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Tuesday, February 3, 2009

Bob Brinker's Pertinent Points

1) For some time now, Bob Brinker has advised listeners to be certain they have FDIC insurance on all deposits.

Here is a new FDIC website where you can check to be certain that you have adequate coverage: FDIC: Electronic Deposit Insurance

2) Bob Brinker often gets calls from listeners who want to know if they should invest in taxable or tax-exempt bond and money market funds. The Vanguard Group has created a Taxable-Equivalent Yield Calculator. You can also learn more about Tax-Exempt Investing.


3) Bob Brinker usually keeps us informed on the latest FOMC decisions. This was released today:

"Release Date: February 3, 2009 For release at 10:00 a.m. EST

The Federal Reserve on Tuesday announced the extension through October 30, 2009, of its existing liquidity programs that were scheduled to expire on April 30, 2009. The Board of Governors and the Federal Open Market Committee (FOMC) took these actions in light of continuing substantial strains in many financial markets.

The Board of Governors approved the extension through October 30 of the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), the Commercial Paper Funding Facility (CPFF), the Money Market Investor Funding Facility (MMIFF), the Primary Dealer Credit Facility (PDCF), and the Term Securities Lending Facility (TSLF). The FOMC also took action to extend the TSLF, which is established under the joint authority of the Board and the FOMC.

In addition, to address continued pressures in global U.S. dollar funding markets, the temporary reciprocal currency arrangements (swap lines) between the Federal Reserve and other central banks have been extended to October 30......."

Read the list of included banks at the Federal Reserve website.


4) Brinker often talks about how horrific the housing recession is. Here is some good news finally:

"WASHINGTON (AP) -- An index that tracks signed contracts to purchase existing homes rebounded in December, as buyers snapped up properties at deep discounts, especially in the South and Midwest................The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for previously owned homes for December rose 6.3 percent to 87.7 from an upwardly revised November reading of 82.5, which was lowest month on record. That's better than the 82.3 reading economists expected, according to a survey by Thomson Reuters.

The reading also was up 2.1 percent from December 2007.

Typically there is a one- to two-month lag between a contract and a done deal. Home sales that were pending in December are likely to be completed in the coming weeks......" [Read article here]


5) Bob Brinker often cites the Personal Consumption Expenditure price index. Yesterday, the Bureau of Economic Analysis released the December 2008 personal consumption expenditure (PCE) price index data:


Personal income decreased $25.3 billion, or 0.2 percent, and disposable personal income (DPI) decreased $25.1 billion, or 0.2 percent, in December, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $102.4 billion, or 1.0 percent. In November, personal income decreased $44.0 billion, or 0.4 percent, DPI decreased $33.9 billion, or 0.3 percent, and PCE decreased $77.8 billion, or 0.8 percent, based on revised estimates.

Real disposable income increased 0.3 percent in December, compared with an increase of 0.8 percent in November. Real PCE decreased 0.5 percent, in contrast to an increase of 0.3 percent. The price index for PCE decreased 0.5 percent, compared with a decrease of 1.1 percent."

Read more about it here: BEA News releases

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