September 30, 2018, Bob Brinker's Moneytalk ENDING TODAY

September 30, 2018....Bob Brinker is Live on Moneytalk for the Last Time After 32 Years.....

Honeybee says good-bye too, and thanks to each of you! I will miss you all! 

==> The BRT (Blog Research Team) has helped me immensely - too many of you to mention by name.  

==>  I am also grateful to those who have contributed wisdom, humor and education in their comments. 

==> I will always be grateful to Frankj for his fabulous guest-author summaries! Frankj's writing ability is first class all the way. 

==> Extreme gratitude to dRahme who has provided great Audio Clips! 

==> Also thank you to our  humor-writer Jeffchristie, who helped us all prepare for the Moneytalk Final Exam. 

I have considered several options of ways to continue this blog, but have decided that the main purpose of the blog was always to "Keep Bob Brinker Honest on Moneytalk." I have done this for many years, but now he will no longer be broadcasting to millions of listeners, so unless he finds a new way to reach (and sometimes mislead) a huge audience, my job is done. 

I have received hundreds of emails from people who have thanked me for saving them a ton of money by simply pointing out that Bob Brinker cannot time the stock market - and has less than a 50-50 batting average. 

Now I would like to take this opportunity to repeat what I have said many times over the years about Bob Brinker's teaching ability.  

It was in the late 1980's when I first found Bob Brinker's Moneytalk on KGO in San Francisco.  I have always been grateful to Brinker for not only teaching me how to become my own financial manager, but for giving me the courage to untangle myself from the clutches of one of the big brokerage house-sharks. 

Back then,  internet information was not available (to me), so I spent many hours doing research at the San Jose, Ca. main library on weekdays, and carefully listening to Brinker on Saturday and Sunday. 

When Brinker said things like "it's not rocket science," or "anyone can become their own financial manager," I believed him.   But that did not make it easy for me. It took hard work to go down that learning curve.  And it took courage to actually get money moved from Dean Witter - they were determined not to let me go.  However, to the DW broker's dismay,  I prevailed and moved to Charles Schwab. 

So I have always known that Brinker is a good teacher and has taught the basics of investing to millions of listeners.

 I also know firsthand that Brinker has a lot of  ugly skeletons in his closet. My blog work over the years will always be available for those who want to investigate those skeletons, but I will not cover that territory today.

FRANKJ'S SUMARY OF MONEYTALK'S LAST  GUEST AUTHOR:

Bob’s final guest in the third hour today, this 30^th day of September 2018 was Alan Blinder, former member of the Fed and professor at Princeton.  He published a book about 5 years ago, “When the Music Stopped,” a recounting of the 2008 meltdown.  His latest book, “Advice and Dissent, Why America Suffers When Economics and Politics Collide,” was the topic of his last visit in May of 2018 which was his fifth appearance as a guest. 

Maybe it is fitting that he is on as a final guest once more.  He and Bob seem to get along like a couple who know each other well enough to finish each other’s sentences. 

The interview started off with Bob asking if Prof. Blinder was surprised by anything that happened since “When the Music Stopped” was published.  The professor took a little swipe at the present administration saying he expected a full on pushback against the Dodd-Frank legislation that passed after the meltdown.  He said he was pleasantly surprised that this did not take place and that only minor adjustments occurred. 

What the guest termed as “silly” mortgage lending practices have gone away.  Dodd Frank will not prevent those from occurring in the future but it will be more difficult.  

Turning to the Bear Stearns meltdown in early 2008, Bob asked why didn’t the Fed see this coming?  Prof. Blinder said the Fed did not realize the web of derivatives that existed, nor their size,  and did not realize what effect the Lehman Bros. bankruptcy would have on markets.  

There was a brief discussion of two Fed chairs.  It is Alan’s opinion that Ben Bernanke left after 8 years because he was tired.  The present Fed chair, Jerome Powell is communicating more and introducing more transparency, which Alan approves of.  The guest thinks a Fed funds rate of 3% is about neutral and as the Fed closes in on this rate in the future, there will be a “rip-roaring” debate over whether to go above it.  

