July 29, 2012, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

July 29, 2012....Bob Brinker is hosting Moneytalk today......(comments welcome)

IN EDIT TUESDAY:  Jeffchristie has posted the answer to this week's Moneytalk Final Exam Question:  "My answer this week is Andy in Redwood city. I believe he has gotten on the air more often than any other caller to Moneytalk. Andy in Redwood City has racked up quite a few frequent flier miles here on the starship moneytalk. Honey has documented seven calls in the last eleven months. He was also on 11 February 2011 when Lynn was hosting. He said the government has failed us when it comes to solving the unemployment problem. Lynn got upset with him. He often gets argumentative with Bob defending DNC talking points." 

Jeff also posted a full list of all the calls that have been documented on this blog -- VERY interesting ! You will find it in the comments section. 

STOCK MARKET....Brinker said: "The Dow Jones Industrial Average....stands at 13075. The S&P 500 close to 1386, giving it a year-to-date total rate of return of 11%. Nasdaq at 2958. The stock market in general had a great week. When you look at this zero interest rate world we live in.....that's pretty good. And those of you who have been fully invested this year and able to take full advantage of this positive market environment we have seen, congratulations to you....

.....What we've seen this year is the market do what it always does in a situation like this year which is climbing the wall of worry.....The worries about the growth rate of the economy, the worries about Europe, the worries congress and its inability to function.....But what they really care about is return on investment, and  I think most investors are very pleased with 11%  S&P 500 total return year-to-date."

Honey EC: I'd like to congratulate Marketimer subscribers who follow Brinker's equity model portfolios II.  As of the end of last month, it finally recovered almost all losses it incurred during the 2008 bear market. Only $600 more and it will be back to what it was five years ago.  :)  Brinker kept all Marketimer model portfolios fully invested throughout the 2008 bear and they have  been recouping those losses since the March 2009 low. Unfortunately Marketimer model portfolio I is still about ten thousand dollars underwater from its October 31, 2007 high.

EARNINGS....Brinker comments: Good earnings reports so far -- a number of companies have reported. Some have disappointed, but 2/3 have reported positive earnings surprises for the second quarter -- the stock market likes this. 

INTEREST RATES....Brinker said: "When you look at interest rates, you don't see much movement there because the Fed continues to hold them down." 

JUNK BOND FUNDS....Brinker commented that junk bond funds have done very well. He recommends Vanguard High Yield Fund (VWEHX).

Honey EC: Brinker has included a 25% weighting of Vanguard's High Yield Fund in his (off-the-books) Marketimer income portfolio. The Vanguard Fund is now closed to new investors. Brinker has recommended Metro West Total Return bond Fund (MWTRX) as a substitute. I question the validity of that advice. MWTRX is quite different from VWEHX and is not a high yield fund.  

SLOW GROWTH ECONOMY....Brinker comments:  We got the real GDP number for the second quarter -- it can be revised -- was initially reported as 1.5 annual growth adjusted for inflation. The first quarter was revised upward to 2.0.  For the first half, you have an annual rate of growth of 1 3/4% -- a slow-growth economy, below trend.

THINGS THE STOCK MARKET LIKES VERY MUCH.....Brinker comments: A slow-growing economy with rising earnings, very low inflation, very low interest rates. All of those things provide the fundamental underpinnings for stock prices.

ZERO TOLERANCE FOR RISK:  Caller James from Alabama asked Brinker to recommend an investment for his parents in their mid-80s, who, because of memories of the depression, have no tolerance for risk. Brinker recommended FDIC-insured laddered CDs.

VANGUARD INFLATION PROTECTED SECURITIES:  Caller Ron from Hot Springs said that he followed Marketimer model portfolio III,  but now about half of his fixed income investments are in TIPS.  "Brinker replied:   Of course we don't have any of that fund at this time in our balanced model portfolio III which is on page 8 of the investment letter. We sold it all. Took profits in it. It was very good to us."

Honey EC: Brinker sold all holding to that fund in all of his portfolios, including the fixed income portfolio.

BEWARE OF INVESTING IN SOLAR AND WIND STOCKS....Brinker comments: I'd be careful. There's been so much money lost particularly in  solar stocks, but also wind stocks, in the past couple of years....I'd probably only consider it speculation with money you are willing to lose.

INFLATION PROTECTED BOND FUNDS (TIPS)....Brinker comments: TIPS  continue to have negative base yields...five year TIPS negative 1.17%....The only chance for return is inflation, otherwise you are losing money.

VANGUARD GINNIE MAE FUND (VFIIX): Caller Ron followed up by asking Brinker about Ginnie Mae fund. Brinker replied:  "Well, we actually still have the Ginnie Maes in the portfolio. We have an allocation to the Ginnie Mae Fund in the portfolio and that fund has been absolutely incredible. It's been a great fund for us. We still have that in the balanced model portfolio III.....Hey, listen, believe it or not, there were people out there shorting the bond market because they thought interest rates were going to go up. They were selling short the bond market....And of course that was a bloody debacle for anybody that did that." 

Honey EC:  Oh my goodness, I wonder why Brinker never mentions the important fact that he has lowered his Vanguard Ginnie Mae Fund holdings in model portfolio III. And his income portfolio is down to a puny 15%?   

HOUSING MARKET....Brinker comments: In the opinion of an economist at Goldman Sachs, we are going to get a strong housing recovery. We'll see how that plays out....a lot of people would like to see that. It's definitely a positive for the economy.

THEY MAY DELAY FISCAL CLIFF....Brinker comments: President Clinton had to correct himself and apologize for saying that the fiscal cliff should be delayed after the White House got in an uproar about it. Now amazingly, congress is considering a delay in the automatic budget cuts on the fiscal cliff....until March -- a three month delay....These are the spending cuts that are supposed to kick in January 1, 2013....one of the ten-year, 1.2 trillion dollar, spending cut program. About  $108 billion of  it comes next year --- about half  of that comes out of the Defense Department.....This would require a piece of legislation that would delay the automatic budget cuts that would fund the government through March (or later)....And would also extend the current tax rates and other tax laws.

NEW TAXES SCHEDULED FOR JANUARY 1, 2013: Brinker covered this subject today, but he also covered it a couple of weeks ago and I reported on it in detail in my July 15th Moneytalk Summary.

FACEBOOK IPO FIASCO...Brinker comments:  In all of my years in the canyons of Wall Street, I've never seen a bigger debacle  than the Facebook initial public offering....Here's a stock that came public a few weeks ago amidst more  hype than I've ever seen before.....When I think back to the high profile IPOs of the past, the Apple....even to the Google....I've never seen a bigger fiasco than Facebook. The stock cracked $24 on Friday...It lost over a third of its price in a very short period of time.  So in addition to raising the price, the underwriter clowns decide they are going to increase the size of the number of shares they are selling.....Facebook opened at $42 on its way to $24....Facebook has lost $34 billion dollars in market value since its IPO two months ago.....On Friday, when the market was doing very well, Facebook lost another 12%.....

