The Flinchum File

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.  This made Republican districts more Republican and Democratic districts more…

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 . . .

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 large storm water retention ponds.  It is not a simple…

While I would not do any business with Wall Street giant Goldman Sachs, I do have great respect for their research and just read their 2019 outlook.  In a word, they are quite bullish on December of this year but less bullish on 2019, predicting only a 5% rise in the S&P, mostly in the first half of the year, before economic growth slows to…

A veteran of the Pacific Theater during World War II, Bert Aaron is a patriot, living in Williamsburg.  I am thankful that he has been a friend, a client, and an inspiration for so many years!  The local paper, Virginia Gazette, just published his latest column.  With his permission, I quote it below: ********************************************************************************************************************************************************************** Stop.  Hold on, take a breath.  The locomotive is running away…

The Fed has been under increasingly heavy criticism.  No president has ever been happy when the Fed is raising interest rates, but the current one is especially loud.  Now, Wall Street is beginning to complain more loudly as well. There is a belief that rising interest rates mean falling stock prices, and it’s only logical . . . in the long run.  History tells us…

Some years ago, a client asked me what was “this Google thing?”  After explaining what a search engine does, I added that Google was the greatest shredder of privacy in the history of the planet.  Then, Facebook came along. If you have not yet read Wednesday’s article in The New York Times, it is well worth the read.  Here it is:    https://www.nytimes.com/2018/11/14/technology/facebook-data-russia-election-racism.html?action=click&module=inline&pgtype=Homepage You will learn that…

The market was already nervous before the 9:30 AM open on Monday.  Higher and higher interest rates were bad enough, but the market was also frightened by a senior trade negotiator who predicted a long, slow fight with China, with no end to the trade war in sight.  Then, the world’s largest company, Apple, was downgraded when several of its suppliers downgraded 2019 earnings.  Later…

My investment outlook is evolving.  Two months ago, the economic data was unrelentingly bullish.  Now, cracks have appeared (see both ISM reports).  This does NOT suggest the recession that investors fear.  Not all recessions are created equal. The stock market has been propelled over the past year or so by rapidly rising corporate earnings (EPS).  The second and third quarters were up 20% on a…

You should always shower and brush your teeth.  You should always respect your elders and do your homework.  And, you should always get a professional financial plan designed exclusively for you and then follow every detail. While I am a Certified Financial Planner professional, I haven’t prepared a written “financial plan” in years.  My initial concern was that a  written financial plan tends to be…

My parents were part of the “Greatest Generation” and had a rather low opinion of my generation of “baby boomers.”  We were a bunch of dirty, long-haired, pot-smoking, commie-hippies who were too self-involved to love our country.  Of course, that was before we got jobs, babies, and mortgages.  Now, we-boomers look down our boomer-noses at the “millennials” or Generation X as being useless techno-addicts, too…

It takes hip boots to wade through the governmental reports issued each day.  In one obscure report by the Treasury Department on Monday, they estimated that they will have to issue bonds (or take on debt) at a faster pace.  The debt to be issued in FY 2019 is 17% more than FY 2018 but 160% more than FY 2017. My Democratic friends will ask…

History teaches us that the current period of incivility we are experiencing is not unique.  In the 19th century, some Congressmen had fistfights on the floor of Congress and at least one pulled a gun on another.  Eventually, the cycle of civility returned to normal.  Regrettably, we have entered another cycle. I think President Trump gets too much blame for the toxic culture we are…

Robert Doll is the Chief Equity Officer of Nuveen and a CNBC favorite.  His latest Commentary is instructive.  He reminds us of ten things: 1.  U.S. economic growth remains solid. 2.  Manufacturing levels may come under pressure. 3.  The outlook for global growth may have weakened recently, but we see no near-term signs of significant financial pressures. 4.  Global fiscal policy is likely to be…

Somebody, please explain paranoia to me!  Every religion feels they are being persecuted for their faith.  The lunatic who slaughtered the innocent Jews in Pittsburgh did it because Jews were slaughtering Christians . . . What?  Like I said, lunatic! If any faith has a documented claim on being persecuted, it is the Jewish faith.  Yet, in Christian churches, both Protestant and Catholic, there is…

Most investors were sorry to see the Dow drop almost 300 points last Friday.  However, I was sorry it didn’t drop 1,000 points.  Stock market corrections don’t hit bottom until there is some degree of panic, which flushes stock out of “weak hands.” I know this slump is not a financial crisis, as I watch that data closely.  I doubt it is not the beginning…

There are many colorful expressions on Wall Street.  One is a “dead cat bounce.”  Imagine your cat dies, and you toss its carcass out the second story window and watch as it hits the driveway below.  It doesn’t land motionless, like a towel.  There is a slight bounce when it hits the concrete.  Yesterday, you witnessed a “dead cat bounce,” when the Dow rose 400…

