Brinker is still bullish on the stock market and made that clear on today's program. In Marketimer, he is currently projecting that the S&P 500 Index will reach the "upper 1400s to lower 1500s range going forward."
Honey
EC: On Moneytalk, Brinker has been mostly silent about the stock market since the
middle of April when it hit its high for the year and began a 10%
correction. Perhaps he is now convinced that the correction is over.
Honey
EC: I see that QQQ is now selling at $55.50. It's still almost $30
lower than when Brinker issued a buy-signal on it in October 2000, using
model portfolio cash reserves. He never closed the trade. This was his
last advice: March 2003 Marketimer, Brinker wrote: "For
subscribers holding Nasdaq 100 (QQQ) shares, we recommend holding for a
significant recovery in the shares in the next cyclical bull market."
(October 15, 2000, a few days after Brinker's "Act Immediately"
Bulletin, QQQ closed at $81.70; March 7, 2003--after 30 months of
"guidance" to "hold", QQQ closed at $24.54)
GREECE: BE OUT OF EUROS IF IT GOES TO DRACHMAS.....The main topic of the program today was Greece, Europe and the euro. Most of the calls and Brinker's comments were on those subjects. The only thing new that I heard was when Brinker cautioned that if Greece exchanges the euro for the drachma it could be a catastrophic 70% loss for those holding euros.
Honey EC: I'm not
going to cover all the political stuff or the rehash of Greece and
Euroland. Brinker is clearly on record saying he does not think it has
any effect on the stock market and the news is available everywhere.
BOND MARKET: Brinker said: "Rates are at or near record lows across the board....And looking at these rates, you really have to laugh at the people who were telling us that rates were going to go up and the thing to do is bet against rising rates. And all the money you were going to make betting against rising rates. Well, that turned out to be pure fiction as rates have been down and they have stayed down."
TREASURY INFLATION PROTECTED SECURITIES: Brinker reported that the 5-year TIPS has a negative yield of 1.2%, and the 10-year has a negative yield of 0.6%. The only way to get a positive return is through inflation.
MORTGAGE RATES: Brinker said: "...remaining excessively low. This is good for housing, fifteen mortgage rates at 3%, thirty year rates at 3.67 -- fixed rates."
WE BETTER NOT GO OVER THE FISCAL CLIFF: Once again, Brinker said that the largest tax increase in history was looming on January 1, 2013. But he also said that he does not expect it to happen. He is sure that between the election and the end of the year, congress will take action because if they don't, "The economy is FINISHED."
FOMC MEETING NEXT WEEK: Brinker expects no interest rate changes at the "pajama party sleep over" meetings on Tuesday and Wednesday. The Federal Reserve Operation Twist is due to end this month. So without a QE3, it looks like the Fed will stop buying our debt. (Honey sez: Yup!)
NATIONAL YEARLY DEFICIT: Brinker said that the United States has over one trillion dollar deficit every year which adds to the national debt. (The national debt is edging ever closer to the $16 trillion mark.)
SOCIAL SECURITY: Caller Rob from Denver asked Brinker what he thought about the Barron's article from last week titled: "Watch Out: Unless Washington acts now, the costs of eldercare will drain the federal budget. Plus: How to manage your Social Security payout."
After talking about having seen too many have their life expectancy cut short by smoking, Brinker said: "It's really hard to predict life expectancy. Having said that, if you think you have a lot of years left, I like the idea of waiting until you get the maximum which is age 70.....The reason is, if you start taking Social Security at age 66, you have to live about 14 more years in order to make it worth your while....If you wait until age 70, you have to live about 15 more years to make it worth your while.....The thing is, when you start taking it earlier, you're ahead of the game for a long time because you have money in your hand that the person that deferred the money doesn't have.Problem is, it takes a lot of years to make it worthwhile to take the money earlier....How long you going to live. Now there's an interesting question."
(Honey EC: No, I did not make any mistakes typing what Brinker said, and I do not understand what he MEANT to say.)
I see that my old friend, Rande Spegielman (from the old
Brinker message boards and Suite 101 days), who just happens to be
greatly disliked by both Bob Brinker's, is cited in the article.
How to Get the Biggest PayoutKEYNESIAN ECONOMICS IN THE USA: Caller Tom from Carson City said that he "knows" that Brinker "leans toward Keynesian Economics."
Like it or not, you may have reached the age where it's time to crunch your Social Security numbers. Or you can let us do the work.
The main question is whether it's better to take partial Social Security benefits at 62, wait to receive full benefits at 66 -- or wait still longer to take even higher benefits at 70, the final age at which an application can be made. Here's how the math works:
• If you're 66, and you're eligible for the top Social Security payments -- $2,513 a month this year -- your payments will be one-third higher than if you had taken benefits at 62.
