July 10, 2011, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary,

Posted July 10, 2011....Bob Brinker hosted Moneytalk today. 

Bob Brinker's comments paraphrased, summarized or excerpted:

STOCK MARKET: Brinker said:  "The stock market measured by the S&P 500 at 1363.61 on its high for the year on April 29th had a minor pullback in May and June, bottoming June 15 at 1265.72, for a minor pullback of 7%. Bernadette asked me this  week how do you calculate the size of a correction.....You take the closing high, which was on April 29th at 1363.61, then you take the closing low at 1265.72  and subtract it from the closing high, then you divide the closing high to get the correction....The total return correction was 7% and it lasted for a period of six weeks......Generally, we call a correction a loss in excess of 10% but less than 20%. This was a 7% event. That would certainly qualify as a minor pullback for the market.....The S&P 500 has subsequently traded up to the current level of 1343 and a fraction, and now stands about 1 1/2% below its closing high for the year." 

BOND MARKET: Brinker did not mention bonds or interest rates today.  

UNEMPLOYMENT/JOBS REPORT:  Recent trend continues, some jobs added in private sector, but jobs lost in the  public sector....In the month of July, 39,000 government jobs were lost...Private sector added 57,000.....That's a net increase of 18,000. Unemployment rate up to 9.2%...underemployment rate up to 16.2%....big numbers that may affect the 2012 election.  (Brinker got his info here: BLS)


ECONOMY:  GDP grew at 1.9% annual in first quarter....Later this month the second quarter is expected to be about 2%....

NON-EXISTENT SOCIAL SECURITY  TRUST FUND:  Brinker said:  "When they went  to  the unified budget many years ago, the Social Security trust fund  and all of that malarkey, it went out the window.....There is just one pot of money, so there is no trust fund, so forget about it.....There is no trust fund....The trust fund is a joke."

HOW THEY PAY SOCIAL SECURITY WHEN THERE IS NO MONEY: Brinker said: "The Treasury is running enormous deficits. Something in the area of 1 1/2 trillion dollar annual deficits we've been running in recent years and that's the reason that we've piled up close to 14 1/2 trillion dollars in our national debt. That means that they don't have any money unless they sell Treasuries to raise money, which of course is what they do every week.....So in order to pay Social Security, and I believe they will pay Social Security to the extent that they decide they want to pay it.......But the only way they'll be able to make them in the long term.....is to sell additional US Treasuries to pay out." 

DEBT CEILING HIKE: Brinker said: "Regarding this debt ceiling bruhaha that's going on in Washington. I would like to suggest to you that this is not the real issue facing the country......They must, those in power in Washington, must raise the debt ceiling. They have no choice. They either do it before a government shutdown, in which case, things go on as they are.  Or they do it after a shutdown, like they did back in 1994 -- short government shutdown and then they re-open. In either case, they must raise the debt ceiling....There is no alternative of no debt ceiling increase....It must be raised."

FIXED INCOME ADVISOR MISINFORMATION: Caller Carl from Buffalo Grove, Illinois said: "I'm a loyal subscriber to your Fixed Income Advisor."  Brinker replied: "Thank you." 

Birdbrain said: "Heard a caller during the first hour saying he subscribed to "your Fixed Income Advsor" to which Mr B uttered a quick thank you, without stating that supposedly his son is the publisher of said rag."

 Honey EC:  Obviously, this was one more (of  many) callers who mistakenly believes that the "Bob Brinker" who publishes the Fixed Income Advisor is the host of Moneytalk. This is only made possible by the fact that the real publisher/editor of the newsletter  (Brinker's middle-aged son) no longer makes any  effort to differentiate himself from his father. He used to be very careful to make sure that he was not mistaken for his father, but that changed 5 or 6 years ago, about the same time that  he started selling newsletters.

Some might conclude that Bob Brinker, the talk show host, is deliberately aiding in the deception. That's my conclusion. Readers should decide for themselves. It may also be a clue as to why he doesn't retire when he is well past retirement age, and no doubt reached "The Land of Critical Mass" decades ago.

REAL FISCAL ISSUES FACING THE COUNTRY: Brinker said: "The real issues facing the country in terms of fiscal are the annual deficits that we're running are in the 1 1/2 trillion mega, mega, mega-zone, and the growth of the national debt, which are simply not sustainable. It's already approaching 14 1/2 trillion dollars. Inaction, doing nothing is not option......There has to be some tax reform and spending reform agreement reached in order to move things forward. Tough decisions have to be made. We need leaders. We don't need whiners. The government's own bi-partisan deficit-reduction commission has already given the formula. You cut spending $3, you raise taxes $1. If you cut spending $3 trillion, you raise taxes $1 trillion....They have a formula, at least as a starting point." 

IF THE UNTHINKABLE HAPPENS: Brinker said: "If the United States were to refuse to raise the debt ceiling -- remember, I don't believe that's an option and I don't expect that to happen -- then the credit quality of US Treasuries would be degraded....because of political posturing."  

A TEMPORARY SOLUTION: "Brinker said: "If they want to come up with a temporary hike in the debt ceiling to push this thing out, turn it over to the voters in 2012. Let's have a plebiscite as part of the general election. Well, the candidates will be the answer.  They'll take positions....Let the voters decide which way they want to go." 

POLITICAL BLOCKHEADS PLAYING POLITICAL THEATER: Brinker talked at length about the debt  problems in the European countries -- Greece, Portugal, Italy, Ireland and Spain.  He emphatically explained that the  "sovereign debt" of those countries  is not risk-free. Brinker said: "If any sovereign debt out there is supposed to be risk free, it's  the USA. But wait a minute. We have political blockhead -- and I'm being very kind, I'm in a good mood today, and that's the only reason I'm being very kind -- we have political blockheads in Washington who are running the risk of a default of the United States triple-A rated paper so that they can play their game of political theater. I'm Bob Brinker. This is Moneytalk."  

In his hot-off-the-press weekly newsletter which includes a summary of Moneytalk,  David Korn wrote about caller Maria from El Paso:

REDUCING SUPPLY ON FOREIGN OIL Caller:  This caller said we have millions of tons of natural gas in our country and thinks we should use it to reduce our reliance on foreign oil. Bob said for two years, he and Dr. Wattenburg have been preaching this. Bob noted that Dr. Bill used his own money to purchase an ad in the Washington Post right after the election where he discussed these very things.  The problem is that Bob has seen no results of the ad.  Bob agreed we should be using natural gas in our transit system in a big way.

(Korn) EC:  The ad Dr. Bill placed was in the Washington Post on February 25, 2009 and paid for by Dr. Bill.  It appears on page A2 at the bottom left hand corner.  Dr. Bill actually mentions Bob Brinker in the ad.  Using unpatented and highly non-proprietary DavidK search technology, I found the ad.  Check it out at this url:  Bill Wattenburg Writes Open Letter to Barack Obama, mentions Bob Brinker

 Brinker's guest-speaker was Steven M. Davidoff:   "Gods at War: Shotgun Takeovers, Government by Deal and the Private Equity Implosion"

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 

SJ_Al sent these beautiful pictures with these comments:

"Pictures of the Stanislaus River at Sour Grass Crossing, off of Hwy 4 near Dorrington Ca, taken July 2. Sour Grass is about 20 miles downstream of Lake Alpine."

"The river area..... is normally a swimming hole. Not this year. High water like this is typical late April through early June, not in July. The dams upstream are all running over their spillways. In a normal year, the rapids shown in Pic 4318, which is just above the swimming hole, would be inner tube and plastic raft safe."

POST AND READ COMMENTS