Bob Brinker's Moneytalk Discussed Here and Around the Net

Bob Brinker, host of Moneytalk....what's the latest scoop? The following comments are in addition to all the excellent posts in the "comments" section of my June 28-29 Moneytalk Summary at bottom of this page:
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Written by InvesTing:
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"Ah Trend, when someone shows your alibi for Brinker game, you call it babbling?

Babbling is what Brinker did this weekend after being so terribly bullish just a few shows ago with oil prices within a skosh of current prices--he excoriated those idiots who didn't understand that the market was behaving perfectly as he knew it would and that those who were bearish should be 'embarrassed'. He BABBLED on and on about how much harm their negativity was doing to investors who listened to them. To prove his point he bragged that the market was 10% off those March lows and was relentless in bashing those who were bearish or cautious. The storm was over according to Brinker in that show-that "successful test in March of the January lows" made everything hunky dory. Now oil was about 130 something a barrel and the effects of that pricing on gasoline was known by even the most dim wittted. The dropping real estate prices was well known and is unchanged. The unresolved credit crisis was known and nothing has changed.

Well now the market is flirting with bear market territory here with the dow entering a bear on Friday and the S&P and dow inches away.

Did Brinker admit he was WRONG to be so dismissive of those who saw continued problems and were bearish? Did he admit they were right to be so and he was WRONG? Did he explain to the audience all the hubris about "the successful test of the January lows" was just babbling?

No--of course not. What Brinker did this weekend was cop out. He is like the kid who was responsible for misbehaving in class and when zeroed in on by the teacher--points his finger at some other kid who just happens to be convenient.

He never mentioned the BEAR word but claimed "like we have said right here high oil prices will have an effect on the consumer and on the stock market"

Whoa Nellie--Nothing could be further from the truth. That was a BIG OLE LIE. Brinker indeed was sanguine at worst and gleeful at best over high oil prices right up until the last week or so. He would brag on it's effect in stopping inflation and never hooked it up with stock market levels EVER before.

What changed? THE MARKET WENT IN THE EXACT OPPOSITE DIRECTION THAT BRINKER SO ADAMANTLY PREDICTED--that's all that changed.

Everybody else in the world seemed to be quite concerned about the effect on the economy--but Brinker who was calling for mid 1600s right around the corner on the S&P.

Well when the market tanked and Brinker should be "EMBARRASSED" he weasled. He now claims that the market is totally at the mercy of oil prices.

He carefully allowed two callers to ask about the stock market--and then cut them off so no specific or embarrassing questions could be asked. In both instances then he FLIP FLOPPED from his bullish BS and said.

"Well the stock market movement is dependent upon oil prices"

So there you go--with 130 something dollar oil anyone who wasn't bullish was an idiot. With 140 dollar oil the market is totally dependent upon the price of oil.

What changed? The MARKET TANKED and Brinker needed an alibi. It shows you how bogus the whole marketiming crappola of his is.

Now I don't know and neither does Brinker if the market will find a bottom and go up or whether it will tank another 10% or more from here. The difference is that Brinker is positioning himself so that whatever happens he will spin it to have predicted it. Total BS"____InvesTing
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Bob Smith replied to Honey's post on Jun 29, 2008 at 8:37 AM
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I was interested to read Brinker's thoughts on the lack of speculation in the oil markets:
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"Brinker spent the remainder of his opening monologue talking politics and explaining why he does not believe that speculators are to blame for rising oil prices. He ended his monologue by saying: “But I thought it was fascinating to watch congress go through this – it’s almost like play-acting when you look at it – almost every day this week demonizing these so-called speculators, when in fact, they know full well, they’ll never be able to show any proof of this. And even if they could come up with something in the United States, they’d still have an enormous problem which is oil’s a global commodity, it’s traded all over the world. The United States does not have jurisdiction on speculators in London or anywhere else for that matter outside of the United States of America.........."

There are articles coming out daily that detail excessive speculation in the oil markets. Here is one I recently read:

"The most surprising e-mail came from Chris Cook, a former director of the London Petroleum Exchange—now ICE Futures Europe. Cook wrote: "I am convinced there has been manipulation of the Brent Complex [the term that defines North Sea Brent crude prices] by ICE members for the last 10 years at least. I think it is quite likely that the Brent forward price is being kept artificially high—which does require deep pockets and accounts for the continuing barrage of Goldman [Sachs] forecasts and much of the other oil market hype that passes for news."

http://www.businessweek.com/print/lifestyle/content/jun2008/bw20080626_022098.htm
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Kirk Lindstrom (Silicon Valley, CA) replied to Bob's post on Jun 29, 2008 at 9:00 AM

To say there is not "manipulation" or "speculation" in the oil markets is foolish. Nobody complained when speculators thought oil was plentiful and would only pay $20 for a futures contract on a barrel of oil to be delivered in the "future."

I'd not be surprised to learn that a good deal of the hostilities in the Middle East are FUNDED by those who control the oil so they can profit from the price gains that come from fear of further violence.

For example, is is FAR MORE PROFITABLE for Iran to say they want Nukes than to actually create jobs in their economy since the fear of conflict with Israel drives the price of their oil up which they can sell to the West at super high prices in an attempt to bankrupt or at least harm their economies.
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Jim Firestone replied to Kirk's post24 hours ago

I totally agree. I couldn't believe Brinker said there is little, if any speculation in oil. Remember last week when oil inventories came out, they were better than expected, so the price dropped. But the very next day an oil minister from OPEC "speculated" that oil would go to $170 a barrel. The futures traders instantly bid up the price of oil based on the "speculation" that he may be right. Also, as you suggested, whenever there is saber-rattling in the middle east, traders bid up the price based on "speculation" that supply may be disrupted"......More of this discussion at Facebook Brinker Forum

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Sea-biscuit wrote:

"Big deal! Here is what I said on this very forum about 6 months ago (1/15/08) :

It is time for you Brinkerbots to start cooking up excuses again if we have a bear-market this year!

I have said how silly it is of Brinker to say that higher oil prices are good for the stock-markets because they allegedly lower the inflation rate. I have asked the obvious question that if people pay more for gas and have less money to buy other things, what happens to the earnings of the companies that sell those other things!

It doesn't take a genius to ask such an obvious question, but it would take a moron not to ask it.

Only now, AFTER a near 20-percent haircut in the market, is your Brinker getting around to explaining that high oil prices would mean lower earnings for many non-energy companies... Sheesh!"

Summary: Bob Brinker's Moneytalk June 28-29, 2008

Summary, Commentary and Excepts: Bob Brinker's Moneytalk, June 28-29, 2008

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Bob Brinker hour-one monologue excerpts:

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“Here on Moneytalk, if you have been with us, you know we have been talking about the importance of oil prices and energy here on our Moneytalk broadcast. And we see the importance of oil prices in today’s economy --we see it with a direct correlation. We saw just this week between rising oil prices and the stock market, with the S&P 500 trading at 1278 at this juncture. And we look at what’s happened to oil prices and they spiked to a new all-time-historic-record on Thursday and Friday, closing on Friday a little above $140 per barrel."

