May 31, 2011, Bob Brinker: What is Still Too Big to Fail?

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Posted May 31, 2011....On Moneytalk, Bob Brinker has repeatedly touted  Andrew Ross Sorkin's book  "Too Big to Fail"  as  the definitive book about  the 2008 financial meltdown.  Bob Brinker  highly recommends the book.  

Firstly, let's see what  Brinker thinks is still too big to fail. For example,  he thinks there are  several banks  that are  too big to fail:

February 20, 2011,  Brinker said: "I still think there are a few banks that currently are in the too big to fail category.....This is just an opinion, it could be right, it could be wrong. I think that Citigroup, Bank of America, J.P. Morgan and Wells Fargo. I think those four banks would be in  the category....of too big to fail."

Brinker thinks  that California's  government is totally dysfunctional, but  isn't sure  if it  is too big to fail.  However if it is, the Fed would have to bail it out. 

November 21, 2011, Caller Tom from Carson City told Brinker he was concerned that the Federal Government might have to bail-out California. Brinker agreed with Tom and said that if the state should become insolvent, there were two possibilities -- either the Fed would offer aid or it would not. It all boils down to this: Is California too big to fail?    

Brinker said: "I don't think there is any financial stability at all in the State of California. I think that the state of California is as dysfunctional as you can possibly get.....And when I look at the results of this last election in California, I don't see any reason to change my view that California is fiscally unstable......They cannot continue to do what they have been doing without becoming insolvent."  

Brinker sees many reasons why the US Treasury is too big to fail:  

May 22, 2011,  Brinker said: "I will say this, if the United States defaults on its debt, I can't give you any reason why anybody in the world should lend a penny to the United States Treasury.....If they actually do that, I can't give you any reason why anybody should invest in a US Treasury......Personally, I don't see how they can go into default because they're constantly going into the market and borrowing more money. If they go into default, they will access to additional borrowing. How are they going to fund a trillion dollar a year, plus, deficit, if they can't go into the market and sell debt. How would they do that? How could they possibly face the risk that they would be unable to sell Treasury debt because they were in default.....I don't see that as a realistic outcome."   

Brinker used  the May 22nd  Andrew Ross Sorkin Moneytalk interview as an opportunity to ask:  "Is the United States Treasury too big to fail?"

Sorkin replied: "Arguably it is. And the question is who, who, who can rescue us? The only people who can rescue us is the Fed which is the lender of last resort at this point. But will they really have enough firepower? And that is what we don't know. If a really big institution, when I say big, I'm talking a JP Morgan or a Citigroup, whatever, got in trouble, are we in a position to save them and what would really happen?

Part of the legislation that was passed around financial reform was this idea that a resolution authority, the idea that you could finally have the authority to take over one of these institutions. And it will be our last line of defense. The question is, will it really work, and there's no way to practice. We won't know until we do it, and I think that has a lot of people very anxious."

 The Andrew Ross Sorkin  book "Too Big to Fail"   debuted as a movie on HBO on Monday, May 23rd.  I have watched the movie,  and along with Brinker, highly recommend it.  The actors were  well-chosen look-alikes to play the roles of Henry Paulson, Ben Bernanke, Tim Geithner and all the others.


Here's a great video that's gives you a taste of the movie and the actors -- and the book author is in it.

http://www.youtube.com/watch?v=wVV6dzDOgQ0 

Dixiegeezer sent this  great  picture. (April Fool's Day?)  LOL!

May 29, 2011, Bob Brinker's Moneytalk: Summary, Commentary and Excerpts

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(Note to those who are having difficulty posting comments: I have made some changes, hopefully it will resolve the issues.)

Posted May 29, 2011....Bob Brinker's fill-in host was  Lynn Jimenez.  Jimenez is a business reporter for KGO radio.

The third hour of the program, Jimenez' guest speaker was  oil analyst John Kilduff.  John Kilduff  recently appeared before the United States Senate Committee on Energy and Natural Resources to give an assessment of the energy markets. Here are a few of Kilduff's  CNBC Predictions for 2011:   Emerging markets will falter; energy prices will trade lower;  the dollar will rally;  the US will take military action in Yemen; the Fed will step back from Quantitative Easing.

Jimenez'  interview with John Kilduff was very interesting.  Is it all to be believed? I report, you decide:

OIL PRICES JUSTIFIED?  Jimenez asks John if the prices we are paying at the pump are justified by supply and demand. John said: "It's hard to justify where prices are right now, given the fact that the economy is slowing down; given the fact where   inventories are around the world......prices should be about 20% lower."

WHAT ARE THE SOURCES OF OIL AND HOW MUCH DO WE USE?   John said:  "We consume about 16 million barrels a day. We import  about 10 million of that, so it's about 2/3rds of our requirement comes from outside the United States. Now we've gotten luckier over the years because a lot of that outside the United States increasingly  is coming from Canada....And Mexico as well pitches in with a good amount of oil....Venezuelans are a big source of our oil as well as Nigeria. And of course, we can't leave out Saudi Arabia, Kuwait as rounding out the top players of oil supply to the United States."

ARE WE RUNNING OUT OF OIL......Lynn asked John if the world is running out of oil. John said  "Oh not at all. They're finding more oil all the time, everywhere, but it is in deeper water....." 

IS DEMAND RISING?  John said: "Demand is actually somewhat stable....the US oil industry is worried about a peak situation. But not the peak oil one that we hear so much about. They are worried about peak gasoline demand in this country." Jimenez asked, then why are they charging almost $4 a gallon?  John said he simply had  "no answer to that question." 

ARE REFINERS MAKING PROFITS?   John said: "They are making wildly unbelievable profits right now. The spread is historic. I can remember where they made a dollar or two a barrel of crude that run through their refinery on gasoline. It recently got as high a $40 a barrel....Normal is about $9 to 12....Because they've been running at persistently low run rate or plants have  just sat idle for the past 18 months. It seems like we never quite got back to the historic levels after Hurricane Katrina, but we flirted with them. They have been running as low as 78% capacity."  

THEY ARE EXPORTING OIL AND KEEPING SUPPLY DOWN... John said:  "Yes, there have been significant exports of finished gasoline products out of the Gulf Coast down south while our own US gasoline inventories, instead of building ahead of the summer driving season,  actually plunged for the past six weeks and supplies got tight.....We had a slight increase in the most recent report last week, but we we're still around 84%, which is really paltry ahead of the Memorial Day Weekend......Folks are seeing remarkably high prices for gasoline and it's threatening the economy."

GLOBAL SUPPLY IN JEOPARDY....John said:  "There's no denying that supplies of crude oil are in jeopardy right now in the Middle East because of the revolutions that are going on there.....There's worried buyers besides us out there who are  potentially going to  step up their consumption of it, their storage of it.  The Chinese especially don't want to be left without sufficient supplies."

SHOULD WE HAVE ALLOWED SO MANY REFINERIES TO BE SOLD OR SHUT DOWN.....John said: "I think it needs to be looked at. What's happening right now with the refiners reminds me of what happened in California with the electricity crisis. When we first heard about it I was skeptical that they would idle plants or hold back on power. Sure enough, that is exactly what happened. So I'm not going to be as  quick this time around to say this investigation is without merit. The investigations that are without merit is at the local guy at the corner stand......"

Jimenez interjected  that part of the reason that refineries are holding back on supply is because the government offers them subsidies.

CAN U.S. POLITICIANS AFFECT OIL PRICES...John said: "Well there's only so much they can do. I think keeping the heat on the industry is a good idea, keeping them honest. I've always been in favor of being more aggressive in using the strategic oil reserves in times like this when supplies are threatened or appear to be threatened. But I also keeping it pure in terms a real national security resource like another terrorism attack....Should we go to a one single national gasoline standard that is may be a bit more polluting to bring down prices in times like this." 
 

