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Saturday, January 31, 2009

Summary: Bob Brinker's Moneytalk January 31, 2009

Sunday, February 1, 2009 Moneytalk Update:

The stock market was only mentioned one time today. Caller Tom from Rhode Island said:
“Hello Bob. I got your special bulletin about your buy, you are positive on the stock market right now. Is that true?"

Bob Brinker answered: “Uhhhh… says what it says, Tom. There hasn’t been any change in it. It was published on the website on 15th of January, and it’s still there for subscriber access and there has been no change to the content of that message…..1-800-xxx-xxxx…."

Here are David Korn's comments about that call to Moneytalk:


Caller: This caller told Bob that he got his special bulletin reflecting his positive/buy view on the stock market and wanted to know if that was still good. Bob said he has had no change in his views since the bulletin was published on his web site on January 15th and it is still there for subscribers to read.

EC: Bob didn't elaborate further, probably because the market is down since that bulletin. The S&P 500 closed January 15th at 843.74. This past Friday, the S&P 500 closed at 825.88. The major thing to take away from this call is that Bob has not changed his positive outlook on the market since the January 15th bulletin."

Brinker spent most of the weekend talking about the stimulus package. Here are excerpts from his Sunday opening monologue that spells out his ideas:

Brinker said: “The big story this weekend is the gigantic Stimulus Package moving to the United States Senate where it will become a topic of great debate…..It’s already been passed by the House. There are some good things in it, especially the tax cuts, but there are a lot of other things in the plan that raise questions about the plan. But most important of all, there are some things missing from the plan……three things missing from the plan that would make it better……

…..As they look at it right now, and this would be in the form of reduced marginal rates resulting in more money in the weekly paycheck as a result of withholding adjustments. One of the biggest parts of the plan – approaching $300billion of the $819billion, so that’s about 35% of the total plan -- is tax cuts for individuals. And under the current proposal this would apply to those making approximately less than $200,000 per year and would amount to about $500 per person or $1,000 per family……

……..The business tax cuts are small relative to the size of the plan and small relative to the job that needs to be accomplished. Now there would be some tax breaks for equipment and property purchases and there would be provisions for some companies to recover taxes paid in good years against more recent losses. But what is missing..….is the type of accelerated depreciation that would stimulate business in 2009……..The focus should be 2009, we aren’t dealing with 2012….I’d like to drum that into the heads of those making policy Washington so they would get it because right now, they don’t get it…..

……The president is talking about putting out a relatively small amount money for infrastructure projects right away, and over a period of years it would be more. But again, why should we have a stimulus package for 2012 or 2011?......

…..In the energy category, such opportunity is there for us to do something really big. And it is absent…..from the program. This is a plan we’ve talked about on Moneytalk where we would have a national initiative—and it should be part of this plan--in the energy section of this plan. A national initiative to move the United States vehicle fleet to natural gas propulsion. Very basic stuff here…..The first year you mandate that all Federal vehicles must be propelled by natural gas……That results in the purchase of a tremendous number of new vehicles – conversion of other vehicles to natural gas…….The second year you’d mandate that the states would have to go to natural gas……The third year the townships, the municipalities, the towns, the cities, they could join. And then you would have all the publically owned vehicles in the natural gas fleet. And then the fourth year, the general public would be ready to join. Now there’s a four-year program…..

…..You want a green investment? This is a green investment because by running your vehicle on natural gas, you reduce your CO2 emissions by approximately 60%......An approximate 60% decline C02 by switching to the much cleaner burning natural gas. Not to mention one of the keys here – we have the natural gas in the United States of America. We have doubled our reserves in the last five years, they are still growing and they should continue to grow……And we can say to the OPEC oil blackmailers, ‘see you later, have a nice life. You’ve blackmailed us one time too many.’…….

…….Natural gas is the answer. We can use it in our vehicle fleet, we have the technology, and guess what – you can fuel your own natural gas vehicle in your own garage, it’s a very simple procedure. Where are your representatives on this subject? Why are they continuing to dictate that we be blackmailed by the OPEC oil blackmailers?......

