STOCK MARKET....Brinker commented that the S&P 500 Index closed Friday at 2670, which is 7% under the all-time-high. The Dow is at 24,463, that is 8% below all-time-high of 26,616.
April 2018, Marketimer, Bob Brinker wrote: ".....For now, we continue to recommend a dollar-cost-average approach for new stock market investing, especially during periods of market weakness.......all Marketimer equity allocations in our model portfolios remain fully invested. In our view, the primary market uptrend remains intact....."
WHO SEZ THE FOMC DOESN'T CONTROL THE MARKETS
IMPACT OF MASSIVE QUANTITATIVE EASING -WHAT HAPPENED....BB commented: "Ten-year Treasuries are now at 2.96 and one of the reasons is because of the left over impact of the three Quantitative Easing programs that the Federal Reserve implemented in years past.....involving the purchase of trillions of dollars of Treasury and Agency Securities which have been parked on the Federal Reserve balance sheet for years, and thereby, they have not been in the open market. That debt was taken out of the public market place and placed on to the Fed balance sheet as a result of their effort to lower interest rates to support consumer spending and to stimulate the housing market......And most of the Treasury and Agency paper purchased during the 3 QE programs is still parked on the Fed balance sheet......"
QUANTITATIVE TIGHTENING = FOMC DUMPING TREASURIES ON MARKET....BB continued:....."They have relegated a small part of it back into the open market because they started their Quantitative Tightening program a few months.....So they have started to redeem it and put back into the public marketplace.....However, they are in the beginning stages of QT....It will not reach its full level of disengagement from the Fed balance sheet until the 4th quarter of this year. We still have to get through the next 5 months, to get to October - when at that point the disengagement rate will reach and annual rate of $600billion. That is $50billion per month = $12billion a week....thrown back into the open market......"
NEW PRESIDENT, BETTER ECONOMY, AND FED DOES A 180..... BB continued:"So even though times are good economically, and the economy has been growing in the 2's - which is a very welcome for investors because it avoids a lot of the problems that come from rapid growth. So we have a budget deficit that is through the roof. We had a combination of activities recently that just blew the lid off the deficit. One was a tax cut that added $150billion a year to the deficit, and the other one was the recent spending agreement that just blew off the deficit. Hundreds of $billions of spending authorized by Congress......As a result of all of this supply and debt, rates are going up.....U.S. 30-year Treasury is at 3.15% right now...."
YIELD CURVE NOT FLAT OR INVERTED (YET)...... BB continued: "The yield curve continues to flatten....We are down to a yield curve that has only 50 basis points between the two year and the ten year. The two year is yielding 2.46 and the ten year is 2.96....But it has not yet flattened entirely or inverted....Bond market investors are very closely tuned in right now because the Treasury rate is getting close to 3%, and the area around 3.05% has been seen as an important technical level for the Treasury rate....
EQUITY INVESTORS FACE THE FED'S TSUNAMI..... BB continued: "So all of this has been a headwind for equity investors as they try to grasp the tsunami of supply that is coming down from the U.S. Treasury. On Monday, we get $90billion in three and six month Treasury Bills. On Tuesday, we $26billion in one-year Bills, and $32billion in two-year Notes - the highest in a long time. On Wednesday, we get $17billion in two-year floaters, and $35billion in five years, Thursday we get $29billion in seven year notes......"
Honey EC: Brinker definitely downplays the growth in the economy, and hammers the deficit and national debt. Brinker has never pointed out the national debt doubled under both Bush and Obama.
CHINA TOP THIEF OF U.S. INTELLECTUAL PROPERTY.... BB comments: There is no doubt that China is at the "top of the list" of country's that steal America's intellectual property.... but now there is "cautious optimism" that an agreement can be reached if Mnuchin goes to China for discussions.
POSSIBLE PROGRESS OVER WEEKEND ON TRADE WITH CHINA.....BB reported this news:
US Treasury's Mnuchin may go to China - Fox Business
The United States has threatened to impose tariffs on $50 billion of Chinese imports in a bid to try and force Beijing to stop its companies from stealing American companies' intellectual property. "A trip is under consideration," Mnuchin said at a press conference during the International Monetary Fund and World Bank spring meetings in Washington on Saturday.
CALIFORNIA UNIVERSITY PAY SO MUCH IT'S HARD TO CHOOSE... Caller Tim from the SF Bay Area DEPERATELY NEEDED HELP. He is in his mid-50's, has a net worth of $3.1MILLION, is retiring from a California University and can't choose between an annual $120,000 (plus full health benefits for him and his wife), or a lump sum of $1.82MILLION.
Brinker rode to Tim's rescue and pointed out that the full health care benefits added a lot if he took the annual pension, but if he took the lump sum, it added to his net worth.
Honey EC: So what should Poor Tim do? Anybody got any ideas? I do, but they are not printable in decent company.
