Summary: Bob Brinker's Moneytalk February 28, March 1, 2009

[Please check the "News and Links" section about halfway down the right column. I update it daily.]

Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, February 28, March 1, 2009. For the month of February: Dow at an 11-year low, closed at 7063 (down 11.7%); S&P 500 Index at a 12-year low, closed at 735 (down 11%); Nasdaq closed at 1391 (down 6.7%); Oil closed at $44.17.

STOCK MARKET.....Bob Brinker opened the program today by saying that the S&P is at the 735 level and "The market continues to show a lot of concern over the banking system and the credit markets. And it's very evident when you look at the financial stocks, as we discussed last week. The Citigroups of the world, the Bank of Americas of the world, trading at less than $5 per share. In the case of Citigroup, trading at less than $2 per share, with the U.S. Government raising its ownership stake to as much as 36% in Citigroup, in return for the massive capital injections and guarantees that we have seen in that case. And obviously, Wall Street is concerned over the health of the banking system because you really do need a viable banking in order to recover the economy."

OBAMA'S $1.75TRILLION BUDGET (link)..... Next Brinker talked at length about the new budget. He called it, controversial, an omnibus approach, ambitious, rambunctious." Brinker said that there will be wrangling in congress in the weeks ahead over the proposal to lower the available deductibility of mortgage interest and charitable donations for high-income earners. He said that they are talking about raising the top bracket to 39.6% and the next bracket to 33% in 2011. High-income earners are defined by this administration as individuals making over $200,000 and couples making over $250,000 annually -- which is roughly 5% of taxpayers.

HIGH-INCOME MORTGAGE AND DONATION DEDUCTIBILITY.....Brinker said: "So you see what this means, if you have one of those jumbo mortgages, you have a high income, instead of getting 39.6 under the new tax rate that's proposed, you'd be capped at 28 -- charitable donations same thing....That's what they are talking about at this point......About 95% of the country gets more money in their pockets because that's where a lot of the money goes........ For the top 5% that will be providing the cash flow to do all these things in the budget, plus the borrowed money that's part of it as well......These people look like they're facing potentially two major changes.......the capping at 28%.......and the increase in the top bracket to 39.6....... "

CAPITAL GAINS TAX INCREASE.....Brinker said: "Additionally, this proposal calls for an increase in the capital gains and qualified dividends tax from the current 15 up to 20%."

ECONOMIC RECOVERY.....Brinker said that he was surprised by the administrations assumption for the economy and considers it "overly ambitious." They are projecting 3.2 real GDP growth for next year. Brinker said: "I certainly agree that the outlook for 2010 is going to be improvement and way better than the debacle known as calendar year 2009 -- the economic debacle that we are seeing right now. But no argument from me that we will see an improvement in economic growth next year." Brinker stated that the average economic forecast for next year is 2.1, even though the Federal Reserve is a little more ambitious than that.

GETTING THE BUDGET THROUGH CONGRESS..... Brinker said: "We are going to have a donnybrook in the United States Congress over this......"

GMAC AND MERRILL LYNCH BONDS.....Brinker told a caller that in his opinion, they are "speculative."

BERKSHIRE HATHAWAY......Brinker opened the second hour talking about "one of the great investors over the last half century or so has been Warren Buffett, the sage of Omaha Nebraska." Berkshire's earnings for the fourth quarter showed $117million, a 96% decline. Brinker also talked about Berkshire's possible $37billion derivative risk which may be due in ten years. [Honeybee EC: this is old news. Here's the (link) to the story and (link).]

RECESSION.....Brinker said: "We've had recessions before. This is not the first, it won't be the last. It's a deep recession. 1974 was a deep recession, and America came back from that one, as it has from a lot of challenges along the way. But there's no question about it, this has been a very, very difficult market environment."

EXCHANGE TRADED FUND.....A caller asked about "double or triple weighted impact" ETFs. Brinker said those have to be separated out because they are different from basic ETFs. He considers owning basic ETFs, like Spyders (SPY), just the same as owning the S&P 500 Index.

BANKS STRESS TEST.....A caller asked about this and Brinker said that they seem to be doing it to large banks first -- that they will be looking at bank fundamentals and determining bank viability. Brinker said he was surprised at the announcement of the "stress test concept" because he thought this was what went on every day. [Honeybee EC: I agree, why hasn't this been done all along. There was an article in the Wall Street Journal (link) about this on February 26th.]

GINNIE MAE/BOND MARKET OUTLOOK.....Brinker recommends Vanguard GNMA Fund (VFIIX) It is trading near recent highs. Brinker said: "I would say that the principle variable in the bond market for quality holdings is going to be the overall direction of interest rates.......Now in terms of the direction of interest rates.......that's where you look at the economy. In other words, if you saw an economy that started to show signs, now remember..... that prior to the first signs appearing -- and they have not appeared -- prior to the first signs appearing, we won't have any information in hand."

"OBAMA'S BONDS".....Brinker said: "You know, when I saw this budget.....I have to tell you the first thing that popped into my mind was, these are Obama bonds.....These trillions of dollars in bonds to pay for all this spending, these are Obama bonds. I think they should call these, United States of America Obama Bonds. The fact is, I have never seen such a spending proposal in my entire life. I mean, it's incredible. I mean, it's unbelievable."

