HOPE EVERYONE HAD A WONDERFUL THANKSGIVING!
Sunday, November 26, 2017
November 26, 2017, Bob Brinker's Moneytalk: Reruns Today
November 26, 2017....Bob Brinker is NOT live today. Moneytalk is re-runs of old monologues and callers.
HOPE EVERYONE HAD A WONDERFUL THANKSGIVING!
HOPE EVERYONE HAD A WONDERFUL THANKSGIVING!
Sunday, November 19, 2017
November 19, 2017, Bob Brinker's Moneytalk: Stocks, Bonds, Economy and Investing
November 19, 2017.....Bob Brinker's Moneytalk...Brinker appeared to be on air live the first half hour and gave out the phone number once. But then reverted to rerunning old calls beginning at 1:35....(comments welcome)
Brinker was live with guest Barbara Weltmann in the third hour. See Frankj's summary below where the new tax bill is discussed, and Frankj does a comparison analysis of how much a caller pays now and how much he would pay under the new plan.
Radio Stations
710KNUS Denver
KKOB770
Brinker was live with guest Barbara Weltmann in the third hour. See Frankj's summary below where the new tax bill is discussed, and Frankj does a comparison analysis of how much a caller pays now and how much he would pay under the new plan.
STOCK MARKET....Brinker commented that next week would be a short week because of Thanksgiving on Thursday. He said to expect light trading volume the last couple of hours on Wednesday - and the market is closed on Thursday and shortened on Friday.
BRINKER'S 2018 STOCK MARKET PREDICTIONS: (Keep reading, they are below after he explains the economic reasons he bases his prediction on.)
HOUSING STARTS UP.... BB comments: Housing starts really good - increased by 13.7% in the month of October, and up to an annual rate of 1.29 million - the highest level in one year.
UPCOMING FOMC MEETING - INTEREST RATE CHANGE.....BB continued: "Put the housing start data in the plus column for the probability that the Federal Open Market Committee, at their up coming December 12th and 13th meeting, will announce an increase in the overnight Federal Funds lending rate from the current range of 1 to 1 1/4% to a new range of 1 1/4 to 1 1/2%. This announcement expected with high probability....."
JANET YELLEN'S LAST MEETING....BB continued: "Also there could be what very well may be the final media conference for the current Fed Chair and outgoing Fed Chair, Janet Yellen. She is able to serve her term out into the beginning of February when it is expected the reigns will be passed to the newly nominated Fed Chair who has to get through his confirmation process....."
BUILDING PERMITS....BB comments: Building permits rose close to 6%, the best gains since June. A big increase in the multi-family sector.
BUILDER CONFIDENCE.... BB said: Builder confidence remains very, very high based on the NAHB Wells Fargo survey.....That's all good news...
SMALL BUSINESS OPTIMISM....BB said: "Small business optimism increased again in October. It's at a level now of 103.8, and it's been above 100 for eleven consecutive months....Small business owners are optimistic, and if they look at the tax bill, they should be super-optimistic....."
ECONOMY IN GENERAL....BB comments: It continues to move along at a moderate pace. So far this year we have nine months of data and we will get an update on 3rd quarter by the end of this month.....
LOOKING AT Q1, Q2 AND Q3 GDP ESTIMATES....BB comments: The annual rate of growth for the first nine months of this year for real Gross Domestic Product......is 2.37%. For many years, we've been clicking along with an annual GDP growth rate in the low-2's, area of 2.2%....
WHY MODERATE GROWTH IS GOOD.... BB continued: So 2.37 is a decent number that has allowed the economy to grow without creating a lot of the excesses that can put serious pressure on an economic recovery......
NO OVERHEATING, NO INFLATION.... BB continued: We have not had the problem of an overheating economy, and as a consequence, the economy has continued to grow year after year at a moderate pace. And that has created an economy where corporate earnings can continue to grow, inflation stayed low - up until now.