STATE SALES TAX....John said: "In some of the states it's a percentage sales tax. So as the price gets to $4, the states getting a bigger and bigger piece of the gallon. It's roughly about 18 to 20%. And when we talk about price differences around the country, it's lower in the southeast where taxes are lower."

DROPPING DOLLAR EFFECTS..... John said: "How much the dollar's deterioration has driven these prices up, extraordinarily.....I hope it's as good for exports as they keep telling us because it's really painful. Not only at the gasoline pump but at the grocery store in terms of our basic food stuffs.  Commodities for the most part are globally priced in US dollars. So as the US dollar payment  gets driven down in its value, obviously  you need to have more of them to pay for the value of the food stuff or the barrel of oil.  So its direct inverse relationship. It's not necessarily pure and breaks down a bit from time to time, but recently and earlier this year, over the past two months,  as the dollar has declined, the inverse relationship has been about 90%."


FED PRINTING CAUSING OIL AND FOOD PRICE TO RISE...John said: "So as we sit here and watch the Federal Reserve do what they can to stabilize the economy and they feel the best course of action is to print more dollars and monetize our debt, that's driving the value of our dollar down against all major currencies and its rised the price of  gasoline and crude oil up. We are paying for that policy whether we like it or not.....


INFLATION SCARE IS TRANSITORY? John said: "Federal Reserve economists that I have the privilege to talk with from time to time will sit there and pound their fist on the table and tell you that until  unemployment picks up that this inflation scare is just that, it's not real. When they say it's transitory, that is  what they mean. It may be an artificially inflated commodity bubble because of monetary policy, but it's not real until there is fuller employment or even something approaching employment, and there's real wage pressure. Until that, they are not going to worry about it is what they tell me."  

Honey EC: All I can say to all of the above is, YIKES, YIKES, YIKES. :)

Dixiegeezer's photo of the entrance to a Botanical Garden in Florida (click to enlarge):

 


Moneytalk on demand and to go with Bob Brinker, is available for FREE audio/podcasting at KGO810 radio for seven days after broadcast. I download and save all three hours, including the third hour guest-speaker. (The program is archived in the 1-4pm time-slots.) If you don't download it from KGO within seven day, it's available at bobbrinker.com by paid subscription. KGO Radio Sunday
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May 29, 2011....Bob Brinker's Latest Bond Market Advice - Fixed Income

Posted May 29, 2011....

BONDS -  STAY SHORT-TERM,  November 21, 2010, Moneytalk,  Bob Brinker said: "My advice has been to stay away from long-term bonds right now. I don't think long-term bonds are a good place to invest right now. Short-term is another story..... "You want to keep the maturities toward the shorter end.....This is not a time when one should be looking to extend their durations and maturities."

 CALIFORNIA GENERAL OBLIGATION BONDS, Moneytalk, November 21, 2010, Bob Brinker said: "I don't think there is any financial stability at all in the State of California. I think that the state of California is as dysfunctional as you can possibly get.....And when I look at the results of this last election in California, I don't see any reason to change my view that California is fiscally unstable......They cannot continue to do what they have been doing without becoming insolvent...... you're buying the full faith and credit of the State of California when you buy one of these Build-America Bonds........

.....Yes, they get a 35% of the interest cost rebate from the Federal Government, but the principle is on the backs of the taxpayers of the State of California......There is so much uncertainty about how in the world the state is going to meet all of the promises it has made to so many people over the years. Including those who have worked for the state and are eligible for benefit packages for many years to come. Who's going to pay for all that? Investors are worried about that, as they should be......The way people are looking at California right now is, it's basically a debt machine. As a matter of fact, this coming week, they are scheduled to sell another $billion of tax-exempt General Obligation Bonds. And another $100 million of taxable-lease revenue bonds......The investor has legitimate questions now about the long-term solvency of issuers like the State of California." 

VANGUARD GNMA FUND (VFIIX)   Brinker has sold the  the Vanguard Ginnie Mae holdings from  Marketimer  model portfolio III and his  "off-the-books" fixed income portfolio down to 15% in each. On Moneytalk, Brinker has recommended using a "mental stop" for those who are concerned about the fund NAV dropping:

December 12, 2010, Brinker said:  "Now in terms of radio listeners who happen to have bond funds, my recommendation has been very clear that if you have any concerns about net-asset-value volatility, net-asset-value deterioration.....then you need to protect yourself. And the way that I recommend you protect yourself is with what is called a mental stop. And a mental stop is very simple.....You come up with a price on each of your bond fund holdings below which you are not willing to maintain the position, and if that price is published on any given night..... If you see your price then at that point, the next day, you liquidate your position......"

VANGUARD HIGH YIELD BOND FUND (VWEHX)...Moneytalk, August 29, 2010, Brinker said: "High yield bonds have been doing very well. We've included those in our Fixed Income only portfolio on Page 7 of the investment letter each month.    We've included for some time a high yield bond fund in there. And I'll tell you what, even today, the yield on that fund is about 7% taxable.....But we have taken a conservative position where we use that for fixed income only investors..."

Honeybee EC: However,  Bob Brinker took no calls about the drastic net-asset-value drop in the High-Yield Fund during the megabear market.  During that time, I received letters from people asking for advice as to whether to sell or hold,  so I'm sure people were trying to get on the program to talk to Bob  Brinker about it.

VANGUARD TREASURY INFLATION-PROTECTED SECURITIES (VIPSX)  On Moneytalk, Brinker has often talked quite favorably about TIPS and he has told callers who are worried about inflation, that they could get total inflation protection by owning TIPS and I-Bonds.

So based on that, one would have to conclude that Brinker is not worried about inflation because in the January 2011 issue of Marketimer, he sold all holdings of Vanguard Inflation-Protected Securities in the Fixed Income and Balanced Model Portfolios. But the actual reason that he gave was that he believes they are "over-valued based on its extremely low base interest rate of 0.38%."   He now has no recommendations for TIPS or I-Bonds in Marketimer.

May 1, 2011, on Moneytalk, Brinker said he sold all TIPS from model portfolios:

Caller Keith from Peoria asked Brinker if the high price of groceries would increase the rates on Inflation Protected Bonds (TIPS). Brinker said that right now, the Fed is a buyer of Treasury securities -- creating demand by putting in about 75 billion dollars a month (from QE2). This helps to keep yields down. Plus they have become very widely owned which creates demand for them. Brinker said: "Right now, I think that the base rates are too low. And that is why we have eliminated them from our model portfolios in the investment letter. We did that at the beginning of the year."

May 29, 2011, Bob Brinker's Latest Stock Market Timing Advice

Posted May 29, 2011....Bob Brinker's Marketimer model portfolios are fully invested, as they have been since March 2003. There has been no change to his asset allocation since March 2003. Bob Brinker currently recommends dollar-cost-averaging new money into the stock market.

Marketimer, May 2011, Brinker said:   "....we continue to prefer a dollar-cost-average approach for new stock market money...All Marketimer model portfolios are fully invested." 

How I Became a Brinker Follower

 I was a very devoted fan of Brinker's from the late 1980's to late 1999. I remember getting very upset when Moneytalk was preempted for a ball game.   I called the station many times, demanding that they put the program on (I don't know why it never helped). I bought a radio from the C.Crane Company that could be programmed to record the show (high-tech for those days). Yes, I admit, I was addicted to Bob.

How did I become addicted? It might have been a lot of things that happened in my life back then, but in spite of all that, I believe that Brinker’s voice has a confident (some say arrogant) mystique about it that inspires trust. More importantly, I believe that he is very clever at disguising his mistakes so that they are  not discernible to radio listeners.

