The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

R.I.P. Ralph

02/02/2019

For the next day or so, Ralph Northam is still the governor of Virginia.  While we are not friends and he does not know my name, we have met several times and kidded each other about marrying girls from Texas.  I know him only as a nice guy and a veteran who cared enough to … Continue reading R.I.P. Ralph

Head-Spinning

02/01/2019

After one of the worst December’s in history, it was followed by one of the best January’s in history. The S&P was up 8.01% in one month.  (Of course, it is still down 2.31% over the last twelve months, attributable almost entirely to the disastrous December.)  MidCap stocks were up 10.46% and SmallCaps were up … Continue reading Head-Spinning

Surveillance Capitalism

01/31/2019

When cigarette companies report record profits, do you celebrate that they are selling so many cigarettes and that more people are getting lung cancer?  Of course not! Yet, that is the way I see the record profits reported yesterday by Facebook and other tech giants.  Does anybody say it’s really great that more privacy is … Continue reading Surveillance Capitalism

Waning Confidence ?

01/30/2019

Did you ever wonder about the relationship between the economy and the elected children in Washington?  Of course, you did! Normally, consumer confidence increases as the job market improves.  However, even with a continuing good job market. consumer confidence has fallen for three straight months.  This is unusual.  Three months ago, consumer confidence was approaching … Continue reading Waning Confidence ?

Co-Equal Evil

01/29/2019

I respect and appreciate whatever religion, spiritual faith, or philosophy that helps a person to find meaning or serenity in life.  Recently, I took an elderly person to their church, as they were too feeble to attend by themselves.  While I would never jump up to interrupt a service in anybody’s church, it was difficult … Continue reading Co-Equal Evil

Misplaced Passion ?

01/26/2019

Feelings are intense about building the Trump Wall, and will remain that way.  But, keep the money in focus! Our national debt is approaching $22 TRILLION.  If interest rates increase a mere one-quarter of one percent on that debt, it will cost us another $55 billion each year. If we would shut down the government … Continue reading Misplaced Passion ?

Chugging Along Nicely

01/25/2019

Generally speaking, increasing money supply causes prices to rise.  “Too many dollars chasing too few goods” is widely accepted as inflationary.  So, after the enormous injections of money by the Fed since The Great Recession, why is there still so little inflation?  A year ago, I wrote there are signs that inflation is breaking out.  … Continue reading Chugging Along Nicely

Half-Empty ?

01/24/2019

Despite repeatedly failing the physical exam, I have often been called with a girl’s name of Pollyanna, due to my natural optimism.  Glasses are always half-full, not half empty.  Probably, that optimism derives from my undying love of country, my naive love of democracy, my enormous respect for capitalism or my well-studied belief in globalization.  … Continue reading Half-Empty ?

R.I.P. Jack Bogle

01/17/2019

The three greatest names in investment history are Benjamin Graham, Harvey Markowitz, and Jack Bogle. Benjamin Graham literally wrote the original ground-breaking book on Security Analysis in 1934.  He advocated the accounting or fundamental approach to investing.  You must know all the details of the company’s financial statements.  You must interview management, as well as the … Continue reading R.I.P. Jack Bogle

Strange Bedfellows

01/15/2019

I have a great deal of respect for Dr. Jeremy Siegel of the Wharton School, but I have zero respect for Goldman Sachs.  Yet, they agree that there will be a significant economic slowdown in 2019 — but NO recession.  They also agree that 2019 faces unusually great political and geopolitical risks, which could easily … Continue reading Strange Bedfellows

On The Other Hand . . .

01/14/2019

One of my favorite thought-leaders is Bob Doll of Nuveen.  He has written six reasons for optimism in 2019 and six reasons for pessimism in 2019.  The six reasons he is optimistic are as follows, with my thoughts in parenthesis: 1.  The economy may be slowing but doesn’t appear headed for recession (Agreed) 2.  Likewise, … Continue reading On The Other Hand . . .