CONSEQUENCES FOR THE FED..... BB said: "And it has created an economy where interest rates are reasonable, therefore the Fed has been able to maintain it's accommodative stance....."
CONSEQUENCES FOR THE STOCK MARKET....BB said: "So all of this has been happening here in 2017, and the stock market has liked this. The reason the stock market has liked it is because corporate earnings are the lifeblood of common stock prices....."
FORCASTING A GOOD STOCK MARKET IN 2018.... BB said: "Not only are we seeing an increase in corporate earnings in 2017 but in addition to that, the outlook is we are going to see a handsome increase in corporate earnings in 2018 in the stock market. If nothing else, the stock market is a discounting mechanism. It discounts future developments - primarily in the economy and as it relates to corporate earnings. So investors are looking, not only at a good 2018 earnings picture, they are looking at what has the potential to be an excellent 2018 earning picture...."
FRANKJ'S MONEYTALK SUMMARY OF TAX EXPERT BARBARA WELTMAN
PLUS, FRANKJ'S TAX EXPERTISE ON THE TAX BILL AND ANALYSIS OF ONE CALLER'S QUESTION:
Bob announced in the first
hour that he’d have an important guest in the third hour and he did – in my
opinion. The redoubtable Barbara
Weltman, tax expert and contributor to the J. K. Lasser tax handbooks was the guest
on the November 19, 2017 edition of MoneyTalk.
The Wall Street Journal has called her the Guru of Small Business
Taxes. Barbara has been a regular, often
appearing during a December broadcast, so it was nice to hear her in November. (Editorial
comments in italics as usual.)
Speaking of being a regular, I think she qualifies
for ALL levels of MoneyTalk SWAG: the
MoneyTalk pen and pencil set, coffee mug, golf visor, shoulder bag,
windbreaker, attaché case, and the sought after leather StarShip flight
jacket.
Not surprisingly the tax reform
being mulled over in the DC Swamp took up much of the interview.
Is it truly a
simplification?: Yes and
no. The reduction in the number of tax
brackets from 7 to 4 in the House bill looks like a simplification but with
most people doing their taxes using software or a preparer, it is not that
relevant. The elimination of tax breaks
simplifies things, yes. But, she said
the rules on the pass through taxes for small businesses are “exceedingly
complex.”
What about the loss of
state and local tax deductions and possibly the property tax deduction? Bob asked
Barbara what she thought about this, being a New York resident where these
taxes are high. Barbara said she now
lives in Florida. Bob got a chuckle out
of that and Barbara picked up the thread and said about two-thirds of filers
don’t itemize anyway. She said “we
can’t know” what effect that the loss of the property tax deduction might have
on real estate values. She pointed out
that Florida manages to provide services without an income tax or high sales
taxes.
What will CEOs do with
the money saved by lowering the corporate income tax? Bob challenged the notion that they would distribute
the largess to employees in the form of raises as has been suggested. Barbara may have agreed with Bob but if she
did she wasn’t very emphatic about it.
Bob posed a fairness
question: consider a very well paid
employee of a small business paying in the high 30’s (%) on a salary, and here
the owner of the business who presumably is also highly compensated, is taxed
at 25%. Barbara reminded Bob that the
owner of the business doesn’t necessarily get to take all that income
home. They need to invest some of that
income in the business.
Barbara was not overly
impressed with the new proposed rules for estate taxes. Both the
Senate and House versions propose to double the exemption and the House version
will do away with it entirely. Barbara’s
take: the super wealthy have already
figured out ways to avoid it using charitable deductions and foundations. In the end it raises a very minor amount of
revenue, given the complexity of an
estate tax return. (I read somewhere recently that the number of estates paying the federal
estate tax in a recent year was a little more than 5200).
Loss of the 401K
deduction? This seemed
to have been considered by the “reformers” for about 15 minutes which is how
long it took them to either come to their senses or to realize their phone
lines were jammed with irate voters.