AN INTERESTING CONVERSATION.....Caller Greg said that Obama's budget director (Peter Orszag) was caught in an outright lie on CNBC, which he repeated on various networks. Greg said that the budget director was saying that only the top 2% of American taxpayers would be hit with a tax increase. He said that when Neil Cavuto pinned Orszag on it, he admitted it would be only the top-5%......

...... Greg said that another disturbing thing about Obama's budget is the assumptions that are being made about reduced costs of the Iraq War when the troops are pulled out -- he said that is a phony assumption......

..... And Greg said that Larry Kudlow correctly said that many of the tax increases on small business and some of the heavy taxes applied to oil companies for drilling, etc., are going to take effect as early as October 2009.....

.....Greg said: "So my question to you is, they claim they are going to be honest and have transparency and his budget director and the president himself, Obama, is out there lying to the American public because they're trying to force a Socialist agenda on the American people, and they know that the American people, and the the news is getting out thanks to your program and others, are getting more and more irate."

Brinker said: "Well that's why we have a United States Congress. This is a proposal that has to get through the filter of the House and the Senate. Now as I've said, the House is very one-sided right now and frankly there's isn't a heck of a lot you can do right now....It's going to go through........But I'm telling you, in the Senate, this is going to be a big battle."

Greg replied: ".........At least you know you were getting the straight scoop from George Bush."

Brinker, changing the subject, told Greg that in year-2000 the country voted in a Republican White House, House and Senate, and that there had been 6-years of prolific government spending. Brinker asked: "What was that all about." Greg told Brinker that George Bush was not a fiscal conservative and that the party had paid the price and was voted out. Greg tried to explain to Brinker what CPAC was all about -- that the Republicans "lost their way," and were trying to rally back. Brinker didn't want to hear about it. [Honeybee EC: I think this conversation was very near the same time that someone Brinker seems to dislike intensely was Russshing to give his "first ever address to the nation." LOL!]

Brinker went on: ".....because the credibility of the Party and its principles are thrown overboard when something like that happens for six years. And that's what set the stage for this budget that was just proposed. This president was elected. He's just taken office and he's fulfilling his campaign promises. That would have never happened without that six-years of irresponsible governing."

SUNDAY UPDATE

I listened to the whole three hour program on Sunday, and I heard no new important information from Brinker in any of the monologues (please let us know if I missed something).

Brinker talked about the tax changes in the new budget package again -- adding that there will be some changes to inheritance taxes in 2009. He talked about the deficit and the stimulus package. He made a "breaking news" announcement about AIG. Here's the [link] to the Bloomberg article about it.

There was a caller who was mostly in Treasuries and Ginnie Maes who asked what Brinker thought he should do "different when the market goes up." Brinker must not have heard that part of the caller's question because he began touting Ginnie Maes again, but said nothing about the stock market.

Another caller who said he had retired with critical mass about 2 1/2 years ago, and had "taken a hit, like everyone else," said he had reversed the numbers from 70% stock/30% bonds to 30% stock/70% bonds last October. Brinker immediately got on his high horse about the caller's equity weighting. Brinker said, "For retirement, that's a very aggressive equity ratio......What you are saying is that it took you awhile after you had retired to realize it, but as you saw your portfolio, you did realize that you had an equity ratio that was beyond what it should be......regardless of what the market is doing, you don't go into retirement with a 70% equity ratio -- that is my opinion."

[Honeybee EC: It amazed me that Brinker had the nerve to so pompously give a lecture to this caller. Here's why: Brinker's Model Portfolio III, which is his balanced portfolio recommended for "those near or in retirement," has not been rebalanced even though it reached 66% equities at the all-time-high in October, 2007. The 66% stock portion of Brinker's balanced portfolio has taken a big hit in the MAJOR BEAR MARKET DECLINE. The difference between 66% and 70% is....ummmm.....let me think.] 8~)

Port3, as of October 31, 2007:

Stock Funds: 144,919 / Total: 219,263 x 100% = 66%
Fixed Income Funds: 74,344 / Total: 219,263 x 100% = 34%
Total: 219,263 = 100%

Another caller asked Brinker what he thought of buying muni bonds. Brinker asked him where is the guarantee? And then reminded him of the Vallejo bankruptcy. Brinker said city munis and California GOs are not the same thing. [Honeybee EC: This is very confusing and I wonder if Brinker isn't being deliberately obtuse on some of his answers on this subject. He almost never gives a straight answer and he often answers the questions with a question -- something he got angry at his guest for doing today.]

Brinker's Saturday guest-speaker was Dr. Bill Wattenburg. Here is Dr. Bill's website (link): Drbill.us

Brinker's Sunday guest-speaker was William Holstein: "Why GM Matters: Inside the Race to Transform an American Icon" [link]

Download Moneytalk for free, listen at your convenience. (The DR. BILL WATTENBURG interview is available for download. It was on Saturday, 3-4pm.) A downloadable version of Bob Brinker's program is available at KGO810 Archives for a full 7 days after broadcast! You won't have to stay online to listen any more. Now, you can listen on your portable media device. Moneytalk, available when you want it, FREE at KGO810

Bob sent this beautiful picture of Grand Coulee Dam in Washington

.