......The  CEO, Mark Zuckerberg, he's a wealthy individual, but Friday, he lost $1.6 billion in stock value....He still has $12 billion in stock....I have no recommendation on this stock. I avoided like the plague on the IPO.....The P/E ratio on Facebook is double the price-earnings ratio on Google....Is that amazing or what? It's more expensive than Yahoo! which has a new CEO.....How much money are they making? They are not making any money. They are losing money. Facebook reported a net loss of $157 million for the quarter they reported on the end of the week.....In the fourth quarter of this year, there will be a release of a huge shares that will become available to the marketplace.

Honey EC: Blog reader, RP, sent the link to this article and video about Facebook: Zuckerberg Speaks! 

WOULD INTEREST RATE INCREASES AFFECT GOLD AND SILVER....Caller Joe from Carmel asked Brinker if rising interest rates would negatively affect the price of gold and silver. Brinker replied: "Obviously the biggest future potential negative for any speculative metal is that speculators will take a hike. The only thing that can push the price precious metals higher is speculation because that's all it represents. A bar of gold bullion earns no dividend.....It's entirely dependent on what speculators are willing to pay for it at any given point.....When interest rates go up, there are holders of gold that would rather have the interest and will switch into interest bearing securities and sell their gold. So that's the connection between interest rates and gold.....

.....Regarding how to buy gold, and I DON'T OWN GOLD, but for my money, there's only one way and that's the Exchange traded Fund.....the symbol is GLD. It is backed by gold bullion. And from my point of view, IF I WERE INTERESTED IN OWNING GOLD, that would be the only way that I would consider owning gold....I would never go to numismatic gold coins."

Honey EC: I added the emphasis to Brinker's EXACT words above. In May 2009, Brinker added GLD to his Marketimer recommended Individual Issues List and it has been there ever since....So Mr. Brinker, are we to understand that your Marketimer recommendations are not your own cuppa tea? 

BRINKER RECOMMENDS BUYING REAL ESTATE IN LAS VEGAS:  Donna, the Prima Donna from Lincoln, said her son had move to Las Vegas and was  thinking of buying a home. She asked Brinker for his opinion of the Las Vegas real estate market. Brinker replied: "I have to tell you, as a Nevada property owner, I think values are good right now. And I think that this is a good time to be a buyer...There's been a tremendous adjustment in prices in that market, and I think that you son has the right idea. A lot of good values out there, in my opinion."

Honey EC: It's easy to see why Brinker thinks now is a good time to buy in Nevada.  But he no doubt wishes he would have waited  awhile. He bought his condo at Lake Las Vegas for a cool million in 2006 and it is now estimated to be worth $217,346. This from Zillow:

20 Via Mantova UNIT 405 Henderson, NV 89011  Not for Sale Zestimate:$217,346 Beds:3 Baths:2.5 Sq ft: 2,021 Lot:--Type: CondoYear built: 2006 Last sold: Mar 2006 for $1,021,523 

BRINKER'S FUNNIEST REPLY OF THE DAY: Scott from Albuquerque said: "I've been exposed to some alternative energy ideas. Understand of course the debacle that's gone on with some of the green energy programs. Obviously that the president had put a lot of money into....." 

Brinker replied: "By the way, that was not the president's money. Not to correct you, but so listeners will know. Unfortunately that was not the president's money that went down the drain on some of those deals. That was your money and my money that went down the drain. That was taxpayer's money. Let's get that straight. It wasn't his money." 

Jeffchristie's Moneytalk Final Exam Question for today: 

The most frequent caller to Moneytalk is: 

A) Lynda Belinda from Yorba Linda. 

B) Andy from Redwood city. 

C) Donna Donna the Prima Donna. 

D) Theodore from Vancouver.

Brinker's guest-speaker was Simon Lack: The Hedge Fund Mirage: The Illusion of Big Money and Why It's Too Good to Be True

San Francisco, Ca. KSFO 560: 1-4pm  (KSFO archives Moneytalk Free on Demand for seven days after broadcast. You can download and listen on the go.) 

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July 28, 2012, Bob Brinker's January Mutual Fund Changes

July 28, 2012....In January 2012, Bob Brinker made several changes in his Marketimer model portfolio mutual fund holdings.  Let's take a look and see how that has worked out.

Model Portfolio II:

SELL: 10% weighting in Vanguard Total Stock Market (VTSMX) reducing holding to 40%; 

BUY: 10% weighting in Akre Focus Fund (AKREX) thereby establishing this holding; 

SELL: 5%  weighting in Dodge & Cox Int'l (DODFX) thereby eliminating holding; 

BUY: 5% weighting in Vanguard Int'l Growth (VWIGX) increasing holding to 10%. 

Model Portfolio III changes were exactly the same as portfolio II, but weighting on each item was half the amounts in Portfolio II. 

Model Portfolio I made the same buys, but sold Baron Partners Fund  (BPTRX) to purchase a 15% weighting in AKREX. That was a good move. Barons has fallen out of bed.

Akre Focus Fund has done remarkably well this year, and has outperformed the Total Stock Market Fund. However, the international fund change accomplished little so far this year -- performances are very similar.

So it looks like these were good moves and have helped Brinker's performance record so far this year. However, remember that AKREX is not  highly diversified, like Brinker always recommends.

The top 10 holdings represent over 50% of its holdings. Some of its stock holding are close to 10% which breaks Brinker's long-held recommendation not to have more than 4% in any individual stock. On the other hand, the fund is now holding 22% cash.

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July 22, 2012, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

July 22, 2012....Bob Brinker hosted Moneytalk today.....(comments welcome)


STOCK MARKET: The only time that Brinker mentioned the stock market today was when he told caller Stewart from New York that he should dollar-cost-average new money.  (My latest review of Brinker's current market views.)

INFLATION.....Brinker said: "I think this whole nonsense about inflation going through the roof is a  complete and total fraud.....I predicted that inflation will stay low."

ECONOMY.....Brinker's comments: The Federal Reserve has done just about everything that it can to help the economy and should just continue doing what it is doing. Economic growth is below trend.  Gross Domestic Product grew 1.9% in the first quarter and  he expects second quarter growth in the area of 1.5%.

HOUSING MARKET.... Brinker's comments: The housing market is looking up and this is a timely development for the economy.

