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Saturday, March 27, 2010

March 27, 2010, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

Posted March 27, 2010...Bob Brinker hosted Moneytalk this weekend.

STOCK MARKET: These were Brinker's only stock market comments Saturday:
"The total rate of return on the S&P 500 Index.....essentially the 500 largest companies in the USA.....year to date -- that would be the price appreciation -- remember, we started the year at 1115....up now around 1166 1/2. So now you also add in the cash dividends year to date and you get up around 5%. Nasdaq setting in at 2395. The Nasdaq 100 at 1952 1/2."

"Rates remain extremely low because the Federal Reserve is keeping them there. It is the Federal Reserve that through its policy machinations determines that short-term rates. And the Federal Reserve has held the federal funds rate, which is the daily rate that banks charge one another when lending out their excess reserves at the Central Bank......has been held between zero and 25 basis points all the way going back into last year.....Three-month Treasury Bills annualized rate of return 1/8 of 1 %.....Now how much would you make at 1/8 of 1% on a $1,000 for one year? You would make $1.25......"

TAXES GOING UP: Brinker said:
"I am on record saying that taxes can only go up. Now we're starting to see this come to fruition and there may be more ahead. There are so many debts being piled up at the federal level, in addition to state the form of the annual deficit which is handed off to the national debt at the end of every fiscal year, in September......I really don't see any alternative other than increasing revenues. Now some cynics will say....and I suspect they are right, that those who drive up spending in Washington, do so on purpose because they know that revenue will have to be provided for that spending.......May be premeditated efforts aimed at forcing people to pay higher taxes into the system. That's the way it looks based on what I am seeing right now.....

...... Now there are a couple of areas for you to put on your radar screen as we move forward in the tax area. Two especially to note --now obviously you know they can raise rates, they do that all the time -- they just did it with the health care bill with the new higher rate for the Medicare payroll rate and the new tax on unearned income. A health care tax on capital gains. A health care tax on interest and dividends. A health care tax on rents and royalties. That's what they just put on that will become effective down the road. That's the 3.8% new tax for high earners to pay for health care, we are told....

......One tax to keep an eye on is the Social Security Payroll tax.....There has already been talk in Washington, even the president of the United States about lifting the cap on Social Security.......We are starting to talk about tax rates that are so confiscatory that they are unreasonable.

......One other one to watch is value added tax. Now they are talking in Washington about the possibility of a value added tax, and that would added to the current tax structure. It would be a new tax, just like this 3.8 on unearned income......

......So the bottom line in all this is, it looks like tax rates are in an uptrend. And I don't see it changing until our spending habits change, and our spending habits won't change until somebody in Washington does something about it. Right now, it's going the opposite way. It's government gone wild in Washington, and this is definitely an X-rated production.....You are witnessing it. It's government gone wild."

DOCTOR'S VIEW OF HEALTH CARE BILL: Brinker said: "There have been many opinions expressed with reference to so-called health care reform, but the views that I've respected the most are the views of those in the medical profession......Who is in a better position to know what is going on out there? Certainly not the politicians in Washington that are making policy decisions. I would go with the views of the collective fraternity of doctors when it comes to what it is really like to be on the front line....

..... And I received a communique from a doctor in New York and this particular doctor did an excellent job of describing what's going on out there in the real world. This particular individual happens to be an orthopedic surgeon in New York......He talks about so-called health care reform and how it relates to him from the perspective of a practicing physician. He talks about the fact that he's going to be directly impacted as a result of this legislation. One area he focuses on is the patient care and how that will change in the future. And in his view....doctors are going to have to jump through hoops in order to get their patients the care that they need. And he speaks as a surgeon in his communique to me, and I thank you Doctor, for this, so that I could share it with Moneytalk listeners as a first-hand look at the reality of what has happened. Your reality, and I'm sure the reality of doctors across the United States.....

......It's going to be necessary for him to request authorization from a government board as to whether he is granted permission to perform elective surgery. Now elective surgery could be one of many different operations. It could be a hip replacement or a knee replacement, or one of many others. And he says that when he makes the request for authorization from the government board as to whether he can be granted permission to go ahead with the elective procedure, that he expects the decision to be based on age and life-expectancy. Now this is a dramatic change in health care in the United States. Because in the past, as he points out, these decisions have been made in consultations involving the doctor, the patient and the patient's family......You haven't heard people talking much about this so I think you should be aware of it. It's really important.....

.....So government is in a position to decide whether it's cost effective to repair your grandmom's hip fracture, for example -- just one aspect of this plan -- one aspect. And in this doctor's opinion, he believes every person in the United States should oppose this plan, which was just passed and signed into law -- just based on this one aspect. And of course that doesn't even begin to address the expense involved in the plan. And of course as you know, we have other fiscal problems, unfunded liabilities, Medicare, Social Security, prescription drugs -- part of the Medicare program, that have given us government gone wild fiscally. With nobody at the helm -- out of control. And of course, medical malpractice reform was not addressed in this bill."

Honey EC: KUDOS to
Bob Brinker for fair reporting on Saturday:

At the end of the first hour of the program, Brinker announced that there are "10s of thousands" of protesters in Searchlight, Nevada right now, who are "mad as hell and they aren't going to take it anymore."

Brinker said there are about 50,000 Tea Partiers who are against the big spending going on in DC -- and the Obamacare bill in particular. Brinker said that there was only about 200 who are for it.

Brinker pointed out that Searchlight is not far from where he is broadcasting and that the road going into Searchlight has traffic backed up 5 to 8 miles and people are walking miles to get to the gathering to voice their outrage. (Fox News also reported that the small road leading into the town was deadlocked with traffic.)

Brinker's Saturday guest-speaker was Stephen Roach:

To Go is Available on Demand Totally Free at KGO810 radio for seven days after broadcast. The three hours of the programs are archived Saturday and Sunday 1-4pm. To download the programs and listen later, just choose the day, right click on each 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:


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