This is the worst month for the stock market since January of 2016.  But, they are very different corrections.  I was nervous during the first one but am just annoyed at the current one. Glencore is a huge London-based commodities trader, and they were struggling two and a half years ago.  Because they were the fifth largest user of derivatives in the world, I recognized…

That creaking sound you hear is the stock market struggling under the weight of both geopolitical troubles and political troubles.  Think about it — our colossal trade war with China, the increasing probability that England will have a messy crash-out of the European Union, the Mid-East is being realigned as we watch in real time, not to mention North Korea and climate change — that’s…

Is it acceptable to punch somebody in the nose for insulting your late Mother? In an overly-long opinion piece inside yesterday’s Wall Street Journal, the writer alleged that leftists  hate “Mr. Trump’s vulgarity.”  Well, my Mother never used a vulgar word but prayed for those who did.  Vulgarity was not a small deal to her!  It was simply inexcusable. But, the insult was suggesting she was…

While I don’t like Goldman Sachs, I do have great respect for their research.  Their chief equity strategist just predicted the current October volatility is now over, and the S&P 500 will resume its climb, as the underlying fundamentals remain strong.  They predict the S&P will end the year at 2,850 or up about 3%.  He is correct that the underlying fundamentals are really strong. But,…

Perry Mason always found the murderer, but he had a big advantage, because it was after-the-fact. While the economic data is as good as I’ve ever seen it, at least during my lifetime, we should remember that “Bull markets never die of old age.  They get killed first!”  Hunting the killer is easier with a list of “the usual suspects.”  Certainly, the Fed is historically…

While it is somewhat dated, here is the link to my latest column for Inside Business https://pilotonline.com/inside-business/news/columns/article_2d091de2-cb3c-11e8-b55e-83e28276fafd.html

I understand patriotism.  I feel it from my toes to my nose.  I love our national identity, warts and all!  Britain also has a strong national identity, with minimal warts.  Of course, they feel pride in their national identity, and they should! My inner Republican imagines the damage to their pride when they had to surrender so much of their sovereignty to the bureaucrats in…

There is obviously a close relationship between the economy and the stock market.  Sometimes, it is not close enough.  During the second quarter, the economy grew earnings 25% year-over-year.  During the third quarter, earnings were expected to rise 15% and actually increased 21%.  The fourth quarter is running 20% up.  Does the stock market growth reflect that growth in earnings?  Nope! The economy is booming,…

Most everybody knows that prices are determined by the “Law of Supply and Demand”.  If supply of a product decreases while demand increases, then buyers will “bid up” the price.  Likewise, if demand increases more than supply increases, buyers will again “bid up” the price.  However, if supply increases more than demand, buyers will not “bid up” the price and will expect discounts, driving the…

The stock market held a SALE today, with the Dow stocks getting over 800 points cheaper.  No, it is not the beginning of the end.  More likely, it is a normal bull market correction.  Here is what happened: The European markets closed down sharply.  They were understandably frightened of rising interest rates.  The impact of rising U.S. interest rates on foreign borrowers of dollars should…

Most people hope to get old and die of natural causes, and most people do!  Bull markets don’t have that hope of a pleasant passage.  Bull markets never die of old age.  Like animals in nature, they get killed – by several different causes.  The most common is the Federal Reserve raising interest rates too much or too quickly or both.  Trade wars also have…

It is the pain that keeps on giving and giving. I watched a movie entitled Last Flag Flying.  It was a story of three veterans from Vietnam.  Like most, their shared memories kept them apart after the war, and they went different ways.  Thirty years later, one lost his son in Iraq, and he sought out his two lost buddies to help him reclaim his son’s…

There are precious few Americans who respect Congress.  Respect for the Presidency varies depending on the President, but most everybody I know respects the Supreme Court. When President Trump nominated Judge Kavanaugh for the Supreme Court, I thought that was fine.  While Kavanaugh’s perspective on expansive executive power worried me, I felt he was reasonably in the mainstream of legal thought and would have voted…

Just when you think that hyper-partisanship could not get any worse, along comes the Kavanaugh confirmation hearings.  For a long time, I have believed that hyper-partisanship was due to two factors.  First, politics become more poisonous when moderates are excluded, which is the result of gerrymandering.  Reliably red districts are not likely to produce moderate Republicans, just as reliably blue districts are not likely to…

I applaud the President on the signing of “Nafta II” or the “U.S., Mexico, Canada Agreement” or USMCA, as he prefers to call it. Critics will cite the minor differences between this new agreement and the TPP, which the President rejected immediately after coming into office.  For example, TPP gave U.S. farmers 3.25% of the Canadian dairy market, compared to 3.75% in NAFTA II.  While…