POST OR READ COMMENTS (LINK)

Bob Brinker's Stock Market Forecasts and Predictions

While Brinker has never raised a dime in cash reserves during this vicious bear market, he has continued to issue new bottom calls and new "buying opportunities."

Today, the S&P closed below the November 2008 low (which was 752). Brinker viewed the November low as the bottom and said he thought it would hold. Sadly, it did not.

Today, the S&P closed at 735. It declined 11% in February. This was its worst month since last October. It is now at a 12-year low.

The Dow broke through the 7100 level -- closing at 7063 -- down 11.7% in February. This is its worst month since October, and it is at an 11-year low.

The Nasdaq closed at 1391, having lost 6.7% in February. The QQQQ closed at $27.53. Brinker issued a buy signal on QQQQ in October, 2000 at $83. He never closed the trade and his last advice was to "hold for recovery." That was 8 years ago.

* June 2007: Declared that a secular bear which he said began in March, 2000, had ended in June, 2006.

* Aug 16, 2007 to January 20, 2008: Mid-1400's = "gift-horse buying opportunity."

* January 20, 2008 -- rescinded mid-1400's (recommended dollar-cost-average only)

* Feb 10, 2008 @ 1331: Low-1300's

* Aug 5, 2008 @ 1285: 1240 or less

* Sept 2, 2008 @ 1282: Low-to-mid 1200's

* September 16, 2008 -- rescinded low-to-mid 1200's (recommended dollar cost-average only)

* January 15, 2009 – low-to-mid 800’s

January 2009 Marketimer: "We regard the stock market as attractive for purchase on any weakness in the low-to-mid 800's S&P 500 Index price range, and we continue to regard the S&P 500 Index 750 to 850 price range as the bottom area for the entire bear market. We expect calendar year 2009 to be a significant positive year for the stock market....."

Bluce sent this pictures of his "Watch Cats." No one will get near his motorcycle. 8~)

Even Watch Cats need an occasional nap

.

POST OR READ COMMENTS

Is THIS the Market Bottom Bob Brinker Predicted?

Today, the S&P 500 Index dropped below Bob Brinker's latest market-bottom forecast. It closed at 743.33; the Dow closed at 7115; Gold closed at $995; Oil closed down another 5%.

February 4, 2008 Marketimer, Bob Brinker said: "We regard the stock market as attractive for purchase on any weakness in the low-to-mid 800's......and we continue to regard the S&P 500 Index 750 to 850 price range as the bottom of the entire bear market."

Blogger Dan said...

"I'm so excited! Here we are only 2points away from the end of the bear market! He did say 750 on the S&P, didn't he? Ok, here we go!"

February 23, 2009 9:57 AM

Kirk Lindstrom's chart shows all of Brinker's bottom calls during this bear market:


[Please remember to check the "News and Links" section about halfway down the right column. I regularly add various items or reminders there.]

SeaBiscuit wrote a new Brinker Shave for us -- some much needed humor:

He told his shirt-less fans,

"I can call the bottom of this bear"

Then they lost their pants too

And now their bottoms are bare!

Brinker Shave

.

POST OR READ COMMENTS

Summary: Bob Brinker's Moneytalk February 21, 2009

[SUNDAY UPDATE ADDED BELOW]

Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, February 21, 2009. For the week: Dow closed at 7365.67 (down 6.2%); S&P 500 Index closed at 770.05 (down 6.9%); Nasdaq closed at 1441.23 (down 6.1%)

Bob Brinker didn't have anything to say about his views on the stock market today. It's interesting to note that in the past 3 weeks, the S&P has dropped almost 15% and is well below the price it was on January 15th when Brinker sent a special bulletin to subscribers.

February 4, 2008 Marketimer, Bob Brinker said: "We regard the stock market as attractive for purchase on any weakness in the low-to-mid 800's......and we continue to regard the S&P 500 Index 750 to 850 price range as the bottom of the entire bear market." [Honeybee EC: Please see the comments section for this post to read Kirk Lindstrom's response to this Marketimer quote. He said that he doesn't think the quote "should be allowed to stand on its own without also posting what Bob Brinker said/wrote a year earlier."]

Brinker spent most of the program Saturday talking about the $787Billion stimulus package and the banking community problems. The callers that were allowed on the air mostly stayed on the same subjects. There were no callers who asked Brinker about his views on how all of this might affect the stock market.

STIMULUS PACKAGE.....In general, Brinker likes the tax cuts in the bill, although he said about 9% of it goes for an AMT patch for 2009, which is not stimulative because "they do it every year" -- so Brinker thinks that the tax package needs to be "reduced" from $787Billion to $717Billion. [Honeybee EC: That makes no sense to me. Brinker is not counting the "spending side of the package which has nothing to do with tax cuts.]......