Code of Ethics

01/13/2019

The CFP Board regulates Certified Financial Planners (r) professionals like myself.  They provide the Code of Ethics, which we are required to follow.  The latest version says:   1.  Act with honesty, integrity, competence, and diligence. 2.  Act in the client’s best interest. 3.  Exercise due care. 4.  Avoid or disclose and manage conflicts of … Continue reading Code of Ethics

Rare Agreement?

01/12/2019

It is not everyday that both Republicans and Democrats will agree with Maxine Waters, the new fiery Chairwoman of the House Committee on Financial Services.  Among other agencies, her committee is responsible for the Securities & Exchange Commission, which has furloughed a whooping 94% of its employees.  There are now less than 300 employees responsible … Continue reading Rare Agreement?

Flip A Coin ?

01/11/2019

Do you remember the “great dress controversy” in 2015 when a dress appeared to be two different colors.  My wife and I sat next to each other and looked at the dress on TV.  We saw the same dress but each of us saw it in a different color.  I thought it was blue & … Continue reading Flip A Coin ?

Brother & Sister

01/10/2019

Everybody knows there is a difference between the economy and the stock market, but they are so closely related – think brother & sister – closely related but still different.  Wearing my economist hat, I see good data points follow good data points.  Yes, the most recent ISM reports slipped slightly but are still very … Continue reading Brother & Sister

Paging Apollo . . . nope!

01/08/2019

In Greek mythology, Cassandra was the daughter of the King of Troy.  Legend says she had dark brown curly hair and coal brown eyes.  By all accounts, she was extremely beautiful.  In fact, the god Apollo fell in love with her beauty and wanted her as a lover.  They agreed he would give her the … Continue reading Paging Apollo . . . nope!

Wisdom of Vikings

01/07/2019

The stereotype of an existentialist is that of a nerdy, 98-pound weakling who contemplates his navel or broods endlessly about death.  However, existentialists see ourselves as intellectual free spirits, untethered to many burdensome conventions.  The death cult characterization is unfair and stems from our casual attitude toward death.  After all, how can death be important … Continue reading Wisdom of Vikings

Big BAD Data

01/05/2019

If there was even a remote prospect that you could do something to help a sick child, how could you NOT do it?  That’s one of the promises of Big Data – the more data that is analysed, the more we can learn about science and medicine, the more we can help future people.  Seems … Continue reading Big BAD Data

tick . . . tick . . . tick . . .

01/04/2019

A surprisingly small percentage of people serve in the military, and an even smaller percentage actually experience the horror of war face-to-face.  For others, war can be clean, antiseptic, and even academic. Yesterday, Apple announced that their revenues were suffering due to the trade war.  Suddenly, a trade war is no longer clean, nor antiseptic, … Continue reading tick . . . tick . . . tick . . .

Good Job, Mr. President

01/03/2019

I agree with the President’s new Acting Chief of Staff, Mick Mulvaney, who famously said “Trump is a terrible human being.”  However, the devil does deserve his due. For decades, China has abused trading relationships with everybody, not just the U.S.  Being reasonable men, Presidents Reagan, Bush, Clinton, Bush II, and Obama  assumed that China … Continue reading Good Job, Mr. President

Wanted: Another Pentagon

01/02/2019

Along with sixty thousand of my closest friends, I had the pleasure of watching the Dallas Cowboys beat the New York Giants in the Meadowlands.  However, whenever there was a change of possession, I noticed there was a lot of just standing around by the players on the field.  To my economist eyeball, that represented … Continue reading Wanted: Another Pentagon

2019 Interest Rates

01/02/2019

To read my latest column in Inside Business, please go here: https://pilotonline.com/inside-business/news/columns/article_5ed0af4e-0ab5-11e9-9a89-cf89b7c2e6bb.html

2019 Wish

12/29/2018

I firmly believe there are just as many nice people in the Republican party as the Democratic party.  Conversely, I firmly believe there are just as many jerks in the Democratic party as the Republican party.  But, they live and work in parallel universes.  So do their families. My 2019 wish is for the partisan … Continue reading 2019 Wish

Take That, Chicken Little !

12/28/2018

We barely hit a bear market, which means the market is down 20% from its high.  It is widely assumed that a bear market signals a recession.  Maybe or maybe not! Of the last thirteen bear markets, there was a recession only 7 times.  There was no recession almost half of the time. From the … Continue reading Take That, Chicken Little !