I first began listening to Bob in late 1986 or early 1987; I subscribed to Marketimer soon after. At that time, I knew almost nothing about investing -- other than CD’s and money market funds. Even so, my dear, late husband turned the job of managing our finances over to me. He was a busy man and had bigger fish to fry. 8^)

I remember the day the market crashed on October 19, 1987 – it dropped 695 points or 25.6% from the top (Black Monday). I was listening to KGO810-radio that day when they brought Brinker on for a short guest-appearance during their stock market report. Brinker was very calm, and reassuringly said that all would be well – just do not sell any stocks or mutual funds. Ironically, it was only a few months later that Brinker sold all equities (in January, 1988) and started recommending Treasuries almost exclusively. That was when the market began to make gains. Brinker missed out on much much of those gains before getting back to fully invested.

Did this cause me to wise up? Only a little bit. When I got my renewal application, I sent it back to Brinker and said that I would not be renewing (then) because he had missed the bear market. But….oops…yes, I kept listening to him faithfully throughout all of the 1990’s. I found reassurance in his bullishness, and as history shows, he was correct to be bullish in the 1990’s (he returned to 100% invested in January 1991).

Because there was no internet back then where one could get information, once again I bought into Brinker’s spin. I actually did not learn that Brinker had sold out in January 1988 and had only returned AFTER the market had made sizable gains, until 1999/2000 when I found it posted on the  Suite101 message boards (now closed).

So I understand why, even when the facts about Brinker are staring them in the face, people continue to trust him. Wouldn’t you have thought that since I knew Brinker was bullish right up and through a bear market crash, that would have been enough of a dose of reality to wise me up? I had lost a bundle thanks to following him back then and yet over the years bought right back into Brinker’s on-air “mystique” all over again. So as I continued to listen to him and  with no one to compare notes with, my addiction solidified. I believed he had integrity and was completely honest with his audience. Ironically, my (now CPA) daughter was catching on to him and told me about it, but I thought she was mistaken – she was just a kid, after all. 8) (I’m sure people who handed their money over to Maddoff felt the same way about him.)

Over the years, I've heard many people actually give Brinker credit for the 1990’s bull market. LOL! I shake my head, but I understand. Even now, after Brinker missed this 2008/2009 absolute disastrous bear market, I totally understand why people feel the need to know what his “next call” is, no matter how many times his calls have  been  totally WRONG.

Let’s fast forward to late 1999 and early 2000 when I discovered Brinker's message boards (now closed) on his website. Sadly, I began to see firsthand that Brinker and his son, the webmaster, were arbitrarily deleting posts and banishing posters unless their posts were  flattering to Brinker. Additionally,  someone on the inside was imping another poster’s name and posting personal insults with it – that was confirmed.

I had made only a few posts on the site but enjoyed reading what others wrote. There were some who were posting general market statistics (Rande Spiegelman). I don’t remember Rande making any comments, but the statistics he posted made Brinker’s latest market forecast look iffy and there were others who were asking questions that Brinker obviously did not want to answer. I think that Rande was the first to go, and others followed. If anyone asked questions about the disappearances or what was happening to other posters, they were immediately terminated.

The banished ones were gradually finding their way to the Suite 101 Brinker Forums, but the connections had to be made via personal email because no one was allowed to even say the words “Suite101” on Brinker’s forums. MOF: many words were forbidden on the website. I got lucky because just before they stopped allowing people to post their email addresses, I posted mine and received an  invitation and a link to the new "speak freely" Brinker discussion forums.

I joined the Suite 101  site and posted  an introduction and a hello. I said that I was upset to see that mass, selective censorship was taking place on the Brinker boards. I was almost immediately terminated from Brinker’s message boards. Yes, they were monitoring Suite 101 forums.

At Suite101, someone started a Testimonial Thread for “Refugees” who got “Booted From Brinkerdom.” Here are a few of them, including testimonies by Will L., Rande and myself from Y-2000:

30. Jul 30, 2000 10:48 PM » JenL_2 - Send us your sick, your homeless, your weary and your poor.

Send us your sick, your homeless, your weary and your poor. Suite101 has become the ultimate refuge for Stage IV Brinkerbots who were kicked off of bobbrinker.com for any number of reasons. I thought we should start a tally of the number of people who were given daBoot by daBrink and wound up posting over here. I will start the BFB List. Simply give your name or alias and the reason for the boot. Booted From Brinkerdom.

1). Jonathon. This goes back some months when Rande all of sudden stop posting. I simply typed in what happened to Rande Spiegelman and ZAP! My post was gone. I tried it one more time, and ZAP! I was gone. Subsequent attempts to log onto bobbrinker.com were for naught. I wound up here, scared and afraid. Anyone else out there like me?

2) Thruhiker. "Where's Rande?" followed by a brief reference to the Saturday Night Massacre.

3) Della O. I was kicked off because I posted on THIS site how I believe the censorship on the BB site is contemptible!

4)UTEK Thread Hello, My name is Ultra and I am a "tech Stepper" It has been 1 year, 47 days and 12 minutes since my name was last mentioned, and not immediately deleted, on the brinker.bot site. Can you imagine what that site would be like if they could start their own threads without JR/SR's approval? Someone might actually start another UTEK thread and I'd fall off the wagon for sure!

5) Steve T. For linking to Ask Rande on Suite101

6) David K. Someone told me that you can't type in the word "Korn" without getting the boot. I guess Bob doesn't like that new hardcore grunge band known as KORN.

7) Phish. me too. I was booted a while back when it wasn't so easy, even before Rande. I posted s u i t e 1 0 1 . c o m and got a warning, but the boot came when I called jr a chickens___! I used a $ for the s, but that was the proverbial straw. The whole situation is hilarious. Bob is gonna self destruct as his image morphs from astute advisor to greedy bitter old prune. I wouldn't be surprised if this is his last year on the radio. Perhaps he's smart enough to get out before it deteriorates into a bigger farce than it already has become. Sad situation - it could have been very different. -Randy

8) Karin. The Reason.....Here is the reason I got kicked out permanently: (link) ( my home-page had the S101 link in it!!!) Karin

9) Wendell. BOOTED. Well, for a simple old fence sitter, I have gotten the boot from both the discussion site and chat room. I was reading the messages at BB.com and someone asked about that "other" site. Well, being such a nice guy I thought I would slip one in. I wrote, please go to: sweetoneohonedotcom and that should get you there. Soon after I joined the land of the banishees. Can't remember what I said in the chat room before Mak gave me the old heave ho. Woe is me. I feel so terrible not being able to post and chat with that elite circle. Wendell D. Semore

10) Will_L. I was a very bad boy and typed exactly what I saw happening in the market vs Brinker's call. I happened to also mention his omissions of things happening in the market. It was a very bad combination. I'm sure the devil made me do it.

11) Steven_Russell. I killed the Town Hall. Great thread. It would be nice if we could re-arrange them in order, with near dates of banishment. Steven Russell here. I killed Town Hall. My post on Town Hall, June 23 2000, 4:09 am, listed and explained the relevant chronological remaining Town Hall posts, by number and time, which were real-time responses to the Will Lxxxxx Imposter, and to the Real Will's immediate subsequent banishment. I also explained how to substitute the Win95 Edit Find function for the earlier-assassinated Search Tool. My post ended with, "This post will self-destruct in 5 seconds." (Kirk said "Not here it won't", and re-posted it here right away, at 6:51 am, on the Brinker Free thread) My original post lasted on Town Hall about another 2 hours, before Town Hall itself was taken out and shot, after the responses that my post generated provoked a wave of new Brinker banishments that morning.

Steven Russell part 2. Banished and purged Monday, June 26, 2000. After the Town Hall execution, I lasted another couple days on other threads, with some moderate continuing respectful criticism of the Brinkers' banishment tactics. I think the final straw was when I posted that the Brinkers were showing great disrespect for the entire community of posters by their overzealous censorship.

