Sunday, August 2, 2015

August 2, 2015, Bob Brinker's Moneytalk: Stocks, Bonds, Economic and Investing Summary

August 2, 2015....Bob Brinker hosted Moneytalk live today.....(comments welcome)

STOCK MARKET....Brinker recommends that those in or near retirement use a balanced approach. Today, he told caller Wesley from Naperville: ..."Even if that balanced portfolio was 50% in the S&P 500 or the Total Stock Market Index and 50% in quality bonds - without going to long-term maturities because of the level of rates – it would still be a balanced portfolio in that context.…"

Honey EC: There are no changes to Brinker's recommended fully-invested asset-allocation. Today, he announced that the August issue of Marketimer would be available tomorrow.

                                       BOND MARKET-INTEREST RATES
VANGUARD SAYS DON'T WORRY ABOUT RATES RISING IN LT BOND FUNDS.....Caller Jack from Minnesota said: "I've got a bond fund through Vanguard.  I've talked to them a couple of times, and I pretty much get the same answer each time, so I want to run it by you.  They say don't worry so much about the fact that bonds may drop somewhat in value when interest rates rise , because in the bond funds, each bond will mature over time and come back to face value.  That in the long run it will be okay.  What you take on that??

VANGUARD BRINKER'S FAVORITE FUND FAMILY IN WHOLE WORLD.....Brinker replied to Jack: Let's do the math.  It sounds great but let's do the math.  Let's take the Total Bond Fund at that fund family.  Now you know that that is my favorite fund family on the whole planet… I think most Moneytalk listeners know that…

HERE'S THE RATE RISE MATH, JACK.....Brinker said: "Here's the math: one of their popular funds is called the Total Bond Market.  The Total Bond Fund is an extremely diversified bond fund.  It has an average duration, currently, of 5.7 years.  It has a current yield of 2.1%… Let's do the math for one year on a total return basis.…  (Total return is how much money you have at the end of the year, including price change and including the interest were paid on the portfolio.)  Here is the answer: how much money will I have at the end of the year with a 2.1 yield and a 5.7 year average duration?  Interest rates go up during this period of 1%.…  The principal value declines 5.7% which is the inverse of the duration.  So $100 is now worth $94.30… Plus the interest it would earn which is 2.1% which would add $2.10.  It would be $96.40.  So at the end of a share, your $100, including the interest, would be worth $96.40.  So a total return decline of 3.6%.  That's the math Jack – that's the math.
Jim's responds to Brinker's "math": 
Blogger Jim said...
So according to Bob Brinker Vanguard is wrong when they tell investors in the Total Bond Market that they will be OK over the long term if they hold. Then he tells the caller how much they would lose in one year if interest rates rise by 1 or 2%. Does Brinker consider one year "long term"? He should have given at least a five year example. It's very unlikely that rates will rise 1-2% EVERY year for the next five years. Brinker is on record as saying that the normalization process will take years, so using a one year example to try and prove that Vanguard's advice is nonsense is very misleading.
August 2, 2015 at 3:16 PM
 Read Bluce's rebuttal to Brinker HERE.

GDP FOR Q2....Brinker comments: Real GDP increased at annual rate of 2.3% in second quarter....Previous quarter revised upwards at plus 0.6% annual....So far this year about 1.5%....

CHEAP GAS  HELPS GDP  INCREASE IN Q2......Brinker comments: We saw stronger consumer spending which is in part related to what's happened to energy prices.…  Much of the money that was saved that was formerly going into the fuel tank was available for consumer discretionary spending – and that's what we saw in the second quarter… Another thing that happened was that government spending increased and that was helpful to the growth rate.  Other things that were not helpful: there was a decline in capital expenditures and there was softer growth in the residential component of GDP.

WHAT'S NEXT FOR THE ECONOMY.....Brinker continued:
So what happens here?  In my opinion, we are going to see a better growth rate in the second half of 2015 than we have seen in the first half.

GANGBUSTERS RECOVERY - NOT! Brinker continued: But the reality is, the recovery that has come following the recession of 2008 has been as far from a gangbusters recovery as you can imagine… A lot of factors come in here – weaker demand on a global basis… The strong dollar continues to be a head wind that occurs as a result of the strong dollar and the GDP fall out in terms of the export account that happens related to the strong dollar.

INFLATION NO PROBLEM....Brinker continued: We are not seeing a whole lot happening there in terms of numbers that would be troubling.  The numbers we're looking at right now remain very reasonable, and I doubt very much that we are going to see a reaction out of the Federal Reserve in terms of what's happening in inflation.