UNEMPLOYMENT REPORT: Brinker did not mention the unemployment report from three days ago. It was not a good one:

DShort wrote: The Unemployment Insurance Weekly Claims Report was released this morning for last week. The 386,000 new claims was a substantial 34,000 rise from the previous week's relatively small upward revision of 2,000. The less volatile and closely watched four-week moving average dropped to 375,500. The big decline posted for the previous week apparently was, as many suspected, a July 4th holiday anomaly. Today's number more than erases last week's decline.

DON'T REFINANCE YOUR HOME AND INVEST IN STOCK MARKET....Caller Douglas from Daly City said he was thinking of refinancing his home and investing in Marketimer model portfolio III. Brinker replied: "I've heard of people that tell people, and I think this is horrific advice....I don't believe in that, and I think that anybody who had done that over the last ten years might be very sorry that they did it. Especially with what's happened to housing values over that period. I think the idea of borrowing on a house to invest in the stock market if probably the worst idea I've ever heard." 

TWO VANGUARD BALANCED FUNDS THAT BRINKER RECOMMENDS:  Caller Carol from Illinois asked Brinker what investments he would recommend for her grandchildren's college funds -- needed in about six years. Brinker recommended Vanguard Wellesley Income Fund and Vanguard Balanced Fund.


BOB BRINKER FISCAL CONSERVATIVE.....Brinker said: "I am often criticized over the fact that now in its twenty-seventh year, this program stands for conservative fiscal policies.....You know, old fashioned ideas like balancing the budget and saying no those who try to game the system and give taxpayers the shaft."

FEDERAL GOVERNMENT HISTORICALLY INCOMPETENT.....Brinker said: "Unfortunately, I think it is fair to say that the level of dysfunction and incompetence in the federal government today is greater than at any time in history.....As things now stand, taxpayers across the country face enormous tax increases on the first of January. These tax increases under current law are scheduled to apply across the board. And congress, collecting its paycheck, collecting its glorious benefits package, accruing its glorious retirement benefits, congress refuses to do anything about this because its an election year.....If you ran your business the way congress operates, you would be in bankruptcy in no time at all."

CALIFORNIA BANKRUPTCIES.....Brinker continued: "As for the local governments, you've see the incompetence and the dysfunction at the local level which has already led to bankruptcy filings in places like Vallejo, Stockton, Mammoth Lakes, California. And San Bernardino is in all kinds of fiscal trouble."

PROOF: PUBLIC SECTOR UNIONS AND NO TAXPAYER REPRESENTATION CAUSE BANKRUPTCIES... Brinker said: "No matter how you look at it, there is no free lunch. And when you're elected officials allow local public sector unions to have their way and walk over the taxpayers, about the only way out is to file bankruptcy and change the playing field. There is no other way out because the money is not there......The proof that the people on, supposedly, your side of the bargaining table at a public sector union negotiation, the proof that you have no representation is the fact that these towns and cities are declaring bankruptcy because they can't afford to pay the benefits that were given away by their alleged representative." 

WATCH OUT FOR THOSE EXITING IF YOU PLAN TO MOVE IN.... Brinker said: "And for those of you who are thinking of moving into any of these communities across the country that are fiscally mismanaged, think again. Check it out before you make that decision so you don't get hit on the way in by that swinging door coming your way from those getting out of town before the local taxes soar." 

NO LAW SAYS YOU HAVE TO PAY, YOU CAN MOVE.....Brinker said: "Fortunately there's no law that says that you have to pay benefits to workers in the public sector that are way better than any benefits you may or may not have yourself. And remember, there is no law that says you have to provide bloated benefits to those who win them at the bargaining table because you, the essentially unrepresented taxpayer, have no recourse......Remember, you can choose to live wherever you want. You might have to make some changes in your life.....That means you are free to re-locate if you have to, if that's your best option."


Honey EC: I wonder if Brinker has an idea how it feels to be forced to move out of your own state or city because of the tax-suckers and big-spenders who have driven California to the edge of bankruptcy and still keep wanting more and more? Or to know that cuts are being made to vital services and felons are being released early from prisons.


GIVE CREDIT TO UNIONS IF YOU WANT TO....Brinker said: "Now if you want to you can give great credit to public sector unions that have won great benefit packages in their local communities....If that's where your sentiment rests."


WHAT HAPPENS IF TAXPAYERS MOVE RATHER THAN PAY UNION BENEFIT PACKAGES? .....Brinker said: "Then the question arises.....if you and others re-locate and leave the city, who pays for benefit packages? .....The answer is, that will be resolved in local bankruptcy court. It will not be your problem. After all, you did not create the problem, so why should you pay for it. The only answer here is fiscal responsibility and we're a long way from that." 


MEDICARE BLACK HOLE IN BUDGET.....Brinker's comments:  The weakness in the Simpson-Bowles budget plan was that it failed to address the "black hole in the budget known as Medicare."  The average couple pays in about $130,000 and receives about $350,000 in lifetime benefits -- will pay out trillions more than beneficiaries paid in. 


EXPLODING NATIONAL DEBT AND HUGE INTEREST RATE GAP....Brinker comments: Average interest we are paying on the national debt (almost $16 trillion) is about 2%.  Looking back historically, the average interest rate on the national debt is 5.8%, so there is a gap between normalization of interest rates and today's interest rates of about 4%  ($640 billion annually).  That is the increase in interest costs that the taxpayers are exposed to as the national debt explodes. 

SEQUESTRATION:  Brinker commented that even this is a failure because it is only $108 billion and cuts all programs including the good one.


"DRONES AND DREGS" IN CONGRESS GOING ON RECESS FOR SUMMER....Brinker said: "How can they possibly go away for the summer with all of this on the table. This defies belief.....Obviously, the statesmen have left the building and we are now ruled by the drones and the dregs at the federal level....And if you were one of them, you would be embarrassed to collect your paycheck and your benefit and retirement package while Rome burns. This is truly, utterly pathetic."


FDIC PAY ON NEGATIVE INTEREST RATES?  Caller Jack asked if it was legal for banks to pay negative interest rates,  and what about the FDIC. Brinker responded  that we are seeing negative interest rates in the sovereign community, such as Denmark, so it can happen. Brinker said: "If you agreed to put your money in a one-year bank CD at minus 1%, then you would agree that a year from now, you are going to get back 99 cents on the dollar. If the bank should fail at the end of that period, why couldn't the FDIC simply make good on the insured amount up to 99 cents on the dollar. I don't see why that would be an issue. Brinker said he'd certainly like to get a legal opinion on that, but he wouldn't rule it out." 