12) Suite101.com. Jen here - I used to read BB.com discussion everyday and if there were questions that could be answered by information already posted at Suite 101 I would post a link to the Suite 101 thread or message. I'd also follow up with an email and send along an invitation to join in the discussion at Suite 101. I was always polite and got many Thank you notes from BB.com members. The purpose was never to "steal" members away from BB.com but to share like sites with like-minded people. But the Brinkers apparently took it as "promotion of a competing site" and blocked all links to Suite101.com without warning sometime around June '99......Jen

13) Jack Swanson here... I got kicked off the Brinker site for...well...for just being Jack Swanson!! Jack jackswanson00@yahoo.com

14) martin_lowe - I got booted twice... from my home ISP as "Martin Lowe," for criticizing the Brinkers for the censorship. Also on my work ISP I had set up an alias, "Bobby Charlton," the England soccer great from world cup '66. In response to a poster as to where Will and Russell had vanished, I posted to "They have gone to Cyberheaven and have be re-born to a site of higher conscious." Martin

15) matttheduck - i wasn't fired, i quit! i quit posting/visiting the brinker site when rande got the boot. outrageous

16) Chris3 - I Quit, Too Like Matttheduck, I quit when Rande got booted. I posted a defense of Rande (name: Chris Fleur) immediately after the booting, about the same time Karin did (at least, I thought she was "our" Karin), and it amazingly stayed there (wouldn't happen now, and I don't know if it is still there. Don't even go back to see what's going on. Who cares? I had very much respected Bob and his investing education advice for years. My eyes were opened that day. I continue to be amazed at what I hear coming out of his mouth on the radio when I listen (I'm not even a little bit as faithful of a listener as I was before), and also amazed at what I read here that is going on over there. I am so disappointed in the man behind the curtain!!!!

17) Kirk (Kirk Lindstrom) - I Quit too! Jr told me via email that it was OK for Jen to keep posting links to our site. He also said that the link to us was accidentally deleted and he would put it back. Both were lies as two hours after the email he had his site deforming Jen's links changing  "suite101.com" to just  "suite101" and so they would fail. I stopped posting there as I don't like to support people that have been proven to  "make alterations to the truth".
Business wise, it is great to point out the snakeoil mixed with the good advice Brinker dispenses. He has mostly good stuff to say so it is hard to detect the snakeoil and so I feel we do a service pointing the snakeoil out. Even better that the  "Buzz" this creates makes our site fun rather than just educational. Of course, he hates us as we point out the snakeoil he is selling which makes it less attractive. Kirk Lindstrom - Editor: Investing and Personal Finance
 
18) Dave_K (David Kimball) - I Quit Also. Had listened to Bob for a long long time. His treatment of some callers was beginning to wear on me. Plus the fact that the education value had seemed to reach a plateau. Used to visit the BB site occasionally to see how informative it might be. Ironically began to see a new level of education coming from posts of people like Rande and Kirk. Visited site more often just to pick out their posts and learn something more advanced. They suffered an undue amount of criticism from good advice/comments even then. Their banning left no attraction to that site. Haven't lurked over there in several months. In addition, the effects of Bob's January call on my portfolio has reduced his credibility. His advice ranks pretty far down below a lot of notable market analysts and commentators these days. I still listen to the radio program when convenient but don't go out of my way to plan around it like I used to.

19) oneputt - me too -1st time was a long time ago, I might have been one of the first. I thought it odd that he would play a taped show and not identify it as one. I posted "Why would he decieve.....". After that I could not log on. I got a new name and password and then was kicked off for finally having enough of poobutt. I asked him bluntly why he intentionally lies when talking about this site. I no longer even read the posts over there. That site is banished from my browser's list.

Top 31. Jul 31, 2000 11:26 AM » Will_L - Much Better Off Like many who dropped by BB's site to find out what was up with the January sell signal, I found myself soon in the middle of a firestorm. Although not sucking up and asking very pointed questions, I treated everyone there with at least more respect than accorded me. After a while I became not just concerned about the wisdom of his call but rather seeing a side of Brinker that I didn't know existed. I began to suspect his motives in many of the things he was saying on the radio and doing on his website. My respect for someone I thought to be a straight shooter albeit an egotistical one eroded. His shinnanigans around his website in trying to smear the reputation of those who disagree with him including falsly posting or allowing others to do so without interference under their name and taking on aliases to attack and generally be a jerk on his own thread certainly demonstrated to me he was neither a straight shooter or someone I would trust at all. As such I was excluded from the site--along with about anyone who has disagreed with him. The way it happened I did object to. The fact that it happened, I really am thankful for. I wish I would have left a little sooner and just posted here. In some respects it is not right once you are no longer just differing on his market calls but think that he is quite the snakeoil salesman that I came to believe to post on his site. Although he pounces on posters, callers and other analysts who have the gall to disagree with him, he has the thinnist skin I have ever seen for someone in his role. So it is just better to talk about him and his calls --just like he loves to do others in the freedom that an environment like this offers. It's much better all the way around.
Aug 3, 2000 10:58 PM » Happy - I thought I should copy this over from the BB site before it get I thought I should copy this over from the BB site before it gets erased:

To: A Lackey (148898) Date: Aug 3 2000 11:50PM From: A Lackey Msg #: 148898 -------------------------------------------------------------------------------- Bob Brinker really blew this QQQ call. He did a perfect call on the botton in May, but he never called the sell, even when it went to 103. People called in and asked, but he put them down, saying he would call it. Today it went to 83.5, so people sold, on his advise to sell at 84. That is a wash since most people bought at 82. He made such a big deal about making a mental stop, not a limit sell, thinking that just because Bob Brinker thinks once the QQQ hits 84, it will just keep on dropping. The stock market does not take orders from the Great Bob Brinker! If you had a sell limit order, and it did not get activated, how lucky you were!! It closed up almost 7 points from your sell!! I THINK HIS ADVICE IS GENERALLY GOOD, BUT HE COMPLETELY MISSED THE CORRECT SELL AT 100. IF HIS CHARTS ARE SO GOOD, WHY DIDN'T HE CALL A SELL AT 100??? I listened to every program, and like a stupid simpleton, waited for his big sell order. NOW HE HAS EGG ALL OVER HIS FACE!!! I WILL USE MY OWN JUDGEMENT ABOUT THESE MOVES, AND NOT BE BOB'S SUCKER!! -- posted by Happy ________________________________________

. Aug 4, 2000 5:51 AM » Rande - It's a ROUND TRIP folks How many times have we said that you have to be right TWICE in order to be a successful market timer -- and even then you have to do it over, over, and over, and over, and over once you get addicted to the trading. Getting lucky once or twice only makes it worse, since that only increases the chance that you will delude yourself into thinking it actually has something to do with knowledge and experience. Nothing short of near-perfection will do when it comes to the round trip. Otherwise, transaction costs and taxes will deliver a minimum wage for all your effort and anxiety....IF you're lucky. -- posted by Rande

Honeybee here: The Suite 101 Brinker forums thrived for several years (but no longer includes discussion forums).    There were literally tens of thousands of posts and all viewpoints were welcome. Brinker could no longer completely get away with changing his stories or burying off-the-books trades. There was always someone who remembered what he had really previously said and when he said it, and they recorded it there.

It was in October, 2005 that I started my own thread at Suite 101 called: “Honey’s Brinker Beehive." I kept a record of what Brinker was saying and what others were saying about what he was saying. Later, I started writing brief weekly summaries of Moneytalk.

When I found out that Brinker had posted under an alias for years at a different site, I decided that those posts should be saved. There are now archives of all of those posts. Of course, it was not illegal at the time, but  some believe that Brinker used his alias to pump a stock (UTEK) that he had inside connections with. In any case, reading those posts is a big eye-opener and shows the true measure of the man. (If anyone wants to see copies of some of them, just let me know and I will post them.)

It was during this time that the personal attacks began. I won’t bore you with details, but suffice to say that any way a woman can be insulted, I’ve been insulted. Someone imped my real name (which I was posting with), and posted filth and sacrilege. I was horrified to think that anyone would mistakenly believe it was me, so I became “Honey.” The personal attacks go on to this day. Someone anonymously sends them to my blog. There are other things that have happened over the years – like having my bank accounts threatened “because junior is a computer genius," but I don't know who did that. However, I have made it clear to this person/people that all this sort of thing does is inspire me -- because they cannot silence me......