…..Do you think your car is going to run on windpower? Do you really believe that you’re going to ride down the highway on wind power? It’s not going to happen……

…..Where is President Obama on this initiative? Why is he out to lunch on this initiative? I don’t have the answer, but he is out to lunch on this initiative, and so is the United States Congress, but this should be driven from the White House. The White House is the engine for this type of policy…..And of course, we need the aid to states and we will get the aid to states. The budget deficits are mounting……

…..I’ve mentioned that Dr. Bill Wattenberg……has been out front on this and it’s such a brilliant idea it’s really in the no-brainer class when you dissect it. And this is the tax holiday for buyers of foreclosed properties, and I would say in 2009 – I’m not saying I wouldn’t extend it. I want to see this inventory off the books…….Now that means if you buy a foreclosed property, you pay no capital gains taxes when you sell it no matter how much you make. You pay no taxes on the rental income for the time you rent it for as long as you own it….. That’s a tax holiday for buyers of foreclosed property……

…..Hopefully a light will go on in Barack Obama’s head that will tell him that it makes great sense to get the natural gas vehicle initiative underway as part of the stimulus package…….Hopefully, Barack Obama will lead the way on that. So far, he has been strangely silent. I say that because he supports energy investments that reduce emissions, and yet ignores the most obvious of all – the national natural gas initiative that we have talked about on this broadcast for several weeks and so far, it has been ignored in Washington……I know for a fact the message has gotten through at a lot of levels. But apparently, they have other fish to fry, like windmills and solar panels……

…..And hopefully, a light will go on in congress and one of the representatives in the Senate will bring up this wonderful idea from Dr. Bill for the tax holiday for buyers of foreclosed properties in 2009. And in addition to that, let’s get this accelerated depreciation fully accelerated, that you can right the whole business equipment purchase off in 2009……

…..These are ideas. These are solutions. You notice we don’t take our time on Moneytalk whining and crying and complaining and criticizing. Because you know why? It may be entertaining to some, but at the end of the day, it’s a waste of time. It’s a waste of time to be crying and whining and complaining and criticizing those who are in a position to make a difference. I’m much more interested in ideas and solutions to the problems. And that’s why we don’t sit around here with the crying and the moaning and the whining. We’ll leave that to others."

Brinker's guest speaker on Sunday was John Tantillo from the Marketing Department of America, who talked about Superbowl ads being a waste of time.


Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, January 31, 2009. For the MONTH of January: Dow closed at 8000.86 (decline of 8.8%); S&P 500 Index closed at 825.88 (decline of 8.6%); Nasdaq closed at 1476.42 (decline of 6.4%); Oil closed at $41.75 (December 31 = $42.66).

Bob Brinker
did not talk about the stock market or bond market on Saturday. The S&P 500 Index had the WORST January EVER, and it was the worst month for bonds in 25 years.

Brinker's comments paraphrased and excerpted:

Fourth quarter GDP declined at annual rate of 3.8% - biggest quarterly decline since 1982 due to a "confluence of events" such as tight credit markets, job losses, etc. Brinker expects weakness to continue in the first quarter of 2009.

[Honeybee EC: Brinker is on record saying that the economy is the worst it's been since Herbert Hoover. We know that is false because Jeffchristie posted the facts to set the record straight. Perhaps Brinker realized his mistake because he didn't repeat it, like he is so often prone to do. On the other hand, he didn't tell the whole story like JoefromSpringfield did here]:
"Brinker claims this is the worst economy since the great depression. Well the GDP numbers are in for 2008. The economy GREW by 1.3% for the entire year. It was down 3.8% for the fourth quarter. Unemployment average for 2008 was 5.8% with December at 7.2% These figures don't look like anything near the great depression. In fact the numbers for 1982 were much worse than this. Unemployment was over 10% and GDP was down 6.8% for the first quarter. It looks like Brinker doesn't know what he is talking about."