....Brinker said that the "real tax cuts" will put a bit of money in taxpayer's envelopes and these people should spend the money. However, Brinker thinks there is too much in there that is not directly related to stimulating the economy and that is unfortunate. He said "it could have been much better" and totally focused on stimulating the economy. [Honeybee EC: Again, this seems to contradict the numbers that he had just cited. What did I miss?]

$65 PER MONTH......Brinker made the point that there are "people out there" saying the stimulus tax cut will add only $13 a week to pay envelopes, but that there are 4 and 1/3 weeks in a month, so it's actually $65 a month -- or about $15 a week. He thinks this is "a good thing" and he would have proposed it and would have voted for it. Brinker said: "I don't understand it the people that are opposed to that. Because if you are opposed to the stimulus package, then you're opposed to the tax cuts.....it makes no sense to me at all. But some people have a one-track mind and don't think it through." [Honeybee EC: Nope, not so, Mr. Brinker. One can be for tax cuts and not be willing to sell out to the vast liberal-Democrat agendas that were put through in this 1100 page document that was passed into law without being read by any of those who voted for it, FOR $13 A WEEK.]

FDIC....A caller asked Brinker about FDIC liquidity. Brinker said that in his opinion, the FDIC "is as good as a government guarantee" and that he expects congress to provide whatever funding might be required for FDIC to "make good on its commitments." [Honeybee EC: I hope I'm wrong, but for the first time ever, I sensed a bit of hedging in Brinker's answer.] The caller told Brinker to think of the accounts that would need to be reimbursed if Citigroup or Bank of America go under. Brinker agreed that was a good point because they are both "really large companies." Brinker said that neither of them has "the credibility right now to support anything more than a penny stock." Citigroup near $2 a share and BAC near $3 a share.

FDIC INSURANCE.....Brinker reminded listeners to be certain that all deposits are covered.

CDARS..... Offers a way to obtain FDIC coverage for up to $50million.

NATIONALIZING BANKS....Brinker said this rumor was what caused the big decline on Wall Street on Friday. It came out of the Chris Dodd interview which was "leaked during the day" on Friday. Brinker said: "So then of course there was the pronouncement from Washington, no we favor a private banking system. So then the market which had been down pretty sharply on Friday in the early afternoon hours, recovered with a relatively modest loss in the broad market on Friday. That was because the rumor was essentially dispelled in the final couple hours of trading on Wall Street on Friday." [Honeybee EC: I almost could not believe my ears when Brinker said that the market loss on Friday was "relatively modest," but did not mention that for the week, the S&P lost almost 7% -- as it did the week before.]

INSOLVENT BANKS.....Brinker said that as far as he is concerned there are legitimate solvency questions at Citigroup and Bank of America and that is why the common stocks are getting battered. Shareholders are afraid that they will wind up like the shareholders at AIG, Fannie Mae or Freddie Mac -- which are trading close to 50 cents a share.

In the third hour monologue, Brinker talked about his own experience in the "canyons of Wall Street," how things have changed, and what caused it all. Here are some excerpts:

Brinker said: "The difference between the way a bank managed its money a couple of decades ago and the difference between how they manage it today, it’s like night and day. I can remember my days working in the bank portfolio department. Now that is the department that runs the banks money, manages the banks money. It’s like a sacred trust in there, well, at least it was when I was there. And I can remember that we felt in managing the banks money – we were a separate part of the bank. We were not in commercial lending. We were not in the other areas. We were managing the bank’s portfolio -- the banks money -- and we were really careful with that money – really careful. Most of that money, the vast majority of that money was in Treasuries……When it came to risky assets in that bank portfolio, they were few and far between. Oh, the bank might have a tiny position in another bank’s shares or something of that order. But really, it was a high quality portfolio, and it really was not at risk. Now you always have the risk, well your interest rates go up, the value of your Treasuries declines on an interim basis until they mature at par, that kind of thing, of course…..This was in the 1970’s that I was involved in this activity…….

.....And then when I think of these banks today -- I don’t care what bank it is -- and the risks they took. Now we’ll excuse from this discussion the banks that did not take these risks, but obviously too many did, and they’re household words at this point and some of them are penny stocks……..When I think of the risk that these banks and the management of these banks took, I’m astounded…... To think that a bank would invest in a package of securitized mortgages just because some rating company got paid to put a AAA rating on it. To think that a bank would get involved with leveraging their portfolio, now that did not used to be allowed.....

.....This is where we get back to Glass Steagall. Prior to November 1999, when Bill Clinton signed [the repeal of] Glass Steagall -- probably the worst act of his eight years in the White House, even worse than anything that went on in the Oval Office…….When he signed that, I’ll tell you what, it was katy bar the door for banks, because the line between commercial banks and investment banks essentially went away. And that is when it all changed…..That’s why they are in the situation they are in today….

…..The investment banking system as we knew, it’s gone, it’s completely gone, in terms of the majors. Bear Stearns part of J.P. Morgan. Do you think that has something to do with dragging down the share price of J.P. Morgan – I do.……..Lehman Brothers gone, good-bye. Merrill Lynch taken into Bank of America. Do you think that had something to do with the penny stock status of Bank of America? I do. And of course, the conversion to bank holding companies of the other two, Goldman Sachs and Morgan Stanley……Both of those companies have been recipients of TARP money…..

