Sunday, April 15, 2018

April 15, 2018, Bob Brinker's Moneytalk: Stocks, Bonds, Economy and Investing

April 15, 2018....Bob Brinker was live on Moneytalk......(comments welcome)

STOCKS....Bob Brinker made no comments about the volatile stock market last week  except in reference to the tariff proposals discussed below. Even with all the volatility, stocks made gains for the week. From a report I posted in comments after the close on Friday:

The Dow Jones Industrial Average closed Friday at  24,360.24....The S&P 500  at 2,656.30.....The Nasdaq at 7,106.65.  The major indexes were up at least 1.8% for the week, driven by a rebound in technology stocks and a strong run for energy companies in reaction to higher oil prices. Investor optimism also got a boost from easing trade tensions between the U.S. and China.....

Wells Fargo dropped more than 3% after confirming in its first-quarter results that regulators have offered a $1 billion fine to resolve auto insurance and mortgage lending abuses. It did not disclose whether it would agree to settle with the Consumer Financial Protection Bureau 

LONG-TERM BOND FUNDS.....Caller Ann from Chicago, net worth almost $2 million asked BB if she should sell the $150K she had in a long term bond fund and put it in an intermediate-term bond fund. 

BRINKER'S BLACK COMEDY JOKE ......Brinker asked Ann about the maturity and yield of the bonds.  When Ann said she didn't know, he sarcastically said:  "You are an extremely well informed investor. Would that be right?"  Ann, not getting his insult,  answered: "Yes. but I should have had answers to those two questions."  BB began backpedalling fast saying, "Well, that was my point. It was just a black comedy joke. Strike it if you like."

BONDS COULD BE "KATY BAR THE DOOR".... BB continued talking to Ann: "Let's say the yield on the long-term Treasury Fund is 3%, let's say the duration is 12.....That would mean if rates went up 1%, and in the current world, 1% seems like a lot.....but they have already doubled. They were below 1.4 in the summer of 2016, now the 10 year Treasury is 2.8.....And there is risk with all the supply coming online - and if there is any inflation that shows up, it will be Katy Bar the Door on the bond market....There is risk there." 

"MONEYTALKERS"  DO YOU CARE ..... BB continued:  "It depends on whether you care.....If you have a duration of 10 and a yield of 3, that a 1% increase in rates over one year will result in a 7% decline in total value of the account, assuming you are re-investing interest - but some people do not care. You have to decide whether you care.  That's the same answer that would apply to all Moneytalkers that have long-term bonds. First of all, do you care whether the net-asset-value continues to decline since it has declined since the summer of 2016?" 

DON'T CARE? THEN FORGETABOUTIT....BB continued: "Do you care? Cause if you don't forgetaboutit. Just go about your day and forgetaboutit. You don't care." 

IF YOU RATES NORMALIZE..... BB continued:  "If you care, then you need to prepare yourself mentally for what would happen if rates normalize.....If rates normalize, a reasonable rate for a ten year Treasury would be about 4 1/2%. Where does that number come from? That would be taking the Fed's forecast  for the next couple of years, averaging it out to roughly 2 1/2% in real GDP growth....And add that 2% inflation that the Fed has promised us and we are getting close to it......that's 4 1/2....

UNITED STATES TEN-YEAR TREASURY HISTORY.... BB continued: "If  you go back through the history of the United States bond market, the ten-year Treasury has tended to have a yield in the neighborhood of the real GDP growth rate plus inflation - right now that's 4 1/2. That is why I would not buy a ten-year Treasury right now at 2.8 - not paying enough money......"

AND FINALLY, THE OTHER SIDE..... BB continued:  "On the other side of it you could say rates are never going to go up. I'm going to hold my long-term bonds....Maybe you'll be right." 

TAX DEADLINE AND EXTENSIONS.....BB comments: The deadline for filing taxes this year is April 17th. You can apply for a six month extension to file the paperwork, but be aware that you still have to pay what you owe by the deadline. The last day for IRA contributions is also April 17th.. 

IRA CONTRIBUTION COVERED BY EARNED INCOME.... BB comments:  The only money that can go into an IRA must be earned.  Money from any other source, such as interest, dividends, inheritance does not qualify as earned income. 

