June 19, 2011, Bob Brinker's Moneytalk: Summary, Commentary and Excerpts

Posted June 19, 2011..........................[Post and Read Comments]

Brinker hosted Moneytalk today.  Bob Brinker did not host the program last week, June 12th.  Lynn Jimenez filled in last week..... 

STOCK MARKET: Bob Brinker did not mention the stock market today. The last time Brinker commented on the stock market was May 1st,  which was the last week  before the six week drop began.   At that time,  he reported that the Dow Jones Industrial Average had  closed the previous Friday at its 2011 high of 12,810, and that the  S&P 500 was  at its 2011 high of 1363.63 and was up 9% for the year.

Since then, the Dow has lost 810 points and the S&P 500 has lost close to 100 points and Brinker has said nothing about it.

BOND MARKET: No mention of  bond markets  today.     

FED MEETING THIS WEEK:  Brinker does not expect any change in interest rates. He expects the Fed Fund rate to remain zero to 0.25%. 

HOUSING MARKET:  Brinker thinks the best we can hope for is some leveling out. There needs to be a reduction in foreclosures and lower unemployment rates before there can be much improvement

WILL THE GOVERNMENT RAISE THE DEBT CEILING?  Brinker says they will because they do not have any choice. The only question is whether or not they will  have a temporary shut-down. It happened in 1994 and nobody lost any money on Treasuries.

* Caller Mark from Santa Cruz asked Brinker if there was any way to measure the lost opportunity cost of a failed investment. Brinker said that it could be measured against the "risk-free" 90-day Treasury Bill.  

Caller Mark from Santa Cruz followed up with this question:  "To be specific when you recommended buy the market in late 2007 before the financial collapse, I've held on since then and I'm still down about 14%. What's most frustrating to me, in this instance was  the inability to buy the market at S&P 900-950 as it went down there."  

Honey EC: Mark is absolutely right that Brinker recommended "buying the market" in  late 2007. He also recommended buying the market throughout the whole year of 2008!

Mark's "lost opportunity" based on his following Bob Brinker's advice is ENORMOUS. Mark made his point well that he was frustrated because he  did not have money available to buy after the market dropped because he had invested at the top on  Brinker's recommendations. 

Mr. Brinker may  have  a steady stream of "new money"  coming in,   but  that doesn't mean everyone does.  Mark clearly did not!  Brinker's  master word-smithing and clever double-talk behind that microphone can  certainly  fool most of the people most of the time,  but hopefully, some of the audience are informed enough to know the truth.   In my opinion, only a  two-bit snake oil salesman would insult Mark with this  answer instead of giving him an apology: 

Brinker's answer to Mark:  "The key here Mark, that in a situation like that, and certainly your buy level was most unfortunate, in a situation like that where you're making one buy and then  the market is 14% lower, you should have collected cash dividends along the way, I would say of about 7 or 8% along the way against that change in principle value. The key is that you did not make the mistake of selling out after the investment went down in value. Assuming it was a broad based investment, for example, like the S&P 500, there was no mistake by you in selling out. You've held the position it's come back and should be a few percentage points of break even.....So given what happened in 2008, looking at a finacial calamity where people thought the banking system was going under, when you look at the totality of what was going on out there, you held your position and came out of the situation and it's come back a long way, and I think you've done the right thing."

Honey EC: Brinker sold Mark the "investment letter" that contained what Brinker called "your buy level" which was "most unfortunate." Sickening response!  Mark actually lost over 57% in the bear that Brinker missed,  and now Brinker has the gall to tell him he's only down 14% four years later and should be happy with the dividends?! (Actually,  it's 18% as of Friday's close.)

  Brinker refuses to take any responsibility for the losses subscribers incurred because of his disastrous market-timing advice. And he adds insult to injury with his red-herring garbage about doing  "the right thing" by not selling at the bottom.