…..How did all this happen? This happened because it was allowed to happen when Glass Steagall was repealed. What were these people thinking? What was Phil Gramm thinking? Oh I’d like to ask him, what were you thinking when you sponsored the repeal of Glass Steagall…….I’d like to ask Bill Clinton the same question……Because these people, in my opinion, they sold the United States of America down the river. Of course they go on merrily through life. You think anybody blames Phil Gramm for repealing Glass Steagall? You hear anybody criticizing Bill Clinton over this? I don’t. I don’t hear the criticisms. And yet this was the seminal decision that was made to change the banking laws in the United States and open the door to this fiasco that we now have in our midst…….."

Brinker's Saturday guest-speaker was Charles Maxwell, senior energy analyst at Weeden and Co.

SUNDAY UPDATE:

Bob Brinker made the comment today that the S&P setting down at 770 shows how concerned investors are about the banking system problems and credit markets.

During a heated exchange with a caller about whether the United States of America is a Republic or a democracy, Brinker insisted that the U.S. is a democracy and instructed the caller to take a look at our elections if he didn't believe it. [Honeybee EC: Well, I would remind Mr. Brinker that indeed our national elections clearly show that we are a Republic -- and it is guaranteed by our Constitution.]

"The Constitution guarantees to every state a Republican form of government (Art. 4, Sec. 4). No state may join the United States unless it is a Republic. Our Republic is one dedicated to "liberty and justice for all." Minority individual rights are the priority. The people have natural rights instead of civil rights. The people are protected by the Bill of Rights from the majority. One vote in a jury can stop all of the majority from depriving any one of the people of his rights; this would not be so if the United States were a democracy." __Read more here

In the second hour monologue, Brinker talked about tax changes. Brinker said that the current Federal brackets are going to be held where they are, at least until 1/1/2011. Brinker said that states cannot print money, so they have limited options available to them, such as raising taxes, cutting spending or going to Uncle Sam. Brinker itemized some of the upcoming tax increases in various states.

Changes for California include:

* Vehicle registrations will go up 77%.

* State sales tax increased from 7.25 to 8.25 (in Santa Cruz and Santa Clara Counties, we already pay 8.25%, so it looks like it will be 9.25% now.)

Change proposed in Massachusetts:

* Gasoline tax increase by 82 1/2%

Brinker said they are also talking about gas tax increases in Oregon, New Hampshire, Illinois and Ohio.

Change proposed in New York:

* State tax top bracket increase to 10.3% = about 50% increase.

Brinker said: "One of the interesting thing about the budget deficits that are being run in many of the states is that it's not all California. It's not all their doing. I think of California because I know how many illegally enter California every year, and therefore, they wind up as an expenditure for the State of California -- a net outflow of taxpayer dollars. It's not the fault of the State of California because they're not responsible solely for protecting the border -- that's a Federal function. And if the border is not adequately protected -- and we all know that has been the case -- it has not been adequately protected. Then the states, think of a state like Arizona as well; think of a state like Texas as well; the states can wind up with some of the economic toll on this deal. Now how many states in the United States have said that they need additional spending cuts or tax increases before the end of their current budget year. Well it's a big number -- it's 43 out of the 50 states according to the National Conference of State Legislatures. And 34 of the states face additional budget gaps as they look out to their next fiscal year." [Honeybee EC: Kudos to Mr. Brinker for clearly stating what most Californians have known for a long time, and have tried several times to change by proposition votes, just to have a single liberal judge throw the vote out every time.]

Brinker's Sunday guest-speaker was David Crook, author of: "The Wall Street Journal Complete Home Owner¹s Guidebook: Make theMost of Your Biggest Asset in Any Market"

Download Moneytalk for free, listen at your convenience. (The Charlie Maxwell interview is available for download. It was on Saturday, 3-4pm.) 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

I took this picture on one of my morning hikes. A nearby neighbor's camellias:

.

POST OR READ COMMENTS

Brinker's Bear Market Bottoming Process

[Friday, February 20, Brinker commentary added below.]

[Please notice the new "News and Links" section about halfway down the right column. I will be adding interesting items and useful links there regularly.]

Bob Brinker has said that the market was bottoming several times over the past year -- the first time was in March, 2008. He has talked about these bottoms on Moneytalk -- even saying that he was "buying" in the low-1300's.

At the beginning of February, he said he viewed the 750 to 850 range as the bottom area for "the entire bear market." He thinks the November low will hold. Will it? Time will tell, but so far, the market is less than impressed with Obama's spending package.

Indeed, there is talk of nationalizing the banks along the same lines as Sweden -- a socialist nation. Even a few months ago, who would have thought this could be discussed as a viable option in our free, capitalist country?


In the following comments, poster "BFree" says that Brinker has no substance -- only "hope," and if he was honest would "end the game.":

"For the most part I agree with Math who is on record as saying that he believed Bob Brinker was incompetent rather than dishonest.