Talk about a stupid idea – considering the pathetic rate of retirement
savings in this country.
Barbara seemed puzzled by
the idea and pointed out how it benefits many employees and that recently
companies got the OK for automatic enrollment of employees.
What about people who
work overseas? Barbara said the proposed rules say that you
can no longer deduct the taxes you pay to a foreign country but you can still
take advantage of the foreign tax credit.
Yeah, well… my experience with the
foreign tax credit for taxes paid on dividends from foreign stocks is this
: you don’t get it all back in a single
year, and yes, you can carry it forward, but I’ll never recover all of it.
Gremlins got in the lines
while Barbara was giving this answer. It
went out 5 x 5 over the airwaves but apparently Bob didn’t hear it so she
gracefully repeated it.
A favorite topic of
Bob’s: carried interest. John in
Albany, NY brought this up: Hedge fund
guys and gals get to pay capital gains tax rates on their income while the rest
of us pay ordinary income tax rates.
Barbara said there is no change to this in the proposals but some fix
may be slipped in late in the game. Bob
said the donors who include hedgies have a lot to say about this reform. Barbara seemed to hold out that the change
could happen. She said if everyone
complains about the reform then it might be a success.
Bob pointed out that about
45% of filers don’t pay any federal income tax.
Barbara agreed.
FIFO or LIFO? Caller Neil
said the reform may remove the ability for an investor to elect the Last In
First Out provision when selling a part of a position, whether a mutual fund or
an individual stock. The new rules would
force one to use First In, First Out accounting for the gain. Barbara said it was probably part of the
plan to mitigate the loss of tax revenue because the first shares bought in an
investment would probably have the highest gain.
Barbara told John from KSFO
Country that the reason there is no step up on an inherited IRA is because
there was no tax on the income that went in (and no tax on the earnings).
Deferred compensation. Kirk
(Curt?) from Los Angeles called with a question about a deferred comp plan at
his company. But it was Kirk’s wife that
came on the line (“He can’t talk). And we could barely make out the question
because the audio quality from her phone was bad. Barbara and Bob pointed out that you better
be confident in your company’s future because if things go south, too bad you
may get nothing.
Finally, Patrick from
Chicago rounded out the batting order with a statement that with 4 kids, he
thinks he’s going to end up paying more in taxes with the loss of the personal
exemptions on himself, his wife, and all 4 kids. Barbara said the things he mentioned are
deductions to gross income but the child and family tax credit is going up from
$1000 to $1600. These are credits which
will reduce the taxes owed on a dollar for dollar basis.
I did some Jethro ciphers and compared what Patrick
might have owed on his 2016 taxes using the rules in effect then. Assumptions:
adjusted gross income 100,000.
Deductions: standard, and 4 personal exemptions totaling $36900. No itemizing, no other adjustments.
From Bankrate.com:
Taxable income $63,100. Tax $8541.
Child tax credit 4 x 1000 = 4000.
Tax owed, $4541.
Using the Senate proposal. $100,000 less 24,000 standard deduction =
$76,000 taxable income. Tax on that is
$8739. (The first 19,050 taxed at 10%
and the rest at 12%). Senate uses $2000
per child for child tax credit = $8000.
Tax owed $739.
This is such a big swing I wonder if it can be
right, but that’s how it came out.
Didn’t Paul Ryan say some families will save enough to remodel their kitchen? Patrick and his wife might want to start
discussing countertops, window treatments and appliances.
Bob wrapped up at around
3:54 pm
Guest author Barbara Weltman: "J.K. Lasser's Your Income Tax 2018: For Preparing Your 2017 Tax Return"
Radio Stations
710KNUS Denver
KKOB770
Sunday, November 12, 2017
November 12, 2017, Bob Brinker's Moneytalk: Stocks, Bonds, Economy and Investing
November 12, 2017....Bob Brinker was 25 minutes late, then came on live.....(comments welcome)
BOB BRINKER'S BIG ENTRANCE TODAY.....The first 25 minutes were re-runs, but as Brinker ended one of the re-run calls, someone hollered for him to "Go" and walla, he was live on air for the remainder of the program.