Bob posited that Gross Domestic Product growth should equal population growth plus productivity growth.  Both are less than 1% now, yet GDP is about 4% … what gives?   They chewed on this bone a while and no real conclusions were reached but the guest pointed out that productivity growth has always been hard to measure but long term it has been about 2.3%.

The first caller was Andre from Berkeley, CA who wanted to know with a debt of $23 trillion, what happens when interest rates normalize?  The guest said about 35% of that is just what is owed by one government agency to another.   The rest is publicly held.  If  interest rates increase, interest payments (which must be made) will squeeze out other spending.  Then we will need to print more money and the result will be inflation.  

Colin from Arroyo Grande, CA wanted to know if there are still toxic instruments out there like there were in 2008.  The answer was yes, there still are some but not nearly to the extent there were in 2008.  

What does Alan Blinder worry about these days?  He worries that the markets have become too complacent about a trade war.  They used to react to each new piece of news but now they don’t.  He also worries that the Fed will “overshoot” and the result will be inflation.  Bob asked why didn’t the Treasury issue 40 to 50 year bonds when the interest rates were so low.  Prof. Blinder said he would have done it but speculated that the Treasury didn’t want to try to guess what interest rates would do in the future.  

Bob bid adieu to Prof. Blinder at 3:49 then came back a few minutes later and mentioned the reports coming out this week.  

He then spent a few minutes thanking a number of people who helped in his radio career.  Here they are and please excuse any misspellings:  Jean Strauss, Maurice Tunic, John McConnell, Jeff Rich, Mickey (Nicky?) Luckoff, Ravi Chandron, Angel Bordone, Bob Mack.  

Bob Brinker announced this would be his last live program and that he planned to concentrate on the newsletter.  The radio show will continue through October with the Best of MoneyTalk. 

Bob signed off with “May the odds be ever in your favor.” 

I guess since I’m writing this I get to add a personal note of my own.  Honeybee was very gracious to let me contribute all these years.  It was never a chore for me – I enjoyed doing the summaries and sending them on.  I appreciate that visitors to the blog sometimes said “thanks,” and that they enjoyed the summaries.   And Honeybee ALWAYS said thank you.  

Bob Brinker introduced us to the phrase “The Land of Critical Mass,” as being the place where alarm clocks are no longer needed.   And he often referred to the Starship MoneyTalk.  If I could change that to “The Planet Critical Mass,” then this analogy makes more sense:  Bob provided many of us with the ignition and lift-off we needed to reach the Planet of Critical Mass in our own Starships.  

He also gave us the navigational tools to avoid the asteroids that can severely damage your Starship:  high-fee funds, non-publicly traded REITs, expensive annuities, discretionary brokerage accounts, too-good-to-be-true fixed income investments and other shark attacks.

Frankj

Honey here: Thank you Frankj!  Your  contributions have been invaluable to making this blog educational and interesting! 

LINKS TO THE COMPLETE BODY OF MY BOB BRINKER MONEYTALK SUMMARIES AND COMMENTARY: 

 (2007) Honey's Bob Brinker Beehive Buzz ARCHIVED (Note: This was taken over by Kirk Lindstrom, so beware of clicking on all ads on that blog.)

(2008-2011) Honey's Bob Brinker Beehive Buzz2 ARCHIVED (Note: This was taken over by Kirk Lindstrom, so beware of clicking on all ads on the blog.)

(2012 to 2018) Honey's Bob Brinker Beehive Buzz3 (Note:  this blog belongs completely to Honey Bee and ad visits are appreciated.)

September 28, Bob Brinker's Moneytalk Ending on September 30, 2018

September 28, 2018:

''Moneytalk'' Radio Program With Bob Brinker Ending

RADIO ONLINE | Friday, September 28, 2018 | 1:59pm CT

After more than 32 years of hosting syndicated "MoneyTalk," Bob Brinker has decided to step away from radio. He'll continue to write and publish Marketimer, his investment newsletter, and says it's time for him to "take his weekends back and enjoy Sundays with his family." The team at Westwood One congratulated Brinker on his unprecedented radio career as he exits the weekend financial show, and wishes him the best.

Will continue to write and publish his MARKETIMER investment newsletter.

September 23, 2018, Bob Brinker's Moneytalk: Pre-recorded Monologue and Rerun Old Calls

September 23, 2018.....Bob Brinker's Moneytalk. The first hour monologue about the FOMC meetings next week,  appeared to be a new recording done for this program.  But the remainder of the show was spliced old calls.....(comments welcome)

Most of the other monologues were Brinker preaching about The Land of Critical Mass!

I listened just in case he came back live.   In the first hour, there seemed to be some broadcasting trouble - at least on the two stations below.

BEWARE:   I heard Bob Brinker replay calls today that contain tax advice that is not up to date because of changes to tax laws this past year.   

FOR THE THIRD TIME, THE CRAZIEST-EVER CALL REPLAYED ON MONEYTALK TODAY:

Originally broadcast on April 5, 2015: 

* 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. __by Jeffchristie

 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!

THE SECOND TIME IT PLAYED WAS ON NOVEMBER 5, 2017

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.

* 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.

THE THIRD TIME THE CALL PLAYED ON MONEYTALK WAS TODAY:

MRC said:   "The $70 million Christian dater call was a scam call re run from long ago."

EDIT:  Here is the follow-up call warning Mark about the way he could be scammed by this $70 million scam. dRahme Audio Clip: Caller Dave and Brinker discuss Mark's call

STOCKS THIS WEEK (CNBC)

The 30-stock Dow rose 86.52 points to 26,743.50 as McDonald's and Boeing outperformed. The S&P 500, meanwhile, closed around the flatline at 2,929.67 after rising as much as 0.4 percent. Both indexes hit fresh all-time highs earlier on the day. For the week, the Dow jumped 2.2 percent while the S&P 500 gained nearly 1 percent.

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September 16, 2018, Bob Brinker's Moneytalk: Stocks, Bonds, Investing Commentary and Summary

September 16, 2018.....Bob Brinker's Moneytalk:  live program today....(comments welcome)

STOCKS.....Brinker  continues to remain fully invested in equity allocations, and still recommends dollar-cost-averaging during periods of weakness (for new money). "The fact that we are now in the longest cyclical bull market run in history serves as a reminder that it it unwise to become complacent abut the stock market."    On Moneytalk today, Brinker commented that the stock market had quadrupled since the 2009 mega-bear low. 

Honey's market comments:  Another nice week in the stock market. The S&P made gains each day and ended up 1.16% for the week. The S&P is up 7.76% YTD.

BRINKER'S MARKETIMER: DON'T BECOME COMPLACENT....Caller Victor wanted to clarify what Bob Brinker meant about complacency  on page 3 of the SEPTEMBER

MARKETIMER:  "The fact that we are now in the longest cyclical bull market run in history serves as a reminder that it it unwise to become complacent abut the stock market."   

Brinker replied: "I think what I mentioned in that letter is that it is not a good idea - to paraphrase  - to be too complacent.....The reason I feel that way - I remember so well what happened at the end of 1999 and the beginning of year-2000, when we saw a high level of investor complacency come into the market. And people believed as we started into year 2000 it was a one-way market. We had an tremendous five-year run leading up to that.....and people came to believe that the stock market could only go up every year....They became complacent and took a lot of risk....

Brinker continued:  "We saw what happened in year-2000, 2001 and 2002 - we saw roughly a 50% drop in the S&P 500....We have had a tremendous run in the market. So what I am expressing in the passage is simply to say, it's always a good idea to not be complacent. We've had almost an unprecedented run since the spring of 2009 where we have the S&P 500....more than quadrupled in value since the spring of 2009.....I think it's a good idea for subscribers - and that was addressed to subscribers - to try not to become complacent."   ==>dRahme Audio Clip

Honey EC: Brinker never misses an opportunity to make his radio audience aware of his utter contempt for them if they are not subscribers. Never mind that without his radio audience, he would have been a small-peanuts newsletter hawker. And never mind the money he makes selling Moneytalk on demand, books, his son's copy-and-paste-off-the-internet-investment rag, and Marketimer.  (Brinker is on record even calling his audience "freeloaders.")

NO BALANCED FUND IN MARKETIMER MODEL PORTFOLIOS....  Jim from Kansas said he knows that Marketimer no longer has any balanced funds, and  asked if a balanced fund would become a buying-opportunity after rates went up.  Brinker replied:  "You are correct, Jim, that we don't have any balanced funds in the model portfolios at this time. What would happen hypothetically...let's say the fund had a 50-50 stocks vs. bonds. What would happen at some periodic balancing schedule that the manager would be follow, there would be an effort to balance the portfolio from an asset allocation standpoint. As far as that being a buying opportunity to bonds, that would depend what happens to bond rates going forward. If interest rates rise from 2% to 3% and you buy the bonds which are down in price because the rates went up, was that a good thing to do? Only if rates hold steady or go down - because if rates continue to go up, the bonds you buy would also depreciate."

Honey EC: Back in 2013, Brinker took extreme measures to be ready for interest rates "normalizing." At the time, he had a portion of his fixed-income portfolio and his model portfolio III (balanced) in Vanguard Wellesley Fund. I haven't checked lately, but last time I did check it, Wellesley continued to do very well - and still is. 

IS THERE A FINANCIAL CRISIS COMING.... Mike from Oregon asked about a Wall Street Journal article that claims there will be a financial crisis in the future.

Brinker replied: "If you write an article that says sometime in the future there is going to be a financial crisis, you are virtually assured of being correct. If you go back through the history of the country, there have been many periods that could fairly be described as periods of financial crisis. So that's basically stating the obvious. The real question is when." (Mike pointed to interest rates going up, credit turns, government raise rates to sell bonds and the stock market starts down.) 

Brinker continued: "That's a fairly common scenario. There's nothing unique about painting that kind of scenario...I will say this, one way you will know in advance what is going on with how investors approach government and corporate debt is by looking at interest rates in the market place. When you look at interest rates right now, you could make an argument that they are lower than they should be.....We have real GDP growth right now of 2.8% YOY....And we also have YOY inflation - using the Fed's favorite gauge of a little over 2%......So that would easily get you into the mid-4's on the Ten Year Treasury......We are not there. We are near 2.9.....As long as that is happening it is very unlikely that we are going to have a financial crisis right here." 

BANK VS BROKERAGE CD'S.... Caller Roger from Sacramento asked about the difference. Brinker simply said it had to do with caring about yield and then reminded Roger to only use FDIC-insured CD's.  These comments came in this afternoon from Bluce with more information:

>Binky missed the biggest difference in bank vs. brokered CDs, when answering one of    the callers.
> Bank CDs must be held to maturity, unless one pays a penalty to sell early.
> Brokered CDs can be sold for their current value on the open market much like a bond.

ECONOMY....BB comments: It looks like a heathy GDP for Q3 ==>dRahme's Audio Clip

JOBS.....tightening labor market. 

FOMC RATE HIKES...Today, BB said that he is still keeping durations very low in anticipation of the FOMC raising rates again on September 26th. He also expects another raise in December and possibly "2 or 3 more in 2019." ==> dRahme Audio Clip: FOMC 

RETAIL SALES.... up over 6% YOY - "a good number." 

53 YEAR-OLD RETIRING INDIANA TEACHER WANTS TO KNOW IF SHE IS AT CRITICAL MASS WITH $70,000  YEARLY PENSION AND HALF OF HEALTH CARE FOR LIFE.... Brinker did not answer her question about Critical Mass. Instead he made it into a "lump sum vs pension" question. That didn't work out well since she said there was no lump sum offer. BB  did point out that she got paid only because the taxpayers stay and are willing to pay up. 

Honey EC: Don't worry, she had a spare half-million that she doesn't need to touch which Brinker recommended she put in a "balanced portfolio" to act as a "wonderful blanket" for her pension money. 

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Bob Brinker was back in the saddle  today, this 16^th day of September, 2018 (after two weeks off).  Ed Yardeni, was his third hour guest and he was ALSO back in the saddle – having been on the program six months ago in March.  Ed now has both the MoneyTalk baseball cap AND coffee mug.  Here is the link to the earlier interview, supplied by Honeybee:  Honey's Bob Brinker Beehive Buzz

The topic today was the same as before, his book, “Predicting the Markets, A Professional Autobiography” published in March 2018. 