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(Honeybee EC: I don't recall ever hearing Brinker say that there was a "direct correlation" between oil prices and the stock market. Is this the unexpected "exogenous event" that Brinker talks about that could cause a bear market to happen while he is bullish and predicting new highs? Last week, he mentioned that the stock market "did not like" what was going on in the Middle East. Two weeks ago, he never talked about the stock market in general during the program, and on June 7th, he said that the run-up in oil prices which was caused by something that happened in Israel had "spilled over" into the stock market and he said that he viewed oil as a "wild card" where the economy was concerned.)
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Brinker continued: "Now why is the price of oil important? Why are energy prices important? Well, the reason they are important is very simple. They have a direct impact on consumer spending. And consumer spending, is for the most part, is what the economy in the United States is all about………….Consumer spending is the engine that drives the U.S. economy and that makes anything that impacts the consumer an important factor – including oil prices………"
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Brinker spent the remainder of his opening monologue talking politics and explaining why he does not believe that speculators are to blame for rising oil prices. He ended his monologue by saying: “But I thought it was fascinating to watch congress go through this – it’s almost like play-acting when you look at it – almost every day this week demonizing these so-called speculators, when in fact, they know full well, they’ll never be able to show any proof of this. And even if they could come up with something in the United States, they’d still have an enormous problem which is oil’s a global commodity, it’s traded all over the world. The United States does not have jurisdiction on speculators in London or anywhere else for that matter outside of the United States of America.........."

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There were no callers on the program today who asked any questions about the stock market:

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Caller one: Nuclear power/politics/Chernobyl….
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Caller two: Oil/Iraq war/national debt
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Caller three: Nuclear power plants
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Caller four: Preferred stock (not-named) paying 10%. Brinker: remember that dividends can be lowered.
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Caller five: Car company in India making cars that run on air and runs for three hours.
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Caller six: Reinvesting a $10,000 CD. Brinker reminded her to be sure she had FDIC coverage.
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Caller seven: Drilling in ANWR. Brinker is for it.
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Caller eight: Nuclear power plant near an airport in Japan – planes have never crashed into it.

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Hour two monologue excerpts:

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The FOMC meeting took place last week. Rates were held at the current 2%. One year ago it was at 5 ¼% -- most of the change occurring since January.
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Brinker said: “Now there were some comments made by the Federal Open Market Committee……..One of the comments they made was that overall economic activity continues to expand. Now I thought that was an interesting comment only in the sense that they didn’t make really remark specifically about the pace of expansion. Well, yeah, overall economic activity continues to expand -- well okay, first quarter real Gross Domestic Product grew at an annual rate of 1.0, fourth quarter grew at 0.6. So if we blend this last six months, we get an annual rate of real growth in the economy of 0.8.

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Okay, so it’s true, overall economic activity continues to expand, but when you look at that rate of expansion in the last six months……..you can see what the numbers are. Now another thing they commented on is some firming in household spending. Well it is true that the consumer has a remarkable resilience, so far, to higher energy prices…………but I don’t much I’d be calling attention to the firming in household spending aside from the fact that the rebate checks are in the mail……..In general I’d think that house spending is definitely having a time dealing with the higher energy prices that are straining consumers.

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They went on to say that labor markets have softened further, and financial markets remain under considerable stress. The labor markets have held up reasonably well. The loss of jobs so far, when you look at historical contractions in the economy, even if that represents a growth contraction which is a lower growth rate which is what we have so far……..The bottom line is they remain soft and are going to remain soft for a while.

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The comment about financial markets remaining under considerable stress – well, I think that’s an understatement. I think the financial markets have been under a lot of stress as the banking community has been coming to grips with this subprime incompetence that we saw from top management in these companies. I mean where else can you go? You have to go to these mucka-mucks that run these financial companies and banks……… And you have to look at these things and you say wait a minute, the reason these people were drawing down the big salaries and bonus checks and packages was because they are supposed to be able to know how to run the company. When you realize that they did not take a look at what they were doing with reference to the risk they were taking in subprime………I realize lot of them have lost their jobs. But some of them went out with golden parachutes and that doesn’t make everybody real happy either.

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They went on to mention tight credit conditions. That is related to what’s going on in banking. Banking institutions have certainly ratcheted up their credit standards now that the horse is out of the barn and across the dale and over the hill and out of sight………..Ongoing housing contraction goes without saying. Rising energy prices is right out there every day for everybody to see -- all those signs going down the highway for the $4.00 gasoline. Obviously all of that is a factor on the economy at this point.

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There was a dissenting vote…….Richard Fisher, he wanted to increase the Federal Funds target rate. Where does this mentality come from? I think comes from those who misinterpret energy prices as an inflationary threat. Has that been the case? No. No, it has not. The key inflation gauge that is used by the Federal Reserve itself is the Personal Consumption Expenditure Inflation Index. Well, that index is updated whenever a GDP report comes out – it was updated Friday, and here are the numbers: Year over year overall inflation counting everything, 3.1%. That includes the fact that gasoline has gone up in price by more than 1/3 in the last year……….Core index, excluding food and energy, 2.1. What was it the prior month? ……Headline was 3.2….and the core stayed the same at 2.1……..

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........Here on Moneytalk, we told you that rising energy prices were contractionary to the economy, they hold down the rate of growth in the economy and they are not inflationary……..They are a pure, unadulterated tax on consumption…………So many told us that this is going to cause high inflation. Well, it didn’t happen, did it? Oil prices in the last year are up 100%.........So these people that told us that rising energy prices would spill over and push core inflation high, they were wrong........."

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Caller one: Hedge funds qualify for capital gains rather than ordinary income on taxes. Brinker said the government could raise a lot of money if this was simply changed to ordinary income tax, and he expects Obama to make the change if elected.
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Caller two: Nuclear power plants in France are safe – so are the ones in the U.S.
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Caller three: Energy
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Caller four: California Air Resources Board, the “Green Gestapo” is putting forth their proposals. Brinker said that is a “scary group.”
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Caller five: National debt.
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Caller six: Detroit motor company preferred shares. Brinker: "speculation."

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Hour Three Monologue Excerpts:

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Brinker said: “Well the S&P/Case Schiller Home Prices Index came out this week. It’s revised on an ongoing basis. And the home price index is based on 20 cities across America. And it is a year-over-year price change index – and it shows an average decline of 15.3%. Now this index is relatively new. It was put together back in year 2000, so it has a very short history…………But just in that limited time horizon, that’s the biggest drop it’s taken…….We’ve heard the stories about some of the most hard hit marketplaces including places like Miami, Florida and Las Vegas, Nevada……Also including Phoenix, Arizona….down over 3% on a month to month basis......"

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Bob Brinker 2.28.08 quotes:

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• “If you live within, let’s say, 40 or 50 miles of a nuclear plant, you get less radiation in a year than if you eat a banana. These are the things that they don’t want you to know.”
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• “People who work in the U.S. Capitol Building get more radioactivity than people who mine uranium.”

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Sunday Moneytalk: Commentary and Excerpts

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Brinker's monologues on Sunday mostly covered old subjects again -- politics, Obama's tax plan, FOMC, Mid-East, energy, oil, estate taxes, etc.

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Honeybee EC: Most of the calls were either too esoteric or too basic to be of interest. For instance, one caller wanted to know how to ladder CD's. I didn't hear anything new that was important enough to write about.

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But there was one call about oil prices and the stock market that was interesting. Bob Brinker did not actually answer the question as asked, but what he said may be of interest to readers. Perhaps we can read between the lines. 8~)

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Caller Daryl: “If gas prices stay high or go higher, do you think that the stock market will stay down or even go down further.”

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Brinker replied: “As I’ve stated, I think that consumers have to deal with the reality of gas prices. And I think that the most helpful thing is for oil prices and also gasoline prices, which go pretty much hand in hand, to stabilize or decline. I don’t see anything helpful in a trend of continuing rising oil and gasoline prices. And I think the reason is because I think it affects the consumer, and I think that that affects future economic recovery prospects. I think it’s all tied together here. I’ve described oil as the wild card in the outlook and I think that is exactly what it is."