==> A treat for all who want to hear that happen from Rahme's audio clip. You will hear it 34 seconds in - then Brinker begins talking about the tax plan proposals.
STOCK MARKET.....Brinker commented that the S&P 500 Index is at 2582, just below the all-time-high of 2597 - that is up 15.3% since the start of the year.
BRINKER STILL BULLISH AND FULLY INVESTED - BUT NOT THE SAME ALLOCATION FOR EVERYONE:
1. BB told 31 year-old Michael from Chicago who was invested 90% stocks and 10% bonds, that in his case, he had no problem with that high stock allocation.
2. BB told Roy from Minnesota, who is invested in model portfolio III and is now at 60% stocks and 40% fixed income, to wait until January to re-balance so he can delay any taxes incurred.
BOND MARKET....BB is maintaining his Marketimer bond funds that are high-yield, but low duration.
NATIONAL DEBT AND DEFICIT....Now Brinker is upset about the national debt and deficits every week. Over the past eight years, he would occasionally mention it.
TAX-REFORM AND POLITICS....Brinker devoted most of the first hour that he was on live to discussing the House and Senate tax-reform proposals. (listen to dRahme's audio clip above)
TAX CHANGES THAT WILL NOT HELP MIDDLE CLASS (according to Brinker):
1. As BB said last week, he is for corporate tax cuts, but made the claim that it will not help the middle class.
2. He is against doing away with the inheritance (death) taxes and claims it will not help the middle class.
3. He is very negative on removing the deduction for state and local taxes. Brinker even went so far as to suggest that people will leave California because of that change.
Honey EC: Brinker referred to "low information people" but he hurried on so I'm not sure who he was talking about exactly
SLAMMING A CALLER WHO DISAGREED WITH HIM.... Caller George from Kansas City, who said he was a business man gave several reasons why the corporate tax cuts would help the middle class. Brinker started his reply with these words: "There's a lot of fiction in what you said!"
Honey EC: George was very gracious and continued trying to reason with Brinker, but it didn't work. Brinker is convinced he knows it all.
TIME TO THINK ABOUT TAX LOSS SELLING ..... Brinker said it was getting into the time to "harvest tax losses." This year, the last trading day will be on December 29th.
==> Thanks to dRahme, audio clip of Brinker's suggestions for tax loss selling.
WASH SALES RULES.... Brinker reviewed the "wash sale," for those who want to keep the same stock they are selling at a loss. Here is a great review of the rule: A PRIMER ON WASH SALE RULES (LINK)...
Honey EC: Rande Speigelman, who wrote the primer for Charles Schwab, is an old friend of mine and former Bob Brinker "critic,"
710KNUS Denver
KKOB770
BOB BRINKER'S BIG ENTRANCE TODAY.....The first 25 minutes were re-runs, but as Brinker ended one of the re-run calls, someone hollered for him to "Go" and walla, he was live on air for the remainder of the program.
==> A treat for all who want to hear that happen from Rahme's audio clip. You will hear it 34 seconds in - then Brinker begins talking about the tax plan proposals.
STOCK MARKET.....Brinker commented that the S&P 500 Index is at 2582, just below the all-time-high of 2597 - that is up 15.3% since the start of the year.
BRINKER STILL BULLISH AND FULLY INVESTED - BUT NOT THE SAME ALLOCATION FOR EVERYONE:
1. BB told 31 year-old Michael from Chicago who was invested 90% stocks and 10% bonds, that in his case, he had no problem with that high stock allocation.
2. BB told Roy from Minnesota, who is invested in model portfolio III and is now at 60% stocks and 40% fixed income, to wait until January to re-balance so he can delay any taxes incurred.
BOND MARKET....BB is maintaining his Marketimer bond funds that are high-yield, but low duration.