When it comes to some conspiracy of Brinker's to lead investors down into these dire straights while shouting quite often during the fall that he had found an excellent buying opportunity, count me out. Brinker has no idea what the market will do and never has had. It was simply BS. I am glad that some former supporters recognize the incompetence, even though it took them an awfully awfully long time when all the evidence was there as to the scheme.

So while agreeing that Brinker was incompetent and not wanting to take his subscribers down for some sinster bizzare reason, his lack of honesty I believe has caused many extra pain.

He ridiculed those investment advisors who told their subscribers to get out last spring. He called them "False Prophets" and "Cassandras" when the market was around 1400. He said in what has to be the most stupid claim ever, "The only thing holding the market back from new all time highs are oil prices and nobody can predict the price of oil".

Brinker predicted new highs last year and claimed time after time he had found the bottom.

I've never considered Brinker a fool. A very good BSer and self promoter. Therefore I am certain that he knows that throughout this market he has not had a single clue as to what was going to happen. By rather dishonestly not mentioning previous "bottoms" and acting as though he is totally capable of guiding the idiots that still trust him is somewhat less than candid.

Everyone with a brain knows that Brinker has been wrong; badly wrong, disastrously wrong. Everyone with a brain knows that Brinker in his latest pontification that the "low for the entire bear market has been set" in his last gifthorse attempt, knows there is no substance, just hope.

Think about what has transpired since Brinker claims he has spotted the bottom (for I forget now? how many times??). The stimulus package, the Tarp, the bailout dejour. Who in their right mind thinks they can predict the outcome of these events-the administration (as well as the last) have asked for billions of $ claiming one thing they will do for it; only to change and do something entirely different.

Brinker's blather as though he knows what the market holds; is like someone during the superbowl claiming at half time, Team A which was leading by 4 touchdowns had scored their last and that team B would win. How would he know that? There was zero way of knowing that. Same goes for Bob Brinker's latest who now I agree with Math is incompetent.

If he were honest about it though now, it would be the end of the game; wouldn't it?"__BFree

.

POST OR READ COMMENTS

Brinker-Historian Comments on Brinker

Mr. "Newslettercheat," a long-time Brinker-commentator and historian weighs in on Brinker's conversation with a caller about the stimulus package and Obama. [Please see my previous post]:

newslettercheat said...

"Brinker has never been a deep thinker - rather a lightweight blowhard that shoots from the hip only to completely flip flop on the air if things don't go well. He was a big proponent of going into Iraq--and then claimed it was a "war of choice" when the occupation seemed lost.

Obviously the caller had it right and Brinker was way off the mark. If Brinker was going to jump on the caller for criticizing the stimulus plan that Obama is going to sign this very day as "too soon to criticize", then when should the guy have become critical?

Let's face it, Obama is a liberal pol who has a great affinity for the left but like Bill Clinton pretends to be a moderate. Had Obama had a clue and was serious about a stimulus plan, it would have looked nothing like the pork laden unaffordable package that already people are saying will need to be repeated.

People who are likely going to be out of work (gross income under 80 k) as this continues are going to be encouraged to buy a house. People borrowing money to go to college which would be the ones most needing relief don't get it but those rich enough to pay get a tax break. Stimulus? nah.

If they wanted to stimulate the economy the most direct and easiest and indeed fairest way it would have been to simply forgo the collection of FICA taxes for 4 months and re-evaluate every four months. Cut capital gains tax on all property to 5% --causing long held properties to be sold and transferred stimulaing some economic movement.

Now that is stimulus--leaving the money to be spent.--Clean, quick and effective. Taking money to washington and having a group of left wing nut jobs that have never ran a business or met a payroll dole out the money to their favorite causes and idiotic schemes-is not stimulus, it's folly.

Brinker is an old 60's lefty who supports the Pelosi/Obama folly, or is simply clueless...or both.

How's that last buying opportunity of his working out?"

February 17, 2009 10:52 AM

Honeybee here: The S&P 500 Index closed at 789.35 (down 4.5% in one day). It is lower than Brinker's latest buying opportunity (low-to-mid 800's), but not yet at the November 20, 2008 low of 752.

The Dow closed at 7552 (down almost 4% today). This is exactly the low that was reached on November 20, 2008.

So much for the stimulus plan that the democrats (and a few Republicans) passed and Obama signed today. Confidence levels have dropped further.

So now we have interest rates near zero. We have over TWO $trillion more in national debt. What's next?

Storm clearing over the Santa Cruz Mountains.

.

READ OR POST COMMENTS

Terry Savage Clear Thinking and Bob Brinker's Political Outburst

Here are some excerpts from Brinker's political outburst on the February 7th Moneytalk:

Caller Rick asked Brinker his opinion on the tax rebate proposal on the purchase of homes. Then Rick said: "....and the statement that I think the big problem right now is just the confidence in the market because of the administration?"

Brinker said: "The confidence in the market because of the administration? [Rick tries to answer, Brinker raises voice and talks over him] What are you talking about? When you say confidence in the market because of the administration, what in the world are you talking about?"

Rick said: "Well, my statement is people who want to make purchases now, I'm identifying on the retail side, they are afraid of the administration -- they haven't had a good two weeks. We were waiting to get rid of the Bush administration and then we sat around and waited for Obama because he was the candidate of change. When the reality is, he is more of the same."

