The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
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Welcome to The Flinchum File

I am an Accredited Investment Fiduciary at Bay Capital Advisors, an investment firm headquartered in Virginia Beach, VA. After retiring from Truist Bank, I started this firm to work more closely with a smaller number of clients, and it has been great! Our client load is about 25% of the national average.

Writing is not for the shy or the meek. It exposes a person’s mind and character. I hope you enjoy the view.

The opinions expressed in The Flinchum File are those of the writer, Jim Flinchum, and do not necessarily reflect those of Bay Capital Advisors, LLC

One Kudo, Mr. President.

My parents worked for the Federal government.  One was a good, conscientious worker, who received multiple promotions.  The other felt that any minimal effort was “good enough for government work.”  I am intimately familiar with both perspectives. The Veterans Administration has about 350 thousand employees.  I don’t think of 50% of VA employees are useless and should be terminated.  I have met many, many fine…

Mind Maintenance

Philosophies can be described as overly-intellectualized coping strategies or ways to deal with the world and other people.  Maybe.  My intellectual drug-of-choice has long been existentialism, which sees the world through the prism of absurdity.  I have read many books on the philosophy, some were good and some were awful.  Still, it colors my views.Recently, when I predicted the President would be impeached, my Republican…

A Spade

According to Wikipedia:  “Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.”I would only add one word . . . Airlines . . . 

Little Lessons

I was a teenager when I read Leon Uris’ classic Exodus, about the Holocaust survivors making their way to Israel and building their own nation.  Though it was fiction, I enjoyed the story and learned a great deal of history. As a young veteran when the Yom Kippur war between Israel and Egypt broke out in 1973, I was massively impressed with Israel’s defense capability.…

Cause vs. Symptom

While I wish a full and speedy recovery, both physically and psychologically, for those victims of yesterday’s horrific attack on Republican politicians as well as their families, I also hope this tragedy will jump-start a discussion on our worsening inability to disagree. Some see the attack as another example of our gun problem.  One sarcastic pundit said, since there are more guns than human beings…

Interest Rates 101

A reader asked why Wall Street obsesses constantly about interest rates?  Whenever the Fed changes interest rates, they only do it by a quarter point, so what’s the big deal? Simple question?  Yes.  Simple answer?  No!  Entire text books have been written on interest rates, but here are a few factoids. Interest rates determine the amount of interest you pay on mortgages and other loans.…

A Foreign Perspective

When the President withdrew the United States from the Paris Accord on Global Warming, he understandably argued that the U.S. had tougher goals than China, which is the world’s greatest polluter.  Why shouldn’t they have the tougher goals?  It is a good argument. From the Chinese perspective, the U.S. has historically been the world’s greatest polluter.  The U.S. grew wealthy and powerful by burning fossil…

Mental Health Advice

For some years, I have advocated a “news-free” day.  Most of us keep close tabs on the news provided by our favored news source.  Of course, it is essential to gather news from those news sources that both agree AND disagree with your point of view.  However, it is also important to maintain perspective.  To do so, you must be free of the news habit…

Soothsaying 101

I have been a member of the National Association of Business Economists for many years and always read their quarterly survey of members.  Here are some of their latest forecasts: 1.  There has been a minor slowing of economic activity.  Despite a weak Q1, they expect Q2 to bounce back with a 3.1% growth rate.  Full-year GDP growth is estimated at 2.2% this year and…

Crossing My Fingers

Dr. Jeremy Siegel of Wharton has long been one of my favorite thought-leaders.  His comments on the latest Jobs Report are that it was a disappointment, as the number of jobs created was less than expected.  Plus, there were downward revisions to two previous months.  (Still, unemployment at 4.3% is at a 16-year low,).  He is mildly surprised that the stock market did not have…

The Dollar Matters

Following the December increase in interest rates, the dollar has increased in value, which makes dollars more expensive to buy for foreigners and makes the goods of foreigners cheaper for Americans for buy. The data on the April trade data has just been released, and the stronger dollar shows up clearly, as Americans bought more goods from foreigners (which increases our imports) and foreigners bought…

20 Years Wasted

Since the Kyoto Protocol in 1997, diplomats have been negotiating a treaty to limit carbon dioxide in the atmosphere.  I’m proud to say that those long, tedious negotiations were led by the United States, which produced a treaty acceptable to 195 nations.  Yesterday, we abdicated that leadership role, in favor of China and Russia. Ronald Reagan called on us to be “the shinning city on…

Let Us Pray . . .

Well, I’m not a scientist — the argument always begins that way — but I don’t need to be a scientist to stick my nose close to the exhaust pipe on my car and know I don’t like the air coming out of it.  It would be hard for me to ever believe such nasty air is not bad.  Plus, I don’t have to be…

Lacking Data

The health of your portfolio is like a stool, dependent upon three strong legs, i.e., economic issues, market issues, and geopolitical issues.  But, how can you determine if the legs are strong enough to support the value of your portfolio? Looking for economic data is definitely “drinking from a firehose.”  There is almost too much to absorb and is never 100% consistent.  Nonetheless, I am…

Deficits Matter

The history of popular economic thought really started in 1776 with the seminal work of Adam Smith, entitled The Wealth of Nations.  It was the genesis of the classical or Austrian school of economics, popularized by Ludwig von Mises.  During the Great Depression, another school of economic thought was popularized by John Maynard Keynes, and it was understandably called Keynesian economics, although it is sometimes…

Saluting the Best

I like holidays. I like Christmas and Easter,the high holy days for Christians,as well as Hanukkah and Passover,the high holy days for Jews. I like Veterans Day,a thank-you note to those who wore a uniform,as well as Fourth of July,a celebration of summer and politicians. I even like the silly holidays,such as Valentines’ Day,a high holy day for romantics and jewelers.Did you know there is…

Youth Wasted ?