THE $825BILLION STIMULUS PACKAGE: This was Brinker's main topic of the day, both in his monologues and in the calls that were let on the air. He said that there are portions of it that are commendable and other portions that are questionable. He likes the "tax cuts" but disapproves of some of the spending. Brinker itemized some of the spending that the bill includes, such as increased unemployment benefits, an extra $80 per month added to the Food Stamp Debit Card for a family of four, and $87billion increased spending on Medicaid (medical welfare) Benefits. [Honeybee EC: Some people are calling it a "Stimulus Christmas List." I don't know where the $millions for birth control fits in -- under "stimulus" or "Christmas list." 8^)]

INFLATION: A caller asked Brinker if he thought that inflation might become a problem due to the spending included in the stimulus package. Brinker said: "It is the solemn duty of the Republicans in the Senate to make certain that this stimulus bill sees the light of day before it is voted on. Anything that's in here that's a boondoggle, that's pork-barrel or anything like that, should be stripped out of this bill, it should be focused upon before the vote. They can do it. They have the bill -- they can do this. And they need to get the people of this country stirred up about wasteful spending. That's not the purpose of this bill. It is an opportunity for wasteful spending, but it's the obligation of the loyal opposition to make sure that sees the light of day before the vote. And you can embarrass the people who are trying to do the wasteful spending and make them pull it back, so I think that's their role.....

......What we need is a stimulus package for 2009. That includes the tax cuts that I mentioned. I would not quarrel with that for a moment. But I would certainly share anybody's concern about the expenses years out that are in the bill. In other words, spending money in 2012 - 2011.....I really don't see why that should be part of the bill. I think that the bill should encompass no more than a two-year time-frame -- that's 2009-2010. And I think it should be front end loaded into 2009 -- and the most valuable piece of the bill is the tax cuts."

TAX INCENTIVES FOR PURCHASE OF FORECLOSED PROPERTIES: Not in the stimulus package, but the "time has come" for it.

A really "stupid" thing to do. Brinker said: "Look what happened if you did that in 2007?"

SMALL BANK CLOSURES: There were 25 bank closures in 2008, and there has been three closures so far this year -- one in Utah, one in Florida and one in Maryland. The FDIC insurance will take a hit of about $225million.

FDIC: For now, will cover up to $250,000 per account, which includes principal and interest.

AFGHAN AND IRAQ WARS: Brinker said that Iraq was "winding down," and that Afghanistan was "the war." Brinker said: "I don't know of anybody that disagrees with the fact that we had to do something major in Afghanistan due to the situation with the Taliban and providing safe haven to Obama Bin Laden, Osama Bin Laden -- and his crowd......The president has stated that he will put more troops into Afghanistan, so that will be expensive." [Honeybee EC: OOPS, daBrink made a slip of the tongue!]

SHARK ATTACKS: Brinker said that for 23 years he has talked about learning to become your own "personal financial manager." He said: "You can do this, but you need the knowledge......The whole idea is to go down that learning curve. Learn as much as you can so that when the sharks arrive, you know enough to avoid the shark attack."

There were no callers on the program today that asked Brinker what he thought about the stock market or how he thought the stimulus package might affect it. And surprisingly, there were no Ginnie Mae calls today. Most of the callers just gave their opinions about the stimulus package.

Brinker's Saturday guest-speaker was Allen St. John, "The Billion Dollar Game: Behind-the-Scenes of the Greatest Day in American Sports - Super Bowl Sunday"

Download Moneytalk for free, listen at your convenience. A downloadable version of Bob Brinker's program is available at KGO810 Archives for a full 7 days after broadcast! Now, you can listen at your convenience on your portable media device, whether it's in your car, on the trail, in your garden, or just relaxing at home. You won't have to stay online to listen any more! Moneytalk, available when you want it, FREE at KGO810

Perhaps Dixiegeezer's picture of a gas station in eastern Washington might have the answer for our energy problems. 8^)

Bob sent another picture taken in eastern Washington. He says this beautiful weathered barn is on Hwy 97 in Kittitas County:


Bob Brinker Sez Bottom is in (Again)

Bob Brinker always says that the stock market anticipates the future about six months in advance, so one would have to conclude that he believes the market bottom is now in, and it will soon be turning up -- IF 2009 is going to turn out to be a good year like he is forecasting.