NATIONAL DEBT AND DEFICIT....Now Brinker is upset about the national debt and deficits every week. Over the past eight years, he would occasionally mention it.
TAX CHANGES THAT WILL NOT HELP MIDDLE CLASS (according to Brinker):
1. As BB said last week, he is for corporate tax cuts, but made the claim that it will not help the middle class.
2. He is against doing away with the inheritance (death) taxes and claims it will not help the middle class.
3. He is very negative on removing the deduction for state and local taxes. Brinker even went so far as to suggest that people will leave California because of that change.
Honey EC: Brinker referred to "low information people" but he hurried on so I'm not sure who he was talking about exactly
SLAMMING A CALLER WHO DISAGREED WITH HIM.... Caller George from Kansas City, who said he was a business man gave several reasons why the corporate tax cuts would help the middle class. Brinker started his reply with these words: "There's a lot of fiction in what you said!"
Honey EC: George was very gracious and continued trying to reason with Brinker, but it didn't work. Brinker is convinced he knows it all.
TIME TO THINK ABOUT TAX LOSS SELLING ..... Brinker said it was getting into the time to "harvest tax losses." This year, the last trading day will be on December 29th.
==> Thanks to dRahme, audio clip of Brinker's suggestions for tax loss selling.
WASH SALES RULES.... Brinker reviewed the "wash sale," for those who want to keep the same stock they are selling at a loss. Here is a great review of the rule: A PRIMER ON WASH SALE RULES (LINK)...
Honey EC: Rande Speigelman, who wrote the primer for Charles Schwab, is an old friend of mine and former Bob Brinker "critic,"
FRANKJ'S MONEYTALK GUEST-SPEAKER SUMMARY
Professor Lawrence Jacobs of the University of Minnesota was Bob’s guest in the third hour of the November 12, 2017 edition of MoneyTalk. Prof. Jacobs and co-author Desmond King authored the book "Fed Power, How Finance Wins"
The guest is not a big fan of the Federal Reserve. He made it clear he is not advocating their abolishment, but he believes they lean too much toward making sure the financial sector is taken care of and they show less concern with the average Joe and Jill.
When home loans were being packaged into tradable securities with little or no transparency as to the risks, the Fed and other agencies should have stepped up.
Alan Blinder, former Fed member and a favorite of Bob’s has said the Fed is non-political. The guest disagreed, citing minutes he’s read where the Fed was concerned about how their actions would be viewed by us, The Great Unwashed. (My phrase, not his). Prof. Blinder has said the Fed is an “independent neutral arbiter.” The guest disagreed saying there has been a consistent pattern of the Fed favoring financial interests and not favoring consumers.
The trade-off between “finance” and consumers is a big difference between the way Canada’s central bank operates and our Fed. He said the Canadian central bank limits risk to consumers and this is a reason the Great Recession did not hit as hard, north of the border. The government of Canada does not promote home ownership via the tax code like we do. He believes this is one reason Canada has avoided a boom and bust cycle.
The guest said the Fed cut secret deals with the Finance crowd after the 2008 crash. He cited the Bank of Canada and Bank of England as having supported their financial institutions with credit . But, it came with conditions that they loan to businesses and be willing to renegotiate existing loans. Our Fed didn’t do that, nor did our Fed clamp down on executive compensation.
On Glass Stegall, the separation of banks’ investment programs from safeguarding depositors: The guest agreed with Bob that separation makes sense.
On the recovery from the 2008 crisis: The top 1% have more than recovered, most others have not.
Was the Troubled Asset Relief Program (TARP) the right thing to do? Yes, but in his opinion it reinforced the public perception that the government was on the side of the financial sector.
What about the next crisis? He said there will be another one, at some point, and he’s concerned with the Fed’s ability to respond.
Globalization: Bob posited that this “new kid on the block” is a reason why the many people have not recovered, financially. The guest seemed to go along with that.