GRIDLOCK, GOLD, FISCAL CLIFF?  Caller PJ from Indiana said he was thinking of dumping all stocks and buying gold if Obama is re-elected.  Brinker's comments:  No matter who wins the White House, we are going to have gridlock even though they will have to come up with a band-aid for the year-end Fiscal Cliff right after the election. The only way to get power in either Party is to have the White House, the House and 60 votes in the Senate.


Brinker said: "I'm rating the chances of either Party getting 60 Senate seats would be close to zero.....I don't see any way in the world that things are going to change.....In terms of actual change, if the Republicans win the White House the Democrats are going to go on defense. Right now, the Democrats are in the White House and the Republicans are on defense....They both are gridlocked, both ways."

Honey EC: For years, Brinker touted "gridlock" as the best possible election outcome. Now he  sounds like it's a disaster.


DON'T RAISE TAXES NOW....Brinker said: "For right now, for January, they should forget about increasing taxes. This is no time, with an economy that's growing slowly, below trend, which is exactly my forecast, they should not be increasing taxes at a time like this.....They should come up with a delay on the tax increase proposal until the economy is in better shape. They do need a long-term solution at the same time. That solution would be a ten-year program to get the federal deficit within 3% of Gross Domestic Product on an annual basis." 


SOME HEALTHCARE REFORM QUESTIONS...Brinker said:  "Why is it that if you have a job and receive possibly 5 figure health benefits you don't pay any tax on those benefits?  But the person next door does not have those benefits at work so has to go out and buy a healthcare policy,  and has to pay for it in after tax dollar? Second, why has the so-called health reform taken the  flexible spending accounts.....and put a very low cap of $2500?....There used to be no limit at all.....This is money you're allowed to set aside for medical expenses....The system is totally screwed up....This is AFTER health reform....Long term it would sink the battleship.....Now obviously, this is going to be addressed. The question is when  and how much additional debt will pile up in the interim." 


SLAUGHTER IN AURORA, COLORADO....Caller William from Littleton, Colorado mentioned the sadness in his area which is near Aurora, a suburb of Denver, not far from Littleton.  Brinker called it a "slaughter and  massacre" that is "depressing and beyond words."  He said it was especially tragic because there were so many young people and children killed. Brinker said: "For everybody at Moneytalk, all of our prayers and sympathies are with the victims, those injured, their families and the entire greater Denver, Colorado community because this is one of the most devastating tragedies in the history of the country as far as I'm concerned. A very, very tragic day for America."


Honey EC: I agree with Brinker, this is an act of unfathomably evil,  and one cannot even imagine the pain and suffering the victims and their families have gone through. This has to be especially disturbing to Brinker because the Marketimer office is located in Littleton. His son and family live in the area and has his own office at the same location as Marketimer.  Here is a bio: The Aurora Shooting Victims.

CALIFORNIA COMMITS SUICIDE:  Caller Paul began his call by telling Brinker that he had done well because he "stayed on his true financial path."  He then talked about  how Jerry Brown has proposed some tax increases including a sales tax increase, while voting to build a high-speed train -- 68 billion dollars and rising, plus giving a 5% raise to legislators, 

FUNNIEST? QUOTE OF THE DAY.....Brinker replied to Paul:  "If I was a voter in California and I was asked to vote on a tax increase and then I found out they were giving raises to state workers, I would vote no. That's ridiculous. You've got to be kidding......Where did the idea come from in the first place-- that the new boss, Jerry Brown would be exactly the same as the old boss, Jerry Brown and that this would represent progress for California? Where did that idea come from? This gives color to that great line from the song: 'Meet the new boss, he's the same as the old boss because he is. He is the old boss....He's the same guy. It's stunning to me the things that happen at the election box are stunning."


Jeffchristie's Moneytalk Final Exam Question of the Day:


Bob took a call from Paul in Sacramento.  He thanked Bob for his advice and said he stayed on:
A)  The shining path.
B)  The true path.
C)  The road to riches.
D)  The road to salvation.


Brinker's third-hour guest-speaker was Maneet Ahuja: The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds 


San Francisco, Ca. KSFO 560: 1-4pm  (Good News! KSFO now archives Free Moneytalk on Demand immediately after broadcast and carries it for seven days. You can download all three hours and listen on the go.)

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July 20, 2012, Bob Brinker's Latest Stock Market Views

July 20, 2012....Bob Brinker's latest outlook on the stock market is bullish. Last Sunday on Moneytalk, he repeated his recommendation to dollar-cost-average for those putting new money into the stock market.

Brinker has kept his Marketimer model portfolios fully invested since March 2003 -- and there doesn't appear to be any possible change in that stance anywhere on the horizon.

As of the July issue of Marketimer, all of Brinker's timing model indicators are in positive territory -- and he sees more upside in what he believes is an ongoing cyclical bull market.

Brinker's four timing model indicators are: 1. Economic Outlook; 2. Monetary Policy; 3. Investor Sentiment; 4. Equity Valuations.


In April 2012, Brinker first raised his S&P target range to the "upper-1400s to lower 1500s."  In May, 2012, he extended the time-frame for the target range projection to "within the next 12 months." The target range remains the same as of July, 2012. 

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July 17, 2012, Bob Brinker's Moneytalk Free on Demand at KSFO

July 17, 2012...Great news for Bob Brinker's Fan Club. KSFO has resumed the free archiving of Moneytalk. All three hours of last Sunday's program are now available if you missed the program or the third hour guest.

They have a nice resume for Brinker on the website:

Bob BrinkerSunday: 1:00 PM - 4:00 PM

Bob Brinker brings more than 25 years of investment management experience to his role as host of the popular weekend financial talk program, Moneytalk. On the program, Brinker answers investment questions from listeners around the country and discusses the week’s most relevant economic issues. The show has been syndicated nationally by Citadel Media since 1986. 

In addition to hosting Moneytalk, Brinker publishes Marketimer, a monthly investment newsletter. Marketimer covers stock market timing, Federal Reserve policy, specific mutual fund recommendations and model portfolios for various objectives. 

Brinker is a longtime member of the New York Society of Security Analysts and the Financial Analysts Federation. He has served as Investment Council Vice President at the Bank of New York on Wall Street and as Chief Investment Officer for the U.S subsidiary of Guardian Royal Exchange, London. Bob is also the co-founder of the B J Group, an investment management subsidiary of Centurion Capital Management. /http://www.bobbrinker.com/

KSFO maintains show archives for seven days after broadcast. You can either listen or download and save so that you can listen at your leisure: 

Talk Radio KSFO 560 Archives

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July 15, 2012, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

July 15, 2012...Bob Brinker hosted Moneytalk today.................(comments welcome)

STOCK MARKET.....Brinker said: "The S&P 500 is at 1357, and that's a total return so far this year of 9.7%, and that's well and good. We're glad to see it....In fact, it's totally excellent in a zero interest rate world.....There certainly has been value in this stock market. Investors have recognized that value and that is one of the reason you've seen a 9% in the total rate of return this year."

