Sunday, March 17, 2013

March 17, 2013...Bob Brinker's Moneytalk: Summary, Excerpts, Commentary and Discussion

March 17, 2013....Bob Brinker hosted Moneytalk today............. (comments welcome)
 
STOCK MARKET....Brinker only mentioned the stock market one time today when he was talking to Ludwig from Connecticut.  Brinker said: "Look at the tripe that people have been sold in recent years.....They were sold a bill of goods about putting more money into gold. Gold was going to go to whatever. Actually more recently, gold's been heading south off its highs in recent months.They were told to beware of the stock market. The stock market was a Ponzi scheme. That turned out to be untrue as we see. There have been so many false premises laid upon the public in the past few years, it's absolutely stunning."

US NOT DEBASING CURRENCY....Caller Ludwig from Connecticut asked what Brinker thought about those who claim that the United States is debasing its currency. Brinker replied: "I  think that anybody that tells you that the United States is debasing its currency is full of soup. The US dollar is one of the strongest currencies on the planet."   

GOLD....Caller Paul from Florida thought people in Cyprus might put there money into gold bars so "it couldn't be taken away from them."  Brinker said: "I understand what you're saying but that doesn't necessarily mean that they're going to rush to a speculative item like gold which is based on supply and demand around the world."

Honey EC: Brinker still has GLD on his short  off-the-books list of "individual issues" on Page 7 of Marketimer. Last February, Brinker added a new item to that list: Vanguard FTSE All-World ex-USA (VEU).  Like with GLD, he has not given any reason for adding it -- or guidance.

Brinker's entire opening monologue was devoted to the Cyprus bank levy. Here are transcribed excerpts from it: 

EURO LEADERS PLACE LEVY ON CYPRUS BANK DEPOSITORS....Brinker said: "Boys and girls, this weekend, we have seen one of the most bizarre developments in the history of finance....I speak of the bank deposit tax that has been announced this weekend in Cyprus....It turns out that the banks in Cyprus are basically insolvent...So the Euro area finance ministers got together this weekend to decide what to do about the de facto insolvency of Cypriot banks. And what they decided is a rescue plan that can only be described as bizarro to the nth degree....As part of the bailout....Cyprus is going to impose a tax on deposits. I know most of you are accustomed to receiving interest on their deposits....Cyprus is going to tax money already in the bank, as of Friday, 6.75% up to 100,000 euros....and that is the ceiling for account insurance for the European Union....For deposits about 100,000 euros, Cyprus is going to tax 9.9%....Now these taxes, if they happen.....There is a banking holiday on Monday....will raise $5.8 billion....There is no problem collecting the tax. They froze the accounts over the weekend...they are going to extract the tax from the balances."

(BRINKER CONTINUED) "There is a lot of Russian money in Cyprus banks....Thirty percent of the deposits in Cyprus banks are non-euro nation deposits.....This is uncharted territory....When you start confiscating, let's use real words here.... When they begin to confiscate deposits in banks, what kind of a precedent does that set?......You can't avoid this....All of the accounts were frozen while the banks were closed....The deposit tax will be assessed before the banks open on Tuesday....They are going to limit electronic transfers until the banks re-opening. There's not going to be any opportunity to get around this.....And one of the politicians said quote, 'as it is a contribution -- that's the word I want to focus on -- to the financial stability of Cyprus, it seems just -- that's another good one -- to ask a contribution... of all deposit holders. Is that the sentence from Hel...sinki or what?"

(BRINKER CONTINUED) "It's amazing to me that something like this would be...or proposed....Now there's concern that they could re-ignite the financial crisis with this kind of an effort.....Another of the observers said that tapping deposit holders -- there's another semantical exercise -- was needed to expand the tax base in Cyprus. Is that a tap on the shoulders when you wake up and find 6.7% of your hard-earned money is gone?....Will people in other countries start wondering about their deposits in banks in places like Greece, Portugal, and Ireland and even Italy.....Could we see re-circulation of money to get away from that risk?"

MORE BRINKER COMMENTS SCATTERED THROUGHOUT THE SHOW:  Brinker said: "This precedent is beyond ugly....It's an outrage. It's outlandish....In my opinion, the people in Cyprus have been robbed.....It's not really a tax. It's an outright confiscation.When you think about the fact that they are doing it to somebody who managed to save 1000 or 10,000 euros over a period of years by scrimping and saving and denying themselves...It's unconscionable."

WILL IT HAPPEN IN UNITED STATES BANKS? ....Brinker said: "I expect that here in the US, people will recognize that it's not going to happen in US banks."