The guest brought up President Trump a couple of times during the interview, citing him as a critic of the Fed during the campaign. Bob pointed out that he has appointed a virtual clone of Janet Yellen in the person of Jerome Powell, so he must not be that big an enemy of the Fed. The guest speculated that the President understands the Fed is quite well established in Washington. He also mentioned that there has been a “push for audits,” and maybe the New York Fed governor should be approved by Congress. (Ed. note: on the audit question, Alan Blinder has said on prior interviews that the Fed IS audited.)
Honey here: Thank you for the informative summary! I think this happened to be a guest that Brinker did not always agree with, but he was polite to him.
Today, Brinker mentioned a couple of his previous Moneytalk guests.
Here are the links to Frankj's summaries of those guests:
Here are the links to Frankj's summaries of those guests:
Radio Stations
KKOB770
Sunday, November 5, 2017
November 5, 2017, Bob Brinker's Moneytalk: Stocks, Bonds, Economy and Investing
November 5, 2017....Bob Brinker was live on Moneytalk the first hour, the second hour was re-run calls, third hour guest Jeffrey Gundlach. .........(comments welcome)
STOCK MARKET....Blog comments earlier today right here:
KC said...
Just curious what everyone thought of the call, about halfway through the first hour from the caller asking about paying $500,000 for the building of his new home. He started to ask Bob about how to withdraw the construction fees from his investment account. When the caller mentioned a reference to something in the November newsletter, Bob quickly jumped in and cut the caller off with a generic answer and waiting until the start of 2018 to defer the capital gains taxes. Any ideas on what the caller was going to reference in the November newsletter that Bob did not want disclosed over the air?
JUST RELEASED TAX-REFORM PROPOSALS..... The first hour of Moneytalk was devoted almost exclusively to the new tax reform proposal that was announced by Speaker of the House, Paul Ryan, this week. Since we all know that there is a ton of water that will go under the bridge before any of it becomes actual law, I won't waste my time or yours covering the callers' complaints.
BB's LIKES AND DISLIKES OF THE TAX PROPOSAL.....Brinker opined that Paul Ryan should not call the House tax proposals a "middle-class tax cut" because most of the benefits go to corporations. Brinker said he likes: The corporate tax cuts (clearly good for business) Brinker does not like the repeal of the death (estate) tax - says it only benefits rich people.
Honey EC: The people who are hurt the most by the death tax are farmers. Truly rich people will easily find ways to pass on their money without paying much tax, but small and mid-size family farms are often lost because the heirs cannot raise enough cash to pay the exorbitant taxes.
MARK FROM ARIZONA CALL IS JUST AS MUCH FUN THE SECOND TIME AROUND....(This re-run call was from April 5, 2015 - excerpts from my summary.)
A TREAT FOR ALL FROM DRAHME: audio clip of Mark from Arizona
* Mark from Arizona was one of the most interesting calls in the history of Moneytalk. He met his future wife on an online Christian dating service. They will marry in a few months and she will inherit around $70,000.000. He told Bob that the money was invested in natural resources. Bob told him to look at the fees that are being charged.
Honey EC: What this caller said was either a late April Fool's joke on Brinker or he was about to become shark bait. Brinker played him along by asking if he had known about this money coming to his "future wife" BEFORE he decided to marry her. He said he didn't know about it, that her deceased father's attorney had contacted him after they decided to marry, and told him that her father set it up so that she couldn't touch the $70 million until she married. And then.....yep....wait for it....Then the new husband would be given control of it. ROFLOL!
KKOB770
STOCK MARKET....Blog comments earlier today right here:
KC said...
Honey here: Brinker did indeed interrupt the caller, Bob in PA. Brinker said that there was nothing in the November Marketimer that would give any reason to be worried about the stock market. He replied that since the caller had "already spent" his money, he should go ahead and raise the cash - being sure to consider the taxes, as you pointed out. I have read the latest issue of Marketimer, and I agree with Brinker - nothing there to worry about.
