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.

A Billion-Dollar Lesson?

Ross Perot was a HIGHLY-opinionated Naval Academy graduate and Dallas billionaire when he ran for President in 1962 and has been credited with the election of Bill Clinton, by draining Republican votes from the incumbent President George Bush.  I watched one evening as he was arriving for a political rally and could see that he was visibly annoyed by the swarm of noisy reporters, pelting…

Q & A . . . Bear Market Edition

A recession and a bear-market are not the same thing, although they are friends and have often been seen together.  A recession is to economics what a bear-market is to investing – bad news.  A recession is loosely regarded as two consecutive quarters of decreasing GDP, and bear-market is loosely regarded as a 20% decrease in the stock market.  Right now, it is not certain…

Yanking the Band-Aid Off

Last month, I was hoping the Fed would increase interest rates by 75 basis points or three-quarters of one percent.  Unfortunately, they only raised it by 50 bps or one-half of one percent. This week, the Fed is likely to raise interest costs another 50 bps, which will disappoint me again.  I hope they increase rates by 100 bps or a full percentage point. So,…

Kudos!

I SALUTE the ten Republican senators who had the courage to stand up to the NRA and reject the stupid “slippery-slope” argument that ANY, trivial restriction on guns would certainly lead to the confiscation of all 400 million guns in America.

The Importance of Rebranding ?

The most powerful industry in America has long been the advertising business.  Who else can “influence” you buy a particular deodorant or automobile or how to vote? It took many years for me get interested in sports.  For me, sports is just another subsidiary of the advertising business. Take the PGA or Professional Golf Association as an example.  Their apparent job is to promote golf,…

Read it . . . or not

Life is nothing more than a series of binary choices . . . you know . . . “either-or” There’s “good or bad” —  there’s “eat or exercise” ? Mothers . . . and other expert psychologists . . . warn us that “all work & no play” makes us dull, boring and unhealthy. Most cardiologists would agree. But, what is “work” and what is…

That Old-Time Religion ?

I just finished reading “Religion’s Sudden Decline:  What is Causing It and What Comes Next” by Ronald Inglehart in 2021.  He is a professor at the University of Michigan.  The book is a scholarly work and, as such, is not easy reading.  The first half of the book is full of references to the work of other professors, but the back half has interesting nuggets. …

Fair and Balanced

Republicans and Democrats make lousy financial advisors.  However, MODERATE Republicans and MODERATE Democrats make excellent financial advisors, but they are tough to find.  That’s why it is necessary to say something NEGATIVE about a politician before saying anything POSITIVE. NEGATIVE:  Neither President Biden nor the Democratic Party have any clue, much less any understanding, of the crisis on the southern border.  It is too easy…

Noise & More Noise

There is a lot of noise out there!  Inflation is running wild.  Shortages are everywhere, from cars to baby formula.  The sky is falling??  Why aren’t you more worried?? Of course, curbing inflation is critical, but I’m optimistic it will be largely controlled by year-end for several reasons. First, the Fed may have been late starting, but they are now raising interest rates rapidly —…

Crypto Crash

This is NOT an “I told you so” blog entry! Last week’s crash of crypto values was terrifying, with some losses as much as 90%.  There was a real human-dimension to this, with multiple bankruptcies.  Let us not be insensitive to their losses. When Bitcoin and other crypto-currencies became newsworthy some years ago, I was not impressed.  Frequently, I wrote “tell me one thing –…

Yada, Yada . . . Thoughts & Prayers . . .

Another fuzzy-faced delusional punk shot up a bunch a innocent people in Buffalo this weekend.  As is normal, his parents were shocked and heartbroken.  You can blame the parents, the kid, his guns, even the spineless, soul-less politicians who accept money from the National Rifle Association (NRA).  As a former member of the NRA, I blame the NRA. In its mindless defense of the Second…

Suppliers Supply ??

Keynesian economists see recessions as a failure of demand.  Consumers don’t want to buy or cannot buy the goods that are produced.  Deficit spending by the government covers that shortfall in demand, thus avoiding recession.  Inflation only happens when demand increases more or faster than supply.  This is called fiscal policy and is governed by Congress and the President. Monetarists see inflation as “always and…

“American-wannabes”

Republicans tend to look at the flow of illegal immigrants on our Southern border and see scruffy dope-pushers with no respect for American laws nor American values.  Democrats tend to look at the flow of undocumented workers on our Southern border and see wretched refugees fleeing persecution from gangs and corrupt politicians.  Economists, however, see one of the “Four Factors of Production” being squandered and…

The Wall of Worry

Have you ever said . . . there is nothing to worry about?  Ever?? Worrying is what humans do, especially investors.  We worry . . . a lot!  Pundits joke that Wall Street is ALWAYS trying to climb a Wall of Worry.  Sometimes, the Wall is tall.  Sometimes, it is short. There was a time, a mere 25 months ago, when we had no worries…

Strong Dollar = Weak Report

For many years, the traditional but unofficial definition of a recession has been two consecutive quarters of negative GDP growth.  Since the first read on GDP in the first quarter was a negative 1.4%, does that mean a negative number in the second quarter will show us in a recession?  No! The fourth quarter of last year was a tremendous 6.5%.  The drop from a…

Short-lived Success ?

In the classical world of economics, Earth is little more than a glorified auction house.  If more people want something, they will bid up the price to get what they want.  However, when supply increases more than demand, buyers will demand lower prices.  Fewer buyers = less demand = lower prices. After Putin invaded Ukraine, there was an impressive unified boycott of the Russian economy. …

Darts Hurt ?