.....but that is not necessarily true. They have "silenced" me in different locations. They got over 3500 of my Beehive posts deleted (and thousands from other Brinker forums) at Suite101 just before they closed their message boards. The moderator of Fundalarm said he was afraid to allow Brinker to be discussed at all because of "letters" he had recieved.

I despise censorship and think it should only be used to enforce a site’s Terms of Use rules and common civility. I think that “book burning” in order to hide the truth is reprehensible.

As long as Brinker is spinning his web on the national airwaves each weekend, I intend to be the Honeybee that buzzes around the spider and reports the TRUTH -- to the best of my ability. So now you know a lot about what inspires me to keep a written record for those who are looking for it – and I am not bashful about throwing in a few EC’s along the way.

May 28, 2011, Bob Brinker Views on Rising Oil Prices and Inflation

Posted May 28, 2011....Bob Brinker has always said that rising oil prices do not cause inflation because it  acts as a tax on people.

RISING OIL PRICES DON'T CAUSE INFLATION.....Moneytalk, November 21, 2010,  Bob Brinker said: "Energy is way up in the past year. Energy, commodities up about 10%. Gasoline is up a big number. Fuel oil is up double-digit in the last year. But of course, rising energy prices alone don't produce inflation because they are weighted into the overall index......We have always maintained that rising oil prices act as a tax on consumers, and are therefore counter-inflationary as they have a negative impact on consumer discretionary spending power."

For over a decade, Bob Brinker's Marketimer off-the-books "Individual Issues" list has contained only two stocks (MSFT and VOD).    However in  May, 2009, Brinker added Suncor (SU),  a Canadian oil company.  He currently maintains it as a hold.  His explanation for adding SU:

Marketimer May 2009 issue, Bob Brinker said: "This month we have added Suncor to our coverage. Suncor is a leading Canadian oil sands producer with vast reserves in the Athbasca Tar Sands of Alberta.....We view Suncor as an excellent way to protect portfolios against the rising oil prices in the future. As with all individual stock issues, holdings should not exceeed four percent of equities." 

May 28, 2011, DoubleLine Total Return Fund: Bob Brinker's New Fund Recommendation

Posted May 28, 2011....

BRINKER'S NEW BOND FUND RECOMMENDATION

May 15, 2011

* Caller Bill from Wisconsin said: "In your last issue of Marketimer, you made a change in the income portfolio, going to a brand new fund. Double Line Total Return and it looks to me like....."

Brinker interrupted: "Bill did you read page 3 of that issue? ....I've explained in there why I selected that fund. It's right there."

Bill continued: "Yes, I have it right it front of me. Let me ask a couple of questions that aren't there. One, it's a very short life fund. It's only been around a year or less, and it has a higher expense ratio. And I assume the rating isn't as good as the funds that it replaces. And I question what the duration would be on that fund."

Brinker replied: "Now this is a change that was made in the income portfolio. Now if you check that data that I published in the letter, you will see that I published the duration. Did you see that?"

Bill: "I looked for it."

Brinker: "No, it's published....it's published in the eh, eh, eh..."

Bill: "On page three?"

Brinker: "You don't see any information on the duration?"

Bill: "No sir."

(Honey EC: Apparently, someone quickly got this information to Brinker, as his prior questions clearly show that he believed the duration rate was in the newsletter Bill was reading from.) Brinker said: "That's because it was effective on the 10th of May. Let me explain why you didn't find the duration, and you will find the duration. The duration is in the table on page 7, but that table does not include the fund because the change wasn't made on April 30th. Everything in the newsletter for May is as of April 30. So what I've done is, I've stated in that recommendation to make those changes in the income portfolio in page 7 ..... that those changes take place on the close May 10th. So they happened last Tuesday....We implemented those changes..... for performance purposes......So when we publish the June investment letter, on page 7, you will see the duration of that fund in there........

Now as to why I selected that fund. I selected that fund because I really like that manager. I think that manager has really outstanding talent. Actually, I stipulate that on page 3 of the newsletter, that I like the manager. And that was the reason that I selected that fund. Now although what you said is true that it's a relatively new fund. It started in the spring of 2010, its done very well its first year out there. Now here's the thing, that manager had a long-term track record at his prior fund. A record of over ten years of excellence in income management at his prior fund. I looked at that record, looked at what he's done the first year in his new fund since he's gone out on his own, and was very pleased at the data I was looking at. And that was the reason that I selected it.....Remember though, if you see a recommendation that doesn't work with you investment, don't buy it...... But I have to go with what I believe in the investment letter because of performance tracking.....and that was the analysis that I based that recommendation on. Good call, Bill. I appreciate it. This is Moneytalk."

Honeybee here: The symbol for Double Line Total Return Fund, managed by Jeffrey Gundlach, is (DLTNX).  The duration of the fund reported on their website is 3.79.   Brinker  did not add this  fund  to any of his official  Marketimer model portfolios.  It was only added to the  "fixed-income portfolio, now knows as the  income portfolio.

The funds that caller-Bill mentioned above that  Brinker replaced with Double Line Total Return Fund were Vanguard Ginnie Mae Fund (VFIIX) and Vanguard Short-term Investment Grade Fund (VFSTX). Brinker sold 10% of each, bringing each weighting down to 15%. He took that 20% and put it into Double Line Total Return Fund.

Brinker says he chose Double-Line Total Return Fund because he "liked the manager."  Beware, this has happened before and was very costly to those who bought TEFQX because Brinker "liked"  the  fund manager.

Marketimer, February 2000, Bob Brinker said: "We believe e-commerce fund manager Kevin landis brings a high level of stock selection talent to the fund."

And be  aware that in spite of what he said about "performance tracking" the Marketimer "income portfolio" is off-the-books, and he does not include that portfolio's performance in his official record. Additionally, Mark Hulbert's Hulbert Financial Digest uses only the three Marketimer model portfolios for ranking Brinker's performance against other newsletters -- not the "income portfolio."


Here is a link to an article about Jeffrey Gundlach's background.  Reuters: Ex-star manager Gundlach sued over stealing, drugs, porn

May 28, 2011 Bob Brinker's Advice on Silver

May 28, 2011....Bob Brinker first recommended silver as an alternative to gold for hedging against the dollar in  November, 2010,  on Moneytalk:


BUYING GOLD FOR HEDGE AGAINST DECLINING DOLLAR...Bob Brinker said: "Hedging the portfolio against decline in foreign exchange, and there is a way to do that. It is a speculation, but there is a way to do it. And that is to put some GLD, the Exchange Traded Fund for gold in your portfolio, a few percentage point perhaps, if you elect to do this. And that will give you a precious metal in the name of gold bullion-hedge in your portfolio against the dollar.

BUYING SILVER AS HEDGE...Brinker said: "As far as silver is concerned, I think it could be considered as an alternative form of hedging in a portfolio......The preferred way for those who wish to have a silver hedge in their portfolio would be the Exchange Traded Fund that holds the silver bullion -- that trades under the symbol SLV.....the Ishares Silver Trust. There is a derivatives investment in an Exchange Traded Fund which is under the ticker symbol DBS (futures ETF). If I were going to consider the possibility using a silver hedge, I think I'd be looking at owning the silver bullion." 

March 2011, Brinker said:   "I've made it very clear that I regard silver bullion as an alternate to using gold bullion for those that want to have a precious metals hedge. And I've said on this broadcast that I prefer the exchange-traded fund approach, rather than going out and buying severely marked up gold or silver coins. I think you should not be surprised if it turns out that what you've bought is only worth half of what you've paid for it if you turn around and sell it. I hope everybody heard what I just said....That's an incredible statement that I just made.....