Brinker told caller Dave from New York that he is still recommending dollar-cost-averaging new money, preferably during periods of weakness -- but he doesn't  think that prices are "at bargain basement prices" right now.

Honey EC: Brinker's latest S&P 500 target range is "upper-1400s to lower 1500s" by May of 2013.

ECONOMY.....Brinker said: "We've been talking ad nauseam on the program about the slow growth in the economy. The first quarter Real Growth Domestic Product annual number, 1.9%.....When you take a look at the long-term trend growth of GDP....adjusted for inflation, you see that the long-term trend is 2.7%.....Right now, I'd say you're looking at a slow growth economy as far as the eye can see.....My target range for real GDP this year is 1.5 to 2.5....all below long-term trend growth."

NO RAPID GROWTH.....Brinker said: "I think that people out there talking about rapid growth, accelerating growth, high growth are smoking something. I have no idea what it is, but it's not good for your mental health."

NO RECESSION....Brinker said: "There are many people out there who are pessimistic about the economy.....They fall into two camps. They fall into the camp of economists who are pessimistic because the work they do tells them they should be pessimistic.....Another category which I think should be completely disregarded....which is the political."

JOBLESS CLAIMS.....Brinker said: "This past week, the Department Labor report showed that initial jobless claims dropped 24,000 from the prior week, and they a now at a four year low. That's the best reading in four years -- 350,000 -- the lower, the better on that number.....But the reality is, the jobs growth is below what it needs to be to get unemployment down......We have now been suffering below trend jobs growth for eleven years in the USA.....Right now the unemployment rate is at 8.2%."

AIRBUS BUILDING NEW FACTORY "IN THE SOUTH".....Brinker said: "We are delighted to see that Airbus has decided to build a new factory in the south. It's wonderful to see a foreign company build a major manufacturing facility here in the USA."

WORRY ABOUT INTEREST ON NATIONAL DEBT? Larry from Indiana asked Brinker when we should worry about  the United States being able to pay its national debt. Brinker replied: "An easy answer. You look at the interest rate that we have to pay on our sovereign debt....Because that tells you what investors around the world think of the quality of your sovereign debt....You know you have a problem when the interest rate on your sovereign debts starts to soar."

Honey EC: The National Debt is now very close to $16 trillion.

BRINKER ON CNBC COUNTLESS TIMES: When caller Ray from Illinois asked Brinker why he wasn't invited to make appearances on CNBC, Brinker replied: "Firstly, I've been on there countless times going all the way back to the 1980s. I don't know if you are aware of it or not, back sometime ago, I had my own broadcast on the Financial News Network. A thirty minute broadcast on Friday afternoon  and evening on the subject of investing and mutual funds. So in addition to guest appearances, I've had many opportunities to do that. You have to understand that the people who are on there, don't have an opportunity to talk to an audience on a regular basis as I do here on the Moneytalk broadcast.  So the places me in a unique position relative to that because I the opportunity to share my views on a regular basis on our broadcast.....As far as whether they confuse people or not, I think probably what you mean is they seem to feel that they have an obligation to put on a bull and a bear....I can see how people can get confused because they are on opposite ends of the spectrum."

BEWARE OF CALIFORNIA MUNIS -- GROWING CITY BANKRUPTCIES....Brinker said: "Let me remind you again, when you buy a general obligation of a place like San Bernardino or Vallejo, or any of these places, when they go bankrupt, your money is at risk. When you buy a general obligation of a city, county or municipality, make absolutely certain that you understand the finances, you understand the pension plan in that community because in a lot of these cases, these places are being dragged down by the overly generous public sector plans that they have promised to employees....There's nobody representing the taxpayer when a public sector union comes to the table, they pretty much get their way.  And that's what we are seeing now with bankruptcy filings in California from these domicile that have mismanaged their finances grossly....It's a sad story."

CALIFORNIA PUBLIC UNION EMPLOYEE PENSION SPENDING....."Brinker said: "In California, the pension spending has been growing 11.4% annual from 1999 to 2010. That's the kind of thing that will bankrupt any place.  Sooner or later, the time runs out.  The Stanford Institute issued that pension spending average....Pension costs in Stockton, California in 2002 were 12 million dollars. Now they're 30 million dollars and they are projected to double to 60 million over the next five years. Of course, Stockton has already filed for bankruptcy. So if you live in one of these communities that has come forth with generous pension plans and benefits for public sector workers, don't assume you are ever going to collect that money. The only way you do collect that money is if the taxpayers of that municipality are willing to pony up. I can pretty much tell you that the typical person who lives in a community, when they find out what these are, that they are going to move out. Now of course, that affects real estate values.....They are not going to pay public sector workers better benefits than they themselves receive in their own private sector jobs."

Honey EC: Brinker may not realize that this has been going on in California for a very long time -- those who work for private sector almost never get the cushy pensions and benefits of public union employees, including teachers and school janitors.

BAD TIME FOR NEW TAXES: When caller Allison from Carolina asked Brinker to talk about the expected tax increases ahead, Brinker replied: "Firstly let me say that it's a poor time to increase taxes, period. I would not be increase taxes in a slow growth  economic environment where jobs growth has also remained below trend."

TAX INCREASES COMING FOR MIDDLE-CLASS TAXPAYERS.....Brinker said: "We had a caller earlier in the hour talking about the healthcare reform tax additions that are going to be hitting. There are a number of areas where middle-class taxpayers, who were promised they would not see a tax increase. Flexible spending accounts are going to be capped at $2500. Prior to this law there was no limit....That's the amount set aside to pay medical expenses. That is a de facto tax increase on the middle class. Also starting next year, the medical deduction itemization bar is being raised to 10% of adjusted gross income, up from 7 1/2%.  That is a de facto tax increase on the middle class. Also the penalty on non-medical withdrawals from Health Savings Accounts is doubling from 10% to 20%.  That is a de facto tax increase on the middle class. How many politicians have promised no tax increase, only to do a 180 and hit the tax increase button? It's a long list going back many decades."

Honey EC: Yeah Bob. There have been some presidents who have gone back on their word not to raise taxes -- including the first George Bush and  Bill Clinton, but neither of them were "re-distribute the wealth" zealots like this one.

