Honey's Bob Brinker Beehive Buzz

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

2018-09-30T13:08:00.000-07:00

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

2018-09-28T17:38:00.002-07:00

September 28, 2018:

''Moneytalk'' Radio Program With Bob Brinker Ending

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

2018-09-23T13:07:00.000-07:00

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!)

* 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

2018-09-16T13:09:00.000-07:00

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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September 9, 2018, Bob Brinker's Moneytalk: Re-run Program Again Today

2018-09-09T13:11:00.000-07:00

September 9, 2018.... Like last Sunday, Bob Brinker's Moneytalk is a spliced and diced program. Beware: some calls are recent, some are years old and are NOT reliable! .....(comments welcome)

Honey's market comments: Tesla and Tech took it on the chin last week, which also affected the S&P 500 Index about 1%, and the Dow a small fraction.

==> Stock Market last week - CHARLES SCHWAB:

The Dow Jones Industrial Average (DJIA) declined 79 points (0.3%) to 25,917, the S&P 500 Index was 6 points (0.2%) lower at 2,872, and the Nasdaq Composite lost 20 points (0.3%) to 7,903. In moderate volume, 707 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq. WTI crude oil ticked $0.02 lower to $67.75 per barrel and wholesale gasoline was up $0.02 at $1.95 per gallon. Elsewhere, the Bloomberg gold spot price fell $4.35 to $1,995.63 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.4% higher at 95.39.

Markets were lower for the week, as the DJIA decreased 0.2%, the S&P 500 Index declined 1.0%, and the Nasdaq Composite tumbled 2.6%.

Joe Tong's comments - just in:

Why does Bob waste our time with repeats - because he can.

Until his program is canceled by the network...or done slowly cause he is losing interest to listeners.

BB appears in retirement, but not in the interest of what once was a great program when it was a "live" program.

If BB doesn't want to bring in a replacement fill-in, let his listeners know it is a repeat slice and dice from prior programs.

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September 2, 2018, Bob Brinker's Moneytalk Rerun Monologues and Calls

2018-09-02T13:10:00.004-07:00

September 2, 2018....Bob Brinker's Moneytalk Rerun Monologues and Calls...…(comments welcome)

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August 26, 2018, Bob Brinker's Moneytalk: Summary, Commentary and Advice

2018-08-26T13:09:00.002-07:00

August 26, 2018....Bob Brinker live on Moneytalk today.....(comments welcome)

HOW FAST TO DOLLAR-COST-AVERAGE INTO STOCK MARKET NOW

Caller Mike from Los Angeles said: "You are not on live on KABC in LA....(BB claimed that it is live "sometimes" - he is wrong.) I have a large amount of funds ($350K) I want to invest in portfolio III. When you talk about dollar-cost-averaging...you typically suggest, four, five, six pieces. A little background. We just passed this last week the longest bull market run backing up the '90's. I'm anticipating, based on your newsletter (Marketimer) which was helpful - in your October letter a year ago, you said to anticipate a mid-term set-back this year so I took advantage of that. Thank you very much. That helped pay for the letter many times over. Anticipating the market topping say in the next year, year and half, how many pieces should I be breaking my money into?"

Honey EC: Brinker didn't mention that when stocks had the 10% correction in February that he sent out a bulletin stating that he was looking for a retest of those lows before issuing a new "buy-signal." That is all water under the bridge and he has moved back to old buy signals - leaving out the repeated mistakes in 2008-2009. Jim eloquently explained in the comment section today:

Jim Wrote:
"If caller Mike took advantage of the mid-term "setback" this year then he wasn't paying attention to Brinker who advised to wait for a retest. It seemed Brinker didn't want to talk about the current year correction but instead chose to mention prior year buying opportunities that he was able to identify. I wonder why. LOL"

MARKETIMER'S FIXED INCOME HOLDINGS....Brinker's reply to Mike: "I would say on model three on the fixed income side, I don't regard a need for DCA....We have largely inoculated that fixed income side by selecting short-duration portfolio assets. In fact, our average duration is less than one year....and the current income on that portfolio stands at a little less than 3%...…"

INTO EQUITIES.... Brinker's continued reply to Mike: "On the equity side, that comes down to your tolerance for risk....The fact is, if you are going to DCA money in, you want to do it in a way where if something goes awry in the market, you are not going to panic and do something that's going to be counter-productive. So I'd move it in on a schedule that you are comfortable with in terms your tolerance for risk - and that would be the key."