• If you wait another four years, your monthly check would be a third higher again, or about $3,350 a month. (There are also scaled gradations between those ages.)
According to Rande Spiegelman, vice president of Financial Planning at Charles Schwab, unless you suffer from bad health, and therefore doubt you'll live very long, or suffer from unhealthy finances, and therefore need the cash, you should be biased in favor of taking benefits later rather than sooner.
The wild card, of course, is whether Social Security benefits get cut somewhere between now and the time you turn 70.
But assuming political stasis, the question isn't so much Social Security's lifespan but your own. If you live until 80, it will have paid to wait until you're 66; and if you make it to 85, you'll do better to take benefits at 70. These examples include an allowance for the risk-free interest that can be earned on dollars received early, though it isn't a lot at the present low interest rates.
Granted, this isn't a lot of money for Barron's readers, but if you have been paying into Social Security all these years, why not maximize the payoff? And if you think the promised benefits soon will be reduced or vanish, you can start taking your payments right away.
Schwab's Spiegelman rightly scoffs at the scare talk about huge cuts in benefits, but he agrees that two reductions might be sneaked in that could make a difference to people about to receive Social Security checks, or even to people currently receiving checks.
The first is some kind of means-testing, which would reduce benefits for higher-income seniors, a cut already introduced for Medicare. The Medicare Modernization Act of 2003, which established Medicare Part D covering prescription drugs, established a means-tested hike in premiums paid, mainly for doctors' services. Beginning in 2007, higher-income seniors began paying higher premiums based on their previously filed tax returns.
The second reduction could take the form of a hike in the tax already imposed on Social Security. Right now, single people receiving at least $34,000, and married people receiving at least $44,000 or more—including dollars from tax-free bonds -- pay taxes on 85% of Social Security benefits. That 85% could be raised to 100%. In addition, the income threshold at which the tax is imposed could be lowered, if only by the ravages of inflation.
Brinker replied: "As far as Keynesian Economics are concerned, we in the United States have never even heard of Keynesian Economics. John Maynard Keynes taught a very solid lesson. He said that in good times you build a surplus....so that the government is in a position to stimulate in bad times. We don't do that in the United States. We have our own form of fiscal insanity. Here's what it is, in good times, we run up giant deficits. In bad times, we run them up even more. That has nothing to do with John Maynard Keynes.....There are many people in the United States, we'll give them the benefit of the doubt, we'll assume they are ignorant. We will assume they have not done it on purpose with malice against Mr. Keynes....And they have twisted and distorted his teachings to try to give him a bad name."
Honey EC: Tom was correct, but Brinker must have forgotten that he was loudly touting the government using Keynesian Economics back in 2008-09, and proclaiming that the stimulus package was a good thing because it was Keynesian. Brinker said this on Moneytalk on March 8, 2008. From my Moneytalk summary:
Brinker said:
" ……I have such criticism for those who, including some of the guests on this broadcast that I’ve criticized many times when I’ve spoken about this subject…whether it’s a guest on this program or whether it’s a caller – either way, I don’t care. The reality is the people who express disdain for the Federal government trying to use a page out of John Maynard Keynes textbook, Keynesian economics, stimulative economics – the people who attack the government – I don’t care who they are…..I think they are wrong. I think they are completely misguided in their opinion – I don’t care who they are. ……..it’s all good, so when I hear people attack the Federal Government for putting a stimulus package together, I think it is just completely off-base, completely off-base, and for that reason, I think we have to mention that. We have to mention, when you have an economy that’s flat on its back, it’s probably growing backwards this quarter, it may grow backwards next quarter, depending on how the stimulus packaged affects it next quarter…..you have to respond. That’s all they doing, they are responding."
FUNNY LINE OF THE DAY: Tom from Carson City said: "Happy Father's Day. I know you and your son should probably be on the golf course, but having said that, I'm glad you are here on the air." (Brinker was not amused, and made no reply.)
Jeffchristie's Moneytalk Final Exam Question for today:
Today Bob Brinker mentioned that the current federal reserve policy has the name of which dance:
A) The Hokey Pokey.
B) The Cha Cha Slide.
C) The Moonwalk.
D) The Twist.
Brinker's third-hour guest today was Edward Luce: Time to Start Thinking: America in the Age of Descent
San Francisco, Ca. KSFO 560: 1-4pm (KSFO offers FREE Moneytalk on Demand for seven days after broadcast.)
13 comments:
Really? On Father's Day? Man, Bob is still a werkin' stiff!