SOHN INVESTMENT CONFERENCE.... BB talked about the Sohn Investment Conference tomorrow (April 23) in New Jersey. Sorry, all sold out....
==> dRahme was not available today to make audio clips for us.
NEXT WEEK IN THE CANYONS OF WALL STREET:
1. Monday: Existing Home Sales (which are about 90% of total home sales): for March, expected to rise from 5.5 million to 8 million.
2. Tuesday: New Home Sales for March expected at 630,000 up from 618,000 for prior month.
To sum home sales: The supply is tightening and the year-over-year price is up about 7.3%.
FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY:
Bob’s third hour guest on
April 22, 2018 was yet another in the
long Conga line of futurists that have been guests on MoneyTalk in the past few
years. This guest was Paul R. Daugherty,
who along with co-author H. James Wilson wrote “Human Plus Machine, Reimagining
Work in the Age of AI.” The authors are
donating profits from book sales to organizations that help re-train mid-career
workers. Pretty nice.
Editorial comments in italics, as usual.
Artificial Intelligence
will prompt more changes in the way we do things in the next 5 years than have
taken place in the last 30 years.
No discussion of the future
on MoneyTalk would be complete without
mentioning autonomous trucks. In this
case, the guest said they would not be fully autonomous, there would be
someone, somewhere, with a joystick, guiding the truck through tricky
places. (My words, not his).
Do truck drivers have any idea how much concern
there is for them on MoneyTalk?
You don’t need to major in
some tech area in college to get along in an AI work environment. The guest mentioned “trainers” a couple of
time. I believe he meant people who
would teach the AI systems some of the cultural nuances they’ll need to
know.
Humanities, poetry,
literature, music, art majors can all take heart!
The financial sector will
benefit from AI. It should help cut down
on fraud although he did say that the bad guys have access to the same AI tools
as do the good guys. A robot may be the
“wingman” for your financial advisor.
You may call to buy or sell 100 shares of XYZ Corp. That’s a task the AI bot can handle.
But the AI is also looking at your age and overall
portfolio and sending a flash message to the human advisor that this client is
of the age where they may be susceptible to an annuity pitch and they’re on the
phone NOW.
I guess only one caller had
an intelligent question and that was Alfred from Madison on a crackling
line. His question seemed to be which
country was going to benefit the most from AI development. The author thinks the U.S., China, France, UK
and Germany are all in the race, with the lead is changing hands. Companies are some familiar names, Google,
Amazon, Microsoft, IBM, Baidu and Alibaba.
Technology is neutral, as
is artificial intelligence. Biases come
into play according to how it is applied.
TALKSTREAMLIVE
TALKOFCONNECTICUT
770KKOB
80 comments:
use the Connecticut station to access Moneytalk
http://www.talkofconnecticut.com
Hope this helps
to listen to Moneytalk , try the CT radio station site:
http://www.talkofconnecticut.com
Hope this helps,
JC in CT
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Thanks JC...I missed the first few minutes because I couldn't get KNUS to work.
I will add your link to the list so that we have more options.
770kkob.com is another good option.
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Thank you, Joseph. I'll add it to the list.
Does anybody remember Bob's list of questions to ask an annuity salesperson? Thx
Josie: I can't help you with that, but I do have some thoughts about annuities, with a slightly different opinion than Bobby does.
I do agree with him that most annuities are to be avoided. HOWEVER, a single premium immediate annuity can be a good thing depending on one's situation. If you have nobody you want to leave any money to upon death, or if you need everything you have just to survive retirement, putting at least a portion of your assets into an immediate annuity can be helpful.
If you can estimate an absolute minimum amount of income you need to survive during retirement an immediate annuity can provide that, regardless of what the stock or bond market is doing. Use other monies for transportation costs, home repair, entertainment, hobbies, etc. You can also have the annuity tied to inflation, for a bit less in the monthly payout.
As Bobby says, be sure to buy from a reputable company, and watch the fees. There is a ton of good info (ratings of various companies, fees, etc.) on the internet about this.
I also highly recommend this book, Money for Life: Turn Your IRA and 401k Into a Lifetime Retirement Paycheck.
FWIW, I don't really have any plans (or need) to buy one, but one never knows, and I would not hesitate to put a portion of my investable assets into an immediate annuity should the need arise.
Good luck!
Bob has a fundamental misunderstanding about Roth conversions.
If you have a $100,000 in a tIRA and it grows at x% for y years,
and you take it out and pay z% taxes the amount you end up with
is EXACTLY the same as if you did a Roth Conversion paid the y% taxes now,
and invested ($100,000 minus the taxes) at x% for y years and took the money out tax free.
The amounts are the same, no matter how many years or what growth rate.
If you can convert today at 12% and not pay later at withdrawal time the same 12% it is a wash, except for some other benefits. (There are several)
If you can convert today at 12% and not pay later at withdrawal time 20%, you are a winner.
Here's my favorite compound interest calculator.
http://www.moneychimp.com/calculator/compound_interest_calculator.htm
Please prove me wrong, no one has yet.
