The Flinchum File

As a longtime member of the National Association of Business Economics (NABE), I look forward to their quarterly surveys. It is important to know when my thoughts are in the economic mainstream . . . or not. Their just-released survey is interesting. I have never seen less agreement at NABE. Take your choice: continuing economic expansion, severe recession, or a modest recession or “soft-landing” —…

As a proud card-carrying “child of the Sixties”, it seems unnatural to respect anything or anyone. Worse, even if you do, it still seems unnatural to show it. However, I cannot hide my respect for the people of Ukraine, who have fought so bravely and have suffered so much at the hands of Russia. I respect the Ukrainians greatly and salute them! In the Army,…

Friday, the Department of Labor released its monthly reports of jobs created last month. It was a great report but too good to be true. Analysts expected about 185 thousand new jobs, as the economy slows down due to higher interest rates. To everyone’s surprise — no, I mean to everyone’s shock — 517 thousand new jobs were created last month. While that is not…

Do you remember much from your freshman course in sociology? Me neither! I cannot remember the professor’s name, but I do remember one particular statement he made: “Anybody who wants to be a cop is therefore unqualified to be a cop!” Huh? His belief was that honorable citizens of a democracy find it so repugnant to beat-up other citizens that they will avoid that duty…

Generalizing individuals, especially millions of individuals, is tricky business and usually in bad taste, so here we go: Early last summer, the media was obsessed with the rapidly falling economy. While I can talk for hours about the defense measures our economy can deploy, I find it helpful to tailor my comments to the listener’s generation. After all, life’s expectations reflect life’s experiences. Members of…

The local Veterans Administration medical system has a new, modern check-in procedure . . . by text message. There is just a large sign instructing veterans to text a five digit number, and they would then receive a reply-text with instructions on what identifying information is needed and must be entered by the veteran. I was sitting in back of the waiting room when an…

My latest newspaper column lives here: https://www.pilotonline.com/inside-business/vp-ib-expert-flinchum-0116-20230117-rxidvdqb6vee3g77tigd36m644-story.html

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…

Here is a column I wrote back in 2019 about the insanity of debating the debt ceiling. https://www.pilotonline.com/inside-business/article_fecaf2c0-5ace-11e9-a648-33d438ae14b0.html

The debt ceiling is stupid! While the goal is great, it has never worked. Why keep doing something stupid? Here is a blog entry I wrote ten years ago: https://baycapitaladvice.com/ceiling-uncertainty/

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…

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…

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…

It is that time of year when pundits feel compelled to make forecasts. The overwhelming majority of forecasts each year are either (1) more-of-the same or steady-state or (2) the sky-is-falling. Of course, both are theoretically reasonable. The current U.S. economic data is almost uniformly positive. That optimism seems to be contagious, as more foreign countries seem to be improving as well. Even more positive,…

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…

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 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…

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,…

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…

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,…

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…

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”…