PRESIDENT'S RIDICULOUS PROPOSAL TO  INCREASE TAX ON DIVIDENDS.... Brinker said: "Democrats in the Senate this weekend are looking to set the top tax rate on dividends at 23.8%. That would be almost 20 percentage points lower than the ridiculous proposal of the president, which is to take the top tax rate on dividends to 43.4% federal. Then if you're in a place like California in the top bracket, you're at 54%. A lot of states, you'd be over 50%....I have no idea what the White House is thinking....After all, when you get a dividend from a corporation, that money has already been subject to the corporate income tax. Then the money is passed through in the form of dividends after it's passed through income tax filter. Then it's paid out to the shareholders. Then it's subject to tax again. Right now, it's subject to a maximum of 15%.....It's absolutely incredible to me that the president of the United States is willing to tax corporate dividends at 43.4% plus state taxes in the highest income taxes. I've never seen anything like that.....It's unbelievable."

CONGRESS HAS TO ACT OR EVERYBODY'S TAXES WILL GO UP IN JANUARY....Brinker said: "Congress has to do something, because if they don't do something, tax rates across the board -- everybody's tax rates -- will go up in January. In addition to that, tax rates will go up on capital gains, dividends, estate taxes. Of course we have the expiration of the 2% cut in the payroll tax at the end of the year. All the new health care taxes that are coming on, including the 90 basis point increase in the employee portion of the uncapped Medicare payroll tax on high earners. And including the 3.8% health care tax, so called Medicare tax on unearned income.  In addition to this, the Democrats are proposing a 3 1/2 million dollar per person exemption on the estate tax. It's $5.12 million right now....And they are also proposing a 45% tax rate compared to the current 35% tax rate. All have to be decided before year end.....Dividends have already been taxed."

FUNNY CALL OF THE DAY:  Chuck from Chicago had a  question about public officials working for two weeks and getting full pensions. Brinker replied:  "Chuck, here's the way I look at it. You're a Chicagoan. I am not a Chicagoan. I've been to Chicago, but I'm not a Chicagoan....I would never dare to try to teach a Chicagoan like you  anything about political corruption. You know much more that I do."

This week's Jeffchristie Moneytalk Final Exam Question:

Bob Brinker has mentioned that he thinks many local municipalities are headed for bankruptcy. The reason he gives for this is:

A) Costs incurred by illegal aliens.

B) Embezzlement by government officials.

C) Excessive union labor costs with high pension benefits.

D) Tax evasion by local residents.

Brinker's guest-speaker today was Brendon Moynihan:  Financial Origami: How the Wall Street Model Broke (Bloomberg)

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July 10, 2012, Lakshman Achuthan Says Recession Here Right Now: Bob Brinker Says He's Riding Ship of Fools

July 10, 2012....Bob Brinker is waiting for an apology that may never come.  Today,  Lakshman Achuthan, Co-Founder and CEO of Economic Cycle Research Institute (ECRI), made a personal appearance on Bloomberg Television.  He announced that "the recession is here right now."  

October 2011, I wrote: "Lakshman and Bob in the Thunderdome. Two men enter, one man leaves," because soon after Achuthan's recession prediction, Bob Brinker began regularly slamming the "recession bears." 

In February 2012, Achuthan made another appearance on CNBC and restated that a recession was coming, but might take up to six months to become apparent. I wrote about it and posted a video of his appearance HERE.

In March 2012, Bob Brinker said:  "You know, we have these private forecasters out there going around beating the drums of recession. Warning everybody that the US is going back into recession. Batten down the hatches and get in the bomb shelter because we are in a lot of economic trouble. That is what they say, but that's not what we see. So far, we see an economy that continues to grow slowly.......One of things that amazes me about the private firms that are forecasting a recession in here is their conviction. I mean they talk about it like it's a fait accompli. They talk about it like it's for sure -- take it to the bank. Well I'm not taking it to the bank. What do you think about that? I think these forecasters are wrong, but I'll look forward to their apology....this is Moneytalk."

May 2012, Achuthan made another appearance and said the recession would be apparent by mid-year.

July 1st, Brinker said: "....it's been a terrific stock market period so far this year. Which flies in the face of so many that were out there predicting a bear market, predicting a recession. I tell you right now, they all look like they're all passengers on the ship on of fools right now. Those people out there predicting the big, bad bear. Predicting the recession. I mean, they're just passengers on the ship of fools." __ Moneytalk

July 5, 20112 Marketimer, Bob Brinker wrote:  "In summary, the Marketimer stock market timing model remains in favorable territory and we anticipate additional stock market progress going forward."

Rather than post a link to the Bloomberg video where they have cut out the first part that shows Achuthan saying that the the economy was "tipping into recession,"  you can watch it on  his website where it has not been edited: Businesscycle  

 Watch Video here: Businesscycle

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July 8, 2012, Bob Brinker's Moneytalk: Neale Godfrey Filled In

July 8, 2012...Bob Brinker took the day off. Neale Godfrey filled in........(comments welcome)

Neale Godfrey went over her lengthy resume.  She has written many children's books, worked in banking and opened a bank for women. Godfrey's level of conversation is so simplistic that I almost got the feeling that she forgot that she is talking to adults.

Bob Brinker didn't show much respect for her, or any of his fill-ins (ditto his listeners), back when he was posting with an alias on Silicon Investor.

Bob Brinker, "anonymously" writing as mister topes:

• From: mister topes Sunday, Feb 15, 1998 10:50 PM
  View Replies (2) | Respond to of 20900
  .
  "Your comments are salient to say the least. Last year I counted the weekends I was forced to endure the likes of William, the Earl of Boredom, Flanagan and Neale, Did You Buy My Latest Book, Godfrey, and the Motley, Greater than all, Fools. It came to a grand total of nine weekends without The Brink's on air presence. Assuming his new contract includes nine or ten weekends off, I would say the odds of him being on vacation during a sell signal are very good to excellent. Wouldn't it be neat to see Brinker issue a sell signal while on vacation from radio, have his subscribers sellout at or near the top, and then see the market collapse with all the radio freeloaders left to fend for themselves when he returns only to tell them the horse is out of the barn and they are on their own! Would not surprise me in the least. Poetic justice!"

Godfrey commented that Bob Brinker was taking a "well-deserved day off." Jim makes a good point.

Jim said...
I just tuned in long enough to hear her say that Bob Brinker is taking a "well deserved" day off. If a person deserves a day off for every nine hours they work then the average american worker deserves a very long vacation. 

.July 8, 2012 3:06 PM

ACCORDING TO GODFREY WE ARE IN A RECESSION:

Godfrey did not talk about investing.  She wanted to talk about the "recession." She must not know that Bob Brinker claims that those who say there will be a recession are "riding on the ship of fools." And she must be ignorant of economic data because we have not been in recession for some time. Indeed, economic growth is small, but it is still growth. 

