Rob wrote:
"Bob Brinker made an appearance on Doug McIntyre's RedEye Radio again last (night). He was on the 50,000 watts of KABC radio here in Los Angeles. Doug actually lives in the San Fernando Valley so he does his show live from the KABC studios. He shows up to work a little early and goes back and forth with the local talk show hosts on KABC before he takes over the mic for his syndicated show.
Of course he could be heard on other stations as well such as WABC New York. He was on the first hours which is july 18th from 10 p.m. until 11:00 p.m. Pacific Time (then run again at 2:00 a.m.) so of course that makes it July 19th from 1:00 a.m. to 2:00 a.m. in New York.
I checked the KABC website and Doug's own site for the RedEye Radio podcast and they both redirects me to the WABC website for the podcast, so New York's WABC must be the big player that you'll have to go to in order to listen to the interview. The podcast from the East Coast July 19show isn't up yet, but when it is you'll be able to find it here
http://www.wabcradio.com/sectional.asp?id=37817
Also, Doug's website is http://dougmcintyreonline.com/
Too bad Bob doesn't get right to the point on his own show like he does on Doug's show. He doesn't repeat the same thing over three times on the same call and to me it appears he gets right to the point with only a small amount of bloviating.
Take Care,
Rob in Pasadena, CA"
BRIEF SUMMARY, COMMENTARY AND EXCERPTS OF THE SHOW:
Doug McIntyre opened his program praising Bob Brinker and meekly said he didn't have a good understanding of how finance works, so having Bob on was very timely. Doug's main topic was the whole debt ceiling and budget debate, and what's going on in Washington. (However, much of the discussion disintegrated into political pontificating by both Brinker and Doug.)
Differences between the debt ceiling, the national debt and the deficit: Brinker explained that the debt ceiling is a statutory requirement on the US Treasury which limits the amount of debt that the Treasury can issue. The Treasury issues debts when it sells bond, etc. The limit is always raised. Brinker said the national debt is the cumulative amount of money that the US owes. Right now the national debt is 14.4 trillion dollars -- that's the cumulative annual deficits for all time for the USA. The annual deficit is added on to the national debt every day and is currently running at an annual rate of 1.5 trillion dollars.
Doug asked what would happen if the US should start "bouncing checks" Brinker replied: "Well for the month of August, we are about 134 billion dollars short of what we need to make all the payments. So we'd have a problem right away in the month of August. We have enough money to make some of the payments, but we have no method and no precedence of making some of the payments. We owe 29 billion in interest, 49 billion for Social Security checks, 50 billion for Medicare and Medicaid payments, 32 billion for the Defense Department, 13 billion for unemployment insurance.....Those are so vital, I list those first. That adds up to about 173 billion but we have another 134 billion that is scheduled to go out. Things like paying our military active duty......"
About possible default: Brinker said: "The fact that we are holding up our bond holders over this debt ceiling issue, that's what we are doing here, playing Russian roulette with our bond holders. And frankly, that's not fair to our bond-holders....."
Doug asked Brinker if we can continue to pile up debts like we have been doing. Brinker said no, it was not sustainable and we are on the road to fiscal ruin if we continue on this road. We have to pay the interest on the debt every day. Right now we are benefiting from very low rates because of the slow economy and Fed policy and low inflation, but long term "interest rates tend to fluctuate." And when interest rates are at higher levels, it's going to cost "a fortune just to pay the interest on this debt."
Doug asks Brinker a question about the president: "I look at this as a political problem. I look at this as a president having to go back to a liberal base that he already irritated by extending the Bush era tax cuts and having to offer some kind of crumb off the table, and not even being able to get that. How do you see it?"
Brinker completely ignored Doug's comments about the president and replied: "Well I think that it's an ideological position being taken as you point out, being led by Tea Party activists and so far they are winning on that point. I don't know what the final outcome will be. I guarantee you they're going to raise the debt ceiling, with or without a government shut-down....You can take that to the bank. But when you talk to the politics of this, and I think you have to take it to the general election in order to decide where the country is going to go on this issue -- spending versus revenue and fiscal responsibility."