.....But if you want to buy gold or silver, you do the exchange-traded fund. By doing that, you buy gold bullion backing the exchange-traded fund GLD for gold, or you buy silver bullion backing the exchange-traded fund SLV for silver. When I first mentioned the GLD shares on this broadcast years ago, they were trading in the 50's, believe it or not. I recommended that specifically for listeners that wanted to have a hedge on gold....I said that's the way to do it. Sometime ago, I also mentioned SLV when it was trading in the 20's for that same purpose - for those that want to have a hedge."  

May 28, 2011, Bob Brinker Advice on Gold

Updated March 14, 2013: Bob Brinker still has a Marketimer recommendation  for GLD in his "off-the-books" Individual Issues list. However, he does not recommend that GLD be added to IRAs.

Moneytalk, October 12, 2012....Brinker said: "I would never even consider putting gold in an IRA....It is a speculative play....For those that want to have a hedge in gold, the easiest and cheapest way is with GLD."

__________________

May 28, 2011....Bob Brinker has altered  his  views  about Gold and Silver over the past couple of years. He added GLD to his Marketimer "off-the-books"  individual stocks recommendations two years ago.  But has he ever officially recommended buying gold in any form?

Nope, Bob Brinker has never recommended buying gold.  If he had recommended gold ten years ago, he'd look like a genius now instead of a market-timer who missed the worst mega-bear market of our lifetime in 2008 and early 2009. Instead, he wants Moneytalk listeners  to think he recommended gold when it was 50% lower.   Here's the truth that Brinker doesn't mention on the air:

For at least two decades before gold began a relentless climb in 2007, Bob Brinker would tell callers that owning gold was "dead money." A number of times before 2007, Bob Brinker told the Moneytalk audience that anyone who had invested in gold in the last 20 years was underwater.

He would regularly tell callers that he did not own gold and had never recommended buying it, but he'd say that  IF someone was determined to own a "small amount as a hedge,” then he  would recommend using the gold ETF as a purchasing vehicle. [GLD]  Brinker is definitely opposed to buying numismatic coins and has said so many times on Moneytalk

So it wasn't buying gold that was his recommendation, it was using GLD to purchase it  IF you were determined to own some gold as a hedge against the dollar. See the difference?

So after Gold had made gains to new heights, Brinker seemed to  mislead the audience into thinking that he had recommended it back when it was much lower. Notice the CAREFULLY chosen words that Brinker used in these quotes from Moneytalk:

Brinker said: "I've said many times that if someone wants to have a small percentage of a portfolio in a gold hedge -- and I like GLD, the Exchange-traded-fund ..... GLD is the favored recommendation. I remember when I first mentioned GLD on the program in connection with a recommendation as a hedge, it was about $50 a share and now it is well over $100."

Bob Brinker said: “Now a long time ago, when these shares were trading in the low to mid-$50s, I gave that recommendation on this program. That for listeners who desire to have a hedge in the gold market that I thought the security to use was the shares that trade under the ticker symbol GLD. Those are the Exchange Traded Fund Gold Shares. And at the time I first gave that recommendation to listeners that were looking for a hedge in gold, those shares were trading in the low to mid-$50s.

When I first started mentioning this years ago on the broadcast the GLD shares were in the $50s. They are now well over $100 per share.....I would say the general guideline we've used on the GLD shares for those wanting a hedge is to have up to 5%......"

David Korn wrote the following comments  about what Brinker said in the paragraphs above: 

"Caller: This caller owns some gold and wanted Bob's opinion on whether to continue holding it or sell. ....As far as whether to stay with gold, Bob said if investors want to own it as a hedge, that is fine. In fact, Bob said he just checked the numbers and Bob said since he has been recommending gold as a hedge for those who want it as a hedge, it is up about 40% and so it has done very well. Bob said if you want to own it as a hedge against inflation or whatever, you can do that, but Bob said he doesn't own it and doesn't see inflation. Bob said he has not missed out being in gold because he has been invested in the stock market and it is up over 100% in the last few years......

........This is a new one for Bob -- taking credit for making a recommendation on something he doesn't own and wouldn't own and said specifically he would not make a recommendation to own.Bob has been steadfastly BEARISH on gold for as long as I have been doing my newsletter."__David Korn

[Honey EC: David Korn has been writing summaries of Bob Brinker's Moneytalk for over 11 years, so if he says Brinker has always been bearish on gold, BRINKER HAS ALWAYS BEEN BEARISH ON GOLD!]

Here are excerpts from the "individual issues" list in the May, 2009 issue of Marketimer.  It was listed as a HOLD from the beginning, and he has never explained why he added it to this list or how much he recommends holding -- or at what price:




Click to view full size images.

As you can see from the May and June 2009 Marketimer excerpts above, Brinker actually issued a "buy" and "buy on weakness" on SU when he added it to the list at the same time he added GLD. He also recommended "purchase on weakness" for SPY, VTI, IWV and DIA, but there was never any buy recommendation for GLD. It was simply added to the list with no comment. It is still on the list as a hold.

May 26, 2011, Mark Hulbert's Most Current Bob Brinker Marketimer Ranking

At Bob Brinker's Land of Critical Mass website, they use carefully selected portions from Mark Hulbert's Financial Digest to advertise the Marketimer investment letter. So how does Bob Brinker's investment letter really stack up against other newsletters in HFD? And how objective is Hulbert when he ranks newsletter performances. A few facts that may surprise you.

In the March 2011 issue of Hulbert's Financial Digest, Mark did a full page summary of Brinker's Marketimer.

Mark said: "Bob Brinker's newsletter is primarily intended to help mutual fund investors time the domestic and international stock and bond market as well as select individual funds. His approach involves a combination of both technical and fundamental analysis."

* Say what? Mark claims Brinker uses Technical Analysis?  That  surprised me. Brinker usually claims that it's all about his "timing model."

* For Mark to give Brinker credit for timing the bond market is a bit of a stretch. Although, Brinker recently lowered the Vanguard Ginnie Mae Fund holdings in balanced portfolio III and the off-the-books fixed income portfolio. (AKA: "income portfolio" since Wellesley Income Fund was added.) And as he mentioned last week on Moneytalk, he sold all Vanguard TIPS holdings.

* Brinker owns no international bonds in any portfolios. He does have a minuscule (total 7.5%) international stock fund weighting in portfolio III -- Vanguard Funds. More importantly, Mark does not include Brinker's fixed-income portfolio in his performance rankings.

* Another thing about Mark's analysis, Brinker has made no "timing" changes in his portfolios since March 2003. Since then, Brinker seems to have joined his infamous, "church of buy and hold." Wonder why that fact doesn't appear in Mark's Brinker analysis? As you saw, he simply mentioned that Brinker "focuses on longer-term trends." Wow I guess so, eight years is a rather long time to remain fully invested for a newsletter named "Marketimer," especially when the worst bear market in our lives happened during those years....

In my opinion, the facts never get between Mark Hulbert and his typewriter when it comes to Bob Brinker or Bob Brinker. He seems to go to great lengths to promote both of them.

Mark ends his Bob Brinker analysis with a footnote. He's done that for over a decade now because he was bombarded by outraged Marketimer subscribers when they noticed that Mark was giving Brinker a mulligan on the QQQ trade.

Here is Mark's footnote from the bottom of the Brinker-analysis page:

"Brinker's bear market bet on QQQQ

Please Note: In late 2000, Brinker forecasted a several-month bear market rally and recommended an investment in the NASDAQ 100-Index--a trade that turned out quite unprofitably. However, because Brinker at the time of making this forecast chose not to make this trade part of his model portfolios, his HFD record did not suffer as a result."

The footnote contains a known falsehood. Brinker decided well after he sent the "Act Immediately" Bulletin not to include it in his official record. I personally know that Mark is aware of that - I wrote and told him. He denied the documented facts. And even if Brinker did "choose" to not hold his record accountable for the trade, does that make it right? Do two wrongs ever equal a right? Hardly, but that is exactly what's going on to this day.

