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Saturday, November 28, 2009

Bob Brinker's Moneytalk: Summary, Discussion and Excerpts, November 28, 2009

Posted November 28, 2009....Bob Brinker is taking the holiday weekend off from hosting Moneytalk. Lynn Jimenez, who according to Bob Brinker is part of his "team" now, is his fill-in host. Ms. Jimenez has been the business reporter for KGO810 for many years.

Lynn Jimenez' opening comments paraphrase and excerpts:

Dow slid 154 points, S&P fell 19 points, trading was light….as of November 24th the market was near a 13 ½ month high….gold fell for the first time in 10 days…bonds rose….all sparked by Dubai…"Even small pebbles can make big ripples sometimes.”

Number of Americans joining jobless lines fell below ½ million for the first time in a year – down to 466,000…..four week moving average came in at 496,000…."Those getting long-term benefits fell mainly because people dropped off of rolls…” Consumer incomes up 1/10….spending up 7/10 in October….consumer sentiment up from the beginning of October.

New home sales
followed existing home sales higher….new home sales rose 6% in October, the highest level in the year…."Of course people were scrambling to take advantage of that home-buyer’s tax credit. It turns out that congress extended and expanded that. The median new home price was still 5% lower than last year, but it was up month to month. By the way, the average rate for a 30-year fixed mortgage fell to 4.78%, so if you have good credit and a 20% down payment, move.”

The S&P Case-Schiller home price index for the top 20 cities rose for a fourth straight month in September by 0.25%....prices dropped more than 9% from last year, the smallest drop in year-over-year home prices since the end of 2007…..we aren’t seeing expansion, but it’s a sign that we may have seen the worst of contraction.

“We also got a little sprinkle of bad news. Durable goods orders delivered a surprise by falling 6/10, and there’s word that bankruptcy filings in Federal Courts are up by 1/3 from last year. Actually, up 35% to 1.4 million. It has been a rough year......

.....Let’s go back to that news on jobs. Now what we saw was a drop in layoffs. We didn’t see a pick up in hiring. Our jobless rate is still at a 26 year high – that’s 10.2%. And it’s very likely to
take several more months for enough hiring to happen to stop it from rising, so I think you are going to appreciate this story.....

.....You know in
San Francisco, the jobless rate is also above 10%. And a local television station, KPIX, found that a Banana Republic Store on the cities Grant Avenue, hired 39 workers from overseas – South Africa, Brazil, Japan, to work as sales clerks – because? Well its PR person told the television station it couldn’t find any U.S. workers to fill those jobs, even though a retailer next to the store, West Coast Leathers, told KPIX it gets two or three people a day walking in looking for work.....

.....The overseas workers are making minimum wage
(San Francisco minimum wage is $9 per hour) and Banana Republic is putting them up at a downtown hotel. So while our nation’s jobless rate’s in double digit and the garment industry’s shipped nearly all of its manufacturing jobs overseas, a clothing retailer is now importing overseas workers to sell you imported clothes face to face. That’s the Banana Republic, which is owned by Gap, which is also Old Navy – go figure.”

[Honey EC: I will not be shopping at Banana Republic, Gap or
Old Navy and I'll inform all my shopping-buddies about this atrocity.]

“Back to the economy. Which direction is it likely to move? Charles Schwab’s chief market strategist, Liz Ann Sonders, is fairly optimistic. Earlier this year, she suggested that the recovery might be a “V” followed by a long flat line. That’s kinda like a square root sign, you know. And this month, she says it looks like just a plain old-fashioned V-shape recovery. ....

.....And jobs? Well, she called the end of the recession in June, earlier than most. Normally, hiring doesn’t start happening for six months after that. No sooner than January, I guess. Now most of the economists I talk to don’t expect hiring to happen until after March. They also caution that the word “normal” isn’t something we can use in this recession. No fooling? Nevertheless, Sonders has a decent track record so barring some unexpected hiccup, she may be right. We’ll keep our fingers crossed.....

.....I know we all looked back a year in October, and remember the big meltdown that cut off credit and revealed that hall of mirrors created by privately and secretly traded derivatives. It all also shed light on the practices at banks and weak and non-existent oversight. It also shed light on the debt we all carried, firms, individuals, nations. And yet a year later, we’re

looking up now and we are seeing some light, if not the edge of that hole we dug ourselves.....

.....You know, I was thinking about that Thursday, Thanksgiving. We seem to be poised to come out of the worst financial downturn since the
Great Depression. We have positive economic growth. We’re moving forward, in fits and starts true, but we’re not in free fall anymore. From its March low, the Dow has climbed nearly 63%. As we noted earlier, even residential real estate is off its back and struggling to its knees. I mean think back. We were worried about the collapse of the banking system, about bread lines. The Treasury Secretary then, Henry Paulson, worried that we’d have mobs in the street. Well times are tough and the path is still steep. We are going to be paying for this for many, many years. But still, we are a lot better off now than we were a year ago. If you put it into perspective, we do have a lot to be thankful for, a lot."

The Saturday Moneytalk guest-speaker was Henry Mintzberg. He wrote the book "Managing" about corporate executives and their leadership.

Honey's Market Report, November 27, 2009:
* Dow closed at 10,309.92 -- 0.08% loss for the week.
* Nasdaq Composite Index closed at 2138.44 -- 0.35% loss for the week.
* S&P 500 Index closed at 1091.49, a gain of 0.01 for the week.
* GLD reached an another all-time-high this week, closing at $115.06. (November 7th, when Lynn Jimenez last filled in for Brinker, she advised a caller (who had borrowed money to buy it with) to sell gold ASAP, it has made 9 new highs since then.)
* Treasury Bond rates, TIPS, munis [LINK],
* Fed Funds, Mortgage, CD rates [LINK]
* Daily Treasury Statement [LINK]

Moneytalk programs are available free "on demand" at KGO810 radio for seven days after broadcast. You can download and save Bob Brinker's Moneytalk programs (owned by ABC) and listen whenever you choose at no cost whatsoever. To download the programs, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link] If you want to call KGO and complain about or praise Bob Brinker's Moneytalk, here are the numbers: Comments line: 415-216-1052....Listener services: 415-216-1050. Here is the KGO email address -- cut-and-paste it into your email compose window:

SJ_Al sent this early Christmas gift for Mr. Skiing-Pig. Al wrote: "This is about 50 miles from and a 1000’ lower than Lake Tahoe, where that famous pig has been known to frequent. Although this picture is a long way from a ski-able amount, this is a lot for this elevation at Thanksgiving. Soon enough, Pig will be able to painlessly drill down those slopes."

Well, we all saw a pig flying here recently, but here's one on skis that SJ_Al sent us. Could this be our own Mr. Pig?

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