Conventional thinking about the current condition of the labor market is misleading.  That thinking is that unemployment is getting low, so low that it will pull discouraged workers back into the market to look for jobs.  They point to the low percentage of the population that actually has jobs, dropping from 63.4% in 2007 to 58.2% in 2010 although rising to 60.1% now. The Republican…

R.I.P. Manchester Kids

President Trump is correct in calling terrorists “evil losers,” but I suspect they were losers first, who subsequently became evil.  Maybe, they were losers because they never had a chance to “hold a job or hold a woman’s hand.”  When the birthrate exceeds job growth, heartbreak follows.  Better birth control and more jobs would help.  Poverty often produces misfits, but religion can make them evil,…

Gone But Not Forgotten

Young economists believe there are two types of economists.  There are those who STILL believe in the Phillips Curve, and then there are the young economists.  The Phillips Curve suggests there is a predictable relationship between inflation and unemployment.  Graphically, it looks like this: In this academic example, if the rate of unemployment is 4%, it can be reduced to 2% by raising inflation from…

. . . On With The Show

It was March 21st that I predicted the President would be impeached.  My objective then was to study how impeachment might impact my clients’ portfolios.  After studying the impeachments of Andrew Johnson, Nixon, and Clinton, I concluded there is no predictable pattern.  (Still, as the market goes down when uncertainty goes up, I felt it would be appropriate to remove some risk by raising cash.)…

Silent Costs

Economists are fond of discussing opportunity costs.  According to Investopedia:  (1) An opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action.  Put another way, the benefits you could have received by taking an alternative action. (2.) The difference in return between a chosen investment and one that is necessarily passed up.In other words, the cost of an…

The Right to Quibble

I don’t know how many generations of my family have served in the military, except that we have served during every war since the Civil War.  We were always taught to love this great country, which makes it difficult for me to understand Republicans or Democrats. When Democrats get in trouble, they blame rich people, like the Koch brothers.  When Republicans get in trouble, they…

Ignoring the Economy . . .

A recession is coming!  There is ALWAYS a recession coming.  We just don’t know when or how severe it will be.  But, we can ignore that!  This is not about the economy.  It is about the stock market.  They are certainly related but still different. The economic data is a fairly even stream of good, if not great data.  It gives no indication of a…

Treadmill Thoughts

At the gym today, I was lucky enough to find a treadmill that could see two separate televisions, with Fox News on one and MSNBC on the other.  As you know, they are slightly different.  After all, one speaks Greek, and the other speaks Polish, i.e., languages coded to their particular viewers. The Fox screen showed much consternation about the hypocrisy of Democrats,who cursed fired…

Cheating Graph

Like most commodity prices, the price of oil reflects basic supply & demand for the commodity plus currency fluctuations.  In the case of oil, rising price has traditionally been an economic indicator of improving international growth.  Up to a point, rising oil prices have always been viewed as positive.  So, how would you interpret this graph: A technical analyst would interpret this as saying oil…

Partisan D.E.W.

Traditionally, financial advisors have been strongly Republican.  My unscientific feel is that they are split about 60% Republican and 40% Democratic.  So, it was slightly surprising to see 50.6% of financial advisors disapprove of the President’s first 100 days, while only 40.6% approve and 7.9% have no opinion. Far more surprising to me is the difference between those who strongly approve or strongly disapprove.  40.3%…

Shameful Parity

During the Obama Administration, I marveled at the sheer, blinding and irrational hatred that some Republicans had for him.  They would not support the President, even when they agreed with him.  While it was not entirely racial bigotry, it was still bigotry, and it reflected badly on Republicans! Now, with the nascent Trump Administration, I see the same bigotry – from Democrats toward the President.…

A Beautiful Tragedy

A beautiful tragedy is still a tragedy.  That’s the way I see the U.S. territory of Puerto Rico.  I fell in love with her beauty in 1970 when I first visited her, with her lush hills surrounded by white beaches and crystal-clear azure water.  I worried about her in 2006 when the U.S. withdrew the income tax credits that had transformed her agricultural economy into…

Uncertainty

My monthly spending was cut today,because my grandson has a “pre-existing medical condition” andbecause his parents are proud entrepreneurs, who depend on Obamacare andlive in the deep red state of Texas. Because I know his health insurance costs are going up andbecause I will have to help his parentsbecause I don’t know how much I will need to help,I do know that I will need…

Advisor: Heal Thyself

USC professor Cary Frydman has been doing some interesting research into “neuro-finance” or how the workings of the brain impact investing.  His latest research suggests that the two biggest mental blocks to successful investing are the Disposition Effect and the Repurchase Effect. The Disposition Effect is that investors are so afraid of losing their book-profit that they sell too soon, thinking it is important to…

Economic Intuition

I’ve never been called a man of superstition, as far as I know.  I flatter myself, thinking I’m more a man of science, despite the fact that I do have respect for intuition.  According to Psychology Today, intuition is described as:  “We think of intuition as a magical phenomenon—but hunches are formed out of our past experiences and knowledge. So while relying on gut feelings doesn’t always…

The Best Bad Option

This week, I sat quietly and listened to several discussions among intelligent people about the Gordian Knot that is North Korea.  Such discussions usually recite a laundry list of things we cannot do, because it would involve the loss of human life.  It seems to me that the loss of human life is inevitable in this geopolitical tar-baby. Eventually, the “crazy, fat kid,” as Senator…

Bay Capital Advisors Receives Top 10 Wealth Management Companies Award

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