IT MUST BE FUN TO BE A PAYING CUSTOMER SO YOU CAN SHARE SECRETS WITH NATIONAL RADIO TALK SHOW HOST.....Honey EC: IMO, it is really scummy to leave out the vast majority of the audience while sharing long calls with subscribers about Marketimer portfolios - in hopes of pulling in a buck or two on the dangled carrot. Let me clarify: Brinker's model III portfolio is roughly half equities and half fixed income. He holds only two bond mutual funds, and as he has repeatedly said, Vanguard Prime Money Market on the fixed income side. Today Brinker described the duration and income from portfolio III fixed income holdings. The ONLY reason, he is getting 3% income on those two bond funds is because they contain high-yield junk bonds! Where else would he get 3% on one year duration?

CORRECTION IN 2018 LASTED NINE DAYS.... Brinker comments: The January/February 10% correction last a total of nine days.....We are looking at a market that is basically the longest cyclical bull market ever - we are at 9 1/2 years. ==> dRahme's Audio Clip: Brinker's stock market history comments, "Secondary Buy Signal"

BRINKER'S NEW INVENTION: "SECONDARY BUY-SIGNAL"...==> dRahme's Audio Clip: Brinker EXPLAINS new term for giving buy-signals while fully invested.

Honey EC: While I understand his embarrassment at the illogical and obvious scam of selling "buy-signals" while he has all followers, and model portfolios, fully invested, this only makes him look more foolish and desperate (in my opinion). Brinker's newly-minted "Secondary Buy-Signal," which he explained means to invest new money while already fully-invested, makes almost no logical sense to anyone who thinks rationally.

INTEREST RATES-INFLATION.....BB comments: Fed Chair Powell not concerned about inflation, but will gradually keep raising interest rates. PCE Index is now at acceptable almost 2%...Fed fears deflation....deflation is the "worst thing that can happen."

FED DUAL TRACK...BB comments: With the Fed on dual track right now, this has never occurred before: raising interest rates and Quantitative Tightening.

BRINKER READS FROM MARKETIMER: THE INVERTED YIELD CURVE.....Caller Marty from Kansas City asked Brinker to explain why he used the Fed Funds to diagnose a possible inverted yield curve. Marty cited the August issue of Marketimer. Brinker explained and read a WHOLE PARAGRAPH FROM MARKETIMER. ==>dRahme Audio Clip.....

NEW HOME SALES.... BB comments: "We have seen some sluggishness come in to the ….new home sales market still okay==>dRahme Audio Clip: New home sales, inventories rose, existing supply steady; median new home sales price decline 1%; Year-over-year GDP 2.8%.

KUDOS TO BRINKER FOR AN ACCURATE GDP REPORT….BB said: "The initial quarterly increase for second quarter GDP which was reported at 4.1%. The consensus revision is 4.0, and the range is 3.8 to 4.2. "Right now, year-over-year rate of real growth in GDP is 2.8%. If this number comes in close to 4%, there shouldn't be any change in that critical year-over-year number, which is the actual annual growth rate of the economy - adjusted for inflation. Now standing at 2.8%. That will come out on Wednesday morning."

SOCIAL SECURITY SUGGESTIONS... Caller Marty from Naperville has a suggestion for shoring up Social Security. BB reminds him of George Bush's suggestion to put some funds in the stock market - which clearly would have been profitable...…==>dRahme's Audio Clip (scroll half way).