Brinker said: "Rick, Rick, Rick, that kind of mentality is complete nonsense. [Rick tries to speak; Brinker talks over him.] All you're doing here is, you're reciting somebody's talking points. You are not thinking for yourself. This guy has been in office for a total of a couple of weeks. He has inherited one of the biggest financial debacles of all time. [Rick keeps talking in background, Brinker talks over him.] And he's in the very beginning process of trying to do something about it and he should be given a reasonable period of time to try to get things done. And I don't understand where you're coming from."

Rick said: "Let me explain it to you then. Maybe I didn't explain it right. We're waiting for a stimulus package, and like you said, the word is stimulus package. And then the bill that was brought before the House and the Senate wasn't a stimulus package. It was a goodie list. If they want to stimulate the economy, do the things you're talking about."

Brinker said: "Well, you're just agreeing with me. [Rick: "Absolutely."] But you see, what you said is not true. Because what the House passed, and I don't like the House Bill as it stands, is they combined the stimulus package with the Trojan Horse -- that you call the goodies list. Now what I say is, strip out the goodies list and let's go with the stimulus package......But To place what the House did on the back of a new president whose barely been if office is absolutely unfair."

Rick said: "I agree that it's unfair. The only thing I would say though is, this is when we need him to lead. The..."

Brinker said: "Well, give him a some time. Give him a little chance for crying out loud. I will speak frankly with you, I have never -- and I know where a lot of this is coming from and it's where I would expect it to come from -- I have never in my life....You know 70% of this country likes this president and they are hopeful he will do a good job. [Rick: "I do too."] Alright, because it's good for America. Now here's the reality. I have never in my lifetime a Rushhhh to judgment to discredit a new president as I have in this case. I certainly didn't see it for George W. Bush in his first two weeks. I did not see the Rushhh to judgment to discredit the man. I have never seen a Rushhh to judgment of a president as I have for this president.

I know where it's coming from, and it's what I would expect from THESE people. But the Rushhh to discredit this man before he's given ANYTHING resembling a reasonable period of time to do what he's trying to do in a VERY tough set of circumstances is very obvious to me. I think it's obvious to a lot of people."

Rick said: "Point taken. Tell me what's going to happen with the $15,000 tax credit in housing."

Brinker said: "Well, I like it. It's not my proposal, it's an offshoot. It's a derivative of the proposal that I've discussed -- that's been discussed by Dr. Bill Wattenburg. That proposal which is the one I really like -- that's the pure one is to put in tax incentive for the purchase of foreclosed properties. Now this is okay. It goes beyond that because it applies to all primary residence purchases. I can live with that. I can live with the amount -- $15,000......10% up to a $150,000 property."

Rick asked: "Is it taxable the next year?"

Brinker said: "No, you don't have to pay this back........No, I think it's a good proposal, Rick. And I would only ask that people give the guy some reasonable period of time......First of all, he's walking in....Look, here's what he's doing, and I don't use this loosely. This guy is coming up to the plate with two outs in the bottom of the ninth with his team trailing 9 to nothing. I mean, this is not the job he ran for, I've said that before. He didn't announce for this job. This is what he got when he got elected. Now the reality is he deserves a fair chance. I'm going to give him a fair chance. I there are people out there, Rick, and I don't include you -- but I know there are people out there who want him to fail because they want to get their own party in --their strictly partisan. By the way, THESE people, Rick, DO NOT CARE about this country!"

[Honeybee sez: This is perhaps the most biased political hate-speech I have ever heard Bob Brinker deliver on his program. He attacked another radio talk-show host (who is much more popular than Brinker), but doesn't have the courage to be upfront about the man's name.

Then he attacked a large segment of Americans who DO CARE about this country, and that is WHY they oppose this stimulus package -- or large parts of it. "Those people" that Brinker spoke so condescendingly about (including the talk-show host that Brinker falsely accused) are not hoping for Obama to fail, they are hoping for this dangerous TRILLION-DOLLAR spending package to fail because they are convinced it will damage our country perhaps beyond repair!

Brinker wants to give Obama "time." Well, guess what, Obama and Pelosi are the ones who wanted this package passed IMMEDIATELY, in spite of the fact that Obama promised this "russhhh" to pass bills would not happen on his watch. And in spite of the fact that no one in the House or Senate had time to read the package -- even if they wanted to wade through 1100 pages.] Youtube video

Here is more up-to-date info on the stimulus package: Today, Terry Savage wrote an article for the Sun Times. Here are some excerpts:

"What stimulus?

It's not that it's all a waste of money. The real problem is that there's no direct link to jobs, growth, incentives and multipliers in so many of the spending allocations.

Income Tax Credit: $400 for individuals, $800 for couples. The tax credit phases out for singles with income over $75,000 and couples earning over $150,000.

Problem: You won't see the money until you file taxes next year, unless your employer is willing to readjust withholding schedules!

Car Buyer Sales Tax Deduction: Deduct state and local sales and excise taxes even if you don't itemize.

Problem: Applies only to new cars, and may not be enough to make much difference.