IN EDIT MONDAY: Honey EC:  Several have pointed out in comments (LINK) that this kind of "confiscation" has already happened in the US.
tomfrompv said...
Heres a family story from my wifes grandma. Backin the early 30s, grandma was a single mother, raising 3 kids. In Venice, CA. Hubby had died in 1929. She took whatever job she could - seamstress, laundry, etc. She rented out rooms in her house. Tough times.

Every so often, when she got some money ahead she would go to the bank. In those days, dollars were convertible to gold. You could exchange a 5 dollar bll for a 5 dollar gold coin. She would do this and put the 5 dollar coin into her safety deposit box. She couldn't keep the coins at home due to the lodgers and crime.

Then came FDRs order. Her bank was closed late on a friday. And stayed closed for a week. When she finally got in, her box had been opened and all her gold taken. She got NO recompense. There was no one to complain to. Ordinary accts were lost too. No FDIC.

Prior to FDRs order, gold was a bit over $20/ounce. Once the govt owned all the gold, they raised it to $35. Instant inflation.

There are a lot of lessons from history. Cyprus learned the same one again - banks take orders from the govt, not its customers.

Delete
BANK SHARES GIVEN IN EXCHANGE FOR THE LEVY:  This item  was called to my attention by R.P. It's from  CNBC: "The arrangement, structured as a bail-in, would give depositors shares in the banks in return for the levy."

Here are a couple links to read more about the subject. This one seems to be keeping it updated regularly:  Telegraph UK News/Cyprus    And this from the BBC.

PEOPLE ARE LINING UP AT CYPRUS BANKS.....Caller Martin from Virgina Beach said if he had money on deposit, he'd take what was left out of the bank as soon as possible. Brinker correctly said that people are already lining up, but the banks have frozen the accounts, limited what can be taken out. Martin ended his call by saying: "They must not have Second Amendment rights over there." 

BE SURE YOU HAVE FDIC INSURANCE...Brinker said: "When people lose money by doing it (not having FDIC insurance on all deposits), they are literally asking for  it. They're saying, okay, I know it's not insured and I lose it if you go under, but I'm going to do it anyway. What can you do to help a person with that mind set. Nothing, they are walking off a cliff if the bank fails. That does happen when these banks that are not too big to fail, go under....We have too big fail banks in our system right now....And we have executives of those banks, in some cases, that are too big to jail. The Attorney General has told us that, so we know that.....But that makes it harder on the smaller banks."

REITS AND VQN: Caller Clark from Baton Rouge asked Bob about non-traded REITS. Brinker said he didn't "like them." He said the only REITS he would invest in is Vanguard REIT Index (VQN) -- an ETF.

REVERSE MORTGAGES....Brinker said: "I don't like them. I don't recommend them."

Honey EC: The hot topic of the day was Cyprus. Most of the callers talked about it, except for a couple that were very esoteric like "should I take a lump sum or not" and "which account should I draw down first when I retire." 
Jeffchristie's Moneytalk Final Exam Question:

What does Bob Brinker think of the new tax on bank deposits in Cyprus?

A) It is the most bizarre development in the history of finance.

B) It's more confiscation than a tax.

C) It is bazarro to the "N"th degree.

D) All of the above.

Answer: D All of the above.
Brinker's third-hour guest was Anat Admani who wrote "The Bankers New Clothes."  (I do not advertise for Amazon anymore.) Here's a LINK to read more about her background.

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

49 comments:

Anonymous said...

So, I missed the opening comments. WLS wasn't carrying it and we were in the car. I'll look forward to your summary. Thanks Honey.

gabe said...

Bob spent too much time on Cypress!

Anonymous said...

With obama in office , how can bob think " it can't happen here ?" don't we remember when Paulson told the banks they would take the tarp or else.? what can stop them ? the constitution? they have already shown that they don't care to follow it. it's not too much of a leap for the leftists in the W H to look at the 17 trillion in IRA"S, etc, and lust after it.

Anonymous said...

What in the he ll is Cypress anyway???

Anonymous said...

Here it is.
Cypress
City in California
Cypress is a suburban city located in the northern region of Orange County within Southern California. Its population was 47,802 at the 2010 census.
Area: 6.6 sq miles (17.09 km²)
Weather: 56°F (13°C), Wind SE at 6 mph (10 km/h), 97% Humidity
Local time: Sunday 9:33 PM
Population: 48,526 (2011)
Unemployment rate: 7.1% (December 2012)

Anonymous said...

MORE BRINKER COMMENTS SCATTERED THROUGHOUT THE SHOW: Brinker said: "This precedent is beyond ugly....It's an outrage. It's outlandish....In my opinion, the people in Cyprus have been robbed.....It's not really a tax. It's an outright confiscation.When you think about the fact that they are doing it to somebody who managed to save 1000 or 10,000 euros over a period of years by scrimping and saving and denying themselves...It's unconscionable."

