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

Rolling Crisis?

When I moved from the barely-growing mid-Atlantic to rapidly-growing Texas in the late 1970’s, I was grateful that at least some part of the country was growing.  A few years later, Texas experienced an oil crash.  I remember seeing bumper stickers that read:  Please God, let there be one more oil boom, and I promise not to waste it next time. As Texas slipped into…

Thank You, John !

Almost every family has some goofy, old aunt or uncle who always complains “the end is near, and we’re all going to die.”  Wall Street is like that, especially about all things political.  When the sky is not falling, it is like Sherlock Holmes’ dog that didn’t bark.  The lack of an expected response can be very telling. Did you know the Federal debt ceiling…

Obama Is A Failure

But, so was Ronald Reagan, George H.W. Bush, Bill Clinton, and George W. Bush.  All promised to “do something” about the loudness of TV commercials.  That has been the most common complaint to the Federal Communications Commission since 1980, averaging over twenty thousand complaints each year. At least Obama “did something” and got Congress to pass the Commercial Advertisement Loudness Mitigation Act (CALM).  In 2013,…

Shelter In A Storm ?

For those of us who worry about a global economic slowdown, there is one sector of our U.S. economy that should remain largely immune, and that is homebuilding.  First, relatively small amounts of inventory have been added since the Great Recession, while population has increased.  With demand for housing rising faster than the supply of housing, it is not surprising that rents are rising faster…

A One-Handed Clap

Psychologists say constant negative feedback creates a certain numbness to feedback, so we should offer some positive feedback whenever possible. How many times have I asked readers to take a cold shower at www.usdebtclock.org ?  That website shows the spiraling problem of increasing debt.  It is frustrating, frightening and maddening! But wait!  The budget deficit for the Federal government’s fiscal year that just ended was…

Still 98.6 Degrees

Is the stock market over-heated?  The shorthand answer on Wall Street deals with the Price-Earnings (PE) Ratio or how many times the stock market values each dollar of earnings per share.  In other words, if a stock earns $1.00 per share and sells for $20 per share, then the PE ratio for that stock is 20 times.  If the earnings per share for the whole…

Bold Predictions ?

I would never hire anybody who worked at investment banking giant Goldman Sachs, UNLESS they worked in the research department, which I do respect.  Here are some of their latest forecasts: 1.  GDP growth in the U.S. remains essentially unchanged at 2.4% last year, 2.5% this year, and 2.4% next year.2.  GDP growth in Europe increases from 0.9% last year, 1.6% this year, and 1.8%…

One Joy of Education

We’ve all heard about the increasing concentration of income among the top 5%.  You might even think the 95% are treated unfairly.  Or, maybe the 5% are just better protected. If you are having trouble convincing your kid that he should stay in high school and then go to college, consider the latest research from the National Center for Health Statistics:  In 1995, a high…

Senatorial Sense

Democrats are right:  The seeds of the next financial crisis are sown in the ashes of the last one. Former Senator Hillary Clinton is right:  She wants to tax high-frequency trading and “dark pools’, making them more transparent and less profitable.  High-frequency trading poses a systemic risk to our financial system by overwhelming it with vast numbers of cancelled trades.  Dark pools are ways for…

According to the Good Doctor(s)

Republicans are right:  When your corporate income tax rates are the highest in the developed world, they are too high.  That is the reason that American corporations have maintained $2 TRILLION overseas, where it doesn’t have to pay 25-40% (depending) income taxes on it. Dr. Ben Carson is right:  He has proposed a six-month window to repatriate the entire amount tax-free, as long as 10%…

Symmetrical Response ?

The Dow rose 304 points yesterday.  Were you elated?  Were you open and communicative with your family?  Did you go out to dinner? If the Dow had fallen 304 points instead, would you have been depressed?  Would you have sat with a sullen face in front of a television without watching it?  Would you have called your financial advisor, as if they were responsible? There…

Amen, Ben !

Readers know I have long argued that punishing individuals is more appropriate than punishing non-individuals, like corporations.  (See blog on September 25th for the most recent.) It is satisfying when a major player agrees with you.  Ben Bernanke was Chairman of the Federal Reserve System during the global financial crisis of 2008/9.  In his new book, he says:  “it would have been my preference to…

Curse of the Y Chromosome

I confess – I have a male ego.  I want to win!  More than I love winning, I hate losing.  It’s a guy-thing, I guess.  Sometimes however, if you cannot win, it can be enjoyable to watch your opponent lose. For years, I’ve wondered how the United States got caught in the crossfire from a tribal duel between Sunni Muslims and Shiite Muslims.  They’ve only…

The Only Guarantee

Friends often struggle to understand why I normally get up by 5AM each day.  The primary reason is that my “body clock” is genetically set for it.  The professional reason is that I want to check the foreign markets before U.S. stock markets open. I can save my clients a little money by using “market orders” which execute when they hit the market, regardless of…

Fill In The Blanks

ASSOCIATED NEWS (AN) – Yesterday, some psychotic nutcase in [insert city and state here] named [insert name of loser here] used a [insert type of guns] to kill [insert number] innocent people and to wound an additional [insert number] innocent people, between the ages of [insert number] and [insert number].  The senseless slaughter took place in the [name of institution] at [insert time of day].  The…

The Passing Storm

The third quarter is finally over .. . GOOD!It was the worst quarter on Wall Street in four years.Most stock averages were down about 7%.Most hedge funds were down 15-20%. The bad news is that there will be more bad news in this quarter. Historically, stock prices suffer during the month of October.Historically, stock prices rally in late December into January. By then, Congress will…

So Much Noise !