I've been told, "That’s called the ‘commutative property of multiplication’.
(1-t)(1+r)(1+r)(1+r)(1+r)=(1+r)(1+r)(1+r)(1+r)(1-t)"
I think I see that, but I used the calculator.
Hi Honeybee. I had the same problem with KNUS too.
I have been using WNTK with much success.
For what it's worth to all the former "anonymous" contributors, it's easy to sign up for a gmail account in order to keep contributing. This blog asks for your account ID after you submit your highly respected two cents. And then... you're done.
If you have privacy concerns about establishing yet another account upon the world wide web (it's about 136 for me) just use as much fake info as you can when you sign up, such as Lincoln's birthday for your birthday, George Washington's phone number for your phone number, and a good fake name like "Yogi Bear". However, you might still receive spam email in your account addressed to "Mr. Yogi".
After all, the objective is to keep this party rollin' and push up on the rafters (raise the roof) like in the 80's.
By the way, when KNUS fails I've always had good luck with WWTF, but I think I've heard a knock-down drag-out in the background a few times, possibly from the radio station control room. Those east coast stations are like that.
Thanks to Connecticut guy for the heads-up today.
.
Stan X....Thank you for that advice. I was sure it was simple and did not infringe on privacy like we are all afraid of these days.
I am thinking of lifting the restrictions again and only require that a name (handle) be typed into the place where it is allowed - IOW, no more anonymous with signatures, but would not require a Google account.
I may do it as soon as Colombo catches the bad guy in about 45 minutes.
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I have removed the Google Account requirement, but in order to keep the trolls away, you will need a "handle" typed in the "identity" link provided with each of your comments.
Thanks, Stan X, and thank you Honeybee for keeping the Brinker Moneytalk fire burning. Us Brinkerbots and Bootlickers appreciate it, too!:-)
As usual good summary by HB thank you.
One important insight I got out of Bob's monologue yesterday was the concept of the long end of the yield curve being artificially lower as a result of the QE. The importance of this is the impact to a flattening yield curve.
The QT phase the fed is currently doing, should put more long dated paper back into the open market which should have the effect of raising the yield on the long end. Without this happening of course the yield curve would more likely invert as the fed I think mistakenly tightens the short end even though inflation is not an issue.
An inversion of the yield curve usually signals a recession. Hopefully Powell avoids this false signal by getting the balance correct. Chain weighted GDP output YOY growth is around 2.5% from the last look 2017Q4 YOY. We are supposed to get 2018Q1 first look this Friday I think.
The deficit talk is also important because growth was supposed to diminish this concern.
Keep an eye out for these issues, they are really important.
Lamont, the error is you are assuming you use your IRA funds to pay the taxes. If you use non-IRA funds to pay the taxes, you have more money that can grow tax free. The taxable account money would grow but you would have to pay taxes on the growth of that.
Put $100 in an IRA and $100 in a taxable account, and grow each for 10 years, paying 20% in taxes on the taxable account every year. At the end of 10 years, assess 20% tax on the entire IRA. Add the two accounts together.
Now put $100 in a Roth and $80 in a taxable account (because you paid $20 in taxes on the Roth conversion). Grow both of those for 10 years, paying taxes in the taxable account every year. Add the two together at the end of 10 years.
Your Roth plus taxable will be more than your IRA plus taxable. Significantly more? Depends on a lot of factors, most particularly how much time you keep the Roth. And remember, you can Will a Roth and it stays growing tax free.
When you have radio station problems, try your smart phone.
For those of you with smart phones, there is a free app called 'Simple Radio'
It allows you to stream live 1000s of radio stations. Search by call letters.
A Google search will find what stations have Bob's show. I just found a Texas station that airs his show at 10pm, probably 8pm standard time, but good if you miss the show.
Honeybee said "So what should Poor Tim do? Anybody got any ideas?"
I think that Poor Tim is young enough to become another California double dipper and get 2 stat pensions. Like Gov Jerry Brown and a host of others ...
Korea ETFs?
President Trump tweeted “they agreed to denuclearization” “(so great for the World)”
He should get the Nobel Peace Prize!
(If it’s true LOL)
Kilgore
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SuzyPie....That is the best post of the year!!!
Kilgore,
Does it make any sense for NK to give up nukes when that is their only assurance?
Look at what happened to MoMar.
Maybe the difference is Kim's definition of denuclearization (probably entails keeping their nukes and no further testing (because they already have working nukes) and US getting off the Korean peninsula). I remember hearing them or maybe Putin say they would eat grass before giving up their nukes.
.
Since January 2017, the number of people using food stamps is down 1.9 million.
.
Kilgore....It will be a setback if the obstructionist congress-creeps don't get Mike Pompeo confirmed. What a disgrace they are!
Here is an exact quote of what President Trump said about North Korea. Note that he gives exact quotes from Kim Jong UN:
Donald J. Trump
@realDonaldTrump
Apr 20
A message from Kim Jong Un: “North Korea will stop nuclear tests and launches of intercontinental ballistic missiles.”
Also will “Shut down a nuclear test site in the country’s Northern Side to prove the vow to suspend nuclear tests.” Progress being made for a
Of course they didn’t agre to de-nuke like President Trump tweeted.
They agreed to stop testing until the peace talks are settled.
I wouldn’t give up my nukes if the USA had a huge military base nearby in SK.
Sorry but President Trump tweeters they were going to denuclearize. My post was copied directly from his twitter. Of course we know that tweet is pure BS and meant for his base. LOL
.
Kilgore...Do you live in the U.S.?
If so, are you aware that North Korea has threatened to nuke the U.S.?
And if you are, why do you infer that their nukes are for "defensive" purposes?
Which side are you on?
Honeybee quoted...
"@realDonaldTrump
Apr 20
A message from Kim Jong Un: “North Korea will stop nuclear tests and launches of intercontinental ballistic missiles.”
Also will “Shut down a nuclear test site in the country’s Northern Side to prove the vow to suspend nuclear tests.” Progress being made for a"
================
smile says...
Most can see right thru the words of Kim, they are giving up nothing...
1) they already have nuclear capability therefore they no longer need to test
2) there is talk that the nuclear test site they are closing is collapsing so if true it is no longer of any use...
So what does Kim really want... we know he is not starved for food personally...
Maybe just to be on the world stage bargaining one on one with the US is his only goal...
As stated even Bannon stated b4 leaving the Admin. that NK has US. First strike would 1 have to be authorized by Congress because it is an act of War. 2) NK would answer any bloody nose or 1st strike by hitting Soul where we have thousands of US troops.
Last I heard they had an ICBM capable of reaching most of US, at that point they are only shy on the reentry piece and given the time lag they probably have that issue solved.
Maybe Kim is seeking the Nobel Peace prize by bargaining that in exchange for him giving up his Nukes he will ask the US to do the same... HA ha ha obvious answer is not gonna happen... at that point he stands up and leaves.
Stale mate nothing more nothing less or accept no more nuclear proliferation or testing with verification in exchange for sanction relief... and chance to join the world community in peace.
If I were Kim that would be the only deal I would accept considering the pain they went thru to achieve nuclear.
Smile I have a question. Putting more long dated paper in the market will raise yields? I thought more supply would lower the yields.
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Kilgore...Don't waste anymore time insulting me and possibly others here, unless you just enjoy writing to yourself.
J Wales,
I'm not really that up on bonds, but the way I understand bonds is there is an inverse relation for bonds in yield and value.
So with that when you increase supply, the value goes down and therefor the yield goes up.
I'm not sure about this next statement so maybe someone more familiar with bonds can address this... point So my theory is that in order to attract buyers when there is increased supply the yield would have to increase but actually the market does this on its own with the supply demand imbalance and inverse relation of yield and value.
Any bond experts please weigh in on this.
Addressing J Wales' question (a flood of helpful replies are coming 'round the bend, I'm sure),
In the bond market, you gotta think opposite. Here's why: When more supply is offered for sale, the few buyers are reluctant to bid against each other for it, so the selling price is reduced by the seller to get rid of it.
Therefore, if you purchase a bond at a reduced price, your effective yield is raised because you paid less for the coupon rate (the interest rate) of the bond.
As Brinker has predicted, the Fed might flood the bond market on or about Oct 31 Halloween with bonds they horded during the QE rescue of the financial world as it existed then. Special thanks to Treas. Sec. Hank Paulson and Dr. Bernanke by extension.
So that's why Bob is recommending ultra-short duration for any bond fund holdings. With rising effective yields (because not enough buyers) the current holdings in bond mutual funds will see their market value reduced, especially in the unlikely event that the fund manager must sell all of them today. Or in the unlikely event of a water landing, Sully.
But if you hold your individually-purchased bonds (not the ones in a bond mutual fund) to maturity in (??) more years, you know, the certificates at the bottom of your underwear and socks drawer, you will receive the full bond denomination back just in time to take the g-kids to Dairy Queen for some ruinous excesses.
I hope that helps.
smile: Thanks for the MFGP spinoff information last week. I didn't realize it was a taxable event.
Lamont: I don't know if Bob doesn't understand Roth conversions, but I agree that he does not like talking about the positive aspects of the conversion. It must be much easier to give a canned answer instead of evaluating each case to determine if it makes sense for the caller.
I agree with your math, but I have to agree with JJP that the difference is where you get the money to pay the taxes for the Roth conversion.
If you are somehow able to divert or withdraw the amount for the taxes from your Roths without penalty, then it's Equal.
If you leave the whole conversion in the Roth and pay the taxes with other money, then it's equivalent to your Equal part plus making an additional Roth contribution in the amount of the taxes you just paid for the conversion. I'll call this a Sidedoor Roth contribution, since Backdoor Roth is already taken.
Since you like math, I have a math problem for you:
A single taxpayer in 2018 has ordinary income of $42,000 and qualified dividends and long term capital gains of $8,600 and takes the standard deduction of $12,000.
So taxable income is $30,000+$8,600=$38,600.
The $30,000 ordinary income part is taxed at 10% and 12%.
The $8,600 qualified dividends and long term capital gains is taxed at 0%.
For total taxable income over $38,600 up to $425,800, qualified dividends and long term capital gains would be taxed at 15%.
If the taxpayer makes an additional $1,000 ordinary income, what would be the effective tax rate? I say 27% because the additional tax would be $270.
Les
Here's a layman's understanding of all this bond stuff:
If there is an excess of anything on the market (more supply than demand) the sellers must do something to entice buyers. In a free market, prices for the product will drift down until there is a balance between the sellers and buyers. The lower price entices the buyers to buy.
With an excess of bonds, the bond prices also get pushed down by market forces (more supply than demand again). As the bond price goes down the yield goes up because yield is always paid on the original face value of the bond, not the price of the bond that someone paid on the secondary market.
Let's say you buy a bond with a face value of $1000 that pays 5%. But you only paid $900 for the bond because sellers are trying to get rid of them.
So you get $50 in interest, which is 5% of $1000. But you only paid $900 for the bond so you're getting a $50 yield on a $900 investment -- making YOUR yield roughly 5.5%.
Something like that.
Agree with most of the above bond comments. I would say, however, that Stan's comment "As Brinker has predicted, the Fed might flood the bond market on or about Oct 31 Halloween," seems a bit misleading.
It is true that the Fed has stated that they will ramp up to a maximum quantitative tightening rate by October. But they already started the process last fall and are ramping up gradually. They are probably already about half way there now. So there isn't going to be a sudden flood of bonds on the market; there is already an increased supply which is in part why long-term rates are rising. The Fed is closely monitoring the impact of the increased supply and if they don't like how the markets respond they can back off at any time. They are hoping for a soft landing, so to speak, without a lot of market turmoil resulting from their efforts.
If the Fed backs off from their original plan, long-term interest rates might not go any higher and might actually come down some. No body knows.
Thanks for allowing the comments again without the google...The internet proxy and voting access only that most corps are doing really bugs me. No dissent, "vote as directors recommend", directors compensation RAISES all now are real "A I" IRWIN in Skokie
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Irwin in Skokie....Please click the link below the window that you write your comments in and enter your name there. It looks like this: "Name/URL"
Otherwise, when I receive comments for moderating, all I see is the word "anonymous" and mostly just trash them without reading them.
I have to do this because of the troll-hater problem....
Natasha lulu lu
Stand, is that oct 31, 2018 or is it october31, 2019? I think I have heard both.
200 DMA for S&P stands at 2606.88 so not much left to slice thru that level.
We never have tested that 2/9/18 intraday low of 2/9/2018 @ 2532.69, on the other hand there is no gap in the chart to fill in that area. I still think the market needs to retest that intraday low but it will take some bad news headlines to get us there.
http://stockcharts.com/h-sc/ui?s=$SPX
On the earnings looks like the market fooled most and already had good earnings baked in = so they bought on the rumor and are selling on the news even with beats not followed by raised guidance.
CAT getting slammed today they beat on all fronts revs & eps and guided higher but stated input cost were expected to rise. Peak earnings 1st Q comment. This I think may be one of the fallouts from tariff talk - higher input prices or at least the expectation.
QT is starting to impact the markets on the long end with 10yr hitting 3% for the first time since 2014.
===
To Les, glad the MFGP spinoff from HPE post was helpful to you. That was a weird one to have the spinco show up on my 1099B for what I initially mistakenly thought was a tax free spinoff for my taxable accounts where I held HPE. Only taxable on the gain of the spinco (adjusted for basis) and can't claim any capital loss if you have it on the spinco. Any gain from the spinco you get to add to basis of MFGP which I sold in 2017 somewhere in the 30s.
Responding to Bluce, and if there is a status below layman, that's me.
Using your example of a $1000 bond paying five percent, suppose I bought that ten year bond five years ago and decide to sell today with interest rates having risen to 7%. To me, that bond to the new buyer worth the price of $900, receiving twenty dollars less annually for the next five years to capture the $1000 face value.
So you are getting a higher interest rate, using your example of roughly a 5.5% yield for the discount, but bypassing the current higher bond yields of seven percent (these numbers are for entertainment purposes only.)
Layman.. sub-layman...
Was it Brinker or Kudlow or someone else who recently indicated there may be market trouble if the 5 year treasury hit 3.05%? Getting close if i heard it correctly.
sn: As HB summarized, on this week's show Brinker said 3.05% is considered an important technical level for the 10-yr treasury. As smile said, it touched 3.00% today.
I think we are seeing the death throes of the 3rd largest bull market in history. Don’t be greedy. Lock in the 250% gains folks.
Kilgore
Holy Smokes, 694,000 New home sales in March vs. 630,000 estimate.
We are simply in correction territory. Buy the dips people!
I’m am do grateful that s President Trump turned things around and jobs are back? Unemployment was around 42% under Barry Obama! Now we are near full employment and wages are rising. Thank you President Trump.
Trump 2020!!!!!
PalaAlto Pam.
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PalaAlto Pam....I typed your name in this time.
Please do this next time: click the "name/URL" link, it will open up and give you a line to type your name. That causes it to show at the top of your comments.
natasha lululu
In response to palo alto pam
I am personally waiting for djia to reach 22700 which will be 15 % off of the 52 week high as of january 2018. Then i am getting vti Exchange traded total stock market index) , If it doesn't happen I will be dollar cost averaging, w starting in July with the money I have divided into 12 parts as of January 2018. I already bought vti when the djia was 10 percent off of the 52 week high as of January 2018. I guess I am gambling.
I am old enough to remember the 40 percent 1 day loss in 1987 though, so I am affected by that.
John I don't know why those putting out these ridiculous Annualized numbers put them out.
They take a monthly number, seasonally adjust it and then they annualize it which makes no sense. Just report the monthly sales number which was 68,000. And yes it is a good preliminary number, but it also has a relative standard error of 7%
Here is the news release by the Census Bureau of all places based on surveys and such:
https://www.census.gov/construction/nrs/pdf/newressales.pdf
I found this other cite here: http://www.calculatedriskblog.com/2018/04/new-home-sales-increase-to-694000.html
which has a chart showing the monthly figures for the last 13 years back to 2005 to put this current number in perspective: https://4.bp.blogspot.com/-FXopxKXwPkc/Wt86DZMVt8I/AAAAAAAAuns/p6grEmJytoYqiUoftIxhcQ7PPV76Cv3RQCLcBGAs/s1600/NHSNSAMar2018.PNG
as you can see from this monthy unadjusted number chart the 3/2018 number (red bar) is not even close to the go go years of 2005 thru 2007 (blue, light blue, and green)
what this market doesn't need is an excuse from bogus headline annualized numbers for the Fed to continue raising rates. Goldilocks is what we want not crazy headline numbers indicative of overheating economy which we are not.
Honey couldn't you look at the end of an anonymous post for a name?
Palo Alto Lulu Yoyo Ma said: Una paloma blanca!
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Olive...Sorry if I have not made clear the reason why I want names/handles typed in.
First let me say that I would prefer not moderating comments at all and letting them simply post. However, occasionally there are some that are not fit for humans, never mind decent people, so I have to read them and then send them on.
So here's what happens when they hit my email box for moderating.
I am shown ONLY the title that looks like this one - yours:
Olive has left a new comment on your post "April 22, 2018, Bob Brinker's Moneytalk: Stocks, B...":
That's all I see unless I open and publish it. Needless to say, anyone sending insults or worse, sends them as anonymous. Who wants to waste time on garbage?
Now you say, so can't they type something in? Yes, but I have a pretty good handle on who is legit and who is not just based on names. If I miss one, I know immediately after it's opened and instantly send delete it.
Four down days in a row. Normally, oversold condition would provide support for an upward moving market. Seems like we are not there yet.
I agree and while not applauding the numbers, they raised my eyebrows. If March is revised upwards later like Jan/Feb were...it will surely be on the Feds radar screen for discussion. Not good news for equities.
And while these sales numbers may pale by 2005-06-07's meteoric plateaus, today's market is performing without the false boost of liar loans.
I've read that 3.09 is an important technical level
I'm wondering if we are getting closer to a buy alert.
Ok thanks Stan & Smile. My brain wasn't clicking on the one cylinder I have left. Yes your right if theres an over supply of of bonds the price should go dowm & the yield should rise. I have the ultra short term bond fund at Vanguard. The yield has been rising & the price has been going down slightly.
I'm happy that I greatly reduced my bond mutual fund holdings, including even the Van. Ultra short term. I did it 3 months ago and the 3 month CDs will mature tomorrow at which they'll go to the back of the line as 12 month CDs with greater than a 2% interest rate.
I know, 2% is nothing to crow about but a CD does not face the headwind of duration effect on share price.
In other news, PIMCO is embracing Artificial Intelligence. They will open an office in Austin TX where they hope to attract about 200 tech-smart workers.
natasha lululu
to Frankj
Good job. I am holding quite a bit of cds out 3 and 4 years, with HUGE early withdrawal periods, at, well, you know it, 2.1 percent interest. My bad. I'll take the hit, unless you have other ideas.
If we have no bad news, expect an upsurge into the markets on Thursday.
Bob Brinker ought to read this forum discussion on the topic of:
"Making the decision to do a Roth Conversion"
https://www.bogleheads.org/forum/viewtopic.php?f=1&t=248001
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I received a couple of comments today with this in the title - which is all I saw because whoever sent them did not add there name in the link provided - as explained above.