It's apparent that due to the fact that HFD does not allow Brinker's "record to suffer as a result" of the double-dip usage of a large percentage of Brinker's model portfolio cash reserves, all HFD performance numbers for Marketimer are suspect (I would call them highly exaggerated). There is no way that those gigantic losses can be ignored without drastically affecting Brinker's performance since October 2000. That is when he recommended using up to 50% of the 65% model portfolio cash reserves to buy QQQQ with -- then the Q's lost over 70%....

Even with all that, in the April 2011 HFD, Brinker's Marketimer did not make it into the top-7 Mutual Fund letters over the past 5-year time frame. And it did not make it into the "Overall Performance Scoreboard" top-7 over the past five or ten year time frames. Marketimer squeaked into 7th place over the 20-year time frame in Hulbert's "unadjusted" column.

Bob Brinker's Five Root Causes of a Bear Market

April 30, 2011....According to Bob Brinker, there are 5 root causes of a bear market:

1. Tight Money
2. Rising Rates
3. High Inflation
4. Rapid Growth
5. Over Valuation

A year ago on Moneytalk, Brinker reviewed these items and decided that they were all negative. Does he feel the same way now? Let's compare what he said then with what he is saying now on Moneytalk.

1. Tight Money

May 2010, Brinker said: "First one of the root causes of a bear market is tight money. What is tight money. That is when the Federal Reserve pulls in their horns, takes away the punch bowl, restricts the growth of the money supply. And money is harder to get, and as a result money price of money goes up....Do we have that now? No. Do we have the prospect of having that now? No. We have easy money now and the Federal Reserve is clearly on an easy money track.....especially with what is going on in Europe."

April 17, 2011, Brinker said: "Well what's going to happen at the end of June when QE2 expires is that the Federal Reserve will no longer be buying 75 billion dollars a month in Treasury securities...That means there is less demand by that 75 billion amount for Treasury securities once QE2 expires. That means that as long as the Treasury continues to offer these securities at a very high rate, because of our trillion dollar plus deficits - way over a trillion this year - closer to a trillion and a half, 1.6 trillion - mind boggling numbers.....That Treasury paper will be available on the market so it will be available to the lowest bidder....The Treasury takes the lowest it can get......I would say that the risk is that you could see 50 to 100 basis points in the Treasury market when the Treasury has to make these offerings without the help of the Federal Reserve in there buying on the Quantitative Easing program.....And I'm comfortable that that is the risk....once we get into July.....Right now, I don't expect a QE3...."

Honey EC: So he thinks that less money availability after the end of QE2 will only raise rates 50 to 100 basis points. If correct, no apparent "tight money" there.

2. Rising Rates

May 2010, Brinker said: "What's another root cause of a bear market? No question, rising interest rates. I'm not talking about the federal funds rate going from 1 to 2. I'm talking about a meaningful rise in interest rates.....When we look at the rates today, they are low, low, low. How low are they? Well, 3-month Treasury Bills are 15 basis points. That's about 1/7 of 1% a year. Six-month Bills are 21% basis points....One-year Treasuries are about 1/3 of 1% annual. Two-year Treasuries about 3/4 of 1% annual. Five-year Treasuries at 2%. Ten-year Treasury Bonds at 3 1/4. Thirty-year Bonds at 4.1........Rising rates are not a problem as we look at the market place right now."

April 2011, Brinker said: "Bond market is starting to act a little better and that's of course because people are wondering whether there will be some austerity measures in the US. Any austerity measures coming out of Washington would slow down economic growth. Less money in circulation in terms of fiscal stimulus.....No question that would have a restraining impact on the US economy. Investors are starting to look at that and they know that if the Federal Government starts to pull back, and there's a lot of pressure on them now with this S&P downgrade....and that's a good thing.

Well if we have any kind of austerity steps in the budget that reduces the growth rate of the economy, it also reduces inflationary pressures. So bond investors are liking what they see when it comes to the subject of the possibility of reducing fiscal stimulus and the possibility of moving away from the risk of inflating the economy. So all of this is going to be something that investors will focus on."

Honey EC: So based on what Brinker said, it looks like we can conclude that there is no indication of major rising interest rates.

3. High Inflation

May 2010, Brinker said: "What's another root cause of a bear market, a decline in excess of 20% in the S&P 500......No question about it, Hyperinflation, rising inflation. Do we have that? No. I know there are a lot of people out predicting it, but they've been wrong. Right now we have a year-over-year Consumer Price Index increase of 2.2. And better than that, the year-over-year core Consumer Price Index is one of the lowest of all times. It's 0.9.....excluding food and energy......So if you've been betting on inflation, well, that horse fell somewhere down a back stretch. I hope it's okay. ......We don't have an inflation problem right now."

April 17, 2011, Brinker said: "Inflation is really low, the core rate 1/10 of 1%, up for the month of March. And year-over-year the core rate up 1.2, and that is what the Federal Reserve watches. They want to keep the core rate below 2%. So far they are getting their wish at 1.2 on the CPI."

Honey EC: Brinker refuses to consider rising oil prices inflationary, and when callers tell him that food prices are rising, he poo-poos it. Nope, no inflation there according to Brinker.

4. Rapid Growth

May 2010, Brinker said: "What's another cause of a bear market. At the root, it's rapid economic growth and a boom in the economy. The economy is roaring ahead. Do we have that? Not on your life. Not even close......Some people are worried about a double dip....."

April 2011, Brinker comments paraphrased: ECONOMIC RECOVERY....Is happening without the help of the real estate market...The rate of recovery is modest....The 4th quarter annualized rate of real Gross Domestic Product was up at a rate of 3.1%....

Honey EC: With the jobless rate still so high, I think Brinker may have been exaggerating a bit when he said the recovery is "modest." Slow might be a better description of it.

5. Over-valuation

May 2010, Brinker said: "And another root cause of a bear market is over-valuation. When stock prices are so high relative to valuations they're on the moon like they were in January of 2000. Well, not true. We don't have over-valuation right now. We have good valuation right now."

April 24, 2011, (When a caller asked if now was the time to sell stocks) Brinker said: "No.....Based on the work that I do, using 2011 operating earning estimates that I have a high level of confidence in at this point, after all it's already the month of April......I would say the S&P 500 is trading below its historic average multiple.....I use estimates for 2011....and I'm comfortable using those estimates."

Honey EC: So it doesn't look like Brinker has made any changes in his outlook on a possible bear market based on his 5 root causes. And:

April 2011, Marketimer, Bob Brinker said: "We expect the S&P 500 Index to make additional progress into the low-to-mid 1400's range within the next 12 months based on our earnings and P/E multiple expectations. The potential for gains beyond that range will be a function of the sustainability of the economic recovery and the ability of the Federal Reserve to manage monetary policy."

Nope, no bears lurking there. Just a word to the wise.... be aware that he didn't recognize the last bear in 2008 until it had consumed a large portion of his fully invested portfolios.

May 26, 2011, Bob Brinker's Secular Bear and Cyclical Bull Market Trends

Posted May 26, 2011....Bob Brinker seems to be very good at spotting those market trends in the rear-view mirror. It's just too bad that Bob Brinker doesn't have enough integrity to tell the whole truth. Instead, he just leapfrogs backwards over his blunders. Why do I say that? Here's why:

Sunday, a caller asked Bob Brinker if he thought we were still in a secular bear market. Brinker told the caller, yes, it began in the first quarter of year-2000 and this is the 11th year of it. Brinker just happened to neglect to say that he had taken a little detour from this bit of market-timing shtick over those eleven years:

Brinker first spotted that secular bear market in August, 2001:

August 2001 Marketimer, Bob Brinker said:

"U.S. stock market entered a secular bear market in the first
quarter of year 2000.