Four political parties? Brinker continued: "We are squeezing four parties into the two party system.....We have the Tea Party and we have the Grand Old Party. And then we have the Democrat Party and we have what I would call the Progressive Party that wants to go way beyond what the Democrat Party stands for down the middle......"
When questioned about Gold prices, Brinker said: "Gold is around $1600 and ounce because people are using it as an alternative to fiat currency which is all the paper money floating all around the world.....It's also getting pushed widely all over the place. Anywhere you go it's buy gold, buy gold, buy gold.....And I think it's benefiting from all of that demand. (Doug: "Can it hit $2000 and ounce?") Gold is a speculative metal. Gold can do anything because it's purely a supply demand speculative metal. You know, it's interesting because you can't go into Walmart and give them any gold, they won't take it. It's not currency. In the United States for sure and in almost all countries, it's not currency."
Doug asked about the "previous" White House deficits. Brinker replied: "Unfortunately, we piled up a lot of debt during that period also. The economy was better then so the debt pile-up was a lot less. I will give you an example of a program back around 2004, around election time that was passed with no funding. And that was the prescription drug benefit bill that was added to the Medicare plan without ever being funded. It's costing the country long-term hundreds and hundreds of billions of dollars. It was frankly a give-away to the voters. There's an example of fiscal irresponsibility. So you see, you just made the point. It doesn't matter which Party is involved. They're both irresponsible."
Here are some more of Brinker's comments from the show:
* "We need a long-term plan to get in the direction of a balanced budget. I'd be happy to see them get within 3% of Gross Domestic Product. Right now we're running in the high single digits of GDP in terms of annual deficits......We don't need a lot of short-term pain, it will just exacerbate this sluggish economy, and this economy is really sluggish."
* "I would be surprised to see the unemployment rate have a whole number below 8 for quite a while. Right now, it's 9.2, and the way this economy is drifting along at a growth rate of only about 2% here for the first half of this year, despite all the stimulus."
* "We have a dysfunctional government in Washington, and unless the country gets it right by getting people in Washington that will get it right long term, we're going to be in a lot of trouble down the road."
* "The annual deficit as a percentage of Gross Domestic Product at 3% or less, I think we're okay there. If we can get there, we'll be alright. We are nowhere near that. We're in the high single digits...What the caller is talking about is the total National Debt as a percentage of Gross Domestic Product, and that figure is rising really fast. That number a few years ago was only about 60%. Now it's getting into the high double-digits."
* "One concern I do have in here Doug, and this is a concern I'm getting because of these annual deficits as far as the eye can see with nothing being done about them. I am concerned that the White House does not have a proper appreciation for the importance of fiscal discipline. I'm becoming more and more concerned about that as I see these numbers pile up, and I think it's a real question."
* "I will tell where we could save a lot of money. We should take a look at all of these troops we have stationed in places like Germany and Japan. I think the war is over, what is it, 65 years or so? I'm not convinced that we are getting value for all of our military expenditures...."
Shameless newsletter plug: Caller Russell from Alabama said: "Twenty year subscriber to Marketimer, and anybody who wants to know anything about the stock market is crazy for not buying the Marketimer every year." (Hilarious comments.....I didn't know it was supposed to be a comedy program.)
Doug promoting Brinker's newsletter, said: "Bob Brinker authors Mark-timer (Yes, I replayed the tape 3 times, he called it "Mark-timer" but he corrected himself at the end of the program and got it right, probably much to Brinker's relief.) Doug also said that Marketimer "....has got everything you could possibly want." (I wondered if he said that with a straight face. Or maybe he's never seen a copy of it.)
The subject of the stock market was conspicuous by its absence on Doug's RedEye middle-of-the-night talk show interview of Bob Brinker. I have to conclude that he was told the subject was off-limits, but that's just my own opinion.