JOBS - UNEMPLOYMENT CLAIMS....Brinker continued: In terms of the job market, we continue to see these initial claims for unemployment insurance at a very low level.  The last reading was 267,000 for the week.  The number to watch is the four-week moving average, that one is 274,700.  This is a very low number.  In fact, this it's very close to the lowest number going all the way back 15+ years ago to the spring season of the year 2000.  So there's no question that we are seeing an improvement in the labor markets.  And we are even seeing a bit of a tightening trend in the labor markets.  This always bears watching because one of the most important components of what happens in terms of prices going forward is what happens in the labor markets.

Certainly the housing industry continues making positive contributions to the economy.  The made Case-Shiller index remains unchanged.…  No doubt about it, house prices have been rising on a trend basis.…  National home prices for existing homes up 4.4% on a year-over-year basis.

BRINKER FLUMMOXED-GET RID OF ADVISOR....Caller Carl from San Jose wants to take some stock market profits to lower his holdings to 50% but got bad advice from his broker.

Brinker replied:  There are flaws in this advise that are enough to flummox one.  Flaw number one Mr. Carl:  you have all this money over here in a tax privileged account – leave that alone.  Go over here in your taxable account where you have immense gains, realize gains, pay the taxes – which is mistake one number one,  in my opinion because you can do it in your tax privileged with no capital gains tax.  Mistake number two:  take the proceeds put it in municipal bonds at a time when we are looking at near historic all-time lows in municipal bond rates.  If I had an advisor like that, I'd be looking elsewhere.

DON'T PAY TO BUY AN ANNUITY....Caller Ray from Iowa has a financial advisor that wants him to buy an annuity which has a 5% surrender charge....Brinker replied: The thing that amazes me is that any insurance company out there is able to hoodwink people – and that's the only word I can think of – hoodwink people into buying annuities with 5% surrender charges for ever.…  The Vanguard annuity program has no surrender charges.  How do these insurance companies hoodwink people into these kinds of schemes?

BE AFRAID,  VERY AFRAID, OF PUERTO RICO PAPER.... Brinker comments: The way I look at it is that Puerto Rico is the US version of Greece.  Here's why I say that.  Years now, the banks around the world and in Europe have had to prepare for the inevitable, which is that Greece is a bankrupt nation.  Whether it's papered over not – right now it's papered over.…  Puerto Rico is a bankrupt Commonwealth, in my opinion.  I realize it's been papered over so far, but it's bankrupt in my view.  Individual investors and banks have had to prepare for this inevitability. So I'm assuming that the only people that hold Puerto Rico paper today are the people that understand the enormous risk of holding Puerto Rico paper.

BRINKER TAKES IT ON THE CHIN ABOUT HIS 4% ADVICE: Caller Douglas from Hoosierland said:  "Three weeks ago I tried to call and couldn't get through to you you had a caller who invested $58,000 over 30 years and his current portfolio worth was $2.3 million.  Analyzing that when he was talking with you, he had over 100 stocks and he had $29,000 income off the dividend.  One of those stocks paid a 10% dividend.  Your advice to him was to sell that – decrease it down to 4% – and pay the tax, $35,000, because it was outside of the protected account and then by the total stock market at today's rate.  To me that's a lousy call.  He's got 100 stocks.  You can have a portfolio with 25 stocks that's a balanced portfolio.  I've done very similar over 30 years.  And you're going to tell him pay the tax to get 6% out of that and put it in total stock market at the highest it's ever been.  Bad call!"

Brinker's reply to Douglas: "Only I said if he subscribes to my view that you don't want to have a heavily weighted position in any one stock.  If he disagrees with that, he can do whatever he wants."

Honey EC: I clearly remember the call that Douglas was referring to, but unfortunately,  I did not cover it in my summary. I have to sometimes make difficult choices -- and that was a bad one.  

However,  Blog Research Team (BRT) Member, Jeffchristie checked his notes and this is what he wrote to me: "On 19 July, the first caller was Jack from Elgin Illinois.  He has a net worth of $3 mil in 113 common stocks.  Biggest position was $400k in Macdonalds. Bob told him to reduce to 4 %." 

