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Saturday, October 11, 2008

Bob Brinker's Moneytalk : Discussion, Commentary and Excerpts, October 11, 2008

Bob Brinker's Moneytalk Excerpts and Honeybee's Commentary, Updates and Discussion


Bob Brinker said:
“I want to make a comment about what we have seen recently which is unprecedented. Without question, this is the most difficult market environment I’ve seen, and my work did not forecast this bear market decline. I had no way of forecasting a global banking crisis. If I had, that would have been a huge forecast to make. And yes, it would have caused a lot of disbelief but I would have made that forecast if I had been convinced it was going to happen.

I’m not a person that believes in selling into a panic atmosphere and much prefer not to do so. My personal opinion is, it’s not the right thing to do. So recognizing that this is a situation that is going to require patience and time to resolve, that’s the way I feel about it. Obviously, we are seeing the reason that we always talk about a conservative balanced portfolio approach for those who are approaching or in retirement……..Now I believe that certainly we will come out of this over time, but there’s no question about it, it’s unprecedented.”

Honeybee EC: We have been in 20% bear market territory since July 2, 2008 with nary a word about it from Brinker, except to say that the S&P was "inversely correlated" to the price of oil. It took a 45% decline for him to mention it. As I have said for years, when everything else fails, Brinker will fall back on the "unprecedented" exogenous event. The S&P 500 Index currently stands at 899.22:

Correction Statistics for 07/02/08
S&P500 Chart
Last Market High 10/11/07 at 1,576.09
Last Market low 03/17/08 at 1,256.90
Current S&P500 Price 1,261.52
Decline in Pts 314.57
Decline in % 20.0%

Brinker said he admires Henry Paulsen and thinks he’s doing everything in his power. He expects needed capital injections from “Uncle Sam” into the banking system in order to stabilize the financial market place -- maybe the private sector too, if they can get what they want.

Brinker said he wonders why the government has never came up with a program to guarantee mortgages so that sub-prime and “liar loans” would be covered -- that would mean that all the toxic mortgages would now be worth “100 cents on the dollar.”

There were no questions about the stock market Saturday.

Brinker’s Saturday guest-speaker was Charles D. Ellis, who wrote: The Partnership: The Making of Goldman Sachs

If you missed the program today and want to listen to it or download it for free, it is available in the KGO810 Archives for one week.


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