As we know, stocks don’t always move up, nor always move down.  Often, they bounce along sideways in a range.  For the last two months, the U.S. stock market has traded in a range.  This is not unusual.  What is unusual is the violence of the moves within the range.  We keep slamming into the upper and lower edges of the range. Yesterday, the Dow…

Justice Defined ?

You may remember some years ago when a Chinese toy maker allegedly used a toxic red paint on toys that infants were prone to put into their mouths.  I happened to be in China shortly afterwards and read the English translation of the Shanghai newspaper about the incident.  It said the CEO was arrested and tried, where it was determined that the CEO had prior…

Patience Will Be Rewarded

The current turbulence in the stock market has not been following the conventional script.  Does that mean we are facing a potential market collapse?  No!  There is no financial crisis on the horizon.  If anything, U.S. banks have TOO MUCH capital, not too little. But, the current turbulence is slightly different from the normal garden-variety bear market that precedes the normal garden-variety economic recession.  The…

Pandering Season

If Greece is the birthplace of democracy, they failed to teach the U.S. one important lesson – short campaign seasons are a blessing.  Yesterday, Greece held a national election for President.  The people of Greece were able to make a decision in a mere five weeks.  (The recent campaigning for British election was also five weeks.)  Why then does it take Americans 18 months to…

Good Custodian !

Like most everything in life, technology is a double-edged sword.  It can open new worlds for you or trap you in a circular hell.  That is especially true for financial advisors. Since TDAmeritrade is custodian for the funds of my clients, I was pleased to see their technology offerings are the top-rated in the country.  49.4% of all respondents reported they were “very satisfied” with…

Let Him Pray !

We were in Philadelphia most of last week and were quite impressed with all the preparations the City is making before the Pope’s arrival this week.  I’m expecting it will be a first-class spectacle and well worth watching. However, I remember working in D.C. when foreign heads-of-state would visit and the preparations for those visits.  There seems to be a difference, at least to my…

Take It From The Top

When I was a boy, I aggressively pursued learning.When I was a teenager, I aggressively pursued “wine, women, & song.”When I was a young man in my twenties, I pursued my career goals.When I was a man in my thirties, I pursued “ostentatious consumption.”When I was a man in my forties, I pursued wisdom.When I was a man in my fifties, I pursued meaning.Now, as…

Fed-Punting

Most economists are delighted when their prediction comes true.  While I predicted the Fed would not raise interest rates this year, I was secretly hoping they would – not because inflation was out of control, not because unemployment was too high – but because it would reduce uncertainty and be good for the stock market. The Fed should be above politics.  Instead, they have become…

Showtime!

Wall Street believes the Fed will raise interest rates modestly this Thursday but rallied in the face of the expected increase anyway.  This is a good sign.  We may witness the market bulls running after the increase is announced, which is the opposite of earlier expectations. I’m confident the Fed does not want to raise rates, due to political pressure both at home and abroad.…

Obsession du Jour

Everybody knows that “Wall Street is always climbing a Wall of Worry.”  We sometimes forget that it is a series of Walls.  For most of this year, Wall Street worried about a Greek default.  This summer, Wall Street fretted about slowing growth in China.  Now, we are fixated on the Fed raising interest rates this week. Since the Fed has long said it will only…

Refugee Tsunami

You would be less than human if you didn’t feel some sorrow for the refugees flooding into Europe.  They are mere “collateral damage,” which is not an uncommon result of war.  But, that doesn’t make them less than human, does it?  That is the moral dimension of this refugee tsunami. I read an op-ed piece in The Wall Street Journal, alleging it was all Obama’s…

Fourteen Years Later

We still vividly remember 9/11.  We had a normal 30-40 minute drive into work, dropping off Renee at her office, before going into my underground parking garage.  Later that morning, a young man who worked for me came into my Alexandria office, saying a plane had crashed into the World Trade Center in New York.  I went online, looking for more info.  Then, we gathered…

Bouncing Along

Generally speaking, rules-of-thumb shouldn’t be rules-of-thumb.  They often turn something overly-complex into something overly-simplistic.  Nonetheless, they have a purpose when they explain how other people are thinking. One rule-of-thumb is that stock market corrections (down at least 10%) and bear markets (down 20%) don’t bounce off the bottom and then go up.  They have to hit bottom twice.  It is called “testing the bottom.”  If…

Equanimity

A few years ago, a dear aunt got the “death sentence” from her doctor, giving her only 3-6 months to live.  She promptly got into her car and started driving all over the eastern United States to say good-bye to her friends and relatives.  She was not remorseful, but she did feel it was important to put a “finishing touch” on her relationships.  I’ll never…