Brinker comments summarized, paraphrased or excerpted:
OSAMA BIN LADEN IS AS DEAD AS A DOORKNOB....Brinker said: "This is the week that we can finally say that we will not be dealing anymore with Osama Bin Laden. He was taken out by United States Special Forces, the brilliant work of the Navy Seals in an operation last Sunday, which was reported after the broadcast.....We congratulate everyone involved in that operation, from President Obama, all the way down to every single Navy Seal involved in that operation. They deserve the kudos that they receive."
STOCK MARKET... Brinker's Ground Hog Day report again -- closing numbers and year-to-date returns again.
Honey EC: There has been no change in Brinker's bullish outlook on the stock market, and his model portfolios are still fully invested. In the May 2011 issue of Marketimer, he is still forecasting the S&P 500 Index will reach the "low-to-mid 1400's range over the next 12 months."
TREASURY RATES....Another Brinker Ground Hog's Day report....rates are very low -- about as close to zero as possible, especially after taxes.
TREASURY IMPLIED INFLATION RATE....Annual: 2.5%. Brinker explained that this is not his inflation rate forecast because he doesn't have one. It is the Treasury market's implied inflation rate.
LEADING ECONOMIC INDEX.... Coming out on Thursday this week....Looking for a little uptick, following a good trend.
CONSUMER PRICE INDEX....Last week = 2.7 headline number; 1.2 core number (year-over-year); one month core number= 1/10th of 1%. Fed wants to see core inflation at no more than 2%.
KEY TO INFLATION.... Brinker said: "Obviously, labor costs are the key to inflation. Some people get it wrong on this and they think commodities are the key to inflation. Commodities are not the key to inflation, believe me. The key to inflation is the cost of labor and that's why inflation is so very, very low."
CALIFORNIA CAPITAL GAINS TAX....Top rate almost 10%, which is added on to the Federal 15% rate -- totaling a whopping 25%!!!!!
NEXT FOMC MEETING....Will be reconvened June 21st and 22nd -- ".....presided over by Obi Wan Big Ben Bernanke."
WHAT WOULD CAUSE INTEREST RATES TO GO HIGHER? Brinker said: "My guess is, that in order to get materially higher rates, you need a faster rate of economic growth.
HOUSING MARKET.... The market is looking to stabilize, but kind of going nowhere. Housing starts are expected to have a little rebound for the month, but according to Brinker, that is no big deal. Existing homes figures coming out Wednesday -- expected to sell at an annual rate of about 5 million....About 90% of housing transactions are existing properties...
Honey EC: While talking about the housing market, Brinker took another swipe at caller-Sue, who was on the April 17th program. She told Brinker that she was for a "Fair Tax." On today's program, Brinker said she called it a "Flat Tax." She did not. She denied that it was a "flat tax," and Brinker contradicted her vehemently. Here are my comments about their conversation:
NEW JOBS....Brinker said: "Here in the first four months of 2011, we have added an average monthly 192,000 new jobs. But it's better than that because the last three months, we've averaged over 200,000 new jobs in each of those months. It's nice to see people get those opportunities, but it's still rough out there because the unemployment rate is 9%. Way too high."Caller Sue from Cape Coral tried to explain to Brinker that the Fair Tax is not a “flat tax.” He clearly did not want to listen to Sue's explanation and repeatedly interrupted her. Later he talked to another caller about what Sue had said.
WAGES AND WORK WEEK.....Brinker said: "As far as wages are concerned, they are really quiet. We saw 3-cent increase in the average hourly wage....That numbers in the area of $23 an hour. And the average work week was unchanged, sitting in at 34.3 hours per week.....So people are not being asked to work longer work weeks at this juncture."
UNEMPLOYMENT REPORT.....Brinker said: "It was a good one. We like employment reports that are spritely, and this one was definitely in that category, 244,000 new jobs added in April.....In the month of April private sector jobs growth 268,000, then subtract another 24,000 government jobs -- gone, goodbye.....slashing budgets, money's not there....We had to wait awhile for this jobs growth, but we have it, at least for now in the data."
WHAT TWO STATES THAT HAVE NO TAX ON EARNED INCOME, BUT LEVY A TAX ON UNEARNED INCOME? Brinker suggested that this may be a question on the Moneytalk final exam. Answer: Tennessee and New Hampshire.
WHAT SEVEN STATES HAVE NO STATE INCOME TAX AT ALL? Answer: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
BRINKER'S EUROS DOING WELL....Brinker said: "Well, I have some Euros that I purchased from my last trip over there. I had a little chat with the spouse what to do with these things. There's no way you can trade these things back in because after you pay the vigorish to go from one currency to the other, and then you go back again -- whoa, I mean forgeddaboutit. So I put them on the shelf and the darn things are up 20%."
Honey EC: Brinker's guest-speaker today was Dan Dicker. The subject, oil and commodities, seemed much more current than the usual Brinker guest-speakers who re-hash the financial crises of 2008. Later this week, I will write a summary of the third hour Dan Dicker interview. You may want to download it from KGO (see the link below).
(The Kindle edition of this book is available at $16.99.)
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Moneytalk on demand and to go with Bob Brinker, is available for audio/podcasting FREE at KGO810 radio for seven days after broadcast. The program is archived in the 1-4pm time-slots. I download and save all three hours, including the third hour guest-speaker. KGO Radio Sunday Archives
Dixiegeezer's beautiful Dragonfly on a water lily (click to enlarge).