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Bob Brinker’s Saturday guest speaker was Richard Bitner, who wrote: Confessions of a Subprime Lender: An Insider’s Tale of Greed, Fraud and Ignorance

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Brinker's Sunday guest speaker was Fran Hawthorne, author of: Pension Dumping: The Reasons, The Wreckage, the Stakes for Wall Street

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Bob Brinker's BULL Market

Bob Brinker's bull market is still hanging on by a straw in a haystack. 8~)

Posted June 27, 2008:
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Dow 11,346, down 19.8% from October 2007 high, just 0.2% away from "official bear" territory -- on track for biggest monthly drop since 2002.
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Nasdaq now at 2315, down another 3.8% this week -- well into bear territory.
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S&P 1278, down 3% this week; down 18.3% from October 2007 high-- on track for biggest monthly drop since 2002 and the worst June since 1930...
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Jeffchristie re-posted this in the comments section this morning. Thanks Jeff.... Here are the excerpts from my Moneytalk Summary on April 19, 2008:
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Caller John, in a follow-up question wanted to know why there are so many “perma-bears” out there saying we are headed for a doomsday.
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Brinker reminded him that he recently had a guest on the broadcast that was extremely bearish when the market was lower than it is now -- and that he had stated “on the broadcast” that he did not agree with the guest-speaker.
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Bob Brinker said: “You’ve heard me say on the broadcast, I think we are going to new all-time-historic-record stock market highs by 2009. I think by the time we get into 2009, we are going to be talking about all-time-historic record highs on the S&P 500 Index. But I know what you are talking about, I see it all the time.....in writings….in talking heads. They are talking down the United States of America. They are talking down our economy………(Caller: “Do you think people tend to focus too much on short-term?”) "Oh, absolutely, absolutely, I know this for a fact because when we have gone through this recent bottoming process, and certainly we have worked very, very hard to identify the bottom that I believe that we did accurately identify in the first quarter.
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It’s my opinion that the March 10th low on the S&P 500 was the bottom for the correction. And I think that what happened was that was a very successful test of the initial low recorded January 22nd. You might remember the S&P 500 closed on January 22nd in a very high volume panic-atmosphere at 1310. Well we knew, that despite the fact there’d be some short-term rally.......back then, we knew there was going to have to be a successful test of that low. And we knew what was required of that test before it occurred. Now that is exactly is what happened. And the closing test in March was, actually it was less than 3% below the initial low established on January 22nd. So we are talking about a text-book testing process in that correction low that we looked at.
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Unfortunately, unfortunately, and I’m sure you’ve heard this, there were a lot of people out there, and I mean a lot of people out there, who got it completely backwards off that correction low and that successful test……I’ve been telling people, going to, actually to February because we do this through the investment letter, of course, I’ve been telling people to actually use periods of weakness to buy into the market at specifically down in the low-1300’s or any minor weakness just below that level, which we got a little bit of there on March 10th and in mid-March, to take those opportunities to add to positions if you’re looking to add to positions – no mention, no thought of selling anything into this kind of weakness……”
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Caller John concluded by saying: “I took your recommendation, Bob.. When it was below the 1300’s I added…….I’m just glad I got you, your son and the Marketimer on demand.”
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Brinker said: "And just for the record, I’m right with John. I was the exact same thing that John was doing. When we saw that weakness on the correction test into the low-1300’s and that very, very minor weakness that we had just below that level for a very short window of time, I was doing the same thing that John was doing – which was adding to positions."
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Honeybee EC: Brinker’s Model Portfolios have been 100% invested since March, 2003, and he has bragged many times about that fact on Moneytalk. Therefore, it would show integrity if he would explain that the low-1300’s buying opportunity that he is now touting (and claiming he has taken advantage of) could benefit only those who happened to come into NEW money AFTER January 20th. Before that, his all-new-money-in buy level had been at mid-1400’s.

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"Vanguard - Responding to Downturns

Vanguard article: "What's the right way to respond to market downturns"


ON a lighter note:

Bob Brinker Still Bullish as Market Declines to '06 Level

Bob Brinker is bullish and his Model Portfolios are still 100% invested.

Dow closed at 11, 453; Nasdaq closed at 2321.

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Bob Brinker's Unexpected Third Market-Bottom Test

Analysis: Bob Brinker's Market-Timing, Posted June 24, 2008:
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In February, Bob Brinker said that the stock market had bottomed on January 22 when the S&P 500 Index hit 1310. Brinker later said that the lows were "successfully tested" in mid-March. (The mid-March low was 1256.)
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Based on what he has said, Brinker did not expect the market to test the lows again. He clearly stated in Marketimer and on Moneytalk that he expected the market to continue its upward trend. He said that AFTER the S&P had risen almost 10% from its March lows. (See May 31, 2008 Moneytalk Summary.)
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Moneytalk, May 31, 2008, with the Dow at 12, 638, the S&P 500 Index at 1400 and the Nasdaq at 2522, Brinker said: “……..And probably a lot of those people got scared out near the correction lows. The initial correction low in January, which was successfully tested in mid-March, before the market reversed and resumed its uptrend.
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Excerpt from Mark Hulbert's June 2, 2008 Marketwatch article:
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"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes." Brinker's model portfolios are fully invested."

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This past weekend, Brinker had absolutely nothing to say about the stock market except to give the closing numbers. What are people saying?
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Jumpnjoey said:
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"Wonder how those that followed his "all in" buy call at 1450 are feeling right now?

S&P 500 is the same where it was 20 Apr 06.

792 days of nota or 2.17 years.

Better off in a money market account. Didn't Brinker use to bash the school of hold and hopers?"
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Sir Pig Esq. replied:
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Pig said...

Didn't Brinker use to bash the school of hold and hopers?

At one time or another, Binker bashed quite a few people, more than the Bashers here have ever done.

He bashed "Buy and Hope" (and pray), but to this day is HOLDING the QQQQ, and quite possibly TEFQX.

NOONE knows about TEFQX, since the trade was made with disappearing ink, and NOONE can find it anywhere. A real stumper for sure! (((ROAR)))

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Honeybee replied to Joey:

Yes Joey, he certainly did bash the buy and hopers. I think he called it the "Church of buy and hold."

Amazing that two years+ have gone by and the S&P is back where it was in April 2006.

It's interesting to note that in June, 2006 (the month Brinker claims a secular bear megatrend ended), his buy-level was at 1250, and he was calling for the S&P 500 to reach new highs.

Now that was a very good call because the S&P did reach new highs in October 2007.

But -- the big one -- in October 2007 as the market was at its all-time-record-high, Brinker was calling for more new highs and the S&P to reach mid-1600's.

So, long story short: He rode this correction all the way back to April, 2006 level -- as you pointed out.

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Dan said:

Dan said...

Brinker riding a horse? Can't picture that, but I can picture him sitting on the edge of his chair this morning watching the Dow test those March 2008 lows.

Because if the Dow breaks them, S&P is almost sure to follow. And if it does, as S&P drop from the top of 20% or more is extremely likely. And that would mean he missed the sell call of a bear market.

So far the Dow has met the challenge. I'm one that hopes it passes the "test", as I still have a few stocks (bought yesterday) and mutual funds (though not much $ in either anymore). And one can usually make a lot more money in a bull market than in a bear. But the market will do what the market will do. We should know by the end of the day--certainly by the end of the day.

June 24, 2008 7:51 AM

Dan said...