NEXT WEEK IN THE CANYONS OF WALL STREET: ==> dRahme's Audio Clip

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Bob’s third hour guest on August 26, 2018 was Professor Adam Tooze. He is a professor at Columbia University but today he weighed in from Berlin. The prof has written a number of books and his latest is titled: “Crashed: How A Decade of Financial Crises Changes the World.”

Oh boy … regular readers know what comes next. All together now, “ANOTHER BOOK ABOUT THE 2008 FINANCIAL MELTDOWN??” Yes, unfortunately. Adam Tooze joins the very long Conga line of third hour guests on this overworked, overanalyzed topic. Who chooses these guests? Does Bob think this topic is still of interest after nearly 10 years?

Thankfully they didn’t spend the whole interview rehashing the financial crisis.

Bob said the Bear Stearns bailout in March of 2008 should have been a warning shot, but it did not accomplish any substantial protective measures. No kidding. Someone (who was that?) saw no major consequences for the stock market and kept recommending adding money as it declined. There was some discussion of Lehman Bros. The guest speculated that the head of Lehman might have seen the Bear Stearns bailout as a good omen but the rug was pulled out when the powers-that-be in government said “fuggetaboudit.”

Bob asked if the Fed fulfill their role as the lender of last resort. The prof said yes, the Fed lent trillions to US banks and to foreign ones as well. These loans were collateralized.

So, why is the Fed demonized, asked Bob. Answer: all this lending revealed a disconcerting fact: Money has no tangible underpinning, i.e. gold backing, it can be created out of thin air as illustrated by the Fed granting credit where needed.

The only caller was Dan from Des Moines who (I think) asked a question but it was hard to discern. Fortunately the guest untangled it for us. The Fed is focused on inflation, but in today’s economy where the internet and all the business associated with it enhance our ability to find out prices – inflationary pressures are eased. The answer went on to describe how deflation hurts debtors, and the consequences of deflation on any equity one might have in their home.

There was some talk of reparations following World War I. (This was the subject of a different book the guest wrote). The US had loaned money to the UK and France, and they needed payback from Germany to pay the US. The consequences were foretold by John Maynard Keynes who was an observer at the Versailles conference. He wrote afterward that the harsh reparations would sow the seeds of another major conflict.

Bob brought up tariffs by saying “My aim is not to get political in any way …” The guest played off this and said he is surprised the current administration went after so many countries all at once. There was good reason to try and deal with China, but not a good idea to “lash out” at everyone.

How many more authors are out there in the weeds with a manuscript on the 2008 meltdown? How many will get published and find themselves guests in the third hour? We will know in the fullness of time. As for me – what the heck, these summaries all pay the same.

Bob wrapped up at 3:51.

Honey here: Thanks Frankj. For me, the words "lashing out" used by so much of the Trump-hating media, told me all I needed to know about that guest. As for Brinker claiming he wasn't "aiming to be political," how stupid does he think his audience really is? (Rhetorical question!)

As always, I bristle when I hear Brinker singing the praises of John Maynard Keynes - but that subject has been discussed in the past when he used to do it almost weekly.

CHARLES SCHWAB MARKETS REPORTS AT CLOSE FRIDAY:

U.S. stocks finished the week in strong fashion as market participants seemingly had a dovish take on Fed Chairman Jerome Powell's Jackson Hole speech and as business spending reportedly rose for the fourth-straight month. Treasury yields ticked to the downside, gold and crude oil prices advanced and the U.S. dollar declined...….

The Dow Jones Industrial Average (DJIA) advanced 133 points (0.5%) to 25,790, the S&P 500 Index increased 18 points (0.6%) to 2,875, and the Nasdaq Composite gained 68 points (0.9%) to 7,946. In moderate volume, 611 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq. WTI crude oil ticked $0.89 higher to $68.72 per barrel and wholesale gasoline was up $0.01 at $2.07 per gallon. Elsewhere, the Bloomberg gold spot price added $19.79 to $1,205.35 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly 0.6% lower at 95.13.

Markets were higher for the week, as the DJIA increased 0.5%, the S&P 500 Index advanced 0.9%, and the Nasdaq Composite jumped 1.7%.