* Caller Kevin from Danville said: "Long time subscriber and I'm hoping Bob, that that S&P gets up into the 1450 range that you keep on talking about, but I'm a little concerned with this European crisis.....that this austerity programs that are going take place in Europe that they are going to impact mult-national companies and a lot of them are in the S&P, what do you think about that."   Brinker ignored Kevin's comment about the S&P 1450 range, and repeated his take on the Greece crisis, saying that its effect on the US will be small.  He thinks a Spain and Italy crisis would be much more important.

Honey EC: Kevin was right that for several months now, Brinker  has been predicting the S&P 500 Index will reach the 1400-1450 range, but he has changed the time frame each month -- moving it out. As of June, the time frame could be infinity.  See my quotes below.

And what irony that S&P mid-1400s is the exact number that Brinker called a gift-horse buying opportunity in 2007 and January 2008 (that Mark bought at then).......You can't make this stuff up. :)

February, 2011, Marketimer, Brinker said: "Since we expect the S&P 500 Index to trade into the 1350 to 1400 range later this year, all of our stock market model portfolios remain fully invested." 

In May, 2011, Marketimer, Brinker slightly revised that prediction to read "....low-to-mid 1400's range over the next 12 months."  

In June, Brinker did not mention any time frame, but instead said ".....1400s range as part of the ongoing cyclical bull marker trend."

WHAT IS ALAN GREENSPAN SMOKING?  Brinker said: "Let me say something about Alan Greenspan who was up late this week on his soapbox arguing that a default in Greece, which he seems thinks is pretty much inevitable, has the potential to cause a recession in the United States......When Alan Greenspan has occasionally done  something right, we've tried to give him credit for it. That doesn't happen much anymore because he has been blamed widely for contributing to the financial crisis of 2008 by keeping interest rates too low for too long......but when he got on his soapbox and started talking about a default in Greece causing a recession in the US, I really started to wonder what he is smoking."  

Bloomberg: "Greenspan Says Greece Default Almost Certain, May Trigger US Recession"

BOB BRINKER IN EUROPE FOR TWO WEEKS, JUST RETURNED HOME (Jimenez filled in for him on June 12th)  Brinker said: "I just returned from an extended stay in Europe the past couple of weeks and I can tell you, it's the only thing that anybody is talking about over there. It dominates the news coverage. It's dominates the conversation, and that is, the fiscal problems over there." 

BILDERBERG MEETING JUNE 9-12 IN SWITZERLAND:  What are Bilderbergs?  The meetings are conducted in secret. The world is expected to take their word about what is discussed  and even who  really attends. Their website contains a  of list participants, but it is suspected  that it is not complete.  The Guardian  reported that over 300 attended the 2011 meeting this year.

Honey EC: I highly recommend this article from the Guardian.  "Bilderberg 2011: The Tipping Point".  Here are some excerpts:  "The global policy concerning the transparency of our social life is being thrashed out in an untransparent forum by people whose "social network" includes people like Henry Kissinger and the chairman of Goldman Sachs International. It also includes people we don't even know are there (this happens every year, names emerge that were never admitted to).

EUROPEAN UNION MEETING SUNDAY ABOUT GREEK DEBT CRISIS....Basically, Greece was  Brinker's  biggest  topic of the day.  (Everything he reported is readily available on the news.) Brinker said:  "Greece has become the poster boy for a welfare state. If you have any doubt about that, just look at those public sector union workers rioting in the streets of Athens as they protest these possible changes in their benefits."

IT'S NOT JUST GREECE:  Brinker said: "Right now it's Greece and certainly they're rioting in the streets in Greece. The workers who don't want to participate in this haircut have been rioting and they're very ugly scenes. But you know it's not just Greece. For example in Great Britain, they are going to have a strike with 750,000 participants. These are public sector workers.....Lot of public sector unions in Europe. That's one of the problems they have. They've developed huge public sector union situation, which gives people the power, basically, to take over the country -- shutting down schools, shutting down transit. You name it...... 

Wall Street Online: "Thousands of UK Public Sector Workers to Strike June 30th"

Brinker's guest-speaker today was Robert Kolb,  "Sovereign Debt: From Safety to Default"

Dixiegeezer has photographed parrots before, but I think this is spectacular. 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 Archives

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