So far the Dow has held above its March closing low and just may survive this "test". The S&P has a way to go before it enters "test" territory. If the Dow does survive the test as it is right now, we may, just MAY be in the clear. Bob must be clenching his fists right now. He's got a lot riding on this call (or lack of one).

June 24, 2008 8:40 AM

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Honeybee said...

Hi Dan,

Yes, I think a lot of us are sitting on the edge of chairs this morning and hoping that these March lows hold.

(The S&P isn't quite there yet, but it's definitely at Brinker's "low-1300" attractive-for-purchase with all new money level.)

Personally, I'm rooting for Brinker on this one. He called a market bottom back in February, and later said it "tested" in March.

Unfortunately, the market didn't continue it's upward trend from the March lows, as he clearly expected as of just a couple of weeks ago.

But hey, one more test won't kill us -- IF, that is what it is... 8~)

June 24, 2008 8:40 AM

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Followup comments after market close:

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DanG said...

It's hard to know if the Dow passed its "test" today. No new low, but it did turn a nice gain into a modest loss in late trading.

Tomorrow is "Fed Day" so you may want to watch the fireworks (or lack thereof) along about 11:15 AM PDT. Very unlikely they'll do much of anything, but they may open their mouths and stick their feet in them. Hopefully not. But as I've always said, "hope" and $1.20 or so will get you a cup of Starbucks! What will be will be.

June 24, 2008 2:33 PM

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Summary: Bob Brinker's Moneytalk, June 21-22, 2008

Summary, Commentary and Excepts: Bob Brinker's Moneytalk; June 21-22, 2008 (See Sunday Commentary below)

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Bob Brinker began his Moneytalk opening monologue Saturday by giving Friday’s stock market closing numbers, but he made no further comments about it.

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June 20, 2008, Dow: 11,842.69; S&P 500: 1317.93; Nasdaq: 2406

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Brinker did not make any direct comments about inflation, recession or the economy today, but I have transcribed some excerpts that may indicate some of his current outlooks.

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After speaking at length about the situation in the Middle East between Iran and Israel (and the U.S.), Brinker said: “………….Now obviously, Wall Street doesn’t like any of this because it feeds right over into the situation in the energy complex. And of course, the oil situation has been really on a roll. We have this latest news out of Israel on Friday – rallying oil back into the mid-$130’s. Highest it’s been is the upper-$130’s so it’s close to its all time high. And people are looking at this situation, and obviously if oil stabilize or come down, that would be something that Wall Street would like to see. But that has not happened yet, and now the drums are beating in the mid-East for a possible Israeli attack on Iran. And even the thought of that situation has a lot of people worried about mid-East stability….

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…..And of course, they are beating the drums on the other side too. The Ayatollah (?) in Tehran, yesterday saying that if enemies, especially Israel and their U.S. supporters, wish to speak in the language of force, they should rest assured they will be dealt a heavy blow on the face by the Iranian nation. This is not the dialogue that Wall Street is looking for – needless to say -- with oil sitting in close to $135 a share....

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....And oil is important. We’ve talked about it on Moneytalk because oil is the basis for the U.S. economy. It is a petroleum based economy. Yes, other fuels are used. Coal is used. Natural gas is used. But when you get into the transportation area, you are talking massive use of petroleum…………..Obviously the price of oil matters. You know it’s doubled in the past year. I think you have to give a lot of credit to American consumers for adjusting and dealing with it as retail sales have held up quite well, considering what’s going on in the energy complex……….”

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(Honeybee EC: It sure seems to me like Brinker is trying to indicate that the price of oil and the Middle East situations are to blame for the stock market's difficulties -- but as a good friend often says: "What the heck do I know?") 8~)

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MODEL PORTFOLIOS….Brinker said: “A balanced portfolio would be 50-60% in the equity market, with the balance in quality fixed income….….something like the Total Stock Market Index…….Obviously depending on how many wrinkles you want to put into a portfolio, the way we invest the Balanced Portfolio in the investment letter that I write is we put part of it in the Total Stock Market Index (Honeybee EC: VTI is a good ETF substitute for the Total Stock Market Fund that Brinker likes.) We put part of it in managed equity funds. We put part of it fixed income funds and we put part of it in international equities, which is something you can also do.”

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Today, most of the calls that Brinker allowed on the air were about politics, energy, taxes, etc. I have covered most of Brinker's views on these subjects in previous Moneytalk Summaries.

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There was an outstanding caller during the second hour. He said he was a retired airline pilot. Brinker engaged him in a discussion about which airports are the most difficult to land in (surprisingly, it is not San Diego). He talked about some of his close calls, and said that fortunately, he had a landing for every take-off. The conversation went on for a long time and was very interesting...

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Brinker's guest speaker on Saturday was Micheline Maynard: "The End of Detroit: How the Big Three Lost Their Grip on the American Car Market."

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Sunday, June 22, 2008, Moneytalk Commentary and Excerpts:
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Bob Brinker's topics of choice today were energy and politics. And how nice for Brinker that those were the very topics that almost all of the callers wanted to talk about too. Not one caller had a question or even a comment about what's been going on in the stock market.
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Brinker's monologue in the second hour was outstanding, in my opinion. I found myself agreeing with many of his points... I have transcribed some excerpts from it.

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Bob Brinker said: “…..consumers are trying to deal with one major problem in their budget and that is, here we go again right, energy. That’s the thing that’s really changed. You know we hear a lot about the housing recession. It’s certainly a doozie, there’s no doubt about that.

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Remember when we talked about, so many times we talked about the fact that housing prices in California declined five years in a row in the early 90’s. We were talking about this during the bubble in housing a few years ago to try to remind people that this was not going to last forever. And we’ve seen it all before. There’s nothing new in any of this.

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But even with the housing recession, that doesn’t affect everybody. It only affects the people who are in the foreclosed properties or underwater on a mortgage. Yeah, they are affected, and they are affected deeply, but that’s a small percentage of the consumer population. Everybody is affected, except for the rich, which is a very small percentage of the country. Everybody is affected by what’s happened to energy prices. Everybody is affected by it that’s in the middle class. The entire middle-class is impacted.

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You know there are people who are reducing their automobile use now as a result of fuel prices. It’s gone beyond what I said months ago where there were people that could not afford to fill their gas tank and they would put in $10 or $20 at a time because they couldn’t afford the $50, $60, $70, $80 to fill the gas tank, so they would put in small amounts. Well, of course you don’t get much gas for small amounts anymore, do you? If you put in $20, you get what, 5 gallons? Well you’re not going from Des Moines to Baton Rouge on 5 gallons of gasoline. So the bottom line is, people are cutting back………

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…….It’s gone beyond that – people are driving less now because they can’t afford it and they have to cut back so they still have enough money for food which is going up way too fast, because we’ve made another mistake. We’ve mixed our food chain in with our energy problem, with things like corn-based ethanol. Now that’s feeding through the system. And one of the reasons food is up 5.1 in the last year is because of that. So we are doing all of these things and it’s impacting consumers to the point where they are actually cutting back on the use of their vehicle and changing their behavior patterns.

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Now how in the world could we be in a situation like this. Well, I would send your thank you note to people who think like they think at the Sierra Club, where they demonize the most important solution out there today to the energy crises which is nuclear power in the United States. Demonized for decades by the Sierra Club. Although if you go back far enough, you will find they actually flip-flopped on the issue. They were FOR nuclear power before they were AGAINST it……. But they demonize it now, as they have for decades. And here we are, here we are. Welcome to 2008 in the United States.