But don't forget that he has made several similar forecasts during this mega-bear market. Here are three examples. (February, June and October, 2008):

1) According to Peter Brimelow’s February 21, 2008 Marketwatch article, Bob Brinker said:
"The initial closing low in the current stock market correction process occurred on Jan. 22, when the S&P 500 Index closed at 1310.50. The market subsequently rallied for eight days, at which point it began the process of testing the area of the Jan. 22 closing low........We now rate the stock market attractive for purchase on any weakness that occurs in the current area of the S&P 500 Index low 1,300s, or any minor weakness that occurs below that level." . "As has been the case with every correction since August of 2007, several stock market pundits are claiming that a bear market is underway. We do not believe this is the case. We expect the S$P 500 Index to work its way into record new high ground by late this year or in 2009."

2) In Mark Hulbert's June 2, 2008, Marketwatch article, he wrote the following about Bob Brinker's stock market outlook:

"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes." Brinker's model portfolios are fully invested."
[Honeybee EC:] Also, in the June 4, 2008 issue of Marketimer, Brinker said that since the March test of the lows: ".......a renewed uptrend has been underway, and we expect the market to trade with an upward bias until new record highs are achieved above the S&P 500 Index closing high of 1565.15 registered last October. Our S&P 500 Index price target remains in the 1600 range either late this year or in 2009."

3) Mark Hulbert's October 7, 2008 article in Barron's says the following:

"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early October, editor Bob Brinker wrote: "We believe the stock market will return to an uptrend within six months of the start of the next economic recovery. Although the timing of the recovery is uncertain, our view is that it could be underway by next spring. If that scenario unfolds, we could be looking at a stock market turnaround beginning in this year's fourth quarter. This bear market decline has been accompanied by an extraordinary flow of negative financial news, but we are focused on stock market recovery in 2009 as investors go through the process of discounting economic recovery prospects in advance of an improved economic outlook." Brinker is recommending that subscribers' stock portfolios be fully invested."

Dixiegeezer sent this picture of Mt. Hood in Oregon:


Saturday, January 24, 2009

Summary: Bob Brinker's Moneytalk January 24-25, 2009

Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, January 24-25, 2009. For the week: Dow closed at 8077.56 (decline of 2.1%); S&P 500 Index closed at 831.95 (decline of 2.1%); Nasdaq closed at 1477.29 (decline of 3.4%) Oil closed at $45.98 (last week: $35.88).

Note: Bob Brinker did not discuss the stock market this weekend except for a few general comments about 2008, and to point out that Citigroup is now a penny stock. Brinker did not mention that Microsoft (which he recommends as a hold) is back to 1998 levels.

SUNDAY UPDATE: Brinker told a caller that 2008 was a "brutal year" for the stock market. He said it might be the "worst ever." [Honeybee EC: 2008 definitely fit the description of the bear market that carried out everything, including "the piano player." Brinker used to claim HE would not be in the market when that happened. How sad that after all those years of making that claim, just the opposite is true. He not only stayed fully invested, he recommended dumping all new money in consistently throughout 2008 -- either lumps sums at 1400, 1300, 1200 -- or each time those were dumped, he said to dollar-cost-average.

So all new money added on his advice has taken precipitous losses. It's very likely that he has issued a new buy signal now in the mid-800's range -- based on when he sent out his most recent special bulletin (January 15th). Is it logical to believe that he is right this time? It's possible, but if not, it's like the weather in parts of Hawaii, just wait awhile, it will change.]

The Sunday program was quite repetitious of Saturday's program -- very little new was offered. He covered the predicted inflation rates and how they are calculated. He's done that several times before, and I have covered it in detail in other summaries. He still doesn't think the Fed will let California go bankrupt. A caller asked him what he thinks will happen to the price of oil. Brinker answered: "I believe the price of oil will follow the economy."

OBAMA: Brinker made the statement that "Obama is one of the smartest presidents in the last 1/2 century." [Honeybee EC: That has to be one of the most blatantly biased and subjective opinions I've ever heard Brinker say on the air -- and I've heard plenty. I would like to ask Mr. Brinker exactly WHAT Obama has done to cause him to reach that conclusion. Has he accomplished some brilliant piece of legislature? Has he ever successfully run a business, or has he ever flown a fighter jet, or ended cold wars and had Communist walls torn down? What is it about this man that would prompt him to spout such propaganda on a "Moneytalk" program.]