Standard and Poor's 500 Index: 1527.46 = March 24, 2000

Dow Jones Industrial Average 11722.98 = January 14, 2000 "

June, 2007, just months before the market reached its all-time-high, Brinker said that the "secular bear megatrend" had retroactively ended in June, 2006.

June, 2007, Marketimer, Bob Brinker said:

"In our view, the valuation based secular bear market that was established following the March, 2000 closing high for the S&P 500 index (1527.46) and following the January, 2000 closing high for the DJIA (11723), reached its conclusion on June 13, 2006 at the bottom of the mid-term off-presidential election year correction."

In May, 2009, just months after the market had dropped 55%+, Brinker changed his mind and said that the secular bear megatrend hadn't ended after all.

May, 2009 Marketimer, Bob Brinker said:

"Although it appeared to us that the secular bear megatrend that began in year-2000 had reached its conclusion, there is no question that the secular bear megatrend remains intact...."

Brinker explained to the caller that his "timing model" work is based on cyclical markets. Maybe that explains why the return to an intact secular bear market. Can you have a cyclical bull market inside of a secular bull market? I don't know, but it sure wouldn't be as exciting, would it?

== > In Edit: June, 2011: Bob Brinker has not changed his stance on the secular/cyclical aspect of the stock market. He believes the cyclical bull market is intact within a secular bear market. Brinker's model portfolios are still fully invested and he advises dollar-cost-averaging for new money:

May 2011 Marketimer, Bob Brinker said: "....we prefer a doll-cost-average approach for new stock market money.....All Marketimer model portfolios remain fully invested."

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May 22, 2011, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

May 22, 2011....Bob Brinker hosted Moneytalk today. Two important topics that Brinker did not bring up today were the Arnold Schwarzenegger scandal, and the rape charges levied against Dominique Strauss-Kahn, the President of the International Monetary Fund -- who reportedly hoped to become the President of France.

STOCK MARKET....Another stock market "Ground Hog Day" with Brinker reciting the Friday closing numbers. Brinker told a caller: "I disagree with what your friend said about the market just goes up and up. That's not even vaguely true. The S&P is lower now than it was back at the end of the 1990's. The end of 1999, the S&P was higher than it is right now. So the idea that the market just continues to go up is a silly bit of misinformation that your friend gave you."

Honey EC: Brinker is correct. The S&P 500 Index closed December 31, 1999 at 1469, and closed last Friday at 1333.

* From there, it went into a bear market and bottomed in March 2003 at 801. Brinker partially sidestepped that bear by raising 65% cash in his model portfolios between 2000 and 2003 (a portion of that cash was used for his QQQ trade, but never officially accounted for).

* Then the S&P began another bull run to an October, 2007 top of 1565. Brinker remained fully invested.

* From there, the S&P dropped to another low of 677 in March of 2009. Brinker remained fully invested the whole megabear.

* Now once again, the S&P is back up to 1333, but still more than 200 points below it's all-time-high of 1565. And as Brinker said, over 139 points below December 1999.

TREASURY RATES.... Another Brinker Ground Hog Day repetition of Treasury Rates. (For latest rates, see the right column under "Items of Interest")

INFLATION....The Treasury market implied inflation rate = 2.38% annual. Brinker said: "Those who are looking for rapid inflation are getting tired....."

ECONOMY...Growing slowly...Next week, revised GDP expected to be at 2.2%

HOUSING MARKET: "...is on life support."

WHAT HAPPENS IF THE GOVERNMENT SHUTS DOWN? Brinker said: "We had an actual government shutdown...in the mid-90's and the market kind of yawned. It wasn't very impressed. The market correctly made the assumption that the government would re-open after a short period - which it did. I think that investors today, in general, are making the assumption that the debt ceiling will eventually be raised and then we can get down to the serious business of trying to get toward a balanced budget, which is a very important subject, and the one that Washington should be focused on going forward."

WHAT IF THE TREASURY DEFAULTS ON DEBT? Brinker said: "I will say this, if the United States defaults on its debt, I can't give you any reason why anybody in the world should lend a penny to the United States Treasury.....If they actually do that, I can't give you any reason why anybody should invest in a US Treasury......Personally, I don't see how they can go into default because they're constantly going into the market and borrowing more money. If they go into default, they will access to additional borrowing. How are they going to fund a trillion dollar a year, plus, deficit, if they can't go into the market and sell debt. How would they do that? How could they possibly face the risk that they would be unable to sell Treasury debt because they were in default.....I don't see that as a realistic outcome."

WILL THEY RAISE TAXES... Brinker said: "I certainly expect to see a continuation of political pressure on raising the rate on the high earners, which are defined for a single person as those making over $200,000. For married couples, those making over $250,000 in taxable income. .....Will they go beyond that?...... That one is going to be fascinating to watch because they have a gargantuan gap between expenditures and revenues right now. And they are going to have to deal with that. A lot this is lodged in Medicare. I mentioned that we have a 110 trillion dollar unfunded liability in Medicare, Medicaid and Social Security. But most of that is Medicare. Medicare is a fantastic deal for those getting benefits. Medicare is a disastrous deal for the Federal Government because it is running the national deficit and the national debt to the moon."

CALIFORNIA BEING RIPPED OFF BY PUBLIC EMPLOYEES......In the opening segment of hour two, Brinker talked at length about California, and he itemized several outrageous public employees' salaries and pensions in various places in the state. Brinker pointed out that in regard to public employees (and their unions), "no one is minding the store" -- while in the private sector, usually someone is at least counting the money.

Honey EC: As I said above, Brinker never mentioned Arnold Schwarzenegger today. Although in the past, Brinker has said that Arnold Schwarzenegger was "good for California' and vigorously defended him. One time, Brinker went so far as to say that he gets “ill” when he hears people "bash Arnie."

Brinker's guest-speaker was Andrew Ross Sorkin, who wrote "Too Big to Fail." The HBO movie is scheduled to debut tomorrow at 9PM eastern time.

Brinker started the interview by asking Sorkin what he would like to add to his book since it was completed a year ago. Sorkin pointed out that the book was actually completed in 2009 - that Brinker was looking at the paperback date.

Sorkin said: "Very little has changed. We now live in a world that is too big to fail squared. The top ten banking institutions in this country now control 77% of all the banks assets. Think about that concentration and what that actually means. We have not solved the too big to fail conundrum, and that to me, is the most disheartening part about this crisis. But the other thing that I think it's really important that we focus on, given that we talked about debt and the risk and what that means, is that the conversation about this phrase too big to fail no longer just applies to banks. We are now talking about in the context of municipalities and states and countries in Europe and eventually maybe our own. I think that is a much larger and more important conversation because the next financial crisis that we have, I'm not sure is going to be generated on Wall Street. I think it's generated by us. I'm not going to say there's going to be a sequel. I actually hope I don't have to write one. But if there is one, that's what this is ultimately going to be about."

Brinker asked: "Is the United States Treasury too big to fail?"

Sorkin replied: "Arguably it is. And the question is who, who, who can rescue us? The only people who can rescue us is the Fed which is the lender of last resort at this point. But will they really have enough firepower? And that is what we don't know. If a really big institution, when I say big, I'm talking a JP Morgan or a Citigroup, whatever, got in trouble, are we in a position to save them and what would really happen?

Part of the legislation that was passed around financial reform was this idea that a resolution authority, the idea that you could finally have the authority to take over one of these institutions. And it will be our last line of defense. The question is, will it really work, and there's no way to practice. We won't know until we do it, and I think that has a lot of people very anxious."

Brinker thanked Sorkin and again announced that the HBO film would debut tomorrow (Monday, May 23rd). The book is also available for Kindle.

Moneytalk on demand and to go with Bob Brinker, is available for FREE audio/podcasting at KGO810 radio for seven days after broadcast. I download and save all three hours, including the third hour guest-speaker. (The program is archived in the 1-4pm time-slots.) If you don't download it from KGO within seven day, it's available at bobbrinker.com by paid subscription. KGO Radio Sunday Archives