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And we have a congress that decides…….We ought to take a nice summer recess like we do every year, not even paying attention to the situation. And for some reason, these high-powered think tanks in Washington, apparently they forgot to ask the $64 question years ago – gee what happens if oil goes through the roof. Yeah, they forgot to ask that one, which of course pretty much negated anything they were trying to accomplish in those sessions. And so here we are.

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The president’s a lame duck. He has one foot out the door. He’s on his way to Crawford and he’s looking forward to it. He’s put in his time. He figures he’s done -- few months to go -- clean out the closet. So don’t look to the White House to solve this. And congress, their priority? Hey, let’s take a summer recess. If you didn’t see it, you couldn’t believe it…..This is Moneytalk”__Bob Brinker

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Sunday Moneytalk guest speaker was Joseph F. Hurley, “Best Way to Save for College 2007: A Complete Guide to 529 Plans”

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Vanguard also offers complete information about saving for college, 529 Plans, ugma/utma, Individual Mutual Funds and Education Savings Accounts at their Vanguard College Savings Center.

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Bob Brinker June 21, 2008, quotes:

• “Where is the U.S. energy security? Well, right now it’s out the window.”
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• "Being in favor of nuclear power in today's country of the United States is a no-brainer"

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Bob Brinker Bashing Bears

Bob Brinker's Stock Market-Timing and Bad News Bears Bashing

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February 4, 2008 Marketimer, Bob Brinker wrote: "As has been the case with every correction since August of 2007, several stock market pundits are claiming that a bear market is underway. We do not believe this is the case. We expect the S&P 500 Index to work its way into record new high ground by late this year or in 2009.". .
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From Honeybee's May 31, 2008 Moneytalk Summary excerpts:
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Bob Brinker gave the following market statistics: “The stock market had a good month in the month of May, finishing at 1400.38 in the S&P 500 Index……….a gain of about 1.48%.........and for the second consecutive month the market showed gains. The Dow finished the month at 12,638, that was up 1.3% for the week……..and the Nasdaq Composite had a big week – up 3.2% to close at 2522.”
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CORRECTION LOW AND TESTS.... Brinker said: “……..And probably a lot of those people got scared out near the correction lows. The initial correction low in January, which was successfully tested in mid-March, before the market reversed and resumed its uptrend. And basically, if you were to total up all of the accomplishments of the Cassandras, that would be it – that they scared people out of the market during a stock market correction in the first quarter………..Because they have been unable to present any evidence of a recession."

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STOCK MARKET BEARS.... Brinker said: “So what we have here basically, is an example of false prophets and it’s sad. And the reason it’s sad is the damage done. Think of the people that are looking today at the market, S&P at 1400 and they’ve been scared out of the market in the first quarter by these bears………It’s just amazing and yet these people are out there, and these people are not happy, I’m sure, to find themselves out of a rising market since March. To find themselves looking for ever lower prices when in fact we’ve had the opposite.

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We’ve had the market rising since mid-March. It’s rather significant when you stop to think about it. If you go back to mid-March and you take a look at the S&P 500 Index since mid-March, right now you have a total return, including cash dividends of about 10 1/2%.....................So it’s fair for you to say to the Cassandras, where is that recession, where are those millions of lost jobs, where are the two quarters of negative real GDP growth? Where’s the bear market? …………The answer is, they blew it! That is the answer, they blew it. They got caught up in their own negativity and they pronounced that it was all over, it was going to spiral downward and there was no end in sight – and they got it completely backwards. Truly amazing to see, and sad to see the people that are harmed by such unjustified negativity.”

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June 20, 2008, Dow close: 11,842.69; S&P 500 close: 1317.93; Nasdaq close: 2406
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Here's an interesting analysis of Bob Brinker's latest buy-level, which he lowered from the "mid-1400's-range" to "low 1300's" (on February 10, 2008) when the S&P was at 1331:
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For the Record Keeper said...

Pig wrote: "I missed the low 1300 buy."

His buy was at 1331, or lower.

Pay attention to the wording in the Feb 10 special bulletin.

What does "Current" mean to you?

The market was 1331.29 that day according to the bulletin.

Brinker wrote:

We now [not next MONTH or at 1293] rate the stock market attractive for purchase on any weakness that occurs in the current area of the S&P 500 Index low 1300's, [not next MONTH or at 1293] or any minor weakness that occurs below that level.

Here is my definition:

Low 1300s is 1300 to 1333
Mid 1300s is 1333 to 1366
High 1300s is 1366 to 1399

1331 toi 1293 is "only" 2.9% lower, but little things matter, especially if someone has a "habit" of calling bottoms every 8% without selling anything at the top.

March 8, 2008 12:54 PM

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Sir Pig, with his outstanding ability to make solid points with humor, responded:
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Pig said...

>>His buy was at 1331, or lower.

OH.........OK. So exactly what does that mean? Should I have bought at 1331, or lower? (Can you make this crap up???)

>>Pay attention to the wording in the Feb 10 special bulletin.

Sorry.........I have enough toilet paper. Can you decipher it for me with your decoder ring?

>>What does "Current" mean to you?

Mmmm? I'm not a genius, but I think it means "current", which is a hell of a lot lower than 1331? What am I missing? Kan U s'plain it to me?

>>Here is my definition:

Low 1300s is 1300 to 1333
Mid 1300s is 1333 to 1366
High 1300s is 1366 to 1399

OK, but where does 1282 fall within that range? And.......where is 1450? Sorry to be soooo stooopid..........but you sound soooo smart, compared to me.

>>1331 toi 1293 is

toi? Sorry, I don't know any foreign language, or Wall St lingo?

>>is "only" 2.9% lower

Thanks. I'll tell that to United tomorrow, when I'm 2.9% late for my flight, and they should make it up to me, and bring the plane back.

Are you based on this planet, or elsewhere?

Sorry to be rude, but you are apologizing and spinning like a top. HTH

AAR, please don't answer unless you have something constructive to add, because so far, you don't impress me as too knowledgeable about making money.

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Bob Brinker's Stock Market Bottom

Bob Brinker's Stock Market Bottom, Test and Re-Test

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It has been five months since Bob Brinker said that this current stock market correction had bottomed in January, and four months since Brinker said that the stock market had "completed a sucessful test of the bottom area in mid-March."

According to Peter Brimelow’s February 21, 2008 Marketwatch article, Bob Brinker said:
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"The initial closing low in the current stock market correction process occurred on Jan. 22, when the S&P 500 Index closed at 1310.50. The market subsequently rallied for eight days, at which point it began the process of testing the area of the Jan. 22 closing low........We now rate the stock market attractive for purchase on any weakness that occurs in the current area of the S&P 500 Index low 1,300s, or any minor weakness that occurs below that level."
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"As has been the case with every correction since August of 2007, several stock market pundits are claiming that a bear market is underway. We do not believe this is the case. We expect the S$P 500 Index to work its way into record new high ground by late this year or in 2009."

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In Mark Hulbert's June 2, 2008, Marketwatch article, he wrote the following about Bob Brinker's stock market outlook:

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"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes." Brinker's model portfolios are fully invested."

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Also, in the June 4, 2008 issue of Marketimer, Brinker said that since the March test of the lows: ".......a renewed uptrend has been underway, and we expect the market to trade with an upward bias until new record highs are achieved above the S&P 500 Index closing high of 1565.15 registered last October. Our S&P 500 Index price target remains in the 1600 range either late this year or in 2009."
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• Since Brinker made that prediction on June 4, 2009, the S&P has dropped from 1400 back down to 1337.
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• Will the S&P reach Brinker's January 2008 "low-1300's" buying opportunity range again?
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• What about the low that Brinker never mentioned either on Moneytalk or Marketimer that happened in March when the S&P dipped into the 1250 range?

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Jim Firestone wrote on Kirk's Facebook Bob Brinker Discussion Forum:

"Yes, he was predicting 1600 in '07 and again here in '08. The way things are going he may be saying it in '09 and '10. It looks like the market does not see the second half recovery that Brinker was talking about. He has said that the market anticipates the future about 6 months in advance. Since we are still not in an uptrend, I must assume the recovery is not in sight yet. If 2009 is going to be as good as Brinker said, then the market should start a move at any time here. He has been on the wrong side of this market since Oct. '07, but he is caught in a bind because he can't change his view at this point. So he must keep calling for 1600. It will happen sometime, and then he will take credit, even if he was a year or two too early."

Honeybee replied:

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Hi Jim,
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You made all good points. Indeed, Brinker IS in a bind. He did away with the whole secular bear megatrend back in June, 2007 (he said it ended in June 2006), and has been ultra-bullish ever since.
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He was totally wrong back in October 2007 when he was predicting S&P 1600 and more new highs. Then in January, he said the market was "favorable as we enter 2008."
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OOOPS! About 3 days later the correction that he didn't "expect" began.
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Indeed, even his market-timing prognostications since January are not looking good.
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Of course, his Model Portfolios have been fully invested throughout this rather nasty 2008 market, so over the long-run, he will not take "credit" for any of these market timing blunders. When the market moves up again, he will just hearken back to March 2003.
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• "The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently."_________John C. Bogle

• "Well, let me tell you, I have been following markets for about 50 years, and I've never met anybody who could time the market correctly. And I say, stay the course............. And what I'm absolutely convinced of is: You'll NEVER, NEVER, NEVER be able to time the market._____Burton Malkiel

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Summary: Bob Brinker's Moneytalk, June 14, 2008

Summary, Commentary and Excepts: Bob Brinker's Moneytalk, June 14, 2008
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Saturday, Bob Brinker made no comments about stock market activity this past week. Brinker’s opening monologue began with a lengthy discussion about oil prices, supplies, etc.
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Brinker commented that OPEC is responsible for over 40% of the world’s oil production which gives them ultimate power in terms of marginal barrels of oil. He said that there is a new Saudi oil field that is set to start pumping in less than 30 days and then “ramp it up” to an additional 500,000 barrels a day. (The United States consumes 20 million barrels a day.)
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Regarding the upcoming meeting that the Saudis have called to “tackle oil prices.” Brinker said: “I can almost picture that meeting – just a bunch of ministers giving out high-fives to one another. What do you think, $134, $135, whatever it is, give or take a few pennies….. say hey, it’s happy hour – they want our product – they’ll pay anything for it. Well, there’s a lot of truth in that.”
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From Reuter’s: U.S. expects to attend Saudi oil meeting -W.House

June 10, 2008

WASHINGTON—The United States, which has wanted OPEC to increase oil production to dampen record-high prices, expects to participate in a June 22 meeting on oil supply in Saudi Arabia, the White House said Tuesday.

"It's a positive sign that Saudi Arabia wants to take a leadership role on this issue. As one of the world's largest producers and consumers, we expect to participate," White House spokesman Tony Fratto said.

"We'll be interested to see what is on the agenda. It would be useful to address the need to open markets to investment that would result in greater efficiency and higher production," he said.

Saudi Arabia will host a meeting of oil producers and consumers on June 22 to discuss record-high prices, OPEC Secretary General Abdullah al-Badri said.

Oil hit a record $139.12 a barrel Friday and traded to a high just below $138 on Tuesday.

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Brinker probably got most of the information about this here: MSNBC Saudis seek meeting

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MSFT/YAHOO/GOOGLE...Brinker said: “Something else (Honeybee EC: Brinker must have actually meant to say something "different" instead of "else" because he used it as a segue out of his energy discussion) has been going on in the stock market involves Microsoft and Yahoo……….The share in Yahoo had risen all the way up to $34 a share in anticipation of a possible takeover by Microsoft. Microsoft had come in with a $31 a share offer about 3 months ago for Yahoo, and then they raised the bid up to $33 a share last month and, you know, that’s like $47 ½billion for the company………Then the speculators went into the Yahoo shares and started bidding them up and got them all the way up to $34 a share…….Yahoo shares have tumbled all the way down to $23 a share…….Microsoft shares have been trading for the most part in the upper-$20’s recently………”

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Brinker said it was reported that Microsoft had been willing to pay $35 a share -- up to $8billion worth of Yahoo shares -- before the deal fell through. Now Yahoo has made a deal with Google, so it is less likely that Microsoft will ever be involved with Yahoo for any major deals.

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An interesting article titled: Google grows stronger in Microsoft-Yahoo fallout

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Brinker said: “Carl Icahn, who is a billionaire, is upset with the Chief Executive Officer at Yahoo, Jerry Yang………and is accusing Jerry Yang………of sabotaging the acquisition plan that Microsoft had out there for Yahoo…….There are a lot of people who are shareholders in Yahoo who are not happy.”

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Here is the link to the New York Times column about Jerry Yang that Brinker discussed "Oh, Jerry, It's No Longer Your Baby" Re: Shafting Yahoo Shareholders," by Joe Nocerra.

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Honeybee EC: Microsoft is one of the two individual stocks that has been on Brinker’s Marketimer recommended list for many years. Here is a chart that shows how MSFT has done compared to the S&P 500 Index:

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CALLER: “First of all, I want to compliment you on your two calls, one in January 2000 and one in March 2003…..We’re not sure whether Babe Ruth pointed to the fence or not, but you definitely called them right on, so I don’t think you get enough credit……..” Brinker said: “Thank you very much, Jerry. And Babe Ruth certainly did point to the fence. There’s no doubt about what Babe Ruth did. What’s on your mind?”

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GNMA...... A caller asked what causes fluctuations in the Vanguard GNMA Fund. Brinker explained that it works inversely to interest rates, and that he expects the NAV to stay within the $9.50 - $10.50 range. Rates have been “firming up” in the last couple of weeks -- VFIIX net asset value is down to $10.11 per share. For those who are bothered by NAV fluctuation, Brinker suggests laddered, FDIC-insured Certificates of Deposit. For those who are not bothered by price fluctuations, Brinker has no problem with holding VFIIX for income.

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CALLER....Asked if Brinker thought Bernanke would “survive another year.” After telling the caller that he definitely thought he would, Brinker said: “You have to understand that a lot of the things going on out there are not Bernanke’s doing……..Ben Bernanke did not create the housing bubble………If there is any blame to be placed, it would have to be blamed on his predecessor, so that wasn’t his problem in terms of the cause………When you take a look at what’s happened to the dollar……..that’s not been really his doing. What’s happened, there has been an international erosion is confidence in the United States plus a recognition by the rest of the word how energy dependent the United States has become……..I think he’ll survive and I think the reason he will survive is, first of all, he is a very, very smart individual. And second of all, I think he’s done a decent job so far.”
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INFLATION....Bob Brinker said: “Although the core rate remains low at 2.3, the headline rate is certainly higher than we’d like to see it at 4.2. Now why is that? It’s because the components in the headline number, in particular, energy really are pushing the headline rate. Year over year energy rise is 17.4. Gasoline’s up a little more than that, by the way. And now we have the food prices also going up faster than we like to see them at 5.1 YOY. . Now part of the reason that food prices are up 5.1 is we’ve mixed up our energy complex and our food complex by getting into things like the corn-based ethanol program. As a consequence, this has had some impact on food prices as well. So we have a situation here where the two items that are not in the core index – energy and food are both going up at a pretty good clip. Energy is ridiculous at 17.4 and food is certainly higher than we want to see it at 5.1. So that is why we have such a disparity between the headline number at 4.2 and the core number at 2.3.
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Now the Fed’s favorite inflation index is behaving better. The Personal Consumption Expenditure Core Index is at 2.1 YOY, and the headline at 3.2% YOY. Now there are elements of the energy complex that can spill right over into the headline number. The most notable is transportation. The cost of transporting everything has gone up. YOY, transportation costs have gone up 8.1%........All this is part of what we are seeing coming out of energy…..With this inflation being concentrated in food and energy, this is definitely putting the pinch on consumer spending."
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Honeybee EC: Please go here for detailed explanation of this Inflation Graph:

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RETAIL SALES: “Pretty good -- they were up pretty decent in the latest reported period.” Brinker commented that the May number, which was way above expectations, indicates that people are spending their stimulus package money in spite of the higher energy costs – and even if they use it to pay off credit card debt, they will “just run them back up again, because that’s what Americans do.”