NOTHING WILL HAPPEN UNTIL CHAIR JANET YELLEN BLINKS OR WINKS IN MID-SEPTEMBER..... Brinker said: All eyes will be on the Fed in mid-September when they have their next pajama party.  And that will be a news conference and statement meeting.  Right now, nobody knows whether they will or will not raise rates in mid-September.  The odds on it are pretty close. If you go out and look at the betting parlors, they are pretty close to 50-50.  It's pretty close to even-Stephen out there as to whether Chair Janet will blink in mid-September, or whether she will wink.  We don't know.  What we do know is that the next Fed meeting is mid-September, nothing is going to happen until then.

MEDICAL CARE INFLATION....Caller Tom from Tuscon asked what medical inflation would be over the next six months. Brinker replied: It's hard to pinpoint it that way.  As you well know, a lot of it has to do with what's happening with Medicare spending in general.…  Over the last 12 months, the year-over-year change in medical care service expenditures is 2.3% according to the CPI index figures.  Over the last six months, the annualized rate of growth has been 2.4%.…  So I think a reasonable estimate for medical care service inflation over the next year would be something in the general area of 2 1/2%.

Bob’s third hour guest on August 2, 2015 was John D. Spooner, investment advisor in Boston and the author of 5 books, including No One Ever Told Us That, Money and Life: Letters to My Grandchildren.
The title for the book came from a comment a graduate student made to Mr. Spooner after a talk on finances:    “No one ever told us that.”   That comment got him thinking about a book that would be useful to young people.   Schools don’t teach financial acumen and too many parents want to be “buddies” with their children and they don’t have “the talk” (about money management).  
MoneyTalk regulars know that this topic is high on Bob’s hit parade. 
There were some great quotes sprinkled throughout the interview.  I think the reader might get a feel for Mr. Spooner’s  commonsense outlook if we start with them: 
=> “If my taxes are lower I can be more generous to my workers and to charities,”  This was John’s reaction to Bob’s question about Bernie Sanders’ 90% top federal income tax recommendation.
=> “All pigs are equal but some pigs are more equal.”   (With a nod to George Orwell, author of Animal Farm).   Mr. Spooner’s answer when Bob asked him what he thought of HRC’s proposal to raise the capital gains tax rate.   (I guess Bob doesn’t want to say the full name of Hillary Rodham Clinton for some reason).
=> “There is no work-life balance; it has to be work for a long time.”   This one proved to be an irritant to the last caller who thinks kids today are great and wanted to know what’s so important about working until you die.  
=> “Take an old pro to lunch.”   If you’re a young person working somewhere, invite a long-time employee to go to lunch.  (Earth to young person, this means YOU pay.)   You’ll have a chance to talk to this individual one on one – this came up during the discussion of 401K’s and why some young people fail to take advantage of this investment opportunity where they work.
=> “Real money is made long term.”
=> “Fear and greed dictate the movement of the markets.”   
On entrepreneurship, John said his office is in a building with a large advertising firm that must employ 500 people who all seem to be 27 years old.  In the elevator they stare at their smart phones.  He sometimes breaks into their reverie with a question about where they see themselves in 5 years.  The answers seem to be 1) “being an entrepreneur,” or, 2) “I don’t even know where I’ll be next week.”  
His advice in this area is to start young if you want to be an entrepreneur.  Take advice only from successful people.  Forget doing a business plan, they aren’t worth anything.   Make a two page summary of the business that your grandmother can understand.  Study accounting and learn about a balance sheet.  Then sell your product, make sure you get paid and have customers who will talk up your business. 
The callers included a woman from Oregon who owns some businesses with her husband.  She provided a memorable quote regarding young people as employees, “kids don’t know anything, they can’t even unplug a toilet.”    (In this age of 1.3 gallon flushes, they’d better learn.  And you young guys…you better know that this is one household chore reserved exclusively for YOU.)
Tom, calling from Chicago is a 46 year old business owner who wants to protect his employees from themselves.  He provides some tax sheltered investments to them in his business, but he said he’s always getting questions on whether they can take the money out.  
Carl from Illinois brought up the concept of “delayed gratification.”   He didn’t get a credit card until his mid 30’s and he’s only ever bought two new cars.   The guest was on board but they didn’t get much time to discuss it.
Bob brought the interview to a close at 3:51 pm.  
Now for editorial comment.   Bob: With this quality guest,  a full hour interview would have been barely adequate.   I may be biased because I think the financial education of the younger generation is the first step toward making them better citizens and smarter voters.
The first segment of the third hour is taken up with a bunch of economic news.  Does anybody really listen to you talking about what’s going to be coming out in the week ahead?    Then the interview starts about 16 minutes or so after the hour and almost always wraps up around 50 minutes after the hour.  I think you barely scratch the surface with some of these guests. 
The book is available of course on Amazon.  I took a quick inside.   It may be just the ticket if you have a child, grandchild, niece, nephew, whatever who could benefit from Mr. Spooner’s message. 
Honey here: Thank you Frank...This was a remarkable and interesting guest.  Finally Brinker had on someone who was not a college professor indoctrinating young "skulls full of mush" with the beauties of Socialism and government control.  I agree that Brinker wastes time covering "what's coming out next week." This information is available at this website: Bloomberg Economic Calendar

What word did Bob Brinker use to describe what an insurance company does to sell an annuity with a 5% surrender charge?