==>dRahme Audio Clip: Tax Time and Bob's State Tax Quiz 

TARIFFS - CHINA'S FIRE POWER, CRANBERRIES AND WHISKEY ....BB comments: "Something going on out there that has caused so much upset in the markets, especially the stock market...."  (Brinker give some detail and some opinions about  the ongoing tariff discussions in dRahme's audio clip.)

==> dRahme Audio Clip: Taxes and Tariffs 

FACEBOOK, MAXI-BILLIONAIRE MARK ZUCKERBERG AND CONTRIBUTIONS TO CONGRESS.....BB said: " Mark Zuckerberg is in the hot seat before the Senate and House members that were questioning him, right?  I'm looking at those softball questions. Some of them were ridiculous - 'oh wow, everybody in my house uses Facebook, it's great"...... What was this, a coronation?  I looked at the list of contributions that Facebook has made to the politicians and I saw Cory Booker, the Senator from New Jersey, has taken over $40,000 in campaign money from Facebook. And then I saw Kamela Harris, the Senator from California has taken over $30,000 from Facebook....And that is just the tip of the iceberg....." 

Honey sez: I also watched Zuckerberg and agree with what Brinker said. You can hear all of Brinker's comments about Facebook on dRahme's audio clip, but it might make your blood boil.

==>dRahme Audio Clip: Next Week and Facebook Rant

BRINKER'S MONEYTALK FINAL EXAM QUESTION:  "There are two states that do not tax earned income, but they tax unearned income, including interest and dividends. There are seven others that have none at all. Do you know what they are?  I would be a fool not to put that on the Moneytalk final exam." 

BRINKER DID NOT HAVE A GUEST-AUTHOR FOR THE THIRD HOUR TODAY. (Frankj got an unexpected vacation - without pay.) 

Listen Online Radio:

http://710knus.com/

36 comments:

frankj said...

Bob must be working on his own taxes today.

Honeybee said...

.
Please note my email address is: honeybee.roses@gmail.com

You do not have to have a Google account to email me.

Herbert Jay S. said...

Bob does seem to be live. He's commenting on tax day.

Honeybee said...

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LOL Frankj!

Can you visualize Bob Brinker sitting down and working on his own taxes?

I think it's more likely a flock of pigs will land on my deck.

Honeybee said...

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Brinker just went LIVE! 22 minutes into the program.

Unknown said...

i disagree,... i think the show is LIVE today april 15th.

Jim said...

I felt Brinker was live because he said today is April 15. I don't know why he delayed giving the phone number. Maybe he did it to just toy with us and try to fake us out.

Honeybee said...

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Jim...I thought about that! Perhaps I was suckered.

But I have heard him use dates before to sucker us in the other direction when he was actually gone.

frankj said...

I listen on WNTK. The show started at the usual time, about 6 minutes past the hour. It went a little way into the monologue and then suddenly went to local WNTK ads, then the show re-started at about 11 after the hour. Odd.

The Brinkster is toying with Ms. Honeybee and her followers. The last time he was on live, he delayed in giving out the number.

Honeybee said...

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Well, we can all guess at the first 20 minutes and wonder why he did not give out the number until after the monologue.

I don't remember him ever doing that before.

I do not think he was there - but that's just my opinion.

Herbert Jay S. said...

Checking out Bob's net worth. I've seen the figure $25 million in a couple of spots. Anyone interested, here is the URL:
https://www.celebritynetworth.com/richest-businessmen/bob-brinker-net-worth/

Bluce said...

Jim said: "I felt Brinker was live because he said today is April 15. I don't know why he delayed giving the phone number. Maybe he did it to just toy with us and try to fake us out."

Are you saying that The Honorable Robert Brinker, Sr., can be anything less than honest

Say it ain't so!

Daddy Paul said...

Paul Ryan's district grows cranberries??? Can Bob read a map?? Does he do any home work at all any more???

Daddy Paul said...

Bob sure does not study tax and ira rules. Bob is getting pathetic.

Daddy Paul said...

Honey thank you for doing this blog. I can't stand Bob anymore.

Unknown said...

Seems like Bob is live now on 3rd hour.. Giving commentary for economic news for the week and announced 800#.

Cheers.
Mike

Bluce said...

At half past, Imma thinking these are old calls. In recent years Bob has ALWAYS had a guest on the third hour. Not so today.

