Bob Brinker did not host Moneytalk today. Bill Flanagan was the guest-host.
Like Bob Brinker often does, Flanagan began the program by giving the latest market closing prices. Flanagan commented that it had been a "pleasant month" for the stock market -- that the Dow gained 4.1% in May; the S&P gained 5.4% in May, and the S&P has had its best 3 month gain since 1938 -- it rose 25%!
HONEYBEE'S WEEKLY MARKET REPORT:
* The Dow closed Friday at 8,500.33. For the week, the index gained 2.7%.
* The closed at 1,774.33. The index added 4.9% for the week.
* The S&P 500 Index closed Friday at 919.14, a gain of 3.6% for the week.
* Oil closed at $66.31
* Gold closed at $980, a gain of less than 10% for the month
* Silver (now seen as a hedge) gained 25% in May.
Flanagan said that both long-term and short-term investors are keeping their fingers crossed because the economy still has a lot of problems. We are facing a lot of questions about debt, and what the effects of the rampant government spending will be.
Flanagan said: "We are now going from General Motors to Government Motors. That is something that people wouldn't have believed maybe as recently as a year ago. But here we are dear fellow American taxpayers -- you now own an auto company......
.....The economic gurus, all Wall Street guys that Obama got together, cooked up the deal and left bond holders out in the cold but certainly did reward, or potential reward the UAW. Surprise, surprise, surprise! After all, all those voters, the UAW, and after all the promises that had been made to Gettelfinger and the fact that he delivered. I must say this, Ron Gettelfinger has certainly done well for the UAW. His union members have a lot to be thankful for. He negotiated a very good deal for his folks -- at other people's expense, but that's the way it is in this kind of a scramble......
.....Well there were a lot of young guys involved in putting this deal together too. Young hedge fund executive by the name of Henry Wilson who had retired at the age of 36 from running his own fund came back into the fold, wrote a letter to a fellow whose name is very much in the news these days, Steven Ratner, whose the czar of the auto bailout deal. And he's got some problems on his hands. It seems that a fund that he had been running, a fund that he owned, Quadrangle, has been mentioned with reference to some pay-to-play nonsense going on at the state pension fund in New York......
.....Can you imagine folks? People in government actually trying to get money out of pension fund operators in order to run their pensions. Good heavens. What do you know? They'll be gambling at Rick's next. I wonder how long this has been going on. At least Cuomo has raised the issue. I hope some other state controllers, and state Attorneys General get on the stick because there is obviously nothing new about this kind of nonsense. And maybe we'll even get to what's been going on with the union. That's asking too much."
Flanagan speculated about what the future may hold for "Government Motors," and what kinds of cars they will build, where they will build them, what they will cost, etc. Then Flanagan said: "Stay tuned folks, it will be certainly one of the most interesting chapters in the history of American capitalism. Or is it chapter one in the ugly chapter of American Socialism."
UPTICK RULE: Flanagan is in favor of it being reinstated.
DRILLING FOR OIL: Flanagan is in favor of drilling in Alaska and drilling offshore. Flanagan said: Why haven't we been doing anything about it? Because we have an administration that is very pro-environment and a congress that is very pro-environment and they're not going to pass anything that is going to do anything like that."
NUCLEAR ENERGY: Flanagan is "big proponent of nuclear" but sees some safety, cost and NIMBY issues. Flanagan said: "You know we keep on talking about the French, 80% of their generation being generated by nuclear power yada, yada. They haven't built a new power plant since 1999. And the new technology that was supposed to get us all out the woods -- they built a plant up in Finland which is experiencing an extraordinary amount of difficulty.....Nuclear would be nice if it worked right."
[Honeybee EC: Ouch! Was Flanagan thinking of all the times that Bob Brinker has championed how the French have been successfully using nuclear power for so long when he ridiculed those who "keep talking about the French.....yada, yada."?
TAX CREDIT FOR NEW HOME-BUYERS CAN BE USED FOR DOWN PAYMENT: Flanagan talked about this a little bit, but for those who are interested in knowing more, here are some excerpts from an article published Friday in the San Jose Mercury: "Change in rules regarding home-buyer tax credit likely to spur housing market [LINK]:
"In a policy change that could benefit thousands of people, the federal government announced Friday that its tax credit for first-time homebuyers can now be used to help pay closing costs on mortgages insured by the Federal Housing Administration.Most of the program and calls were devoted to politics and energy sources. There was a lot of talk about how the administration and congress is spending so much money on "pork." Flanagan's frustration with so many of them, like Teddy Kennedy, who just keeps coming up with more and more give-away programs while the ones already in existence are going broke, was palpable today.
The economic stimulus bill passed in February allows first-time homebuyers a tax credit equal to 10 percent of the home's purchase price or $8,000, whichever is less, when they file their federal income taxes. But under the plan announced Friday, buyers using FHA-insured loans will be allowed to treat the tax credit as additional down payment funds, or use it to pay for the closing costs that are typically incurred when a mortgage is funded.
"Families will now be able to apply their anticipated tax credit toward their home purchase right away," said Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, which oversees FHA."
As Flanagan pointed out, they act like they think there is a money tree somewhere. He talked some about Kennedy's background and how he got his "degrees." [Honeybee EC: Add in Chappaquiddick and Mary Jo Kopechne drowning alone in a car while Kennedy went back to a party, and it is really an ugly picture.] Flanagan said that he was sorry about Kennedy's health problems, but....
GOVERNMENT BOND YIELDS: National Municipal Bond; Inflation-indexed Treasury; and U.S. Treasury Bond yields [LINK]
Bill Flanagan talked about how much he enjoys Amazon's Kindle Wireless Reading Device, and all the advantages it offers over small-print books. Here is a [LINK] if you wish to purchase it.
You can download your own FREE copies of Bob Brinker's Moneytalk programs. The programs are archived for seven days after broadcast at KGO810 radio [LINK]. To download the program to your MP3 player or flash drive, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link]
[Sunday, Bill Flanagan hosted Moneytalk again. The entire program was about General Motors and cars. GM is expected to declare bankruptcy Monday. ]
SJ Al sent these pictures of the USS Alabama in Mobile, and the Pensacola Naval Air Museum: