Bob Brinker's Moneytalk Summary, Commentary and Excerpts, May 30, 2009

[Jeffchristie's Moneytalk calls commentary added below.]

Bob Brinker did not host Moneytalk today. Bill Flanagan was the guest-host.

Like Bob Brinker often does, Flanagan began the program by giving the latest market closing prices. Flanagan commented that it had been a "pleasant month" for the stock market -- that the Dow gained 4.1% in May; the S&P gained 5.4% in May, and the S&P has had its best 3 month gain since 1938 -- it rose 25%!

HONEYBEE'S WEEKLY MARKET REPORT:

* The Dow closed Friday at 8,500.33. For the week, the index gained 2.7%.
* The Nasdaq Composite Index closed at 1,774.33. The index added 4.9% for the week.
* The S&P 500 Index closed Friday at 919.14, a gain of 3.6% for the week.
* Oil closed at $66.31
* Gold closed at $980, a gain of less than 10% for the month
* Silver (now seen as a hedge) gained 25% in May.


Flanagan said that both long-term and short-term investors are keeping their fingers crossed because the economy still has a lot of problems. We are facing a lot of questions about debt, and what the effects of the rampant government spending will be.

Flanagan said: "We are now going from General Motors to Government Motors. That is something that people wouldn't have believed maybe as recently as a year ago. But here we are dear fellow American taxpayers -- you now own an auto company......

.....The economic gurus, all Wall Street guys that Obama got together, cooked up the deal and left bond holders out in the cold but certainly did reward, or potential reward the UAW. Surprise, surprise, surprise! After all, all those voters, the UAW, and after all the promises that had been made to Gettelfinger and the fact that he delivered. I must say this, Ron Gettelfinger has certainly done well for the UAW. His union members have a lot to be thankful for. He negotiated a very good deal for his folks -- at other people's expense, but that's the way it is in this kind of a scramble......

.....Well there were a lot of young guys involved in putting this deal together too. Young hedge fund executive by the name of Henry Wilson who had retired at the age of 36 from running his own fund came back into the fold, wrote a letter to a fellow whose name is very much in the news these days, Steven Ratner, whose the czar of the auto bailout deal. And he's got some problems on his hands. It seems that a fund that he had been running, a fund that he owned, Quadrangle, has been mentioned with reference to some pay-to-play nonsense going on at the state pension fund in New York......

.....Can you imagine folks? People in government actually trying to get money out of pension fund operators in order to run their pensions. Good heavens. What do you know? They'll be gambling at Rick's next. I wonder how long this has been going on. At least Cuomo has raised the issue. I hope some other state controllers, and state Attorneys General get on the stick because there is obviously nothing new about this kind of nonsense. And maybe we'll even get to what's been going on with the union. That's asking too much."

Flanagan speculated about what the future may hold for "Government Motors," and what kinds of cars they will build, where they will build them, what they will cost, etc. Then Flanagan said: "Stay tuned folks, it will be certainly one of the most interesting chapters in the history of American capitalism. Or is it chapter one in the ugly chapter of American Socialism."

UPTICK RULE: Flanagan is in favor of it being reinstated.

DRILLING FOR OIL: Flanagan is in favor of drilling in Alaska and drilling offshore. Flanagan said: Why haven't we been doing anything about it? Because we have an administration that is very pro-environment and a congress that is very pro-environment and they're not going to pass anything that is going to do anything like that."

NUCLEAR ENERGY: Flanagan is "big proponent of nuclear" but sees some safety, cost and NIMBY issues. Flanagan said: "You know we keep on talking about the French, 80% of their generation being generated by nuclear power yada, yada. They haven't built a new power plant since 1999. And the new technology that was supposed to get us all out the woods -- they built a plant up in Finland which is experiencing an extraordinary amount of difficulty.....Nuclear would be nice if it worked right."

[Honeybee EC: Ouch! Was Flanagan thinking of all the times that Bob Brinker has championed how the French have been successfully using nuclear power for so long when he ridiculed those who "keep talking about the French.....yada, yada."?

TAX CREDIT FOR NEW HOME-BUYERS CAN BE USED FOR DOWN PAYMENT: Flanagan talked about this a little bit, but for those who are interested in knowing more, here are some excerpts from an article published Friday in the San Jose Mercury: "Change in rules regarding home-buyer tax credit likely to spur housing market [LINK]:

"In a policy change that could benefit thousands of people, the federal government announced Friday that its tax credit for first-time homebuyers can now be used to help pay closing costs on mortgages insured by the Federal Housing Administration.

The economic stimulus bill passed in February allows first-time homebuyers a tax credit equal to 10 percent of the home's purchase price or $8,000, whichever is less, when they file their federal income taxes. But under the plan announced Friday, buyers using FHA-insured loans will be allowed to treat the tax credit as additional down payment funds, or use it to pay for the closing costs that are typically incurred when a mortgage is funded.

"Families will now be able to apply their anticipated tax credit toward their home purchase right away," said Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, which oversees FHA."

Most of the program and calls were devoted to politics and energy sources. There was a lot of talk about how the administration and congress is spending so much money on "pork." Flanagan's frustration with so many of them, like Teddy Kennedy, who just keeps coming up with more and more give-away programs while the ones already in existence are going broke, was palpable today.

As Flanagan pointed out, they act like they think there is a money tree somewhere. He talked some about Kennedy's background and how he got his "degrees." [Honeybee EC: Add in Chappaquiddick and Mary Jo Kopechne drowning alone in a car while Kennedy went back to a party, and it is really an ugly picture.] Flanagan said that he was sorry about Kennedy's health problems, but....

GOVERNMENT BOND YIELDS: National Municipal Bond; Inflation-indexed Treasury; and U.S. Treasury Bond yields [LINK]

Bill Flanagan talked about how much he enjoys Amazon's Kindle Wireless Reading Device, and all the advantages it offers over small-print books. Here is a [LINK] if you wish to purchase it.

You can download your own FREE copies of Bob Brinker's Moneytalk programs. The programs are archived for seven days after broadcast at KGO810 radio [LINK]. To download the program to your MP3 player or flash drive, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link]

[Sunday, Bill Flanagan hosted Moneytalk again. The entire program was about General Motors and cars. GM is expected to declare bankruptcy Monday. ]

jeffchristie said...

Based on the lack of comments, there must not have been much interest in Moneytalk or should I call it Cartalk. I will comment on some of the callers.

1. A lady called and complained that she went into a dealership and knew what model of car she wanted to buy and what she was willing to pay. The sales person wanted her to finance her purchase so he could make more money. The lady wound up walking out. She should have done what my brother did the last time a car salesman pulled this type of thing with him. He said in a loud voice: "What can I do to get YOU to sell me this car Today". The other potential customers in the showroom roared with laughter.

2. Another caller talked about how well GM was selling its cars in China. Last Friday I talked to an auditor who recently did some work in China. He said the economy was improving there and it looked like their stimulus package was working. GM is successful and profitable in China. I said I heard that the most popular car there was Buick. He said it was the Lucerne and the one they produced in China was nicer than the one they make here. He said he would like to buy one of their models. He noted that the Chinese economy was a cash economy and only the very rich have a credit card. When a car is sold it is paid for before it leaves the show room.

3. Some callers said they would buy American while others said they would not because of quality issues. One caller even said he would switch from GM to Ford because they didn't take money from the government. Another caller said he was a conservative and wouldn't buy an American car because the UAW contributed heavily to the Democratic party. One caller even suggested we put a tax on all foreign manufacturers including cars they assemble in this country. It all reminded me of the time I was driving home a few years back. The car in front of me was a Chrysler. It had a UAW bumper sticker on one side and the other side said Buy American and it bashed foreign made cars. I was driving a Jaguar at the time. I had to laugh at this ignorant fool. He was driving a care made in America but the company he worked for was owned by a German company. I OTOH was driving a car manufacture in England that was owned by the Ford motor company an American corporation.

June 1, 2009 11:17 AM [Posted here]

SJ Al sent these pictures of the USS Alabama in Mobile, and the Pensacola Naval Air Museum:


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David Korn's Response to Mark Hulbert

Bob Brinker is not in Hulbert Financial Digest "Top-5 Performers" for the past 5 or 10 years. However, Mark Hulbert, in a Marketwatch [LINK] article claimed that Bob Brinker was one of his "top 7" market timers during the last couple of bear markets. (Please see my prior post on this subject.) [LINK]

David Korn wrote these comments (posted with permission):

"2. I was pretty shocked that Brinker made the list of top timing newsletters, even under Hulbert's stated criteria. Sure, Brinker side-stepped the bear in 2000-2002 and did better than a buy and holder with his good call to raise 60% cash reserves in January 2000 (increased to 65% in August 2000) and redeploy them in March 2003. Hulbert didn't include the QQQQ recommendation which would have hurt Brinker's performance considerably. But since March 2003, Brinker has been a buy and holder. No timing moves whatsoever in his model portfolio. In fact, Brinker made several buy recommendations in 2008 at much higher levels. All of these recommendations turned out to be extremely lousy buy points. When he finally gave up trying to identify bottoms, he missed the market bottom in March. So how he made this list is beyond me.

3. In the past, I have communicated with Mark Hulbert directly on several occasions and he has quoted me before. He always responded to my questions and asked to continue to receive my newsletter. When he published this article, I immediately sent him an e-mail with some pointed questions about his article and how he came up with Brinker. He did not respond to my e-mail this time. Perhaps the other newsletters Mark tracks are so bad, they couldn't make the list. But given that Bob has made no timing moves since 2003 in his model portfolios (which is what Mark claims he tracks), I can't fathom how his advice did better than a buy and holder in the last bear market and intervening bull market. Incidentally, I also e-mailed Peter Brimelow from CBSMarketwatch who has quoted me in the past and who usually responds to my e-mails, but he didn't on this one either. Hmm, very strange. If I do hear something back from them, I will let you know."

Complimentary issues of David Korn's newsletter and the Retirement Advisor [LINK]

[Honeybee here] I posted some comments at Hulbert's Marketwatch article. I advised readers that Bob Brinker had not done any model portfolio market-timing during the 2007/08/09 bear market -- that he had remained fully invested. I also quoted Brinker's model portfolio performance numbers for 2008. MY POSTS WERE SINGLED OUT AND DELETED.

Here are Bob Brinker's 2008 model portfolio numbers:

Model Portfolio I = Down 39.7%

Model Portfolio II = Down 37.4%

Model III (balanced) = Down 23.9%

SJ Al sent these pictures from his recent visit to New Orleans:



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Bob Brinker's Moneytalk: Discussion, Commentary and Excerpts, May 23, 2009

May 23, 2009

Bob Brinker's guest-host on Moneytalk this weekend was Bill Flanagan.

* Flanagan's big topic of the day was his concern that newspapers will go the way of dinosaurs.

* Flanagan said the huge increases in the national debt "scares" him.

* Flanagan said he didn't see anything in stock market fundamentals that are encouraging.

* Flanagan seems to be pro buy-and-hold, but cautions that those near retirement should use stop losses in case the market should decline precipitously.


You can download your own FREE copies of Bob Brinker's Moneytalk programs. The programs are archived for seven days after broadcast at KGO810 radio [LINK]. To download the program to your MP3 player or flash drive, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link]

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Mark Hulbert and Bob Brinker's Marketimer

May 21, 2009

It looks like Bob Brinker's Marketimer received another major Mark Hulbert "Mulligan." In my opinion, Hulbert's spin for Brinker in his Marketwatch column is disgraceful, disingenuous and dishonest. Hulbert claimed that Bob Brinker "did better than buy-and-holders" in the bear market that started in 2007.

Hulbert ignored the fact that Brinker has been a buy-and-holder during this mega-bear market. Brinker's advice has been to keep all stock market money fully invested. He told Moneytalk callers, "do not sell." At the same time, Brinker attempted to find new bottoms and new "buying opportunities" several times and utterly failed, but unbelievably missed the March 9, 2009 bottom.

Hulbert also ignored the fact that Brinker was a raging bull at the beginning of the mega-bear. In October, 2007, Brinker was calling S&P mid-1400's a "gift-horse buying opportunity" and looking for S&P 1650.

Here are some excerpts from Mark Hulbert's May 20th Marketwatch column [LINK]:

Mark Hulbert wrote: "Another week and we're still no closer to a consensus on whether we are in a brand new bull market or a bear market rally......

.....To gain hopefully more insight, I decided to mine my investment newsletter database for a select group of top stock market timers who've been consistently right in recent market cycles. Specifically, I wanted to find those services whose stock market timing advice did better than a buy-and-hold in each of the last two bear markets (2000-2002 and the one that began in 2007), as well as during the intervening bull market......

.....This is a demanding set of criteria, as it turns out. Merely beating the market over the entire period since early 2000 would not be good enough to meet this test -- hard as it is to do that. I was interested instead in services that performed well in each of the three market periods. Only seven of the nearly 200 newsletters I track were able to jump over these hurdles.

Here's a list of these seven, in alphabetical order, along with a brief summary of their current stock-market forecast:

• Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early May, editor Bob Brinker wrote: "We believe the final bottom for the cyclical bear market was registered with the series of benchmark closing lows that occurred in early March on reduced trading volume. Since that time, we have been in the early stages of a cyclical bull market which should carry into next year and generate large percentage gains for the major indexes." Brinker is recommending that subscribers' stock portfolios be fully invested." [End Hulbert quote]
  

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Mark Hulbert also quoted Brinker as being "bullish," in an October, 2008 column in Barrons: [LINK]

Hulbert wrote: "Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early October, editor Bob Brinker wrote: "We believe the stock market will return to an uptrend within six months of the start of the next economic recovery. Although the timing of the recovery is uncertain, our view is that it could be underway by next spring. If that scenario unfolds, we could be looking at a stock market turnaround beginning in this year's fourth quarter. This bear market decline has been accompanied by an extraordinary flow of negative financial news, but we are focused on stock market recovery in 2009 as investors go through the process of discounting economic recovery prospects in advance of an improved economic outlook." Brinker is recommending that subscribers' stock portfolios be fully invested." [End Hulbert quote] [Honeybee EC: Hulbert's Marketimer quote is from the October, 2008 issue.]

Mark Hulbert also quoted Bob Brinker as "bullish" in a December 2008 Marketwatch column [LINK]:

Hulbert wrote: "Brinker currently believes the stock market is in a perhaps extended bottoming process, and he therefore recommends that subscribers invest in the stock market on a dollar-cost-averaging basis. "We are aware that there is widespread fear that financial Armageddon is the likely outcome of the global financial crisis. We take the opposite view, and expect the stock market to record significant gains during the next major market uptrend. We continue to focus our efforts on the ongoing bottoming process that we regard as essential to establishing the level from which a sustainable market uptrend can occur. When we reach the point at which we can upgrade our current stock market view from dollar-cost-average to a renewed buy recommendation, we will do so."[End Hulbert quote] [Honeybee EC: Hulbert's Marketimer quote was from the December 2008 issue.]

As I said, Brinker's bullishness and bottom calls go way back to the early stages of the bear market. In a February 21, 2008 Marketwatch column, [LINK] Peter Brimelow published a major portion of the special bulletin that Brinker issued on February 10, 2008:

Brimelow wrote: “All of them (“Bold Bulls”) seem shaken by the economy's deterioration, but still positive long-term. Brinker said recently: "Marketimer views the establishment of a correction bottom as a process which unfolds over a given period of time. This process involves the initial establishment of a closing S&P 500 Index low, followed by a short rally, followed by a test of the area of the previously established low on reduced trading volume. 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."

In our view, the correction bottoming process has proceeded with a high degree of historical consistency to date. We have witnessed a decided reduction in selling pressure during the testing process, which is essential to a successful outcome. 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." [End Brimelow quote] [Honeybee EC: Brimelow's quotes are from Brinker's February 10, 2008 special bulletin]

One has to wonder if Bob Brinker and Mark Hulbert have a symbiotic relationship. Does "one hand wash the other" -- so to speak?

Brinker uses HFD in ads for his newsletter on his website -- which gets millions of hits. Hulbert uses a footnote to cover the fact that he gives Brinker a mulligan on his blown QQQQ trade in 2000 for his performance rankings. However, Brinker never mentions Hulbert's footnote in his newsletter ads when he quotes Hulberts Financial Digest. Even the footnote contains false information about when Brinker decided to keep the trade "off the books." I have proof of that and have offered it to Hulbert. He isn't interested in seeing it.

In the April issue of Hulbert's Financial Digest, Mark Hulbert did a full page write-up about Brinker's Marketimer. Hulbert wrote:

"Brinker’s fund selections on average have lagged the market. The HFD reports an 8.7% annualized gain for his “Aggressive” portfolio, which is 0.6 percentage points per year less than what this portfolio would have made if each of its funds were invested in the DJ Wilshire 5000 during the times they were owned.

Please note: In late 2000, Brinker forecasted a several-month bear market rally and recommended an investment in the NASDAQ 100 Index, a trade that turned out quite unprofitably. However, because Brinker at the time of making this forecast chose not to make this trade part of his model portfolios , his HFD record has not suffered as a result." [End of Hulbert quote] [Honeybee EC: Brinker did not tell his subscribers that he would NOT make the trade part of his official record until weeks after the rally failed to materialize, even though he recommended that THEY use cash raised from model portfolio stock sales in January 2000.]

"There are three classes of men: lovers of wisdom, lovers of honor, lovers of gain." __Plato

My Idaho sister-in-law sent these pictures. Notice worried Momma Robin on the fence in the second picture. Barb wrote this: "New baby Robins, maiden voyage out of the nest! Mom & Dad are teaching them how to get worms etc. I walked within 3 feet of these babies! Of course, I almost got dive-bombed like a Blue Jay does when I got close, but I got these pictures. There are 3 babies in this group!"

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David Korn Comments on Brinker's Latest Stock and CA Bond Views

May 19, 2009

Bob Brinker's 2009 stock market projection.

May 13th, Bob Brinker said this on Moneytalk: "You know, I published a statement in January that I thought that 2009 could be a good year for the stock market – and that was back in January……A lot of people thought basically I had gone insane to make a comment like that. Look, it’s only May and we’re already in positive territory. Certainly we can slip back into negative territory for a period. Nobody can rule that out because we are only in minor positive territory using the S&P 500…..I still think 2009 is going to be a significant positive year for the stock market. I’m on record back in January having said that and I’m not changing anything about that forecast. I think that 2009 will be a significant up year for the stock market. And I certainly think that what we have seen so far, despite the volatility…..bears that out.....

.....I’ll give you the exact quote on that comment, ‘We expect calendar year 2009 to be a significant positive year for the stock market.’.....So I would have to tell you, from everything I’m looking at, and it just represents my opinion of course, that I think that comment is on track – that calendar 2009 should be a significant positive year for the stock market. We’ll see how that works out. I don’t see any reason to make a change in that projection, and that projection was made back in January.”

David Korn's interpretation and commentary about Brinker's projection. [written May 17th]:

[David Korn] "EC: Bob was referring to a special bulletin he did in mid-January of this year where he recommended that new stock market money be added when the S&P 500 was in the low-to-mid 800s. It is nice to hear that he is bullish, but I don't give him much credit for coming out on the radio 5 months later to crow about it. After all, he missed a bear market already this year when you measure from the beginning of 2009 to where the market bottomed on March 9th at 676.53...

...Moreover, he had dropped his lump sum buy level once the market went into the low 700s and he said he was going to look for a new bottoming process. But he never identified it as the market took off on a tear following the inflection point on March 9th. Look, if he didn't advertise himself as a market-timer, I wouldn't be critical of this. But for someone who had been bashing buy and holders and ribbing the "bears" in 2007-2008, I got to tell it like it is."

[David Korn] "EC#2: For those trying to "interpret" daBrink's words, a logical question would be what he means by 'significant" positive year. As of last Friday, the market was up a couple of percentage points for the year. (It is now down 2.3% year-to-date, excluding dividends). To me, a significant positive year would be at least 15%. That's just my take on it though. Incidentally, for the S&P 500 to put in a 15% return based on price change, it would need to rise to 1038."

[David Korn] "EC#3: If you are going to make timing moves based on Bob's timing recommendation, then presumably you would be buying into the market right now with the market in negative territory for the year. After all, if you believe Bob is right and this will be a "significant" up year for the market, than you would do pretty well. I would note that on January 15th when Bob gave that special bulletin, the S&P 500 was at 843.74. The S&P 500 closed Friday at 882.88."

Bob Brinker's latest views on California General Obligation Bonds.

May 16th on Moneytalk, Brinker said: "Now California, although it is investment grade, it's the lowest investment grade of any municipal bond in the United States. Now why is that the case? Fiscal irresponsibility on steroids in California........That means that they not interested in balancing the budget -- which they must do, and they have shown no propensity to get their financial house in order......So there is always the possibility that they are going to be unable to come up with the money to do whatever they have to do to meet their obligations.....

.....Hypothetically, my personal view is, if you had a default in the State of California, I'd expect you'd get assistance from the federal government. Now whether that assistance would bail out the bondholders is an entirely different story."

David Korn's interpretation and commentary on Brinker's radical reversal on Ca. GO's. [written May 17th]:

[David Korn] "EC: The foregoing comments marked a subtle, but dramatic 180 degree reversal on Bob's longstanding position. He didn't make a big deal about it to the caller, but he is basically saying that all bets are off for bondholders of California. For many years, Bob strongly recommended California General Obligations. Then last year when they were tanking, he came up with some kind of weird justification saying that the California GO's that he held had extra government protection. After getting some flack for that position, he reverted to his belief that the government would step in and bail out California.....

.....Today, he acknowledged that even if they do that, they might not bail out the bondholders. At this point, Bob has basically taken every possible position such that if the bonds recover, he can claim he was right, and if the bond holders get screwed, he can say he pointed out that risk on Moneytalk. Bob has been flip-flopping on this issue a lot lately, and now I think he is just trying to cover his tracks as best he can."

Honeybee EC: It is worth noting again that Bob Brinker has been a "buy and holder" since March 2003. His timing model did not predict the biggest bear market in over 70 years, and he never recommended raising cash at any time during it.

Additionally, every one of Bob Brinker's market bottom calls in 2008/2009 [mid-1400's, low-1300's, low-to-mid 1200's, low-to-mid 800's] were taken out as the market continued to drop to 677 on March 9th -- the real bottom -- the one that Brinker totally missed. The market has recovered over 30%; now Brinker says "buy on weakness."

Please request complimentary issues of David Korn's outstanding weekly newsletter and the Retirement Advisor. The Retirement Advisor Portfolio 3 gained 3.73% in 2008. According to Mark Hulbert, Bob Brinker (the son, who now uses the same name as the talk-show host) lost 5.2% in his Portfolio 3 of Fixed Income Advisor in 2008. [LINK to David Korn's newsletters]

SJ Al sent this picture taken from his hotel room in Destin, Florida:

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Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, May 16, 2009

May 16, 2009,

This is the second week that Bob Brinker has not done any monologues to speak of at the beginning of the hour. Today, Bob Brinker commented that he had received a letter from Guam and said: "If you want to know what's going on in the housing market, all you have to do is look at the front page of the New York Times," then he went directly to a caller.

CALIFORNIA GO BONDS: Bob Brinker told the first caller: "I don't consider the insurance as a safety net for municipal bonds, and I'll tell you why. In the event you have a massive default in the municipal bond market, I don't know where the insurance companies would get the money. They don't have nearly enough money.....to pay off massive claims in the event you had a widespread municipal default across America.......I consider the insurance of no value at all.....

....... So as always, we go to the underlying rating. Now California, although it is investment grade, it's the lowest investment grade of any municipal bond in the United States. Now why is that the case? Fiscal irresponsibility on steroids in California........That means that they not interested in balancing the budget -- which they must do, and they have shown no propensity to get their financial house in order......So there is always the possibility that they are going to be unable to come up with the money to do whatever they have to do to meet their obligations.....

....Now it is unlikely in the case of the bondholders, because the bondholders under law in California are second in line after education to get paid. So they are so high up the food chain in the order of getting paid that they are protected to a significant degree......Hypothetically, my personal view is, if you had a default in the State of California, I'd expect you'd get assistance from the federal government. Now whether that assistance would bail out the bondholders is an entirely different story. It may not bail out the bondholders, but I think it would provide essential services for some interim period. But there is no doubt about it, State of California has been really a national disgrace in the way they have conducted their fiscal affairs.....in Sacramento, California."