House Doc said...

I tuned in for a rare peek into the Starship while painting. I think there are no new questions to ask Bob. The situation may differ but his solutions and opinions stay the same. Best to all, enjoy the blog HB.

dRahme said...

About Cranberries.....that triggered a memory from the short time I visited the state.

From a website: "Wisconsin is the nation’s leading producer of cranberries, harvesting more than 60 percent of the country’s crop. The little red berry, Wisconsin’s official state fruit, is the state’s number one fruit crop, both in size and economic value. "

Daddy Paul said...

Very true but the cranberries are grown in the north. Very few are grown in Paul Ryan southern district. It is a cool time to visit the dairy state when the berries are being harvested.

dRahme said...

"Very true but the cranberries are grown in the north. Very few are grown in Paul Ryan southern district."

Boy if I need a lesson on splitting hairs, I now know where to go!

Kilgore Trout said...


The discussion will be improved with only registered members commenting.

Bluce said...

Trout guy said: The discussion will be improved with only registered members commenting.

What about Bacon Boy? He's registered but . . . well . . .

Honeybee said...

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No worries about our Bacon Boy. He and his cute little nose is always nearby. :)

frankj said...

House Doc: MoneyTalk is good company while painting. I still remember years ago, listening to Bill Flanagan while painting. It was the broadcast where he said "Chrysler makes (explitive) cars." I almost dropped the roller.

burt said...

Frankj here is the audio:the broadcast where he said "Chrysler makes (explitive) cars."

at 5:22
https://youtu.be/ssFEIcts7PQ

Honeybee said...

.
Nice day on Wall Street:

U.S. stocks rallied Monday, as strong corporate earnings helped investors brush off geopolitical concerns.

More on this story: https://www.foxbusiness.com/markets/dow-gains-213-points-on-earnings-optimism

smile_1 said...

My taxes were not simplified yet thanks to HPQ spinoffs of HPE which spunoff DXC and MFGP and figuring tax basis. Luckily I found this tax basis calculator and was able to confirm based on form 8937. The MFGP was especially strange because it involved a foreign entity (inversion) which caused the spinco to recognize gain on what normally is a tax free spinoff. Any gain is then added to basis of MFGP... simple as PI.

Wow what a mess and all I had to do is sell HPE before those dagblamed spinoffs.

Cool thing was I was able to pick up an additional $400 refund by using the IRS sales tax calculator and, I also found another $100 of contributions to Salvation Army I missed my 1st pass a couple months ago. Procrastination due to spinoff cost basis weariness.

Oh well all I need to do is efile. Probably do another quick review b4 sending.

Good day in the market - keep it up folks. I need to sell some more stock. Feeding the fish.

Honeybee said...

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Irwin from Skokie has personal reasons why he does not have a Google account, so he sent his comments to me via email. I am happy to publish them for him. (Next post.)

Honeybee said...

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Posted by Honeybee for Irwin in Skokie:

NO google or home internet, I do my travel agent work at the library. Would
like to still comment on the site via special arrangements. Paul Ryan lives
in the district where FOXXCONN China is opening a factory..Tax breaks from the
state,mucho jobs, infrastructure, and population boost. He can work, lobby,
make $$$$$ just cheesin' in Wisconsin. IRWIN in Skokie

Bluce said...

"Cheesin' in Wisconsin," Irwin in Skokie, Pig in the mud, Bluce in the dark . . .

smile_1 said...

FYI, might be a good idea to update your router's firmware, and also ensure you are using a strong password for the router not the default password.

https://www.cnet.com/news/us-uk-warn-of-russian-hackers-targeting-millions-of-routers/

Kilgore Trout said...

Paul Ryan just wants to spend more time with his tax cuts. (Borrowed from China)

Bluce said...

Anybody want a good laugh? Read this article about the new Cuban leader.

But ESPECIALLY read the comments below. I read probably 50 or more and EVERY ONE of them ridiculed the idea, as it should be ridiculed. And this is on the left wing Yahoo news page.

Where are the voices of "The Resistance?" Haha.

Bluce said...

Anybody home?

frankj said...

Our pal, Alan Blinder has another book out. "Advice and Dissent." So I wonder how long before he is back during the third hour? Yawn.