What is the difference between that and SS? They can change the benefit at will including eliminating it.

This is the nature of taxation and redistribution. I am not sure why he is shocked. Liberals do this all the time.

Bluce said...

Anonymous said...

With obama in office , how can bob think " it can't happen here ?


I laughed at that. Some foolish people think that however things have been in their lifetime, that's how they will remain. History starts the day you were born.

Hey Bob, did you know that "Executive Order 6102 is an Executive Order signed on April 5, 1933, by U.S. President Franklin D. Roosevelt 'forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States'. The order criminalized the possession of monetary gold by any individual, partnership, association or corporation."

Will this happen again? Who knows, but it could. And confiscating part of your bank account is just a sideways step.

Governments will take all the wealth (including your IRA or bank account) and freedom they think they can get away with without causing civil unrest. Morality is not a factor.

Who is so foolish to say "It can't happen here?" (besides Bob)

Politicians do whatever they want and the courts, for the most part, back them up. This is Thomas Jefferson's worst nightmare.

Bluce said...

To Anon:

The subject is the nation of Cyprus, an island in the Mediterranean which is a member of the EU.

Anonymous said...

"Governments will take all the wealth (including your IRA or bank account) and freedom they think they can get away with without causing civil unrest. Morality is not a factor.

Who is so foolish to say "It can't happen here?" (besides Bob)"


But you also can't go through life being guided by some grand conspriacy theory either.

The government is going to take my money, my gun, my kids etc etc etc.

You become one of those nutcase preppers living in an old missle silo sitting on a thousand cases of cat food and a machine gun.

What good will your AR-15 do you if the government slaps a tax on you that you don't like? Are you going to run down to the bank with an assault rifle and demand your money?

Realitycheck

Honeybee said...

My friend and long-time Bob Brinker Fan Club member, Boca Pete, wrote:

"So the "leaders" of the Eurozone have turned to crime ("Bank robbery") to solve their member country financial challenges. Brinker railed about this event early in his program yesterday.

http://finance.yahoo.com/news/yen-firms-asia-shares-fall-001926588.html

It kind of reminded me of the 1930's when FDR seized and melted down the privately held Gold.

Is it just a matter of time before our leaders also turn to bank robbery to solve our government created problems?

We know from the past government can seize your gold. We now know they could seize your bank account. I'd bet they are licking their chops in Washington trying to figure out a way to steal all or part of our retirement accounts. Is there no place in the world to hide anymore? Any ideas here on how to avoid such a potential robbery in the future?"

P

Honeybee said...

Well, Pete calls it "robbery." Brinker didn't use that word, but he did use the word "confiscate."

In my opinion, confiscation is just "legal" robbery.

Bluce said...

One of the Anons wrote: "But you also can't go through life being guided by some grand conspriacy theory either."

What conspiracy would that be?

That governments exist to take wealth and liberty away from their people is hardly a conspiracy. I have all of human history to back me up.

Anonymous said...

"That governments exist to take wealth and liberty away from their people is hardly a conspiracy. I have all of human history to back me up."

What's the alternatve bluce? Are you one of those anarchists? No government whatsoever?

Hey Bluce, it's time for a ....

Realtycheck

Anonymous said...

>>>"It can't happen here?"

Hard to think Bob could ever say so? Maybe he's been politically optimistic lately or he's been unpredictable or inconsistent as usual. I can't recall exact date, but remember in one of his past shows he was rumbling about Argentine state took control of the country's privately-managed pension funds, and raised the possibilities of happening here.

Anonymous said...

Heres a family story from my wifes grandma. Backin the early 30s, grandma was a single mother, raising 3 kids. In Venice, CA. Hubby had died in 1929. She took whatever job she could - seamstress, laundry, etc. She rented out rooms in her house. Tough times.

Every so often, when she got some money ahead she would go to the bank. In those days, dollars were convertible to gold. You could exchange a 5 dollar bll for a 5 dollar gold coin. She would do this and put the 5 dollar coin into her safety deposit box. She couldn't keep the coins at home due to the lodgers and crime.

Then came FDRs order. Her bank was closed late on a friday. And stayed closed for a week. When she finally got in, her box had been opened and all her gold taken. She got NO recompense. There was no one to complain to. Ordinary accts were lost too. No FDIC.

Prior to FDRs order, gold was a bit over $20/ounce. Once the govt owned all the gold, they raised it to $35. Instant inflation.