When I agree with a Republican position, I often get complaints from Democratic readers.  When I agree with a Democratic position, I often get complaints from Republican readers.  The most vociferous complaint was a few years ago, when I wrote that social media was a “clear & present danger” to our democracy.  He even said I was too dumb to manage money, even for a…

What Happened on Friday?

Imagine a kid with a belly full of jelly beans plus a can of Mountain Dew, who is complaining about a bellyache but cries when given a tablespoon of Pepto-Bismol or other medicine. That’s how I see the current stock market.  After riding high thorough a pandemic with a belly full of deficit spending and cheap money, it complains about inflation but cries when given…

Logically Absurd

If it is true that the best protection from a bad guy with a gun . . . is a good guy with a gun, then shouldn’t we encourage or even require good guys to carry guns? When some pathetic sicko shows up and shoots ten people on a subway platform, why didn’t nine of those people return fire, shooting the sicko? In fact, wouldn’t…

What’s In A Name ?

Bitcoin and cryptocurrencies are misnamed.  Those names give the impression that they are actual currencies and can therefore be valued the same way as traditional currencies, like the dollar, the euro, the yen, etc.  Of course, the ever-present supply & demand for the cryptocurrencies is the final determinant of their value, but it doesn’t reflect balance of trade, balance of accounts, reserve status, trade treaties,…

Thanks . . . Dude!

Last December, I was talking with a young financial advisor wannabe and mentioned that my goal for the new year was to become more conversant about bitcoin and other digital assets. He joked . . . “Dude, you already have grey hair and can never learn that stuff.” First, I thought a dude was a “momma’s boy.”  Second, what difference does the color of my…

To My Democratic Friends

There is much to learn from the embarrassment of Russia for their poor performance against the much weaker Ukraine.  The Russians didn’t understand the “enthusiasm gap” between their conscripts or draftees, compared to the Ukrainians who were fighting for the country and their families.  Enthusiasm matters! When discussing immigration, my Democratic friends dismiss my Republican friends as merely being racist.  That’s not true!  It is…

The Value of Indirect Costs

Dr. Joseph Stiglitz is a Nobel Prize winning economist, who has opened discussion on a number of interesting subjects.  One is how to measure the cost of war. There are direct costs, such as the price of bullets and other armaments, plus transportation costs of soldiers & equipment to the war zone, plus the salaries of the soldiers, plus any survivor benefits to families of…

Complete Agreement

Economists are a cantankerous lot.  Most don’t even like each other, but there is one thing they agree on: Presidents — ALL presidents — get too much credit when things are good and too much blame when things are bad. Like aircraft carriers, the economy is huge and changes directions slowly . . . very slowly!

Sooner or Later

If you lend me $100 and want repayment tomorrow, there is a near certainty you will get repaid.  If you lend me $100 and want repayment in 30 years, there is the additional risk that I could die, go crazy, go bankrupt, or disappear and fail to repay you.  The point is that the longer the term, the greater the risk, and you should be…

Appropriate Violence

My late mother always told me it was NEVER appropriate to hit a girl.  However she also said, it was okay to hit another boy, if . . .”absolutely necessary”! I am amused at the uproar over some male actor slapping another male actor at the annual Oscars award ceremony last night. Apparently, one male actor made a tasteless joke about the other male actor’s…

What, Me Worry?

A few years ago, I saw an advertisement for a DNA analysis for $29.95, which I thought might be fun.  You know, spit in a vial & mail it somewhere.  It was interesting.  Who ever suspected I was 1% African??  Later, I learned the company was sold to the Chinese, who now have my DNA.  I know . . . who cares . . .…

Damn Shame!

Blackrock is the world’s largest money manager, managing well over ten trillion dollars of other people’s money.  The longtime CEO is Larry Fink.  He is both important and very self-important, but I would not drink beer with him. This week, he made news, when he declared globalization killed by Putin’s war on Ukraine.  He is wrong.  Globalization has been terminal dead for years.  It was…

Walking Among Giants

During that period between my retirement from the bank and my eligibility for Medicare, I looked to the Veterans Administration for my health care.  After they verified my eligibility, I was told I was a Group 3 veteran.  That’s nice, I thought, but what was a Group 3 veteran? I learned Group 3 vets have extra benefits.  However, when I learned that Medal of Honor…

Morning Factoids

As a longtime member of NABE (National Association of Business Economics), I enjoy reading the periodic surveys of other members.  The latest shows:  78% of members think the Russia-Ukraine war will make the supply-chain bottlenecks even worse.  A whopping 95% think global GDP will fall, due to the war . . . but not much.  To lower the price of gas, 31% think we should…

$203,500

Would you take one of the world’s worse jobs for a salary of $203,500?  If not, you’ll never be Chairman of the Federal Reserve Board!  We’re lucky anybody would take the job, especially a person like Jay Powell. Yesterday, he led the Board in raising short-term interest rates by a quarter-point (1/4) or 25 basis points, with the stated expectation of six more similar increases…

Inflation State of Mind ?

There are no less than 200 monthly reports on the economy.  Experts bicker about which reports are the most important.  In normal times, the “jobs report” and the JOLTs report get the most attention.  Both of those reports have been quite positive in recent months.  Unemployment at 3.8% is terrific.  The JOLTs Report (Jobs Openings and Labor Turnover) is also terrific, with ten million job…