Tech-Dump

12/27/2018

Wall Street pundits have called the current market correction “a collapse without a cause.”  I agree this December collapse has been illogical but no more illogical than the record 1,086 jump in the Dow during one day.  As I type this, Dow futures are down 344 points.  The individual opinions of economists and analysts did … Continue reading Tech-Dump

When ?

12/26/2018

The most common question I’m hearing is — “When will the market stop falling?” What they mean is — “When will the pain stop?” Once investors stop asking when the market will bounce back and start asking when the pain will stop, that is a bullish signal. The answer is — “Not this week!”  Mutual … Continue reading When ?

Wayward Bull ?

12/25/2018

Unfortunately, many parents have had the experience of raising a wayward child.  You spend decades teaching and coaching to the best of your ability.  You are proud of them!  Then, disturbing little signs start to worry you.  Suddenly, she is gone, and you are worried sick.  One day, you see her in the distance, returning home.  … Continue reading Wayward Bull ?

Wayward Bull

12/25/2018

Unfortunately, many parents have had the experience of raising a wayward child.  You spend decades teaching and coaching to the best of your ability.  You are proud of them!  Then, disturbing little signs start to worry you.  Suddenly, she is gone, and you are worried sick.  One day, you see her in the distance, returning home.  … Continue reading Wayward Bull

Who To Believe ?

12/24/2018

Both Fox News and The Wall Street Journal are controlled by the same person, Rupert Murdoch.  Watching Fox News, one gets the clear impression that Americans are resoundingly in favor of the President and his goal of building The Wall along the Mexican border.  However, the newspaper reported that, three years ago, 49% of Americans believed … Continue reading Who To Believe ?

A Pleasant Memory

12/24/2018

As my hair gets whiter and my wrinkles deeper, I find the holiday season less and less interesting. Except for one silly American custom. On Christmas Eve each year, NORAD pretends to track the journey of Santa Claus. They discuss it with great seriousness on television — tongue securely in cheek. NORAD was already doing … Continue reading A Pleasant Memory

Best Loser of 2018

12/23/2018

My favorite stock in 2018 was Facebook (FB) — not because it did well, but because it did poorly,  losing 30% of its value! Early on, I recognized their business model was to sell the privacy of others, albeit with their “consent.”  The need to connect with others was more important than privacy.  The need … Continue reading Best Loser of 2018

Interest Rates — Part Two

12/22/2018

In Part One, we discussed how the supply and demand for bonds impacts interest rates.  In particular, we discussed how Quantitative Tightening (QT) was putting upward pressure on interest rates.  In this part, we’ll discuss how changes in interest rates cause changes in the market value of bonds. Let’s say you bought a new bond … Continue reading Interest Rates — Part Two

Only Human . . .

12/21/2018

If I was under six different investigations and . . . If I worried my kids might go to jail and . . . If people didn’t want to work for me . . . If American banks wouldn’t do business with me and . . . If my allies decided I was unpredictable and … Continue reading Only Human . . .

Interest Rates – Part One

12/20/2018

There are many definitions of interest rates.  One is that interest rates are the price or cost of liquidity.  As liquidity increases, the cost goes down.  (The supply of liquidity is greater than the demand for it.)  As liquidity decreases, the cost goes up.  (The demand for liquidity is greater than the supply of it.) … Continue reading Interest Rates – Part One

mano-a-mano

12/20/2018

Fighting is easy.  Walking away from a fight is difficult. The Federal Reserve is a creature of Congress and can be terminated whenever Congress chooses.  Fortunately, Congress recognizes that independent economic guidance cannot come from either the Executive or Legislative branches of government.  After all, somebody has to guide the economy who cares more about … Continue reading mano-a-mano

The Wall

12/19/2018

I am confident that, if my family depended on it, I would find a way over or under or around or thru any fence.  (Of course, I still remember how to use C-4 plastic explosives, as well as “bangalore torpedos.”)  Assuming that is mere bravado or over-confidence on my part, then a wall on the … Continue reading The Wall

One More Time ?