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ECONOMY: (Brinker comments paraphrased) Federal Funds rate down to 2%, which combined with the stimulus package that consumers are receiving this summer, should contribute to recovery down the road.

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CALLER: A recent widow with $2million, who didn’t want to become bait for a shark-attack. Brinker said, “Well you are shark bait, but at least you are smart enough to know it.” and then he advised her to learn to become her own financial manager.

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Brinker recommended these books to the previous caller:

John Bogle's "Common Sense on Mutual Funds, New Imperatives for the Intelligent Investor" (paperback)

David L. Scott's Wall Street Words: an A to Z Guide to Investment Terms for Today's Investors

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CALLER: Wanted to know what Brinker had to say about the economy and interest rate cycle and the “best thing to do right now.” Brinker said: “I think the best thing to do is look forward and not look backward. And I think that when we look at investors today, the smart investors are looking forward. What I mean by that is they’re looking at an economy that has been bouncing along at a very, very slow rate. The real Gross Domestic Product in the fourth quarter 0.6 annual rate – that’s really slow. In the first quarter 0.9 annual rate – that’s really slow. And now here in the second quarter, even with the rebate checks on their way for lots of people, we are looking at real Gross Domestic Product in the second quarter – I think it will be close to zero….. But then I think you have to look forward.

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What I mean by that is okay, we have the stimulus package, we have the lower interest rates we’ve been seeing from the Fed, so we look forward into the second half, and more importantly into 2009. And then we start to ask ourselves can we look for the economy going into 2009 to start to show some signs of recovery – actual recovery by 2009 – perhaps some signs in the second half…….. I think that the big mistake right now that investors make is looking in the rear-view mirror……I don’t think it’s helpful and I don’t think it’s going to be helpful to investors to do that.”

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Brinker's Saturday guest speaker:

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Roger Lowenstein's "When Genius Failed, The Rise and Fall of Long-Term Capital Management" (paperback)

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Bob Brinker said to Roger Lowenstein: “We had a guest on, David Cay Johnston, recently – he was critical of Warren Buffet. I wanted to ask you about this because he claimed that Warren Buffet had taken advantage – legally, legally, taken advantage of opportunities. He described a loan of about 6 or 7 hundred million dollars that Warren Buffet had benefited from through his corporate empire – interest-free loan – long-term, various things where he said he’d taken advantage of things. [Lowenstein: “Who was the loan to? It wouldn’t have been the Buffet personally.] No, not to him personally. We’re not talking about that. We’re talking about stuff that was done through his corporate entities. But I wondered in your work on Warren Buffet whether you had seen anything like that."

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Roger Lowenstein said: “No, I didn’t come across that, but I have a general response, which is that often people try to come up with some reason, if not for this, if not for that, he benefited from this, he benefited from that. You know, he started with nothing. He’s been doing this for 50 years and to say it was this loan, that tax break. He’s basically just bought stocks and companies and held on to them.” [Brinker: “Yeah, that’s a fair comment.”] If you had started with him and given him $10,000 in 1956, you’d now have $550million. So it’s not a question, did he find some legal thing here or there, he’s off the charts. It’s like saying well Michael Jordan got a few calls."

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Brinker said: “Yeah, that goes without saying………That was David Cay Johnston, and that was his book “Free Lunch” where he made those comments for those who want to look it up.”

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Honeybee EC: Brinker frequently tells Moneytalk listeners that he likes to allow his guests to speak freely even when their viewpoints don't agree with his own. However, this is not the first time that Brinker has let his guests speak their opinions and rather than say anything to them at the time so that they can defend their position, he has denigrated what they said on a later program. Not nice, Bob IMHO....
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Brinker made no comment to David Cay Johnston about what he said about Warren Buffet. Here are the David Cay Johnston excerpts from last week's Summary:
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Bob Brinker's guest speaker on saturday was David Cay Johnston, reporter for the New York Times, and Pulitzer prize-winning author of "Free Lunch, How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill).

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David Cay Johnston said: "Well, Warren Buffet is in my book, less for his generosity than for the way he deals with the tax system in other areas. I tell about how Mr. Buffet got a hundred million dollar gift from the taxpayers in New York State for a business that cost him $40million dollars. How he got a interest-free loan for 28 years for for 2/3rds of a $billion dollars. You think about that for a second. Imagine where you are in San Francisco, where if you bought a house in 1980, you'd never made a payment on it -- didn't have to pay interest on it all these years, and this year, you finally had to pay half the price you agreed to in 1980. I mean, that deal alone would make you very, very well off.

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And then I show how Mr. Buffet has a utility, an electric utility that's trying to do two things. It wants to keep the taxes that are built into the rates you pay. Because utilities are legal monopolies, they have to collect every cost from you, including their income taxes. And he's been fighting to be able to pocket those taxes permanently.
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And then another of his electric companies, he's charging much higher prices than local businesses believe are appropriate. And he used his political muscle to shut off public debate about this by threatening an ally of the local business people with onerous legislation unless they passed a resolution promising to never help try and get out of the clutches of his business again.
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So Mr. Buffet is a very smart investor, but he's enhanced those returns by using the government to give him money, to extend him extraordinary loans, to charge rates that are higher than the market or normal regulation, and to pocket taxes that you are forced to pay if you are one of his companies......."
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Immediately, Brinker said: "Steve is on the line in Virginia, Steve......"
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Miscellaneous

Bob Brinker’s Critical Core Concepts When it Comes to Investing:
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• Diversification
• Asset Allocation
• Indexation
• Keeping expenses to minimum

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A Bob Brinker “Cardinal Rule”: “When you are approaching retirement, you go into a balanced portfolio strategy.”

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Summary: Bob Brinker's Moneytalk June 7, 2008

Moneytalk Summary, Commentary and Excerpts, June 7, 2008

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Bob Brinker only indirectly referred to the stock market today in his opening monologue. He never mentioned it again during the whole three hour program. He basically inferred that the big run up in the price of oil, which he opined was caused by the “nerve-wrecking” news out of Israel (more on this later), spilled over into the “market.”
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Brinker, began his monologue with a discussion about the jobs report and unemployment data. Apparently choosing to see the glass half-full, he said the job-losses were better than expected (49,000 for the month of May; 324,000 cumulative for this year). That is not the way it was presented on CNN:

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“NEW YORK (CNNMoney.com) -- A spike in the unemployment rate - the biggest in more than two decades - raised new concerns Friday that a weak labor outlook, high oil prices and continuing woes in the housing and credit markets are leading the U.S. economy into a painful recession.