Caller Jim said that he was calling from Cape Girardeau, Missouri, Rush Limbaugh's hometown. Jim said: "I worked for the Hartmarx Corporation home office in Chicago for 41 years. Mr. Barack Obama, when he was campaigning, stopped and had a town hall meeting at our factory, which makes suits for Marx. And he fielded questions for 100 employees only and I was fortunate enough to shake his hand and meet him......He guaranteed us change and we made his suit that he accepted the nomination in......And about two to three months later, we started going to 3 days a week. And then after 41 years, on November 26th, we closed our sewing and cutting side and I was out of a job. So I saw the change, let's put it that way."

Jim asked Brinker if he thought it might be possible for him to get some kind settlement from this company where he had worked for so long -- which has now filed Chapter 11. Basically, Brinker said it was going to be up to the bankruptcy judge.

Bob Brinker then asked Jim: "How is Cape Girardeau doing? I mean, okay, you've lost this particular facility. In general, how is the town doing?"

Jim replied: "Well they lost the Dana Axle Factory just before our plant went out and then we lost ours and that was 325 jobs, but we have a Proctor and Gamble Factory in town that's doing good and pays well. There's a lot of work force out there and I've found that a 60-year old white man is the most discriminated person in the world, my personal opinion."

Brinker continued: "Let me ask you a question. You mentioned a famous talk-radio host that's made gargantuan amounts of money, of course. Now you mentioned him as being from your home town....has he brought any of that money back to Cape Girardeau? Has he brought any of that money back to his hometown for the people?" Honeybee EC: for more information about Bob Brinker and Rush Limbaugh's philanthropy [LINK]

Jim answered: "Uhhh...not that I know of. I know he contributes to various charities in town, and his family is much rooted in there. He was there -- they named the Federal Courthouse after his grandfather (Brinker, "ummmm") and he was there for that. He comes at various times to visit relatives. But as far as his personal impact, I know he came back to the high school -- he went to Cape Girardeau Central -- he came back to the high school and gave the commencement speech, which I thought was nice of him."

Brinker responded: "Yeah, what I was asking whether you had seen any financial benefit to your hometown as a result of that. Your answer is 'no'."

Jim replied: "Well, in the tourism, yes. His names on.....(Brinker interrupts: "Oh, okay, you're getting into tourism, okay.") Yes, we have a flood wall along the Mississippi River and we have all the famous Missourians and his picture's there."

Brinker said: "So the people are coming from all over the country then to see this 'flood wall' and it's generating tourism dollars for the hometown folks? Is that what you're saying?"

Jim replied: "Yes, I think that helps. The home of Rush Limbaugh, and as he becomes more focal in the Republican Party, he uh, all of us listen to Rush Limbaugh, most of us anyway, on this same radio station 960...."

Brinker interrupted and said: "Well Jim, I know that he is one of the very famous favorite sons of Cape Girardeau, Missouri. And we have many good friends in Cape Girardeau, and I hope things work out for you. I'm sorry about your plant closing but we really appreciate your call."


NATIONAL DEBT: A caller asked Brinker what is the total national debt, then asked: "Did Obama inherit a $1.3 trillion deficit from Bush, or did the Republicans, under Bush, leave approximately a $450 billion debt?

Brinker replied: "I think what we have to do there is look at calendar year numbers....the forward numbers are estimates. The backward numbers we have, and I think we have to let the numbers speak for themselves in order to make a judgment on this -- take the politics out of it. In terms of the deficit.....for 2009, the estimated deficit looks like about 2 trillion one hundred billion dollars.....fiscal year ending September.....

.....Now in terms of who is responsible for that: It was a team effort. The retired president would be responsible for October, November, December and the first three weeks of January, and then the rest would go to the current occupant of the White House for the rest of the fiscal year through the 30th of September. So we'll call that a team effort. Looks like about 2.1 trillion dollars for the fiscal year. Let me be more specific. That is the amount of debt that will be sold, but that includes rollovers. Let's just talk deficit numbers. Deficit $1.84 trillion, that's current estimate........