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August 19, 2018, Bob Brinker's Moneytalk: Summary, Commentary and Advice

2018-08-19T13:11:00.000-07:00

August 19, 2018....Late today, but Bob Brinker was live on MONEYTALK.....(comments welcome)

STOCK MARKET.... Brinker made no comments about what the stock market did last week, or that we are not far away from reaching the all-time-high set in January. He's still looking (hoping?) for a correction this year. He has made no changes to his fully invested equity allocation and continues to advise callers to do the same - balanced for those near or in retirement.

HONEY'S FINANCIAL MARKET REPORT: DJIA finished the week up 1.4% to 25,669, with the S&P 500 Index up to 2850.13 - and is now up about 6% YTD; Nasdaq dipped 0.3% to 7816.

The 10-year Treasury Note flat at 2.86%; the U.S. dollar traded lower; gold and crude oil prices were higher. More jobs available than qualified applicants.

STOCK MARKET CALLERS:

==> Caller Mike from Illinois wanted to know if he should put $50,000 new money into his mortgage or into the stock market. Brinker found out the mortgage was 4.65% and told Mike that paying it off would be a guaranteed return. (Honey EC: BB made no comment about stock market to Mike, but we all know he can't guarantee anything about it.)

==> Caller Charles from Indiana and retired, said his allocation was about 70/30. After some more questioning, Brinker found out that he was more close to 50/50 and that was what he recommended for retirees.

==> Caller JoAnne from Chicago, a single, retired, 62 year old teacher with a pension of $71,000 per year, sold a house in Illinois and wondered if she should dollar-cost-average into the stock market with that money using Marketimer model portfolio III......

…...Brinker spent about 10 minutes finding out all about JoAnne. He found out that she was going to be living part of the year in Florida in a new home she just bought there, and part of the year in Chgo using Airbnb. But right now, she is staying with her brother and is flying off to Europe. Brinker also checked to see if she had plenty of "contingency money" but got so involved in talking to her, he never actually told her whether or not to dollar-cost-average, but he did recommend Vanguard Prime Money Market Fund to her.

MARKETIMER MODEL PORTFOLIOS.... Brinker told Charles from Indiana that even though Marketimer model portfolios use mutual funds, with a large percent in the Vanguard Total Stock Market Fund, he has no problem with using the ETF for it instead of the fund - symbol is VTI.

BRINKER'S BOND DURATION ADVICE....Caller Nelson from Beaverton said he invested in Vanguard Total Bond Fund and wanted to know if the duration was too long. Brinker said that the duration was 6 years, so if interest rates go up 1%, the fund would go down 6% - but adding back in the yield of 3%, that would equal a total of a 3% negative return. Brinker ended by saying that "some don't care" about the net-asset-value because they are only interested in the dividends.

Honey EC: Perhaps one of the BRT (Blog Research Team) knows how well that fund has done over the last five years.

IN HONEY'S OPINION BRINKER BOTCHED BOND TIMING.... Honey EC: Brinker first moved to very short duration bond funds in 2013. That was a costly mistake for those who followed him down that path. He is still on that same path, but it looks like rates are finally going up. However, it is now too late for followers to ever regain the opportunity-costs loss of his short-duration moves.

Here is an article that presents PROFESSIONAL analysis of why it is a mistake to keep duration too low: Charles Schwab: Are Your Bond Holdings Too Short

FEDERAL RESERVE....Brinker commented that it is "highly probable" that the FOMC will raise interest rates to 2.25 at the September meeting - rate increase number eight.

NEW JOBLESS CLAIMS....BB commented that jobless claims (new) are the lowest in almost 50 years....Tight labor market - very strong. (Honey EC: We now have the lowest Black and Hispanic unemployment ever, and lowest women and young teens unemployment in over 50 years.)

HOME SALES.....BB commented that home sales are expected to be up - new home sales contribute a lot to the economy.