A) Hornswoggle.  B) Bamboozle.  C) Hoodwink.  D) Swindle.
 Honey here: Welcome back Jeff! I'm glad to know that a shark didn't get you....

Brinker's guest-author was John Spooner: No One Ever Told Us That: Money and Life Lessons for Young Adults

Los Angeles. KABC 790. Moneytalk plays two hours later in the evening. They podcast and ARCHIVE podcasts.

                                               (summary posted at 7:55pm PDT)

Sunday, July 26, 2015

July 26, 2015, Bob Brinker's Moneytalk: Stocks, Bonds, Economic and Investing Summary

July 26, 2015.....Bob Brinker hosted Moneytalk live today....(comments welcome)

                               HOUR-ONE OPENING MONOLOGUE

HILLARY CLINTON PROPOSES RAISING LONG-TERM CAPITAL GAINS TAX.... (Honey EC: For some reason, Brinker covered up the name of the "presidential candidate" he was talking about until the third-hour guest let the cat out of the bag.) Jim remembers back when Brinker wasn't so shy:
Jim said...
When Brinker was talking about the proposed increase in Capital Gains Tax I wonder why he didn't want to mention who proposed it. He kept saying "one of the presidential candidates". Most of us knew which one, but there might have been a few listeners who did not. Finally in the third hour David L. Scott mentioned Hillary Clinton by name. Without Mr. Scott a few listeners may not have learned the identity. As much as Brinker talked about "Evita" in the past I'd think he wouldn't be afraid to mention her name now.
Brinker said: This weekend we have a brand-new capital gains tax proposal by one of the top candidates for the 2016 presidential race.  And this is quite a proposal.  It affects the top bracket earners, and it really changes forever the capital gains structure.  Right now, in the top bracket your top federal capital gains tax rate is 23.8%.…  It's the sum of two pieces.  The first piece is the top federal bracket on long-term capital gains which is 20%.  The other part of it is the healthcare capital gains tax 3.8%… For positions held more than one year which are defined as long-term capital gains.…  If you come in under one year it's ordinary income - that's 43.4% right now… The new proposal from the presidential candidate this weekend is that the holding period be extended to a minimum of two years in order to get any benefit off of a new rate – which is the same as the ordinary income tax rate.  In other words if you take again under two years, its ordinary income… And then it gets very convoluted.  If you sell in the third year is 39.8% - n the fourth year, 35.8% - in the fifth year 31.8% – in the six-year 27.8% – in the seventh or later, 23.8%.  Which is what it is right now for over one year.  So it drives it all the way out to the seventh year and beyond.

Honey EC: Frankj has the changes laid out in easy to read format for you in the guest-summary.

DID BERNIE SANDERS MAKE HER DO IT.....Brinker continued: So it adds all these additional years in all these brackets to the tax code.…It's just a further complication for the tax code for capital gains.…  The candidate has told us the reason to do this is because  public companies have a tendency to emphasize short-term performance as opposed to long-term performance.…I don't understand the point of this proposal unless it represents an effort to respond to the populist rhetoric of Bernie Sanders… Who has already gone on record and said he can live with a 90% tax rate ...

BRINKER'S OPINION OF HILLARY'S PROPOSAL.....Brinker continued: In any case, it's pretty bizarre… Let us remember, that we are talking about money you have put at risk… You invest this money, whether it be in a real estate property or in a company… Under current law, you are rewarded with a lower tax rate so I think it is a fool's errand – and I'm being kind to make a proposal like this.  However, I have no idea where you would get the votes in Washington DC to pass this kind of a scheme

BRINKER PROPOSES INDEXING....Brinker continued: If you want to make a proposal that would have an impact on capital gains, then do what should have been done years ago – and that is, index the cost basis for assets - so that taxpayers are not forced, as they are today, to pay taxes on inflation.…  Why should you pay tax on inflation… And if they did that, they would've done something positive for investors.