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The government said Friday that the unemployment rate soared to 5.5% in May from 5% in April - much higher than economists had forecast.

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The surge marked the biggest one-month jump in unemployment since February 1986, and the 5.5% rate is the highest level seen since October 2004. Unemployment is now a full percentage point higher than it was a year ago.

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"You're not going to have a lot of people arguing 'no recession' with this data," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute. The prolonged job loss and jump in unemployment are better indicators that the economy is in a downturn than is the traditional thumbnail rule of two quarters of falling……” Full Article

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Brinker commented on the fact that manufacturing jobs are in decline because they are moving out of the United States. He reminded us of the old “Hubcap Theory,” which says that if someone in Detroit wants $25.00 an hour to put on hubcaps, someone else will come along and offer to do it for much less, and eventually someone in a third-world country will be willing to do it for 25 cents an hour.

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Brinker gave the following breakdown of the demographics of the unemployment rate.

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Racial:

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White: 4.9%

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African-American: 9.7%

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Hispanic (which according to Brinker, includes any race that is not white or black) 6.9%

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Asian: 3.8%

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Teens ("yon"?): 18.7%

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Educational:

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No high school diploma: 8.3%

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High school diploma: 5.2%

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Some College: 4.3%

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Bachelor’s Degree or higher: 2.2%

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Bob Brinker quote: “The best money you will ever spend is the money you spend on education. The best deed you will ever do is to help another get a good education because this is the old story about teaching a person to fish. Once you’ve taught a person to fish, they can feed themselves for the rest of their lives. They even need you anymore. What greater gift could you give to someone than the ability to take care of themselves for the rest of their life?”

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Brinker continued his monologue: “Certainly there was some extremely nerve-wracking news for the market, especially the oil market, and that spilled into the other markets that came out of Israel on early Friday before the markets opened. Brinker said this report drove the oil markets “into a frenzy yesterday with an $11.00 per barrel single day record increase to about $138.00 a barrel." Here is an excerpt from an article about the incident Brinker was referring to:

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"Israel has said a strike on Iran will be "unavoidable" if the Islamic regime continues to press ahead with alleged plans for building an atom-bomb.

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The warning, from Israeli transport minister Shaul Mofaz, is the bluntest threat yet against Tehran from any member of prime minister Ehud Olmert's administration.

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In an interview with the mass-circulation Yedioth Ahronoth newspaper on Friday, Mr Mofaz said that Iranian president Mahmoud Ahmadinejad - who has called for Israel to be wiped off the map - "would disappear before Israel does".

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If Iran continues with its programme for developing nuclear weapons, we will attack it. The sanctions are ineffective," said Mr Mofaz, referring to pressure by the United Nations security council to end Iran's disputed programme of uranium enrichment. "Attacking Iran, in order to stop its nuclear plans, will be unavoidable."" (Full Article)

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Brinker continued: “Now my view on oil has not changed. I view oil as a wildcard. The higher the price of oil goes, the stronger the headwinds blow against economies all over the world and especially here in the United States because we don’t have a realistic energy policy…….we just drift along, importing 12 million barrels a day. As a consequence the United States is basically held hostage by the price of a barrel of oil in terms of what happens to the economy. Now give consumers credit, retail sales for May were better than expected..........It's still a headwind against economic growth, so oil is and will remain a wildcard. I don't see anything out there that will change that. Now obviously, as we've said, we need a Manhattan Project here in the United States to develop a major change in the way we deal with energy.”

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Bob Brinker's Manhattan Project Proposals:

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• Expansive nuclear-power program -- "If we start today, we can have plants online by 2014."

• Once the major nuclear program is going, free up natural gas from being wasted in power plants and use it in transportation..

• Coal to liquids program.
  

• Raise fleet café-standards/mileage.

• Immediately start drilling in the Arctic National Wildlife Reserve.

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Brinker said: "We should be drilling in ANWR now. President Clinton vetoed the ANWR drilling passed by congress in the mid-1990's. If President Clinton had signed that bill, today, we would be producing about 1 million barrels a day out of the ANWR preserve. Thank you, Mr. Clinton."

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Caller Jim: “I’ve been reading your Moneytalk newsletter and your Fixed Income Advisor for quite a long time……..” Brinker: “Thank you.”

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Honeybee EC: It seems very misleading when Brinker allows those kinds of comments to stand with no disclaimer. Robert M. Brinker is editor and publisher of the Brinker Fixed Income Advisor. and Lisa J. Brinker is an editor. Robert J. Brinker, host of Moneytalk, is a "consultant."

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I’d like to suggest that you apply for a complimentary copy of the Retirement Advisor (Editors: David Korn, Kirk Lindstrom & Henry To), and compare it to the free sample of the Brinker Fixed Income Advisor, then decide which is superior. I think you will find that Retirement Advisor contains more valuable information. (I also think you may see some redundancy between Marketimer and Fixed Income Advisor.)

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One of my favorite features in Retirement Advisor is the monthly Fund Family Review. The April 2008 issue, contained an extensive review of Loomis Sayles. Loomis Sayles was founded in 1926 by Robert Loomis and Ralph Sayles. Loomis Sayles has “approximately $130Trillion in mutual funds, separate accounts, and commingled funds.” I happen to own a sizable chunk of LSBRX, so I was very encouraged and reassured by the page-and-half in-depth report in the Retirement Advisor.

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Bob Brinker's guest speaker on saturday was David Cay Johnston, reporter for the New York Times, and Pulitzer prize-winning author of "Free Lunch, How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill).

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Caller Marilyn asked David Cay Johnston: "I was just wondering if other people thought about the generosity of Warren Buffet, and maybe the Fisher Family, in their attempts of donating $billions of dollars and then avoiding the taxes that they would have had to pay had they declared this."

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David Cay Johnston said: "Well, Warren Buffet is in my book, less for his generosity than for the way he deals with the tax system in other areas. I tell about how Mr. Buffet got a hundred million dollar gift from the taxpayers in New York State for a business that cost him $40million dollars. How he got a interest-free loan for 28 years for for 2/3rds of a $billion dollars. You think about that for a second. Imagine where you are in San Francisco, where if you bought a house in 1980, you'd never made a payment on it -- didn't have to pay interest on it all these years, and this year, you finally had to pay half the price you agreed to in 1980. I mean, that deal alone would make you very, very well off.
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And then I show how Mr. Buffet has a utility, an electric utility that's trying to do two things. It wants to keep the taxes that are built into the rates you pay. Because utilities are legal monopolies, they have to collect every cost from you, including their income taxes. And he's been fighting to be able to pocket those taxes permanently.
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And then another of his electric companies, he's charging much higher prices than local businesses believe are appropriate. And he used his political muscle to shut off public debate about this by threatening an ally of the local business people with onerous legislation unless they passed a resolution promising to never help try and get out of the clutches of his business again.
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So Mr. Buffet is a very smart investor, but he's enhanced those returns by using the government to give him money, to extend him extraordinary loans, to charge rates that are higher than the market or normal regulation, and to pocket taxes that you are forced to pay if you are one of his companies......."
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Brinker said: "Steve is on the line in Virginia, Steve......"
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The vast majority of the calls on Saturday were about U.S. energy policies and who is to blame for our dependence on imported oil (Brinker places a lot of the blame on the Sierra Club for our lack of nuclear). Brinker talked a lot of politics, including how the candidates might handle tax increases. He has covered all of this territory before, and I didn't hear any change in his views -- or any new information about the candidates.
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