==> dRahme AUDIO CLIP: Home sales; FOMC meeting next week; Vanguard Prime Money Market recommendation; jobs market

ITEM: ILLINOIS DOESN'T TAX TEACHER PENSION....Don from Illinois, a retired teacher (who uses Marketimer model portfolio III) asked about having fixed income investments in non-taxable accounts. He made the statement that Illinois does not tax teacher's pensions. Brinker advised him to have fixed income investments in tax-sheltered accounts and equity investments in non-tax-sheltered accounts.

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Bob’s guest this Sunday August 19, 2018 was Olga Mizrhai, author of the book, “The Gig is Up, Thrive in the Gig Economy.” (The subtitle is actually longer but I am continuing my boycott against annoying and overly long subtitles.) She is an instructor at University of California at Irvine in digital something or other. The book was issued in paperback in February 2018.

The “gig economy” is project-based, temporary (employment) and on-demand in nature. She characterized it as 1099-type labor. She referred to participants as “giggers, ” and asserted that both “giggers” and traditional employees no longer feel comfortable with long term employment.

In a short discussion of a chapter called, “Reviews, Rejection and Redemption,” the author said everybody is getting reviewed. Uber drivers review their passengers. (Probably not a bad idea given the number of nutcases out there.) She cited an example of the burger chain 5 Guys which in the DC area uses a temporary employment place to get temp employees. These temps review the manager they work for. As a professor, she gets reviewed and she said anything other than a 5 star review is a “fail.”

Bob seemed skeptical about the veracity of reviews. How many of them are legit and how many are postings by one business trying to trash another one? As part of her answer she mentioned the internet review site, Yelp which she indicated needed to do a better job of screening reviews.

Bob from San Francisco, who is a repeat caller I believe, asked what I thought was a good question: “If you could turn back time to the period of long term employment, a pension and a gold watch vs. the gig economy… what would you do?”

She ducked the question. She said contract workers are no longer stigmatized as they once were. They no longer get a broken chair to sit in and now get invited to meetings instead of getting ignored. She ended up saying it wasn’t possible to turn the clock back.

Toward the end of the interview there was a little talk about the safety net for contract employees. An association of contract employees is trying to make disability insurance available. As for what she would like readers to take away from the book, she said she’d like to hear from them on their experiences.

Bob wrapped up at 3:50 pm which is a little earlier than usual.

Honey here: Thanks Frankj…..Great job of making a silk purse today. :)

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August 12, 2018, Bob Brinker's Moneytalk: Pre-recorded Monologues and Repeated Old Calls

2018-08-12T13:09:00.002-07:00

August 12, 2018....Bob Brinker was not live on Moneytalk....(comments welcome)

In Bob Brinker's absence today, here are some investing tips, ingenious analysis and great humor sent by top-notch gurus on this blog - for your enjoyment and entertainment:

TODAY'S "WORN-OUT RETREAD" PROGRAM, COPYRIGHTS AND BANANAS:

Vegas Vulcanizing has left a new comment on your post

Could hear the deafening whine generated by those worn-out retreads on the greasy Clinker Highway today. Gosh, even the roadkill and the empty beer cans were stale leftovers from days of yore. Could feel a snooze or an oil change coming on rapidly, whichever arrived first.

But then my head jerked back, as if yanked into the present rudely by an audible screech, by a comment seemingly spliced and diced into the trailing entrails of the radio show's first hour. It was a pin prick heard 'round the world, "From the islands of... to the shores of... (you know the drill)"

The radio DJ said, with an intentional Hollywood dramatism (quoted loosely, haven't seen the instant replay yet) "...and our broadcasts are...(insert drama) copyright...(more drama) protected."

What's that supposed to mean? Is it that people can't discuss what he said because if someone didn't hear the original broadcast with its commercials then it's a copyright steal to tell them? That sounds like dumbass logic to me, as is his statement.

If he's not reading the latest M* thread and intentionally commenting on it, I'll be a monkey's uncle. Got a banana?

LOOK AT PERCENTAGES, NOT NUMBERS:

birdbrain said...

I have informally advised more than a few folks over the years about investing and an saddened with the lack of basic mathematic knowledge that has been heard.