There are a lot of lessons from history. Cyprus learned the same one again - banks take orders from the govt, not its customers.

Bluce said...

To Anon # 49958: So why did you change the subject? What is the conspiracy?

Anonymous said...

Bluce - awesoem comments.

My thoughts, par tof the problem is we lsot the moral arguments with the new deal, which instituted inter-generational theft in the form of social security and then normalizing robbing your neighbors and calling it public education and welfare.

tfb

Bluce said...

Tom: Good story.

This is why I said -- twice -- on a previous thread that someone who is worried about having their physical gold stored by another party should probably hold it and hide it themselves.

Banks are the most highly-regulated business in America (although health care will probably soon overtake them). They have to follow strict rules laid down by the politicians.

So if the politicians decide -- once again -- that they want to open everyone's "safe" deposit vault and steal whatever they may find, they will do it. They have already done it here, as you pointed out.

But as I also previously pointed out, a lot of people think history starts the day they were born. So they adopt the attitude "it can't happen here," even though it already has.

Anonymous said...

Realitycheck:

A desire for more limited government is not the same as a swerve into anarchy. But you know that already.

Trying to score points with hyperbole and ad hominem attacks on an opponent is something high school debate teams learn not to do. So calling someone a “prepper” or placing them in a missile silo isn’t going to work. (But I’ll take a missle silo over Section 8 housing any day.)

Now I know it sounds quaint to talk about the Founding Fathers, but they DID hit the reset button when it came to the powers of government. Concepts such as limited government, and that rights were bestowed by the Creator, and that men should serve their nation and then go back to their private lives.

We have a government now whose number one mission seems to be to propagate itself, 1) by getting re-elected, 2) by advancing the agenda of the party, contributors, and their constituents, in that order. In order to accomplish the above, Congress facilitates the transfer of money from one group to another: auto manufacturers, people who buy electric cars, the ethanol industry, farm subsidies in general, some defense contracting, the solar and wind energy crowd, and my favorite, the Elko, Nevada Cowboy Poetry Festival.

None of this stuff is "free" and much of it includes an infringment on one's liberties.

-- Frankj

Bluce said...

To tfb and Frankj: A big "thank you" for your support.

Anonymous said...

Small Mediterranean island nation.

Honeybee said...

This has been a great discussion. I too, disagreed with Bob Brinker when he so cavalierly said that this Cyprus bank robbery couldn't take place here.

As as some have shown, it has already taken place in slightly different forms.

birdbrain said...

Frankj:

Your comment reminded me of this classic statement made by Sen Reid two years ago:

Reid stated earlier: “The mean-spirited bill, H.R. 1, eliminates National Public Broadcasting. Now, that is really saying a lot, madam president. It eliminates the National Endowment of the Humanities, National Endowment of the Arts. These programs create jobs. The National Endowment of the Humanities is the reason we have in northern Nevada every January a cowboy poetry festival. Had that program not been around, the tens of thousands of people who come there every year would not exist.”

Imagine that. Tens of thousands of hard working, poetry loving Americans would be wiped off the face of the earth were it not for NPB.

Honeybee said...

TomfromPV,

What a heartbreaking story of "legalized" government robbery.

Thank you so much for sharing it.

I am going to add it to the summary to show Brinker that it has already happened.

Anonymous said...

None of this stuff is "free" and much of it includes an infringment on one's liberties.

In a strictly hetro-sexual way I am beginning to love frankJ.

Awesome - a real American!

tfb

Anonymous said...

Thank you Honeybee. To add a little more info, my mother-in-law, a child at the time, lost her entire savings of $29. Sounds like a pittance, but recall that $30 bought 1 and 1/2 ounces of gold. Before all that inflation, $30 was a lot of money.

Sadly, I have to agree with your other contributor who said most people think history began when they were born. These folks have to learn the same lessons yet again.

Anonymous said...

12:04 PM Stock turn decidedly lower as Cyprus' ruling party will apparently abstain from the bailout vote, thus assuring its failure. The ball now moves back to Brussels, where the ECB has threatened to withhold funding from Cyprus' banks if the bailout (and depositor haircut) isn't passed.

Bluce said...

Per Anon's comment at 12:04 . . .

No matter what the outcome is, I bet the people will empty their accounts as soon as the banks re-open.

Jeffchistie said...

The pastor of my church is a Polish priest who lived under the communist government. In his sermon one Sunday he talked about a saving program that the people had to build up a nest egg for their children. Just about every family had one of these accounts. At some point in time, the government took everything. Years of savings were wiped out.

Anonymous said...

This sums it up:

"No man's life, liberty or fortune is safe while our legislature is in session." ...Ben Franklin

tfb

Pig said...