=> THANKS TO DRAHME: Audio clip....stock market and tax proposals
BOND MARKET....(This was a rerun call from April 5, 2015 that BB played in the second hour - excepts from my summary on that date:)
Connie from Kansas City called with a couple questions. She and her husband are 60, plan to work to age 70 and have a cool million in equities. Bob advised a 60/40 or 65/35 allocation, stocks/bonds and pointed Connie toward the Income Portfolio on page 7. A listener with access to the newsletter could better follow this call as Bob jumped back and forth between the Income Portfolio and another one of his (numbered) portfolios that contains bond funds.
Interestingly, Bob said that “we’ve solved the bond market problem…” referring to the page 7 portfolio yielding 3%. Connie said she’s signed up for Bob’s alerts. Her next topic: the business they own has its 401K plan with a company other than Vanguard and she asked about switching to save money. Bob helped her with the math: if they have $2 million in this plan and Vanguard charges 18 basis points and the current firm charges 36 bp, then she’ll save $3600 per year.
Connie from Kansas City called with a couple questions. She and her husband are 60, plan to work to age 70 and have a cool million in equities. Bob advised a 60/40 or 65/35 allocation, stocks/bonds and pointed Connie toward the Income Portfolio on page 7. A listener with access to the newsletter could better follow this call as Bob jumped back and forth between the Income Portfolio and another one of his (numbered) portfolios that contains bond funds.
Interestingly, Bob said that “we’ve solved the bond market problem…” referring to the page 7 portfolio yielding 3%. Connie said she’s signed up for Bob’s alerts. Her next topic: the business they own has its 401K plan with a company other than Vanguard and she asked about switching to save money. Bob helped her with the math: if they have $2 million in this plan and Vanguard charges 18 basis points and the current firm charges 36 bp, then she’ll save $3600 per year.
Honey EC: Brinker's answers to Connie were very important in that Brinker claimed the risk has been taken out of his bond fund holdings. That is not so because he has added funds with large holdings in high-yield (junk bonds). Marketimer has three bond funds in the balanced model portfolio III, and in his "off-the-books" income portfolio (MWCRX, OSTIX, DLSNX).
BB's LIKES AND DISLIKES OF THE TAX PROPOSAL.....Brinker opined that Paul Ryan should not call the House tax proposals a "middle-class tax cut" because most of the benefits go to corporations. Brinker said he likes: The corporate tax cuts (clearly good for business) Brinker does not like the repeal of the death (estate) tax - says it only benefits rich people.
Honey EC: The people who are hurt the most by the death tax are farmers. Truly rich people will easily find ways to pass on their money without paying much tax, but small and mid-size family farms are often lost because the heirs cannot raise enough cash to pay the exorbitant taxes.
MARK FROM ARIZONA CALL IS JUST AS MUCH FUN THE SECOND TIME AROUND....(This re-run call was from April 5, 2015 - excerpts from my summary.)
A TREAT FOR ALL FROM DRAHME: audio clip of Mark from Arizona
(we didn't have this the first time around - ENJOY!)
* Mark from Arizona was one of the most interesting calls in the history of Moneytalk. He met his future wife on an online Christian dating service. They will marry in a few months and she will inherit around $70,000.000. He told Bob that the money was invested in natural resources. Bob told him to look at the fees that are being charged.
Honey EC: What this caller said was either a late April Fool's joke on Brinker or he was about to become shark bait. Brinker played him along by asking if he had known about this money coming to his "future wife" BEFORE he decided to marry her. He said he didn't know about it, that her deceased father's attorney had contacted him after they decided to marry, and told him that her father set it up so that she couldn't touch the $70 million until she married. And then.....yep....wait for it....Then the new husband would be given control of it. ROFLOL!
* Dave from Alabama said he was enjoying todays show. He wanted to know the number for the Christian dating service that Mark was using. He noted the possibility that Mark was being scammed. Bob said if he was ask to wire money so he could get the inheritance he should watch out.