Godfrey's topics, she said: "The economy, not only here, but overseas as well. We live in one globe....Let's talk about how the recession has hit your home, and what you would like to do to fix it. The recession has affected all of us. Are you looking for a job? Have you recently gotten a job? Have you recently gotten laid off? What are you doing? What are the things that are bothering you? We want to talk about your life, your world, the globe, the economy. How are we together going to fix our problems. We can learn from each other today. Be part of the show. Pick up the phone." 

While Godfrey sounded like she was dying to hear the callers talk about all that fascinating material, it was cruel and unusual punishment for me, and I won't subject you to much of it.  LOL! 

Godfrey's political views are extremely left-leaning.  She made the statement today that under Obamacare,  the middle-class is going to have their health care paid for by the "rich." That is factually incorrect.

FUNNY CALL OF THE DAY: There was one hilarious caller today who was difficult to understand because of his heavy accent. He told Godfrey that he wanted full enjoyment (or possibly full employment); twenty-seven hour work weeks; fifteen dollar minimum wage; when unemployment went higher, work weeks should become shorter; transportation and buildings paid for by the users, and enough housing for all colleges. 

Jeffchristie's Moneytalk Final Exam Question: 

Posting on Silicon Investor with the alias DonLane/MisterTopes, Bob Brinker made which of the following comments about Neale Godfrey?

A)  Neale, I am the greatest woman bank president, Godfrey. 

B)  Neale, I wrote more books than most people have read, Godfrey. 

C)  Neale, did you buy my latest book, Godfrey. 

D)  Neale, Tweet me, Godfrey. 

Honey here: Very soon, I will do a recap of Bob Brinker's latest Stock Market Timing Update.

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July 5, 2012, Is the Starship Moneytalk the Good Ship Moron?

July 5, 2012....Last Sunday, Bob Brinker said that those who are predicting a recession in the face of such a great stock market are "Passengers on the Ship of Fools"  (see July 1st show summary).

Last Tuesday, Mark Levin talked about Bob Brinker's "weekend" show and said he was "Riding on the Good Ship Moron."

Thanks go to TFB who reported this and  made a Youtube video for us. You can listen to the section of Mark Levin's show where he says that anyone who thinks the economy is doing well because the stock market is up must be riding on the "Good Ship Moron" and is an "economic illiterate." (see link below)

Levin gives some facts about current unemployment, manufacturing contraction,  and other economic data that makes Brinker's  bear-bashing last Sunday look questionable.

As Levin says in the video, "Most of the indicators suck," but as of July 1st,  all components in Brinker's Timing Model remain in favorable territory."  

* The Marketimer timing model consists of four components: Economic Outlook; Monetary Policy; Equity Valuation; Equity Valuation; Investor Sentiment. Bob talked about his timing model at a public Leukemia event in San Jose a few years back, and I double-checked in Marketimer -- it has not changed. 

BE ADVISED: 

* Bob's timing model missed the worst major bear market since the Great Depression in 2008-'09, and his model portfolios lost 57% -- top to bottom. November 22, 2008, this exchange on Moneytalk: Caller Darryl asked: "Did your market timing model detect any of this chaos in the market?" Bob Brinker answered: "It did not."

Watch The Fluffy Bunny's five-minute video of Mark Levin slamming daBrink (LINK)

You can listen or download Levin's whole July 3rd show HERE

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July 1, 2012, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

July 1, 2012....Bob Brinker hosted Moneytalk today.........(comments welcome)

STOCK MARKET: Brinker said:  "The first half is done. We have the first six months of 2012 in the books officially, and it's been a terrific stock market period so far this year. Which flies in the face of so many that were out there predicting a bear market, predicting a recession. I tell you right now, they all look like they're all passengers on the ship on of fools right now. Those people out there predicting the big, bad bear. Predicting the recession. I mean, they're just passengers on the ship of fools. We'll just let those people sail on because they are obviously clueless.  S&P 500 a little above 9%. That's pretty good when you figure we are basically in a zero interest rate world....."

Honey EC: Brinker's bullish confidence in the stock market is reaching the same level it was in 2008 just before the market dropped 57%.  Back then, he was bashing the "Cassandras" who were predicting a recession and stock market correction.  It's the same message now with "ship of fools" -- just voiced in different words. Some might wonder if this is a contrary indicator. 

WHAT DOES BRINKER'S 4% RULE APPLY TO?  Caller Sandy from Folsom said she followed Marketimer model portfolio III, which is a balanced portfolio (50% stock, 50% bonds). She  wanted to know if Brinker's 4% rule  on individual stocks should be applied to the whole portfolio or just the equity portion. Brinker explained that if you have 50% of your assets in the stock market, that is the portion that you would use to apply the 4% rule.

Honey EC: Perhaps some of our resident mathematicians can give us an example based on dollar amounts that will be helpful.  IN EDIT Monday: By email, RP said:

"You don't actually need to use money but I will. 4% of 50% is 2%.
So if your total portfolio is $100,000 then you would have $50,000 in stocks and no more than $2,000 in one stock."

WILL JANUARY TAX INCREASES (see below) AFFECT THE STOCK MARKET IN 2013?  Brinker unequivocally stated that he did not make stock market forecasts years in advance, and has not made any forecasts for 2013. He thinks it is too early to make 2013 forecasts, but that he had made forecasts for 2012, but none for next year.

Honey EC:  I never cease to be surprised when Brinker makes statements that I know are simply not true.  Someone correct me if  I'm wrong, but isn't 12 months from  May about six months into 2013?

*  In March, 2012 issue of Marketimer, Brinker wrote: "....we are projecting a rise in the S&P 500 Index into the mid-to-upper 1400s within the next 12 months..... a slight increase from our prior target range in the low-to-mid 1400s range."   

*  In May 2012 issue of Marketimer, Brinker wrote: "We expect to see the S&P 500 Index trade into the upper-1400s to lower 1500s range within the next 12 months...." 

BONDS: Brinker said: "Not much going on with bonds except the yields are essentially at or near record lows. There has been price appreciation along the way as yield went down, but now yields are down."

MARKETIMER VANGUARD GINNIE MAE FUND WEIGHTINGS:  Caller Fred from Nebraska told Brinker that he had 40% of his portfolio in GNMAs. Brinker said that was much more than he recommended -- that he had "a 15% GNMA weighting in Marketimer model portfolio III,  and a 20% GNMA weighting in the income portfolio." 

Honey EC: Heads up: Brinker's model portfolio III is quite over-weighted in equities now, so beware if you follow it and think you are invested in half bonds/income funds, and only half in equities. 