What's the alternatve bluce? Are you one of those anarchists? No government whatsoever?

Why is your alternative such a drastic extreme? You bypass limited government and jump to anarchy?

Some of us here might be prepared to exist (not enjoy) under total anarchy. I would say that you would not make one day without your beloved government, social welfare, drugs and financial supplements.

When the meds wear off, do your own realtycheck in a mirror. HTH

Realitysucks

Anonymous said...

10:11 AM The term "high-yield" doesn't quite cut it anymore as the 30-day SEC yield on the High-Yield Corporate Bond ETF (HYG) threatens to drop below 5%.

Jeffchristie said...

Mr. Pig your friend Realitycheck needs a reality check.

1) Nothing costs more than a government program that is FREE.

2) No greater SLAVE exists than a person who is dependent on the government.

Anonymous said...

brinker had to keep his mouth shut about gold for so long he couldn't wait .. but unlike brinker people sold and made profits we are not all MARKET HOLDERS about cypress brinker is so upset with the money tax he doesn't seem to be upset about the money being stole from seniors and savers by uncle ben's low % rate policy . I guess it's all right if you don't get the money then have it taken away ...YOU know like your not being starved if you don't get the food only if it's taken away P.S>stock market still not even from 2007 let's compare that with GOLD

Anonymous said...

Platitudes are a dime a dozen.

Honeybee said...

Anonymous said...

Platitudes are a dime a dozen.

So are, it seems, commenters who don't have the cahones to use a name or even sign their posts.

Pig said...

Platitudes are a dime a dozen.

I gots a quarter. Can I get tirty?

Is shipping free?

Bluce said...

My dad had a '67 Platitude but I borrowed it one night, got drunk, and totaled it.

Bluce said...

Jeffchistie said...

The pastor of my church is a Polish priest who lived under the communist government. In his sermon one Sunday he talked about a saving program that the people had to build up a nest egg for their children.

Just about every family had one of these accounts. At some point in time, the government took everything. Years of savings were wiped out.

----------------------------------
And some people would say that isn't theft, because the government did it.

Honeybee said...

Investors are still clamoring to buy junk bonds instead of the bad news bears on them -- like Bob Brinker:

"Yields in junk bond ETFs are threatening to fall below 5% for the first time ever as strong demand for speculative-grade corporate debt in a low-rate environment keeps pushing yields down.

The iShares iBoxx High Yield Corporate Bond (NYSEArca: HYG) is paying a 30-day SEC yield of 5.00%, according to BlackRock, while SPDR Barclays Capital High Yield Bond (NYSEArca: JNK) sports a 30-day SEC yield of 5.13%, according to State Street.

Junk bond ETF yields are at record lows as many large investors position for a pullback in this hot fixed-income sectors. Bearish bets against high-yield bond ETFs hit all-time highs this month and the activity appears to be partly driven by Wall Street credit brokers who are offering large trades to clients."

Read more

Jeffchristie said...

Barrack is on the line from Tel Aviv.

Hi Lynn

Thanks for taking my call. Your guest Mr. Whitecare says that GM cars are the best in the world. Can he explain why my car broke down today?

Anonymous said...

You know there was a time when men so loved the ideals of limited Government that they died to establish it.

Some years later there was a time when men so loved what this country represented in terms of liberty and the ability to live your life as you saw fit with limited interference from the Government that they shelter the symbol of this country, the flag, with their own body.

And now some come forth ready to clean the dust from the boots of their Government masters with their tongue, groveling in front of their children, and slapping the chain of bondage and Government servitude on their children and grand children themselves.

It is sickening.

tfb

Bluce said...

^ what tfb said.

As for me, I'll quote Emiliano Zapata, a leader in the Mexican Revolution who said:

"I'd rather die on my feet than live on my knees."

Bluce said...

In case anyone is interested, here's an article in the British "The Guardian" about the Cyprus banks:

Cyprus to keep banks shut into next week as it seeks deal to avert disaster

http://www.guardian.co.uk/world/2013/mar/20/cyprus-keeps-banks-closed-talks-continue

(Honey, could you activate the link please? TIA)

Honeybee said...

Here's your link live, Bluce:

Cyprus to Keep Banks Shut Into Next Week

Anonymous said...

Cyprus's Orthodox church said it was willing to mortgage its assets to invest in government bonds. The church has considerable wealth, including property, stakes in a bank and a brewery.

gabe said...

When is his next newsletter?

Honeybee said...

Hi Gabe,

Bob Brinker publishes Marketimer soon after the first of every month. I think you can usually get it online by the second.

gabe said...

Thank you, Honeybee!