Anonymous has left a new comment on your post "April 22, 2018, Bob Brinker's Moneytalk: Stocks, B...":
I do not know who you are or what you wrote since I deleted them without opening.
Guilty as charged. Always thought I knew it all. But always seem to learn something new while checking this blog.
Never knew that folks consider 10-yr Treasury yields to be "long term rates." Always thought they were mid-term rates, with the 30-yr "paper" being long, like Rip Van Winkle. On the other hand, 10 years is a long time. Wouldn't want to work at Starbucks for 10 years.
But don't worry, BB is forecasting much trouble and tribulation surrounding the Fed's QT program.
Every week, he sounds the fire bell and warns of the giant spoon of castor oil coming down the pike into your bond fund when the Fed has a 2-night pajama party and a boxed lunch just before lighting the fuse on the whole rockin'-n-reelin' QT full-bore extravaganza!
Can agree, he's providing a service. He's lighting up the construction zone before they start the major digging. And certainly, let's hope for a soft landing.
Is that like lovin' with your kickers on?
I read the SEC notice about why corps are allowed "internet access only" for votes and proxys. "Saves costs and helps environment" Lame permission to disenfranchise, ignore shareholder input, corporate greed and raise director compensation
Natasha lulu lu
Re: internet
Schwab was unavailable for a moment this morning on internet. I had just placed one order and wanted to place a second. La brief moment later I was able to place the order. This as a few minutes after opening
Is the MONEYTALK facebook page "for real"? less than 50 likes but recent posts
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Irwin...I doubt it, but I can't find the link you are referencing.
If you will send it, I will take a look. Others use the word "Moneytalk."
Honey did a fine job summarizing BB’s commentary on recent investment returns of the 10-yr Treasury. I had meant to post this BB transcript back on Sunday, April 15, 2018 but, as fortune would have it, I had to cover a situation in another location. All turned out well – but it took a lot of time and required a long absence from this site.
===============
CRICKETS IS WHAT IT IS
“I would say right now, if rates normalize, a reasonable rate for a 10-yr Treasury, right now, would be about 4.5%. Now 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 2.5% in real GDP growth…, so the next 2 – 3 years, averaging it out to let’s say 2.5% over the next 3 years, the Fed’s forecast, the central tendency mid-point forecast of the Federal Reserve. If you take that number, it’s in the ballpark, let’s say average of the next 3 years, it’s in the 2.5% ballpark.
So, take that 2.5% number and add that 2.0% inflation that the Fed has promised us, and we’re getting close to it, we’re getting very close to it – that’s 4.5%. So, a real GDP number averaged over 3 years of 2.5% plus 2.0% inflation target, which we’re getting very close to – that’s 4.5%.
If you go back through the history of the U.S. bond market, the 10-yr Treasury has tended to have a yield in the neighborhood of the real GDP growth rate plus inflation. Right now, that’s 4.5%.
That’s why I would not buy a 10-yr Treasury right now at 2.8% - not paying enough money. If inflation’s 2.0%, I’m not going to take 80 basis points for investment return when inflation’s 2.0% and the coupon is 2.8%. I’m getting 8/10nts of 1.0% real return. Because the inflation’s going to take away my purchasing power over a period of one year, so that 2.8% is not going to buy 2.8% worth of marbles a year from now. It’ll buy .8% worth of marbles a year from now – worth of the basket of the CPI goods is what we’re talking about here. That’s not enough, that’s not enough.
If your getting 4.5%, you could say, “well yeah, the basket of goods will be 2.0% more next year, but at least I’ll get my 2.5% real return – 4.5% minus 2.0% is 2.5%.”
Right now, you’re not getting that. You’re getting 2.8% minus 2.0% which is crickets, crickets is what it is.”
Honeybee's website got posted at:
http://socialize.morningstar.com/NewSocialize/forums/p/383182/3928790.aspx#3928790
They were arguing if Brinker was live or not. Halfway down the page.
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Fritz Zenner,
I see that someone with a handle "yogibearbull" accuses me of posting "fake news" when I report truthfully the times that Bob Brinker is not live on the air, and is deceiving the audience into believing his is....
Clearly, Yogi proved my point about the deceptiveness of Brinker.
Also, I see another one or two agree that Brinker is always live. That is very, very sad to me that Brinker succeeds in deceiving so many.
I cannot post a reply on Morningstar, or I would - but if you want to give them a message from me, tell them that proof of Brinker playing "spliced old calls" has been posted here for years.
IOW: The Blog Research Team has found the calls documented from the past and I have posted them alongside the re-run shows. And literally hundreds of people listening on the days that I report the re-runs, verify what I am saying.
Please let us know if you post what I have said over there.
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Fritz Zenner,
Here is another post from the Morningstar link that you posted. It is important because of the last part of it. Bob Brinker has been shutting down discussions - especially if the least bit critical - since the first message boards started.