 Also, his income portfolio contains some funds that some would consider on the risky side. For example, a 25% weighting in Vanguard High-Yield Fund (VWEHX). I own it and don't think it's very risky, but if the stock market goes down or crashes, it will too. 

Another fund that is doing well, but is also mostly high-yield holdings is DoubleLine Total Return Fund. There's  a 20% weighting in the income portfolio.  Of course, one also needs to remember that Brinker's income fund is off-the-books for his "official" performance record-keeping (Ditto, Mark Hulbert's Hulberts Financial Digest rankings).  

EUROPEAN BANKS: Brinker said: "The European fiscal summit did yield some result. Namely, European Central Bank is going to be offering direct help to banks."

FDIC TO CONTINUE?  Brinker said: "I think will (extend FDIC past year end). They really don't want to see a run on the banks. People have become accustomed to $250,000 in FDIC coverage. They're comfortable with it."

SUPREME COURT DECISION ON HEALTH "CARE".....Brinker said: "The Supreme Court decided the health care reform act essentially is constitutional based on the taxing power of the US Congress....."

STATES AND EXPANDED MEDICAID COVERAGE:  Brinker said: "There are some wrinkles with reference to the states accepting the expanded Medicaid program....But if you are the governor of a state and you opt out... which is paid for 100% for the first three years by the federal government and at least 90% by the federal government after three years. If you opt out for the voters of your state....what is that going to mean for you on your re-election campaign....Don't be surprised if most, if not all, decide to accept the expanded medicaid coverage."

Honey EC: The federal government is paying a large part of the "free to recipients" expanded Medicaid coverage by cutting HALF BILLION DOLLARS from Medicare which goes to those who pay in all their working years and still pay a high fee when collecting it. At the same time the fed is  increasing the cost of Medicare tax.

FIVE HUNDRED BILLION NEW TAXES BECAUSE OF OBAMACARE:  Brinker said: "Of course, the health care reform act did carry a number of new taxes. Over a period of a decade, they add up to over $503 billion. And over 40% of that comes from taxes I want to talk about that are going to affect many of our listeners starting in January under current law.. Of the 500 billion dollars of tax increases, and the Supreme Court has been very specific in labeling this whole situation a tax. So there is no longer any question about labeling the semantics...It's clearly a tax and the Supreme Court says it's a tax....Many of our Moneytalk listeners are going to be paying this tax. Now these are affective under section 1411 and they go into affect in January.....

First of all, the increase in the hospital insurance portion of the payroll tax. Under this provision, the tax will increase the employee portion from 1.45% to 2.35% for families making over $250,000 a year.....There is no cap on the Medicare tax....The employer stays the same a 1.45% and the sum of the two if you're self-employed is now 3.8%.....In addition to that, this same section imposes a new payroll tax on investment. This tax applies to a Medicare tax on unearned income.....The amount is 3.8% of all of the money that is unearned income....Capital gains? Yes. Dividends? Yes. Rents and royalties? Yes....goes into affect in January....Now these new two taxes.....total 210 billion dollars between 2013 and 2019, and that is 30 billion dollar a year....."

ADD THE FISCAL CLIFF TAX INCREASE: Brinker said: "As we all know we have the fiscal cliff coming up at the end of the year. So you can add this to the fiscal cliff. The fiscal cliff already included the expiration of the George W. Bush tax cuts. They are scheduled to expire under current law, on New Year's Eve.....Across the board, higher tax rates....All way up to 39.6% for high earners....To put a tax increase like that on the books at a time when the economy is growing at a modest pace, is inadvisable -- to put it mildly.....

In addition to that, the 2% employee portion payroll tax is scheduled to expire at the end of the year. You're talking about roughly ten billion dollars a month in consumer spendable cash....So the fiscal cliff is a lot greater now than it was prior to the Supreme Court Decision. If the Supreme Court had thrown out healthcare reform, then this stuff would have been washed down the drain. As it is now, it stands."

CAN "HEALTHCARE REFORM" BE OVERTURNED? Brinker said: "For those who want to overturn it now, the bar is set really high....You would have to have the White House, the House of Representatives and 60 votes in the Senate.....It's a very high bar that's been set for overturning. The Supreme Court decision has essentially put this healthcare reform act into implementation position.....Going forward, unless something changes, you should assume, if you're in these categories I explained,  you are going to pay a lot more tax starting in 2013....This going to add up to real money." 

Honey in EDIT Monday: RP reminded me via email that due to the circumstances, only 51 Senate votes will be needed to overturn this bill. Brinker either didn't know this or neglected to say it. RP also sent a link to this article that explains how this works:  "Senate GOP Will Use Reconciliation to Repeal Obamacare"

SOCIAL SECURITY: NO TRUST & NO TRUST FUND: Brinker said: "The money that is taken out of the Social Security6 trust fun. Please forgive me for that word, because it really doesn't really apply. That money that's taken out of the Social Security fund with the payroll tax cut, is actually taken out of the general fund....If there's one that can get me really ill, it's that expression the Social Security Trust Fund. Let me tell you what. There isn't any trust in the Social Security Trust Fund. Once they went to general funding, they blew the whole thing up." 

NO LIMIT ON HOW MUCH INCOME TAX YOU ARE ALLOWED PAY:  Brinker quote of the day: Caller David from Danville, who is a CPA, said he was a very high income person who is all for having taxes raised to pay for health care. Brinker replied: "David, as you well know, you're allowed to pay as much tax as you wish. You're not restricted by the tax code. You can pay as much tax as you wish to pay... You are completely free to pay as much money as you want into the tax till every year and you are not penalized for paying additional taxes over and above those that are due on your income tax -- no limit on how much you are allowed to give to the federal government."

Honey EC: Reminds me of Warren Buffet who is always for raising tax on everyone else while he "shelters" his by giving billions to further his personal agendas.  If he took a salary, he might have a bigger tax bill. Or he could just send in a check, like Brinker suggested. When pigs fly....

In the third hour opening monologue, Brinker covered the Economic Calendar for next week.

* Jeffchristie's Moneytalk Final Exam Question: 

Bob Brinker said that people who were 
bearish on the stock market this year are: 

A)  Passengers on the Titanic.

B)  Passengers on the Orient Express.

C)  Passengers on the Ship of Fools.

D)  Passengers on the Concorde.

San Francisco, Ca. KSFO 560: 1-4pm  (KSFO offers FREE  Moneytalk on Demand  for seven days after broadcast, but it is temporarily down right now.)

Brinker's guest was Kirsten Grind: The Lost Bank: The Story of Washington Mutual-The Biggest Bank Failure in American History

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