                                                       STOCK MARKET

(Honey EC:  In spite of this caller's speculation, there are no changes to Brinker's stock market advice. He is still fully invested and recommends dollar-cost-averaging new money into the market. Marketimer current S&P target range is low 2200s.) 

IF BRINKER ISSUES SELL SIGNAL SHOULD YOU PAY TAXES OR RIDE IT OUT...Caller Bruce from Santa Rosa, California, who is fully invested in Marketimer model portfolio III,  has $1.4 million in a taxable account. He asked Brinker if would recommend that he follow any future "go to cash" advice since  he have to pay enormous federal and state taxes.

Brinker replied: One of the considerations for you would be the tax ramifications and whether you wanted to encourage that kind of a tax liability or whether you wanted to simply ride it out.

Bruce followed up: "Can you be of any additional help – you are saying it would be okay to not follow your recommendation and just ride it out and go through the down-swing and then up again."  

(Brinker interrupted)  What I said was for an investor that did not want to pay the capital gains tax, that that would be one option."

Bruce then asked:  "Okay, any additional options – maybe taking out options? ......Anything a little more sophisticated than just selling the whole thing?

Brinker replied… You're in a taxable account.  I think you're going to find if you put a hedge on against the position - Let me give you an example of a hedge.  There is an exchange traded fund that performs essentially the same as the total stock market Index – the symbol is VTI.  Now let's say you short VTI to offset your long position in the total stock market Index,.  Because you are in a taxable account, you could get yourself in a position  where it wouldn't do you much good… Some of the hedges that you could put on could trigger a tax…

Brinker continued: Now there are other things that you could do that might get you in a position where you'd be okay.  For example, suppose you had a short position in the exchange traded fund SPY, which is the S&P 500 Index.  Now that performs very closely with the total stock market index.  It might be possible to put on a short position in the Spyders and that would serve as an offset to whatever percentage you went against your long position.  It would not make it necessary for you to take capital gains in your long position in the total stock market index because that's a different index.…  That short position in Spyders would then serve as your defense in the event you are in a declining market.  But keep in mind that if you put a short position on  Spyders, and the market continues to go up, you're going to lose what you're making in the total stock market index… The performance is very close.  So that's the risk of putting a short position on with SPY.

Bruce said:  "What would you do in my situation?"

Brinker replied: I think probably in a situation like that – there are so many variables that come in -  it's very difficult to answer.  I certainly am willing to pay capital gains taxes.  I pay capital gains taxes almost every year and I do so very happily.  So I don't have the same attitude toward capital gains taxes that you do.  I happily pay my capital gains taxes because that means profits are rolling in and that's a good thing.  So that doesn't bother me at all.

Bruce followed up:  "So I take your answer to be that you would just follow the recommendation and just sell."

Brinker replied:
that certainly is my inclination.  And keep in mind that even if you did what I said and you put up a short position in Spyders and they went down and you cover them in a profit, that would be a short-term capital gain.  In your case, it would put you in a much higher tax bracket.…  The way to sidestep it completely, is to do this in a tax privileged account.…  That is certainly something I do.  I use tax-privileged accounts for some market activity, and as you know that defers the whole thing out so it's not a current tax problem.


INTEREST RATES GOING UP BUT NOT NEXT WEEK.....Brinker said: Rates are near historic lows… And we know for a fact, because Chair Janet has told us, that she is going to embark on a program of rate normalization.  That means rates are going to change – they are not going to go much lower, but they could go meaningfully higher. I would say that there's no chance whatsoever – none – that you will get an increase in rates at the upcoming meeting.  I think the chances of the Fed raising rates at this meeting this coming week are zero.  The Federal Reserve wants to get more information before they make this decision.  They are going to have a Fed meeting on Tuesday and Wednesday with an announcement Wednesday afternoon.  I do not expect any change in the Federal Funds rate at this meeting.

Brinker continued: However, I think the data that comes in between now and the September meeting will determine whether they take action on a small rate hike… And I think it would be a minimal hike of 25 basis points.  That's the first time that I would be looking for the possibility would be at the September meeting.  I think the next time that I would look for possibility would be at the December meeting… September, a possibility but it's data dependent.  And December, for either a first or second, depending on what happens in September… There are some exogenous factors at play here.  For example, how much weight does Chair Janet give to Christine Legare – we know Christine is out there , and she said please don't raise rates.... but Chair Janet is her own gal.  She will do what she has to....

