Summary, Commentary and Moneytalk Excerpts, August 24, 2008
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Bob Brinker did not discuss nor comment on any stock market activity today -- and he made no forecasts. The only time he referred to the stock market was when a caller asked about selling his stock now and buying it back a year later. Brinker asked him why he would want to sell stocks now that the market is “off its highs," then Brinker said: “I see it differently from you…….[I see] that a year from now if you wind up putting that money back into the equity market at a higher level than you’re getting out, then you will have foregone that profit………the only way you could answer your question would to be absolutely be certain where the equity market will be in one year. And if you have a way to actually know where the S&P will be trading in a year with guaranteed certainty, well then obviously you’re operating on a whole different level. But for those of us, even those of us who try to forecast where the market will be going forward, to make a statement that you know that a year from now it will be at this level, that’s pretty tough country to operate in because it requires an operable CRYSTAL BALL.”
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Today, there was lots of political talk, GNMA talk, some repeat data about inflation, and several very personal questions from callers that received lengthy answers.
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A caller who wanted to know how much one could “low-ball” an offer when buying a home. Brinker explained that it was certainly a buyer’s market, but she should check comparables in the area.
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NOTE! Brinker told a caller that if the government does bail out Fannie Mae and Freddie Mac, it might mean that the common stock will become worthless.
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Brinker repeated what he has said previously about the certainty of Obama raising taxes if elected. Much of what Brinker said was almost a verbatim repeat of what he said on April 5, 2008 -- as I recorded in my Summary that weekend. Here are the excerpts:
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Bob Brinker said: "The most likely nominee based on the current polls, subject to change, is Barack Obama………Barack Obama stands firmly on raising the marginal tax rate on entrepreneurs to levels not seen since John F. Kennedy………..he’s talking about a potential marginal tax rate of about 60 to 63%........Now I think with a marginal rate of 60 to 63%, I think that a lot of entrepreneurs will take a page out the old Johnny Paycheck Songbook, ‘Take This Job and Shove It, I Don’t Work Here Anymore.’ That line made the late, great Johnny Paycheck famous and it may make Barack Obama famous too, to a lot of entrepreneurs who may take up golf. Because the bottom line is if you are confiscating 60% or more of somebody’s compensation, in a lot of cases, they’re just going to find something else to do with their time.”
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Brinker continued by stating emphatically that this was a gigantic misstep in Obama’s campaign, and that he may get away with it with people who don’t know any better or understand where the jobs come from, but he was not going to get away with it with him..
Brinker went on to explain how easy it would be to construct this 60%+ marginal tax bracket for a lot of American entrepreneurs who create jobs. Firstly, Obama and Clinton will very quickly get the top federal rate up to 39.6 after inauguration – as soon as they can get it through congress..
Obama has made it clear that he likes this donut-hole Social Security plan that he has come up with. Brinker described Obama’s “donut hole” plan: “This is the plan where, right now you have the $102,000 cap on the Social Security tax. This is the 6.2 plus 6.2, which is 12.4 to the entrepreneur and business owner…….everything above that not subject. Well, he has this donut hole idea, where you create maybe a $100,000 up to $200,000………. where you don’t do anything right now………where you don’t make any changes. Then he sinks the battleship when the donut hole is finished. Because above $200,000, the Junior Senator from Illinois, in his naïve notion of how jobs are created and economics works, is talking about lifting the cap on Social Security……..So we have the 39.6 and we have the 12.4, so all of a sudden we’re up to 52%. And the 2.9, the cap is already lifted on Medicare…….now we are up to 55%. How many entrepreneurs do you think live in places that charge high state taxes………now you are up to 62%, depending on the state you choose. A 62% marginal tax rate on entrepreneurs. This is the policy that Barack Obama is talking about.”.
Brinker commented that he thinks Obama may get away with this because entrepreneurs don’t elect presidents – they are elected by “rank and file.” However, Brinker thinks it is one of the worst economic policies that he has ever heard out of a presidential candidate, and he believes that if Obama doesn’t change his “donut hole” policy, then he is running a “dreadful, dreadful” presidential campaign -- because he will be attacking the “core growth engine for new jobs in America.”
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Brinker’s guest speaker today was Richard Thaylor, who co-authored, Nudge: Improving Decisions about Health, Wealth and Happiness
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Pen-name Stoxnbonds from Facebook wrote a "Brinker-Shave" enjoy... 8~)
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More poems. Enjoy!
The streak of good calls
Has come to a halt
Now all he can say
Is it's oil's fault
Brinker Shave!
The market direction
Is going the other way
So Money Talk is reduced
To nukes and Ginnie Mae
Brinker Shave!
When the timing model
Misses the mark
Radio listeners
Are left in the dark
Brinker Shave!
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