The guest said he wrote the book to share his 40 years of experience in finance. 

The first topic was trade and tariffs.  Mr. Yardeni said he is “all for free trade” but did not disagree with what the President is doing.  He likes the idea of negotiating bi-lateral agreements instead of complicated, multi-lateral ones.  They take so long to hammer out that some of the issues they were designed to address may have gone away.   He thinks the President may declare victory before the mid-terms and this could push the stock market higher. 

Bob agreed on the advantages of bi-lateral agreements and asked Ed about China and the theft of intellectual property.  Ed said this President is the first to blow the whistle on China. 

The conversation then turned to interest rates.  Inflation is about 2% and interest rates (the Fed) are pushing for 3%, leaving about 1% real increase which the guest was comfortable with.  Our rising rates are having an effect on emerging markets.  Money is starting to flow back here at the expense of emerging markets.  Each country in this sector seems to have its own problems, he said, mentioning Turkey and China. 

What would an interview in September be without re-visiting the meltdown in September 2008?  

This is the 10^th anniversary of the “Lehman decision,” which let it go bankrupt.  The guest said Chapter 8 in his book addresses this.  The market was down about 20% BEFORE Lehman was let go.  Afterward, the market crashed.  He said Treasury Secretary Paulson did not like Lehman’s Dick Fuld and that contributed to the decision.   He reminded us that after refusing to bail out Lehman, the Fed and Treasury bailed out AIG and in effect, turned Goldman Sachs and Morgan Stanley into banks, allowing them access to loans from the Federal Reserve. 

What about inflation and wages?

Bob said hourly wage increases are being offset by inflation.  The guest dodged around some, mentioning that people often use anecdotal evidence to make their case, then he cited some research he did which indicated an upward trend in (real) wages.   Caller Jim from California was queued up and cited his own anecdotal evidence, working for $10 per hour in 1967 … 

Ed still likes the new Fed Chair, Jerome Powell.  (He liked him in March too.)  He said the Fed is going after these incremental rate increases – on the way to 3% so that if they see a recession over the horizon, they have some wiggle room to lower the rate. 

The deficits and debt in Washington DC are of some concern to Mr. Yardeni but he said worry about this issue has come and gone for 40 years.   The stock market does not seem to be worried but it is on his radar screen. 

They spent a few minutes hammering Robert Schiller the developer of the CAPE Schiller valuation model which has been telling us that stocks are overvalued – and have been for some time now.  I think it was Bob that said Schiller was “blowing a lot of smoke.”  Chapter 14 of the book deals with valuation.   The guest explained that Schiller’s model looks at trailing 10 year Price/Earning ratios.  If you are going to use this metric to gauge your market exposure, you’ll get out too soon.  If you look at only forward (estimated future) P/E ratios, you might jump in too soon. 

When will the next recession come?  The guest said he didn’t know, “but give me three to six months warning.”  

That said, I saw an article that mentioned a paper issued by the San Francisco Federal Reserve bank on how the inverted yield curve may be a reliable predictor of recessions.   I tracked down the actual research paper by Michael Bauer and Thomas Mertens of the Federal Reserve Bank of San Francisco.  Here is a link:  https://www.frbsf.org/economic-research/publications/economic-letter/2018/august/information-in-yield-curve-about-future-recessions/

Mr. Yardeni gets high marks from me because he seems like a plain talking guy and he described himself as an optimist.  I think the context was, “I have 5 kids, I have to be an optimist.”   He is certainly more informative than the guests from Great Britain and Europe pontificating on the US and European economies.  My Stars and Stripes are showing.  Sorry.  NOT.

Hey Bob, read Jason Zwieg’s Wall Street Journal column on Howard Marks of Oaktree Capital Mgt. and see if you can get Mr. Marks as a guest.   He’s coming out with a new book, “Mastering the Market Cycle.”  

Honey here: Thanks Frankj. I enjoyed listening to Ed Yardeni and reading your summary of his second guest-appearance this year. 

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