First Time Home Buyer Credit -- Refundable tax credit of 10 percent of purchase price up to $8,000 for purchases in 2009. Phases out at incomes over $75,000 single, $150,000 couple.

Problem: Credit maxes out at $80,000 home price, too low a limit Must be repaid if house is sold within 3 years.

Pell Grants Increased by $500: Max grant is $5,350 in 2009.

Problem: Nice headline, but not enough to help these poorest students, and where's the stimulus effect?

Higher Ed Tax Credit: Spend up to $4,000 on higher education, and get a $2,500 credit.

Problem: Limited to those already spending college money, doesn't make borrowing -- or repayments -- easier.

COBRA Health Insurance Help: Employer will pay 65 percent of costs to extend your health care coverage after you're unemployed.

Problem: Very helpful to those who lose jobs, but may still leave them with significant monthly cost. And, again, where's the stimulus?

There's nothing really wrong with these ideas. But even lumped together they don't make a significant dent in our economic problems. They don't deal with the thousands facing foreclosure, or the threat of bankruptcy. And they don't work together to get the economy going again."

Read full article at Sun Times

[Please notice the new "News and Links" section about halfway down the right column. I will be adding interesting items and useful links there regularly.]


.

READ OR POST COMMENTS

Summary: Bob Brinker's Moneytalk February 14, 2009

[Please notice the new "News and Links" section about halfway down the right column. I will be adding interesting items and useful links there regularly.]

Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, February 14, 2009. For the week: Dow closed at 7850.41 (down 5.2%); S&P 500 Index closed at 826.84 (down 4.8%); Nasdaq closed at 1,534.36 (down 3.6%); Oil closed at 38.01 (down 6.6%).

Bob Brinker's replacement-host this weekend was Bill Flanagan. The subjects of the weekend were the stimulus package and energy. Bill gave his views, which seemed mostly favorable to the stimulus package and pro-nuclear. There was no discussion about the stock market.

This year, the Dow has declined 10.6%; the S&P has declined 8.5%; and the Nasdaq has declined 2.7%.

From the market high, the Dow has declined 44.6%; the S&P has declined 47.2%; and the Nasdaq has declined 46.3%.

Several times during 2008, Brinker said that the market had bottomed, and he issued an “attractive for purchase” buy-in level for “new money.” Unfortunately, he was wrong each time, so he removed them -- but he always continued recommending dollar-cost-averaging.

According to the February 4, 2009 issue of Marketimer, Brinker believes this “major bear market" which “began during the fourth quarter of 2007” is bottoming in the "750 to 850 price range." He said: “We expect calendar year 2009 to be a significant positive year for the stock market.”

Mark Hulbert, in his latest issue of Hulbert Financial Digest, writes that “Believers in buying and holding are hard to find these days.” Mark said that one should not “confuse brains with a bull market” and "don’t confuse a bear market with timing skills.” If those two aphorisms are true, then one might wonder what would be the point in paying someone to try to time the market.

Mark also said that timing the market is difficult in a rising market and that going to cash “is more often than not a losing proposition during bull markets,” and that “when the market is declining, a cash position is likely to make a market timer look like a genius.”

As Mark pointed out, the stock market has produced an average annualized loss of 3.8% over the last five years, while the gold market has produced an 18.1% return. The bond market has done well, but not nearly as well as gold.

Mark seems to conclude that that none of these factors have anything to do with a market-timer's ability. He said that in order to be objective about a market timer, one has to “first look at whether the market he’s been focusing on has itself been strongly rising, as well as whether it has been particularly volatile.”

At first, I wondered why Mark was trying so hard to make (what I consider SILLY) excuses for market-timers that did well during rising markets, but have “held” during this major bear market, then I took a look at Mark Hulbert's very latest performance rankings in Hulbert's Financial Digest:

I looked at the “Mutual Fund Performance Scoreboard Top 5 through 1/31/2009.” Brinker’s Marketimer is not there in any time period – 5 years; 10 years; or 15 years.

I looked at the “Top 5 Performers (all newsletters Hulbert ranks) Through 1/31/1009.” Brinker’s Marketimer is not there in any time period (adjusted for risk or not-adjusted for risk) – 5years; 10 years; 15 years; 20 years; 25 years.

Then I looked at the “Top Timing-Only Performers Over Five Years Through 1/31/2009” category. ( Hulbert includes stock, bonds and gold in these rankings.) Brinker’s Marketimer is not in the Stock timing top-5; Brinker’s Marketimer is not there in the Gold Timing top-5; But voila, there it is! Brinker’s Marketimer is ranked number two in the bond-timing top-5.

I challenge anyone to find any instance where Brinker has EVER TIMED THE BOND MARKET.

Bob Brinker has remained bullish and fully invested throughout this major bear market. Does this make him a member of the “church of buy and hold?” Yep, but he was drafted, and dragged in unwillingly. Brinker does not believe in “buy and hold,” and has often talked how he would be out of the market long before they took out the “piano player.”

Here is a great graph that tells a thousand words story. Thank to Kirk Lindstrom:

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

.

HAPPY VALENTINE'S DAY TO ALL

.

POST OR READ COMMENTS