Investors may hear on the news "the Dow fell 100 points." Is this bad? Terrible? No big deal? As I say, you need to look at the percentage change. Had the Dow been at 1000, that would represent a ten percent decline, a financial earthquake for a market index. With the Dow currently over 25000 it would take a 250 point drop to represent only a one percent slip.

Unless you trade equities (as I did in a former life), and have a long term term outlook with your retirement account, look at market moves on a weekly or quarterly basis. Forget the day to day gyrations. More often than not after five days of wild swings the index you follow will be close to where it started.

Thank you for attending. Class dismissed.

July 31, 2018 at 11:49 AM

BOND INVESTING, BALANCED FUNDS AND THE ENERGIZER BUNNY:

Trees said:

I read of the benefits of pivoting from growth stocks when they are high priced to value and dividend paying stocks. This is the category wherein Wellington lies.

Also, we read that bonds may have a weaker future given the expected interest rate increase over long term future. It may be better to be 70% stocks with bonds reserved for safe money.

We know how hard the bond market or income producing investments are, given Bob's costly investment advice to stay ultra short duration for some years now. From my personal research, my faith in knowledge of the income investment market is weak, but my faith in the Wellington's expertise is high. An active managed fund has better return in this category. May be do to the knowledge of real risk vs return and not just some radio host's easy talking point.

Also, these balanced funds have return opportunity to increase the bond or stock percentage within appropriate time periods. The one referred to does typically have low a percentage of foreign stock for same purpose to increase yield and lower volatility. Rebalancing the funds investment occurs not upon some random year anniversary, but upon intelligent time frame. For example, best to let winning bets run. Yet, it is wise to pull money from winners to invest in value such as our lower priced bonds at some point that I'm clueless to know.

I've moved some investments and have 50% of portfolio in cash. There isn't much cost to be in cash, now, since markets are going sideways. Better for the short term to be in the low interest trading account. Not for the long term, but for some buying opportunity if such appears. I think a boatload of investors are doing likewise and as a result no opportunity will appear unless? No one knows. My retirement plan was to spend down taxable IRAs before Social Security and that is a 5 year span. Most will advise to stay in safe investments for this short time period.

I'm thinking that the economy could do extremely well during the Trump reign and if so could be another 8 yrs after that. So, many good things that know one could have thought were possible. This Energizer bunny is pushing hard to MAGA. Those aren't empty words, apparently. We'll see in the long term if he can be successful. IMHO, everything is spot on. Early in the political campaign I liked the guy after hearing his management philosophy. Get the best you can get to do a good job and empower them to do so. This is good management to delegate and hold these people accountable, Trump knows how to market and manage the Left and their press. Politicians in general can't delegate as they have crafted their popularity and career gains by grabbing all the credit.

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August 5, 2018, Bob Brinker's Moneytalk: Summary of Stocks, Economy, Bond Advice

2018-08-05T13:09:00.000-07:00

August 5, 2018...Bob Brinker was live on Moneytalk for the first two hours....(comments welcome)

STOCK MARKET....Brinker made no comments about current stock market activity.

Honey's EC: As I have written before, Brinker is still looking for the market to retest the February lows based on the fact that this is an off-presidential election year. But if that doesn't happen, he is all set to look for "a market top" in 2019. The big clock on the wall aboard the Spaceship Moneytalk will certainly be right again some day. :)

VANGUARD PRIME MONEY MARKET FUND....Brinker told first caller, Mitchell, that he prefers Vanguard Prime because it pays a higher yield than Schwab Money Market Funds.

INTEREST RATES....BB comments: The Federal Reserve will continue to increase rates and dumping Treasuries on the open market, via Quantitative Tightening (as opposed to Quantitative Easing).

EMPLOYMENT AND UNEMPLOYMENT.....BB comments....Current unemployment rate is now 3.9%....Average hourly wages - year-over-year - have increased 2.9% (not adjusted for inflation)

GROSS DOMESTIC PRODUCT....BB gives the year-over-year number as 2.8%. (BB did not mention that the GDP for Q2 came in at 4.1% and some say will be higher next quarter.)