12/18/2018

During the global financial crisis of 2007/8, the assessed value of my home starting dropping.  Two years later, it had dropped 29%.  Did I cry?  Did I sell my home?  Did I curse my realtor?  Of course not!  I just waited for it to recover. The S&P 500 has now dropped 11% and is still … Continue reading One More Time ?

Dark Pools

12/14/2018

Let’s say you’re a large pension fund that wants to buy 100,000 shares of Apple.  If you enter such a large BUY order into the market, it would drive the price up.  Of course, you don’t want to pay any more than necessary.  So, what do you do? You enter a “dark pool.”  Large financial … Continue reading Dark Pools

Maintaining Focus

12/13/2018

I parted company from my Republican friends, when they impeached Clinton for lying about sex with a woman. I will part company from my Democratic friends, if they impeach Trump for lying about sex with two women. Sure, there are nuances of differences, but they are only nuances. HOWEVER, if Trump — or any other … Continue reading Maintaining Focus

Dirty Word

12/11/2018

Like most people, economists like to argue.  However, one idea that almost all economists agree with is:  “If you want less of something, tax it.  If you want more of something, subsidize it.” Otto von Bismarck said:  “Politics is the art of the possible, the attainable — the art of the next best” The president of … Continue reading Dirty Word

Dirty Words

12/10/2018

Like most people, economists like to argue.  However, one idea that almost all economists agree with is:  “If you want less of something, tax it.  If you want more of something, subsidize it.” Otto von Bismarck said:  “Politics is the art of the possible, the attainable — the art of the next best” The president of … Continue reading Dirty Words

Fox Failed Trump

12/09/2018

When I go to sleep at night, I reluctantly relinquish control of the TV remote.  By then, that poor piece of plastic is exhausted, breathing heavy, and sweating profusely.  That’s because it has been worked so hard — after all, every commercial break requires a channel change. In the never ending search for a balanced … Continue reading Fox Failed Trump

Layers of an Onion

12/08/2018

Many years ago, the mentor of Warren Buffet was Benjamin Graham.  He taught:  “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” Colleges teach us that the stock market reflects both current economic conditions and future expectations.  It weighs economic data.  Today, the economic data … Continue reading Layers of an Onion

Importing Trouble

12/06/2018

Inside our country, the stock market has been fretting over the possibility of slowing growth in corporate earnings and GDP, as well as rising interest rates, an ominous yield curve, the trade war, and the perpetual political circus.  As if all that was not enough burden on U.S. investors, we just imported two more – … Continue reading Importing Trouble

Importing Trouble

12/06/2018

Inside our country, the stock market has been fretting over the possibility of slowing growth in corporate earnings and GDP, as well as rising interest rates, an ominous yield curve, the trade war, and the perpetual political circus.  As if all that was not enough burden on U.S. investors, we just imported two more – … Continue reading Importing Trouble

Yield Curve Over-Reaction

12/05/2018

Think of buying a bond like loaning money to a friend.  If he must repay the money tomorrow, there is not much that can go wrong before then.  However, if he must repay you in twenty years, there are many things that could go wrong, and you might not get repaid.  An example would be … Continue reading Yield Curve Over-Reaction

Wrong + Wrong = Right ??

12/04/2018

Democrats did a bad thing!  Back in the 1930’s, they introduced the concept of gerrymandering in Virginia.  Instead of voters picking their legislators, the legislators picked their voters.  Hiding behind the valid concept of redistricting, which is required every ten years following the census, the Democrats packed Republican voters into as few districts as possible.  … Continue reading Wrong + Wrong = Right ??

R.I.P. 41

12/01/2018

There are good Republicans and there are bad Republicans. George H. W. Bush was a great Republican. More importantly, he was a good and decent American, who will be missed. Rest in a well-deserved peace . . .

A Silk Purse?

11/28/2018

Living close to the water in a coastal community, sea level rise is not an academic issue to me – it is personal.  I know we cannot just build a wall to hold back the sea, nor can we elevate entire cities, but I have been impressed with how effective “improved drainage” can be, including … Continue reading A Silk Purse?

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