Bob Brinker's Saturday opening monologue was exclusively devoted to the banking/financial situation. He talked about the original TARP program which was supposed to have been used to buy toxic assets on bank balance sheets -- instead, the first three and a half $billion went for bank capital injection and the AIG bailout.

Brinker said that as of now, the problem the government is facing is how to implement the second round of the TARP program. Brinker offered his own solution, which I have included here.

Brinker said:
"Obviously, the problem has been standing out like an 800 pound parakeet in the room since day-one of this problem has been, how do you get the toxic asset off the balance sheets of the banks, which will then allow the banks to resume normal lending practices. Which by the way, is the essential mission of the banking system. Until the banks feel that they are no longer bound by these toxic assets on their balance sheets, they are going to be recalcitrant when it comes to approving loans..........Automobile financing is just one of the significant areas of what is going on out there where the banks have pulled back on their lending practices...... And the thing that is frustrating to me -- not that I believe anything I say on Moneytalk should carry any undue weight in Washington, because I don't believe that. I think that it's a good thing for people to express their views, come up with as many ideas as they can, and see which ones can see the light of day and perhaps contribute to a solution. And that's really our effort on the program......

......But I do find it frustrating that we've been talking about an RTC, a Resolution Trust Company Solution to this same problem of toxic assets on bank balance sheets since last autumn,
we've been talking about it since last autumn [Honeybee EC: I have never heard Brinker say the words "Resolution Trust Corporation" on Moneytalk. Perhaps I just missed it all these months, but I don't think so.] and we still have not seen anyone in Washington, from either party -- it's not a partisan deal -- come forth and lead the way to a Resolution Trust Corporation type solution to this problem. And that would simply be the creation of an entity -- back in the 80's we called it the Resolution Trust Corporation -- right now, you can call it whatever you want, but back then it was the RTC. And what they did back there was, they had the office of thrift supervision take over about 700 insolvent the S&L sector.....What happened was, they took the bad loans out of these companies, they transferred ownership of the bad loans to the Resolution Trust Corporation. And the RTC had the responsibility of managing the loans until they could sell them later on, and they did sell them later on......

......Now all was said and done, the Treasury lost over a $100 billion on the deal, but it solved the problem. It solved it in a relatively short period of time in the sense that it got the bad loans off the balance sheets of the S&L's. And that was it. That was the solution and why we've not had any leadership in Washington from either Party.... And they've had all this time.......It worked before and it will work again.....This is the way they are headed.They don't really have an alternative.....They must get the bad loans off the balance sheets of the banks.....That's the only way you'll get the banks to resume normal lending habits.....Because in the interim, the bankers are in a state where they are frozen. They cannot bring themselves to make major new loan programs to their customers because they are still worried about their capital......

......So what we need is a Resolution Trust type of solution. I don't care what you call it this time, but you should call it RTC2. I've been thinking about names for this entity and this is the one I like the best because it sticks to the knitting. It focuses on what we successfully did in the 1980's and 90's..... My favorite name for this is RTC2."

In addition to the above suggestion, Brinker recommended two tax-code changes that he believes would help with the financial/banking situation:
Firstly, he suggested that vehicle loans be made deductible again, like they used to be years ago.

Second, he thinks that depreciation should be accelerated for business vehicles.
In hour-two monologue, Brinker talked about John Thain's $1.2million office remodel at Merrill Lynch. Brinker said this story reached all the way to the White House and that Obama was very, very critical. Here is a story about Obama's reaction and possible repercussions.

Later in the program, Brinker sang a little bit of a song about Zsa-Zsa Gabor and said that she was another victim of "The Mad Dog" (Bernard Maddoff) and may have lost $10million. (The song that Brinker was "singing" is "Donna, Donna, the Prima Donna." Zsa-Zsa is mentioned in the lyrics. There is a website with the lyrics on it, but I am not going to link to it because the site had several pop-ups.)

