual workout for that weak muscle.  It is a day to be humble, a day to remember how other people have helped us.  Nobody does it alone, without the help of others.  So, go exercise your … Continue reading Giving Thanks

Schwabing the Deck?


In 2004, I had a good job with a bank, which was acquired by another bank, which was then acquired by yet another bank.  It is disconcerting and confusing for the staff, of course.  Employees of an acquired company invariably expect a “housecleaning.” Yesterday, Schwab announced it was acquiring TD Ameritrade (TD), subject to various … Continue reading Schwabing the Deck?

Leading the Way


Over the Summer and Fall, our economic data slowly got weaker and weaker.  For the last few months, the data has been looking a little brighter .  But the Index of Leading Economic Indicators (LEI) is still flashing bright red.  It has dropped for three straight months, primarily due to the recession in manufacturing.  The … Continue reading Leading the Way

Paging A Mystic . . . Stat!


The best book on financial planning to hit bookstores in 2007 was undoubtedly The Number by Lee Eisenberg.  For those willing to study the possibilities, it was a great resource.  While I would always encourage a person to read this excellent book, I suspect the mere title of the book has created an interesting, continuing problem. … Continue reading Paging A Mystic . . . Stat!

The Tyranny of Dreams


Dreams are born in experience and can consume the mind. My late mother’s father died young, and she was raised by her mother in a tiny white clapboard house.  It was slightly below grade and close to a relatively busy road, as busy as roads get in the boondocks.  She was sensitive to her standard … Continue reading The Tyranny of Dreams

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

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