FRANKJ'S MONEYTALK GUEST SUMMARY
Bob’s third hour guest on this first Sunday of November 2017 was Jeffrey Gundlach. Mr. Gundlach is the CEO of the Doubleline family of mutual funds which he started in 2009 after leaving the TCW family of funds. Bob has spoken highly off JG in the past and has Doubleline’s Low Duration Bond fund (DLSNX) in his income portfolio and his model III portfolio. You can read more about Mr. Gundlach here:
Bob must have been beaming behind the microphone when Mr. Gundlach told Bob he’s been a listener since 1986. (He would have been 27 years old).
The coming transition at the Federal Reserve: JG thinks Jerome Powell is a centrist and will follow through with the planned interest rate increases. Mr. Powell is not a classically trained economist though, he is more of a pragmatist. The Fed has indicated 3 raises in 2018, while “the market” thinks there may only be one raise.
William Dudley who represents the New York Federal Reserve bank is close to announcing his retirement so the shape of the Fed could change more with his replacement.
The guest echoed the sentiments of other, recent guests regarding the Fed’s diligence at telegraphing their plans. He referenced Ben Bernanke’s unfortunate reference that led to the taper tantrum in 2013. This Fed is doing a better job at carrying out a “no surprises” approach.
There was the usual talk about GDP and 10 year Treasury rates. JG said that the 10 year rate often moves close to what the GDP is. Interesting.
It takes population growth and productivity growth to increase GDP. This is a topic we’ve heard often enough with guests – readers better assume it will be on the final exam. The guest said he sees GDP only at 3% on the high end. He said those predicting higher numbers might be mathematically challenged. We are only looking at 0.7% population growth and 0.7% productivity growth. Those numbers aren’t enough to get us to 4% GDP. Again, he echoed what other guests have said about measuring productivity – it is hard to do with the amount of automation in factories.
Other countries: Russia is looking at a projected fall off in population. China had a lot of population growth but they “fixed” that with their one-child policy which slowed down their growth. India’s labor force is going to explode and he sees this as a positive. He recommended the INDA ETF as a long term holding.
Junk bonds: They are not signaling a recession right now. When their yields depart widely from treasury bonds however, watch out. If you own any “bank loan” type mutual funds you might want to take note: Loans are being issued to borrowers without covenants. Issuing WITH covenants used to be the way things were done … having these in place protects investors in these funds. Now, it is thought that placing covenants on a borrower means the borrower is too risky and there must be something wrong. Read your prospectus.
Is the Fed creating inflation? That was the question from Carl, a repeat caller listening to WLS in Chicago. By alluding to 3 rate hikes in 2018, is the Fed inadvertently creating inflation? Mr. Gundlach said, as much as they would like to have some inflation, no, he did not think enough people even knew what the Fed was, much less would act on what they thought the Fed might do.
Mike in Vallejo, CA threw a hanging curve ball to the guest. “Is this a good time to invest in a bond fund?” Of course Mr. Gundlach, a fixed income expert said “you might want to invest in a low duration fund of 2-4 years.” Bob stayed silent which might have been difficult since he’s been pounding the table on short duration funds for quite a while and Mr. Gundlach’s Low Duration bond fund is in Bob’s stable of funds, as mentioned above.
The House GOP’s proposed tax package: First of all, the guest does not think it will pass as written. He didn’t like the fact that it did not do away with the “carried interest” provision that allows the hedge fund operators to pay capital gains tax rates on their earnings, versus ordinary income rates. He said the package is bad for top wage earners and said his taxes in California are going to go up. It is very good for the heirs of the wealthy.
Was it live or is this Memorex? Remember those old TV ads? The consensus seems to be that the second hour was pre-recorded. This third hour sounded like the usual, live third hours.
Radio Station KKOB770
Subscribe to:
Posts (Atom)