He has succeeded in "shutting me down" more than once on various forums. And he literally got thousands of hours of my Moneytalk documentation deleted at Suite 101, when they were still doing message boards.
I have to assume that, based on "Rossby's" comment, Morningstar has knuckled under to his "copyright" threats.
I get threats also, but they go way beyond copyright - they have even been life-threatening. But so far, Google must be ignoring one little radio talk show host who hawks "investment letter" snake oil THREE SUNDAYS per month.
Here is Rossby's post:
Re: Bob Brinker
3 hours, 31 minutes ago | Post #3928805
I concur with Yogi’s comments. Never heard a “Best Of” and he use to have some good fill in hosts but have not heard one in some time.
I have been a listener for many years and find his advice to be sound. I particularly like his opening dialog where he comments on the week’s news.
He occasionally lets callers with differing views speak. These are usually Annuity and Whole Life Insurance peddlers.
This subject may disappear come Monday. Some time ago Brinker complained to M* about his copyright material being posted. M* put the word out that there would be no Brinker discussions.
Ha, amazing.
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Bluce....You are right. It is amazing.
Those who have questioned my claims that the Brinker's reads everything (especially this blog) that is written about Brinker and resorts to any means possible to shut it down, can see in living color that I am right.
I would also point out that you are all aware at the harassment we get from "anonymous" here, and that makes it VERY likely that those Brinker-is-always-live posts on Morningstar are instigated from the same source.
DOCUMENTATION IS BOB BRINKER'S ENEMY! Without it, he can cover up and re-write his costly blunders on air and in Marketimer.
I don't know how "yogibearbull" can ever claim Brinker is always live because every time it's spliced calls, which is quite often Brinker never gives the phone number for people to call in. Does "yogibearbull" think everyone has the number memorized? Also, Brinker never has a guest segment on rerun Sunday's. If he'd have a repeat guest segment people would remember hearing the conversation before and obviously know the show is a rerun.
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All good points Jim.
And there are so many more "tells" for anyone who is paying attention. On re-runs, he never talks about anything that happened during the week - and many times the actual advice he gives the caller is out-dated.
If anyone wanted to devote the time to keeping track and writing summaries of the re-runs, it would be an amazing revelation.
And neither Yogi or the other Brinker-bots explained why in years past, Brinker would have guest hosts regularly. Do they actually think that now that he is in his mid-70's that he would stop taking time off altogether.
I'm betting that "yogi" is a Brinker - probably the junior one, but could be senior because the writing is similar to senior's.
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Yep it's the Brinker's over there on Morningstar selling newsletters. This one was posted this morning.
Note that they deceive readers into thinking this is the radio talk show host's newsletter by interspersing it with the conversation about him.:
Re: Bob Brinker
2 hours, 44 minutes ago | Post #3928894
I requested and received a free copy of the Brinker Fixed Income Advisor(Sept.22012) . I don't know if you can still do this. It provided commentary on the Federal Reserve Open Market Committee meetings, current information on US Treasury yields, Treasury Action Calendar,Information on highest yielding Savings Account and CD Rates for the current month's newsletter, Municipal Bond Calendar, Brinker Fixed Income Advisor- Recommended No-Load Mutual Funds,and 4 Recommended no Load Portfolios , Aggressive, Moderate,Conservative,and Tax-Exempt Portfolios.
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PS: Lying and self-deprecation are two of Bob BrinkerSr's favorite anonymous posting ploys!
Keep up the good work,Honeybee!I just let my MT subscription lapse. Decided to go with the Vanguard Personal Advisor service, instead.
Joe, I used VG PAS for about a year. Good service but I was unhappy with the generic diversification. Total mkt, total international mkt, same for bond funds. Nothing creative to earn my .3 pct fee. Let us know what you think of their fund mgmt.
Thanks “House doc”, I will.
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Wonder who Brinker thinks he is kidding by suddenly beginning to announce: "We are taking calls during THIS hour of the program."
He must be getting a lot of complaints on his days off when no calls are being taken and is trying to cover his butt. He can now just ask if "taking calls" was announced.
I need to respond to JJP.. he said,
"Lamont, the error is you are assuming you use your IRA funds to pay the taxes. If you use non-IRA funds to pay the taxes, you have more money that can grow tax free. The taxable account money would grow but you would have to pay taxes on the growth of that."
That is no error, the point is, if you pay the taxes from the IRA account and and convert to the ROTH, you end up with the same amount to spend when you withdraw.
Bob, always asks, "why would you want to give up that money? At withdrawal you are giving up nothing!
I do like what Les said, about paying the taxes from regular money, this is like putting more money into the ROTH. I have not done the math to see what that taxable money that you paid the taxes with would grow to, if you didn't use it to pay the taxes. So that is a caveat and that math needs to be done.
Les, You're right on the effective tax, you just happened to hit the sweet spot that is very sour.
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