HOW TO FIGURE PENSION INTO BALANCING INVESTMENT PORTFOLIOS...Brinker said: As far as calculating what the value of pension income is, the way you would do that is to take the 10 year Treasury Note rate, which right now is about 2 1/4%.  By applying that to some X, which we can define in a moment, then you can determine what would it take to get that pension. …  If you took $1 million in and you put it into a 10 year Treasury, then you would currently generate about $22,500 in annual income.…  You can refine that figure as rates change – now rates haven't changed much for several years because of the Federal Reserve policy of holding down rates.…  And in fact, their policy has extended to even holding down long rates and the way they did that is through Quantitative Easing – a large-scale asset purchase program which created demand for all the different maturities, thereby holding down yields.

                           FRANKJ'S  GUEST-AUTHOR THIRD-HOUR SUMMARY:

David L. Scott, professor of finance at Valdosta State University in Georgia was Bob’s guest on the July 26th third hour of MoneyTalk. Dr. Scott is has been a frequent guest and probably has his own reserved seat in the first class section of the StarShip. He has written some books on finance and one he is best known for among MoneyTalk regulars is “Wall Street Words,” a dictionary of sorts of financial terms. 

Today’s interview was lackluster in my opinion. And, I missed a part of the first segment due to a phone call.

Bob had primed Dr. Scott to comment on Hillary Clinton’s recent proposal to raise the capital gains tax – basing it on holding periods, with the lowest rate only for holdings of 6 years or more.

These are the rates Hillary proposes by holding period, with the current rate shown in parentheses. They would apply only to the top 0.5% of income earners and they do not include the extra 3.8% Obamacare surcharge.

==> Holding period of less than one year 39.6% (no change from current).
==>1 to 2 years: 39.6 (20%).
==> 2-3 years: 36 (20%).
==> 3-4 years: 32 (20)
==> 4-5 years: 28 (20)
==> 5-6 years: 24 (20)
==> 6+ years: 20 (20).

The idea according to Hillary is to somehow get corporations to think beyond quarterly performance and by doing so it would encourage people to hold onto equity investments longer (??). Or, is it by encouraging people to hold onto equity investments longer, it will encourage corporations to think beyond the next quarter. (??) I confess I don’t see the connection and neither did Dr. Scott or Bob Brinker. I wonder what staffer dreamed up this plan?

After the bottom of the hour break Bob said economic growth is coming in at a puny 2 to 2.5% and asked Dr. Scott what’s going on?

Dr. Scott said we have had large deficits, the government doesn’t know what to do, and he added, “I don’t either.” Ben Bernanke did the right thing (quantitative easing) and the US economy has been better than Europe’s. Medicare and Medicaid are the biggest issues and there is no political solution.

Bob called it the 3rd rail of politics.

Politicians don’t want to go near it. Jeb Bush said medicare needs an overhaul and he was criticized for uttering what everyone with a brain knows is true.

The political talk continued:

==> Term limits might help (DS).
==> They’ll stop the celebrity politicians. (BB).
==> Politicians will say anything to get elected. I thought Romney was saying things he didn’t believe ==> (about Romneycare in Mass.) (DS).
==> Hillary is not as far left as she’s indicating. (DS).
==> Bernie (Sanders) is OK with 90% tax rate (BB).
==> “I don’t want to pay that!” (DS).

The two chums got serious for a moment and talked about the QE program, was it a success?

The fiscal policy gridlock was so serious that Ben B. did what he had to do which was adopt QE. They agreed that prior to Ben B. the Fed was run like a secret society.

The only caller was David from Florida who asked if the deal with Iran was going to hurt the US oil industry. Dr. Scott said prices are down since the deal was announced and yes, with Iran exporting there will be consequences for companies with reserves in the US.

Bob asked about bankers taking the heat for the financial crisis. Dr. Scott said people blame Wall Street and think those responsible for the meltdown didn’t get hurt and they didn’t get punished.

Bob then brought up the TV show American Greed and they wrapped up the interview talking about people who get scammed out of their money. The interview ended at 3:51.



HERE IS A CHUCKLE from "Seabiscuit," a long-time Brinker critic, who is now deceased. He wrote this at the end of the mga-bear market in early 2009. (If you don't get this, Google Burma Shave):
 He told his shirt-less fans,

"I can call the bottom of this bear"

Then they lost their pants too

And now their bottoms are bare!

Brinker Shave
Los Angeles. KABC 790. Moneytalk plays two hours later in the evening. They podcast and ARCHIVE podcasts.

                                                 (summary posted at 7:25pm PDT)