All of the callers stuck with Brinker's subjects of the day. There wasn't even a Ginnie Mae call. 8^)

Brinker's Saturday guest-speaker was David Cay Johnston, author of: "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill)"

Brinker's Sunday guest-speaker was Steve Knobber, who wrote: "Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age"

Download Moneytalk for free, listen at your convenience. A downloadable version of the entertaining Bob Brinker program is available at KGO810 Archives for a full 7 days after broadcast! Now, you can listen at your convenience on your portable media device, whether it's in your car, on the trail, in your garden, or just relaxing at home. You won't have to stay online to listen any more! Moneytalk, available when you want it, FREE at KGO810

Dixiegeezer took this beautiful picture. It is Mt. Rainier in Washington state.

Bob just sent me this picture that his son's friend took on a hiking trip in Washington's Mt. Rainier National Park


Thursday, January 22, 2009

Microsoft Back to 1998 Level

Bob Brinker's Marketimer "Individual Issues" list has included Microsoft for many years. Brinker upgraded MSFT to a buy on March 11, 2003 at $23, and it is currently on hold.

Marketimer April 3, 2003, Bob Brinker said: "On March 11, we upgraded Microsoft to "buy" at a price of $23....."

Bob Brinker also issued his major buy signal in March 2003 -- investing all available cash reserves at S&P 807.

Here we are almost six years later. The S&P 500 Index is basically flat -- it closed at 827 today, but has been as low as 752. Today Microsoft closed at $17.11. Oops....

Dixiegeezer took this picture of El Capitan in California's Yosemite Park:


Wednesday, January 21, 2009

Bob Brinker's Bear Market Bottoms

Bob Brinker announced a special bulletin on his website, on January 15, 2009. Some of you have asked if he has called a new market bottom and issued a new buy signal.

If Brinker did call a new market bottom on January 15, 2009 it would be the third one since the start of the mega-bear market just a year ago when Brinker's buy-in level was at S&P mid-1400's.

Brinker's first bottom call was at the March, 2008 lows, when he said the market had bottomed and was "attractive for purchase" at mid-1300's. On Moneytalk in April 2008, Brinker said he was buying in the low-1300's:
Caller John said: “I took your recommendation, Bob.. When it was below the 1300’s I added…….I’m just glad I got you, your son and the Marketimer on demand.”

Brinker replied: "And just for the record, I’m right with John. I was the exact same thing that John was doing. When we saw that weakness on the correction test into the low-1300’s and that very, very minor weakness that we had just below that level for a very short window of time, I was doing the same thing that John was doing – which was adding to positions."

Brinker's second bottom call was September 3, 2008. Brinker said he thought there might be "additional testing of the July 15 closing low," but in his view "the S&P 500 low-to-mid 1200's range is an attractive area for equity purchases." (Brinker rescinded this advice just two weeks later, and he has recommended dollar-cost-averaging since then.)

Now here we are in January, 2009 and some are speculating that Brinker has found a new bottom and issued a new buy signal. Well, he is not alone if he is thinking that the market is in a bottoming process and testing the November lows.

Mark Hulbert wrote an article for Marketwatch on January 15th titled:
"No Key Reversal." Hulbert thinks that the bear market bottoming process has further to go.

January 17th, David Korn said that he thinks a good entry point is 750-800:
"There was some talk on Wall Street about a retest of the lows occurring Thursday. The S&P 500 recorded its closing low on November 20, 2008 at 753.44. Now other than that day, the lowest close for the S&P 500 was the day after (November 21st) when it closed at 800.03. We got pretty close to that on Thursday, when the intra-day low was 817.79, before it closed at 843.74. I prefer a retest where the new low is breached, on lower volume. But if you are looking to buy, I think a good long term entry point is between 750-800 in the S&P 500."

It's important to remember that Brinker never recommends selling the market into weakness. Brinker reiterated this to a caller on Moneytalk just 3 months ago. September 27th, Brinker said: "Actually Ken, it's not my opinion that you should be selling stocks right now. I don't have a recommendation to sell stock right now. And if I did have a recommendation to sell stock right now, you would know about it. No, I do not have that recommendation. And really, that's all I can say. We have not, we have not issued a sell signal on this market.

In the January 6, 2009 issue of Marketimer, Brinker said that he expected the 750-850 November lows to provide support for completing the bottoming phase.

Dixiegeezer took this beautiful picture:


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