.....Now here's the bad news.....For the following fiscal year, the estimate one and a quarter trillion additional, so for the 2 years, it's over $3 trillion. By the way, the estimate for 2011 is close to a $trillion, so for the 3 years, it would be right around $4 trillion. To answer your first question, the total national debt right now is over $11 trillion. The Congressional Budget Office estimates $20 trillion within the decade. The United States of America is a fiscal train wreck.....The national debt will be in the area of $15 trillion by September of 2011.....We are draining the future growth potential of the United States when we pay the interest on the debt. Right now, we have government gone wild.....

.....It's a shame that we do not have people in Washington, and we have not for the past 8 years, right up to the present.....that understand the importance of fiscal responsibility. Just like in California. They have people in Sacramento that have no regard for the importance of fiscal responsibility. That is what has dragged California down to the lowest general obligation bond rating of any state in the United States, and that has certainly opened the possibility in California......."

[Honeybee EC: Brinker did not answer the caller's question and he never let him back on the air. As for his "team effort" in fiscal 2009, it was a rather imbalanced team -- less than four months against eight months. It was also imbalanced in the AMOUNTS that each added to the national debt -- that was what the caller wanted Brinker to address. But Brinker, in his eagerness to find opportunities to continue blaming President Bush equally for this obscene national debt, ignores the fact that there was a Democrat congress the last two years of his term in office.]

Bob Brinker's misc responses to callers paraphrased:

* When your bank go belly up, FDIC coverage guarantees principal and interest to the date the bank went under, then the new entity can renegotiate CD rates.

* There are about 789 Chrysler dealerships closing by June 9 -- about 25% of existing dealerships. There will still be about 2400 Chrysler dealerships operating.

* General Motors is closing about 1100 dealers in a year. That could change if there is a bankruptcy, which would not be surprising.

* Bankruptcy judges have enormous power because they can come in and void existing agreements.

* Estate tax law for 2010 will likely be changed from zero, which is where it is now. Best guess, they'll change it to $3 1/2 million per person or $7 million per married couple -- which would be extending current law.

* Annuities and load-funds are sold -- not purchased.

* Free do-it-yourself method pay down your mortgage early: Get amortization schedule, when you make payments, add in next principle sum to it . Thirty-year loans will then be paid in fifteen years -- if you add two principle payments each month, it will be paid in ten years.


STOCK MARKET: If you tuned into Moneytalk today to hear Brinker discuss his viewpoints about stock market activity this week, you were very disappointed because the stock market was not mentioned.

* For the week, the Dow declined 3.6%, closing at 8268.64
* For the week, the S&P 500 Index declined 5%, closing at 882.88
* The Nasdaq declined 3.4%, closing at 1680
* GOLD closed at $931.30
* OIL closed at $57

This was a down week for the market. It's worth noting that last weekend Bob Brinker said this: "You know, I published a statement in January that I thought that 2009 could be a good year for the stock market – and that was back in January……A lot of people thought basically I had gone insane to make a comment like that. Look, it’s only May and we’re already in positive territory. Certainly we can slip back into negative territory for a period. Nobody can rule that out because we are only in minor positive territory using the S&P 500…..I still think 2009 is going to be a significant positive year for the stock market. I’m on record back in January having said that and I’m not changing anything about that forecast. I think that 2009 will be a significant up year for the stock market."

[Honeybee EC: It would have been nice if Brinker would have taken this opportunity to point out that just last week he said the market was volatile and might "slip back into negative territory for a period." But as usual, he goes silent when the market is declining.]

Bob Brinker's Saturday guest-speaker was Nariman Behravesh: "Spin-Free Economics" [LINK]

Brinker's Sunday guest-speaker was David L.Scott: "Wall Street Words: An A to Z Guide to Investment Terms For Today's Investors" [LINK]

David L Scott's new book: "An American Heritage of Business Terms" [LINK]

You can download your own FREE copies of Bob Brinker's Moneytalk programs. The programs are archived for seven days after broadcast at KGO810 radio [LINK]. To download the program to your MP3 player or flash drive, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link]

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