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

Protecting Presidents

It was 1969 that I was selected for a particular mission. We were told to report, of all places (?), to Fort Gulick in the American Canal Zone. When we arrived, we signed papers that said we would never disclose what we learned from the classified documents we would see. Punctual as always, the briefer and the documents arrived exactly on time. (We were even…

Too Much Information

I’ve long respected the late Queen Elizabeth for providing the “stiff upper lip” to the British people but thought the remainder of the Royals were just a bunch of pampered sissies, except for the two princes. While both had military service, William was a military bureaucrat, and Harry went to Afghanistan TWICE. Obviously, I respect Prince Harry but regret his comment about killing exactly 25…

A Thing of Beauty

Years ago, I enjoyed scuba diving and did many open-water dives, as well as night-dives, cave-dives and even shark-dives, but the dive I remember most often was a drift-dive off Cozumel. For a drift-dive, you let the water current simply carry you along, drifting as the underwater world passes by. Cozumel has a ten mile long coral reef that you can watch while drifting. There…

Baby in the Bathwater

Thirteen years ago, Bitcoin started to show up in the financial media. Soon, there were other crypto-currencies. Today, there are hundreds. This delighted younger investors, as well as younger advisors, as it was something new that older investors and older advisors could never understand nor appreciate. Annoyed, I decided to make a deep-dive into the subject. My first conclusion was that, except for criminals, there…

2008 Redux ?

2008 was a lousy year in the stock market, and it ended in a major scandal when Bernie Madoff was arrested in December. 2022 was also a lousy year in the stock market, and it also ended in a major scandal when Sam Bankman-Fried (SBF) was arrested in December. Of course, there are differences. Madoff orchestrated history’s largest Ponzi scheme, while SBF of FTX fame…

Santa Claus Rally

There is no such thing as a Santa Clause Rally, officially, but it has become almost traditional, and we have even come to expect it. The week between Christmas and New Year’s has traditionally enjoyed a robust stock market (except 2018). The conventional wisdom is that selling to take tax losses has been exhausted by Christmas and that wise investors step in to buy the…

The Curse ?

The USS George Washington has a crew of 6,012. Three crew members committed suicide in April. Of course, these are not ordinary humans who had enough life already. They are highly/expensively trained assets of the US Navy and needed for our national security. Yes, they do matter more than most people who commit suicide . . . assuming anybody really matters. One of my favorite…

Which Recession ?

My nomination for the most over-worked noun of 2022 is . . . RECESSION. Pundits fear-monger about it constantly. However, there are different types of recession. Know your recession! Most people confuse the GREAT RECESSION of 2008/9 with normal recessions. It was not! That was a global financial crisis which morphed into a really bad recession. Don’t confuse a financial crisis with a recession! Officially,…

Sandy Hook

On the tenth anniversary of the horrible massacre at Sandy Hook, it would be appropriate for gun-lovers like myself to admit that Jesus Christ did not come down from Heaven to write the Second Amendment. Of course, it would also be helpful if the “other side” would identify social programs to be trimmed enough to pay for the enhanced treatment of those people with mental…

Exit Costs

It is that time of year to start thinking about New Year’s resolutions. Having just returned from a trip to attend a funeral, I was shocked that it cost $795 to dig a hole . . . just two feet wide and two feet deep. Even with no crypt, a ceramic looking pot to hold the cremation urn cost $495. A grave marker was another…

An Innocent Bystander

The price of gas is slightly less today than 12 months ago, and the Democrats are heaping praise on President Biden, which he doesn’t deserve. The price of gas was much higher 6 months ago, and the Republicans heaped scorn on President Biden, which he didn’t deserve. No president, Democrat or Republican, has much control over gas prices, especially in the short run. They are…

Through the Looking Glass

In 1872, Lewis Carroll wrote the sequel of “Alice in Wonderland” in which Alice crawls through a mirror and discovers everything is reversed. I think about that whenever Wall Street discovers good news is bad news. The most recent jobs report was stronger than expected, which caused big losses in the stock market. What? That seems illogical! The same thing happened with the latest GDP…

The Cynical View of Sport ?

When I was young, I enjoyed playing sports in general and baseball in particular. I knew all the teams and had at least a thousand baseball cards of the players. Coaches always said sports was good for me physically, emotionally, and spiritually. You know, “idle hands are the Devil’s tools”, plus it builds character and respect for rules, yada yada . . . When I…

Economic Forecasting ?