==> dRahme's Audio Clip: employment and GDP reports; recommends Vanguard Prime Money Market Fund and why, to caller Mitchell in Naperville.

JOB SKILLS ARE NEEDED....BB commented on "income inequality" and how no one ever points out that workers have the responsibility of getting the skills or education needed to do jobs and get higher wages.

"STATE LEADING INDEX" REPORTS.....BB said that according to the State Leading Index Report, over the next six month, economic activity will increase in 46 out of 50 states. ==> dRahme Audio Clip: job skills needed....meaning of State Leading Index

APPLE STOCK

WHY APPLE MARKET CAP HIT $TRILLION.... BB said: "Think about the caller (Bernie from West Lake Village) that we had last hour that made an attempt to link the fact that the company - Apple - now has a $trillion market cap. Which simply means that the number of shares outstanding, plus the price of the stock equals a trillion dollars, plus. That's all it means. And that's entirely a function of the corporate profitability of that company and the job that Tim Cook has done running that company as the successor to Steve Jobs in the role of CEO...…"

WE ARE TETHERED TO IPHONES AND SMART PHONES....BB continued: "It's about the fact that that company has created the iPhone that is literally tethered.....to millions and millions of people. I see a lot of younger people that are so tethered to their iPhone, they can't put it down. They won't put it down. One wonders what could have possibly happened in the last 38 seconds that would require another visit to the screen, but that's the way it is. It is what it is, and there is nothing anybody can do about it....."

SO THIS IS HOW APPLE MADE THE $TRILLION..... BB continued: "So if you create a product like that that literally takes over the life of a human being - millions of them. They are going to the APP Store and taking advantage of the services, maybe buying some of the other products the company produces. It's like magic, right? …..So in a situation like that, the company benefits. These are customers. They are paying money for the phones, services, for everything. This has accrued to the benefit of the company and shareholders. That's where they get the revenue and earnings, that's how they pay the dividends. And that's why the stock has done what it's done."

MARKETS THIS WEEK (Honey's report):

STOCKS FOR THE WEEK: the DJIA ticked 0.1% higher (25,463); the S&P 500 Index gained 0.8% (2840); and the Nasdaq Composite 1.0% (7812).

OIL: WTI crude oil dipped $0.47 to $68.49 per barrel.

GOLD: Bloomberg gold spot price gained $5.90 to $1,213.73 per ounce,

DOLLAR: Nearly unchanged at 95.17.

10-YEAR TREASURIES: The yields on the 10-year note decreasing 3 bps to 2.95%.

TRADE BALANCE... The deficit widened by a slightly smaller amount than expected to $46.3 billion in June, compared to forecasts of $46.5 billion. May's deficit was revised higher to $43.2 billion. Exports were down 0.7% m/m at $213.8 billion, while imports rose 0.6% to $260.1 billion.

FOMC ANNOUNCEMENT: decided to maintain the target range for the federal funds rate at 1-3/4 to 2 percent.

BRINKER BOOK CHALLENGE... Caller Roy from Corte Madera said: "What I encourage anyone who is doing investing to do is ask their broker - give them like 4 to 6 books from your book list like Bogle's Common Sense on Mutual Funds; Random Walk Down Wall Street; Against the Gods. Then ask the broker if those books will help with investing. If the broker says 'no, I'll take care of everything,' go find another investment advisor." Brinker raved about the idea and several times during the show made reference to the call and the recommended books.

(Honey sez: FrankJ has done short reviews of the four books which were mentioned today, and added some of his own recommendations.)

FRANKJ'S BOOK RECOMMENDATIONS AND COMMENTARY:

Bob’s third hour guest this Sunday, August 05, 2018 was ……… oh, wait, there wasn’t a third hour guest. This was strange because during the second hour he mentioned the third hour guest would be Elizabeth Rosenthal, author of the book “An American Sickness: How Healthcare Became a Big Business and How You Can Take It Back.”