News from KSFO
"Responding to our listeners’ need to understand what’s happening to their money, starting June 19th, KSFO will be adding the Larry Kudlow Show to our Saturday night lineup from 7:00 to 10:00PM."
There was a time when Kudlow occasionally filled in for Brinker. I remember hearing a call Brinker took a week later in which a man blasted Bob for allowing Kudlow to fill in because he was too too too patriotic and covered himself with the Stars and Stripes.
Imagine: conservative, flag waving, free market capitalist. On the air waves in San Fran. Oh MY! I' ll bet that Robert Reich has the show tuned in for the full 3 hours at a Berkeley coffee house. LOL.
Church Mouse
It's the Church Mouse,
Just realized that the date KSFO gave for Kudlow can't be correct. They listed the start date as Saturday the 19th. They had to mean the 16th. The show is already archived on the web site and I sampled a clip earlier this evening. Sorry about the incorrect info, but I copied and pasted directly from the KSFO web site. The wrong date didn't catch my attention until I saw the post on your blog.
Sorry again, Church Mouse
It was written in the show summary:
"KEYNESIAN ECONOMICS IN THE USA: Caller Tom from Carson City said that he "knows" that Brinker "leans toward Keynesian Economics."
Well sure he does. Brinker is a stock market man. Pumping money into the system helps the market and it follows that a good market will make his news letters look better.
In my view, it's the political bias, the amateurish meddling , the naive picking of winners and losers that makes Keynesian economics distasteful .
To Brinker any government action that boosts the market is okay. We can agree to disagree on that point.
Powder Keg
Regarding Bob's comments on Social Security. Another consideration as to when to start Social Security would be the age of any children you may have at home. If you start social security at age 62
and have a child under the age of 18 that child can receive social security monthly payments equal to one half of the benefit that you are entitled to at age 66. Those in this situation should consider the child benefit when making a decision as to when to start their benefits.
"If you start social security at age 62 and have a child under the age of 18 that child can receive social security monthly payments equal to one half of the benefit that you are entitled to at age 66."
Man there's a boondoggle loophole that needs to be closed.
Why should the taxpayer be obligated to pay for YOUR kids if you CHOSE to retire before your kids were 18.
Why should the taxpayer pay anything for any kids where the parents are still living?
Taxpayer
David T:
Do you know the reasoning behind the child benefit you described? Is the parents benefit split? Or if the parents regular benefit is say $2000, does this mean the bambino gets $1000?
Thanks, Frankj
Mr B's mention of the Nasdaq 100 inspired the following:
The QQQ Blues (sung to Suzie Q, CCR version)
Ooh, QQQ Bob said to buy you
Eleven years ago what a misuse of dough
QQQ
Hold for recovery
the final words from he
No profit for me I'm getting atrophy
QQQ
He never will admit
this market call was s---
To his regret we never will forget
QQQ
A lesson to be learned
so you don't get burned
Listen for advice
but do not trust the buys
of BobbyQ
One item of note on Social Security. If one spouse applies first and then the other spouse applies at his or her retirement age on his or her spouses earnings he or she receives half of the spouses earnings, then at age 70 he or she applies for her wages she gets the increased amount. This strategy works great for married couples.
Mark
In case you missed the Fed news (doubtful), they have decided to extend Operation Twist until the end of the year.
Now let me see, what else happens at the end of the year besides the biggest tax increase in history (if congress doesn't act on it)? Is there a presidential election? Yep, by golly, I think those two things are happening. Here's the press release:
Press Release
Release Date: June 20, 2012
For immediate release
Information received since the Federal Open Market Committee met in April suggests that the economy has been expanding moderately this year. However, growth in employment has slowed in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending appears to be rising at a somewhat slower pace than earlier in the year. Despite some signs of improvement, the housing sector remains depressed. Inflation has declined, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchase Treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less. This continuation of the maturity extension program should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
Federal Reserve News Event
Birdbrain,
Another masterpiece of writing about daBrink. LOL!
One of these days, maybe this evening, I am going to put together a whole front page post: The Best of Birdbrain. :)
Honey,
Thanks for the kind words but don't bother. A "best of" these ramblings would reside in the dollar bin at record stores (remember them?) along with "Don Ho With All My Love" and "The Andy Williams Christmas Album."
Birdbrain,
I do not agree with you, but I sure don't want to embarrass you either.
Of course, that doesn't seem likely since Birdbrain is quite a nice pen-name, and one that certainly does not apply to you. :)
For me, one of the big mysteries of this blog is: Who is Birdbrain? Do I know him from a past internet "life"?
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