As a longtime member of the National Association of Business Economics, I look forward to their survey of members. Normally, I am satisfied with their conclusions but think their latest is overly-pessimistic. Nonetheless, here are some of their current thoughts: My biggest disagreement with NABE is that they see the Fed as too-aggressive. While it was slow to recognize inflationary pressures, they have certainly moved…

Our Critical Culture

The educational establishment has worshiped at the altar of the “scientific method” (SM) for many decades. That is a decision-making tool for determining truth, by developing a hypothesis and then testing it against actual observations. If the observations don’t support the hypothesis, then the hypothesis must be untrue. With roots as far back as ancient Egypt, belief in SM didn’t become commonplace until the 17th…

Hollow Emotions

Existentialists often joke that words are just hollow emotions. One example is the oft-spoken “thank you for your service” that veterans hear. At first, it was appreciated. Now, it is just a reminder of how many years we never heard it. Another example is “thoughts and prayers” which is uttered by every politician afraid of their base of voters, as well as the all-powerful gun…

Destructive Accounting

The economic recovery from the 1980 recession was slow, so Congress they decided to jump-start it by invigorating the banking system. They authorized bankers to make equity investments. Instead of lending money to build a shopping center, for example, they could buy it. Later, they were allowed to buy companies. Indeed, bankers were strongly encouraged to be more than mere bankers. The accounting was simple…

Not Your Father’s . . .

Since Spring, I have advised people that the outbreak of inflation is not “your father’s inflation.” It’s not as bad today as it was in the early 1980s. One reason is that we have additional tools to fight it. Your father only had increasing interest rates to kill inflation – a proven technique but no longer the only cure. Appealing to patriotism didn’t work. (Remember…

A Bad Time for Good Medicine ?

I’ve always wanted to be Superman – you know, “Faster than a speeding bullet! More powerful than a locomotive! Able to leap tall buildings at a single bound!”  Unfortunately, I didn’t look good wearing tights and accepted that harsh reality. The new UK Prime Minister is Liz Truss, and we wish her well, but I suspect she wants to be the legendary Margaret Thatcher, her…

Reasons To Sleep

Let’s see . . . the stock is way down, the economy is suffering, both inflation and interest rates are soaring, the world is sinking into debt, a deranged world leader is threatening to use nukes, and the news media relentlessly reports wars and other pleasantries. Who can sleep with all that happening?  You should! One reason I don’t lose sleep that, earlier this year,…

Next . . .

When I was still young enough to know everything, I loved the concept of democracy.  Sure, lots of people have argued that we are a republic, not a democracy, but that is a difference without significance in America.  Authoritarian forms of government are too repugnant to even consider.  Likewise, the constitutional monarchies like the United Kingdom, Japan, Thailand, Norway, etc. were also offensive forms of…

Wrong Direction

Unfortunately, today’s release of the Producer Price Index confirmed yesterday’s Consumer Price Index.  Prices are still going up, although not as rapidly as before.  On a year-over-year basis, consumer prices went up 8.3%, while producer prices went up 8.7% – both more than expected! We are already experiencing a mild recession, which suggests a “soft-landing”.  That means it won’t be necessary to trigger a “real”…

Which Direction?

Oh, what a difference one-fifth on one percent makes . . . . immediately knocking 600 points off the Dow and making three-quarters of one percent increase in interest costs later this month a virtual certainty. This morning, the CPI report for August was issued, showing it increased 0.1% instead of decreasing 0.1%, for a disappointment of two tenths or one fifth of one percent. …

Updating Best Intentions

Do you think poor people are poor because they are lazy?  If so, what percentage?  What percentage are just plain stupid?  What percentage are emotional refugees? As a former Texan, I enjoy reading former Senator Phil Gramm (R – TX) whenever I can, and he had a recent opinion piece in The Wall Street Journal, along with John Early of the American Enterprise Institute. It…

Once A G.O.A.T. . . .

Going from G.O.A.T (greatest of all time) to Goat (stupid mammal) in just two years requires more than bad luck. Two years ago, the head of the Fed Reserve, Jay Powell, was celebrated for his actions getting us past the pandemic.  He dropped rates and greatly expanded the money supply.  Facing soaring job losses from Covid-19 and in concert with Congress, he injected trillions into…

Just Rip It !

Your choice . . . do you slowly peel-off a band-aid or do you prefer to simply rip it off? Economists have long believed the only certain tool to end inflation is a recession.  Paul Volcker proved it!  He was Chairman of the Federal Reserve from 1979 to 1987 and ushered in two recessions, by raising interest rates from 11.2% to 20% during 1980 and…

Ying/Yang Fiscal Policy

For those who like to see a conspiracy behind every tree, here is a fresh one . . . So, assume President Biden wants increased spending, but that causes more inflation. Further, assume Fed Head Jerome Powell wants less inflation and drives up interest costs to slow inflation. Is it possible they floated down the Snake River in Jackson Hole this week and conspired that…

Soaking Human Stumps ?

I have a young cousin who is dumb as a stump . . . maybe dumber?  Fortunately, he lives six hours away, and I have rarely seen him over the years.  Unfortunately, his downward slide began when he was expelled from school about fifteen years ago for smoking pot and started hanging out with a bunch of losers. Shortly afterwards, there was a large family…

Nerdfest

Anybody who have ever been to Jackson, Wyoming, has fallen in love with it — truly a remarkable place for lovers of nature.  It’s also a remarkable place for nerds.  In fact, the Federal Reserve System holds their annual Economic Symposium there in late August of every year, and it is jokingly referred to as The Nerdfest.  I suspect all the attendees still have their…