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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:


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