The Flinchum File
Thoughtful Economic Analysis and Existential Opinions



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

False Alarm REDUX


Today, the Dow dropped over 800 points because interest rates inverted.  What does it mean?  Very little!  It was discussed in this blog on August 9th.  Take another look here: False Alarm

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%, … Continue reading Still Dismal ??

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 … Continue reading Crazy Talk

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, … Continue reading Quick Manufacturing Update

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 … Continue reading Agriculture Update

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 … Continue reading False Alarm

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.”  … Continue reading A Soft Number

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 … Continue reading Walk and Chew Gum

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 … Continue reading Dancing Monkeys

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 … Continue reading World’s Fed

Deep Dive Into Racism


To your Bucket List, be sure to add a visit to The National Museum of Peace and Justice in Montgomery, Alabama, which was one of the primary slave trading centers in the United States.  (Please don’t call it the “Lynching Museum” as it is more commonly known.) As a non-racist Southern boy, I was certainly … Continue reading Deep Dive Into Racism

Economic Evolution


No animal ever had an opinion on evolution.  No plant was ever asked to vote on evolution.  But, they changed over time — they evolved anyway. Originally, there was no study or discipline known as economics.  It was a period of  chaos, with extreme boom/bust and with harsh economic consequences during those inevitable downturns.  Then, … Continue reading Economic Evolution

Loose Thoughts on Immigration


No serious person thinks we should have zero border security – none! The political perspective is that (1) if you worship at the Republican altar, you must believe as instructed and (2) if you worship at the Democratic altar, you also must believe as instructed.  Nonpartisan thinking cannot be tolerated! The religious perspective on immigration … Continue reading Loose Thoughts on Immigration



“Past performance is no guaranty of future performance” — how many times have we heard that? Standard & Poor’s just released a report on “persistence” or how long does a high performing mutual fund continue to perform so well.  They looked at all 546 equity mutual funds that were in the top quartile (top 25%) … Continue reading Persistence

Eyes on the Prize


I had a roommate in college that was obsessed with women’s hair.  If he met a nice girl in English class, he wouldn’t say that.  He would say he met Brunette in English class.  He never used their names.  All women had just three names – Blond, Brunette, or Redhead.  He was not interested in … Continue reading Eyes on the Prize

Jim’s Safe Deposit Box


Years ago, my parents gave me a little “lockbox” with a key about the size of a loaf of bread, for my important papers and other treasures, like my collection of baseball cards.  When I returned from the Army, the key was nowhere to be found.  Drilling it open cost more than the original cost.  … Continue reading Jim’s Safe Deposit Box

“Why Liberalism Failed”


Raghuram Rajan recently wrote The Third Pillar:  How Markets and the State Leave Community Behind, and I attended the lecture he gave in Las Vegas.  He explained a healthy society needs three strong pillars, i.e., government, economy, and community.  He argued that we have a strong government and strong economy but community no longer exists for … Continue reading “Why Liberalism Failed”

Good = Bad


For my inner economist, the first Friday of each month is the most interesting, as that is when the monthly “jobs report” is released by the Bureau of Labor Standards or BLS. This morning’s report (it is always released at precisely 8:30 AM.) showed a slight uptick in the unemployment rate to 3.7 percent.  More … Continue reading Good = Bad

Thanksgiving for Independence


When I went to Hong Kong in 1984, that city-state was still governed by the British but long-coveted by China.  I found that city to be a vibrant, exciting international financial center, with heavy traffic, crowded sidewalks, and excitement in the air.  One day, when I went on my morning run, the city was suddenly … Continue reading Thanksgiving for Independence

To Tariff or Not to Tariff


For those who want to read my latest column in Inside Business before it hits the presses, you can find it here:

Education Exercise


There are many ways to spend time, without watching well-meaning windbags pretend to debate each other.  Last night, when changing channels, I landed on such a “debate.”  During the five seconds required to enter another channel number into my remote, I heard one windbag suggest that community college should be free.  I remember thinking “fat … Continue reading Education Exercise

Mixed Signals


Sparing you the many details, the relentlessly positive economic data over the last few years has taken a turn during the second quarter (Q2).  The first look at Q2 GDP growth will not be available for another three weeks, but I expect it to be substantially less than Q1 growth rate of 3.1 percent, which … Continue reading Mixed Signals

Retirement Income


So, you have searched your soul, looking for the real reason you think you want to retire . . . And, you have verbalized your thinking to a trusted loved one, giving airtime to both your thoughts and their thoughts . . . And, you have prepared a budget for a good economy and another … Continue reading Retirement Income

Propped-Up ?


It seems like a long time since December, which was the last time the Fed raised interest rates.  The stock market promptly had a “hizzy-fit” (whatever that is?), and the President began threatening to fire the Chairman of the Fed.  This week, the Fed had its normal policy meeting and strongly suggested it would cut … Continue reading Propped-Up ?

Rise of Populism?


You’ll recall the President’s famous boast that he could shoot somebody in the middle of Fifth Avenue and not lose a single member of his “base.”  That was an interesting comment, and I started thinking about the origin of his base.  At first, as a student of Hillbilly Elegy, I thought it was logical that … Continue reading Rise of Populism?

The “Real” Number


Ever since Lou Eisenberg wrote The Number in 2006, those thinking about retirement have focused on the one big magic number that will take care of them the rest of their lives.  How big a “nest-egg” is big enough?  Unfortunately that number is income-focused.  You don’t know if any number is big enough, if you don’t … Continue reading The “Real” Number

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