What was odd was that Bob almost never reveals the name of the third hour guest beforehand. And when I was looking at archived third hour summaries on my hard drive (the ones the Bulgarians had not hacked into) I noticed a summary of the very same author and the same book from August of 2017. (Cue the Twilight Zone music.) So how did that mention slip into the second hour? Inquiring minds want to know.

Early in the show Bob got a call from someone who said that people using financial advisors or contemplating using one should ask them their reaction to 4 books on Bob’s reading list (available on his website – and it is a long one.) Not all of them have to do with investing, per se, some are topical and a great many are by third hour guests.

So here are the four books the caller recommended:

1. A Random Walk Down Wall Street by Burton Malkiel. Malkiel is a finance prof (still, I think) and he’s a board member of Vanguard last time I checked. That makes him an index fund guy. I read this book a long time ago but it is now in its 12^th edition.

2. Against the Gods, by Peter L. Bernstein. Bernstein has been a guest on the show. He wrote this book and others which show up on Bob’s reading list. I read this book too, largely on Bob’s recommendation but I have to confess I don’t remember a whole lot about it other than it focused a lot on risk. I bought this book but don’t have it anymore so I must have given it away.

3. Common Sense on Mutual Funds, by the venerable John C. Bogle, founder of Vanguard and the innovator of index fund investing (although I read somewhere recently that some other outfit brought out an index mutual fund way earlier, it just wasn’t that widely available.) I read this one too, but no longer have it. I gave my kids each a copy of another book by St. John, The Little Book of Common Sense Investing. This is a short book which is part of a series of “Little Books” covering various aspects of investing.

4. Winning the Loser’s Game, by Charles Ellis. Mr. Ellis has been a guest on the program several times and he has more than one book on Bob’s reading list. I read this one too, having heard about it on Bob’s show. I liked this book, had it for a while, probably gave it away.

Which of these four would I recommend to someone starting out if I could only choose one?

That would be John Bogle’s book. And I would advise them to read Ellis’ book because it explains how financial advisors can take a chunk out of your earnings in various ways.

At one point the blog here included its own reading list of good books. I don’t see it there now, but I am sure it is archived.

Here are some other books I read and recommend:

A book I liked on bonds was Larry Swedroe’s (co-author) The Only Guide to a Winning Bond Strategy You’ll Ever Need. This also seems to be part of a series with “The Only Guide” as part of the title of other books. Personally, I learned some stuff about bonds and it got me to take a more critical look at junk bond funds, and I ended up getting rid of the one I had.

Then there is Lowell Miller’s book, The Single Best Investment, which I have read at least twice and is now heavily highlighted. The “single best investment” being dividend growth investing. He describes the advantages, how his investment firm screens stocks and how you can do this yourself. He gives specifics on what he looks for in choosing individual stocks.

Jeremy Siegel’s The Future for Investors, Why the Tried and True Triumph Over the Bold and New. This is another book emphasizing dividend paying stocks over growth stocks. Published in 2005 though, so I’m not sure if investors in the FAANG stocks would be much interested in the ideas here.

Howard Marks’ book, The Most Important Thing, Illuminated. 2013. He was chairman and founder of Oaktree Capital Mgt, at time of publication. Marks is firmly in the camp of active fund management. The Oakmark fund has a pretty good record, long term. What is the “most important thing?” Actually there are 21 of them, each chapter describes a “most important” concept.

There is a book I snagged for $1 on our local library’s surplus shelf: Steven B. Achelis’ Technical Analysis from A to Z. I’m not a chart guy but I found this book interesting in that it described dozens of technical trading approaches all in one place.

Here is a quick mention of Bad Blood, by John Carreyou as long as we’re on the topic of books. Remember him as a third hour guest a little while back? I recently read this book and found it very good. Entertaining to the extent that scams like the one Theranos was running could be. Well written. Moves right along. Remember, Theranos was the company that was going to revolutionize blood testing using tiny pinpricks to obtain blood droplets that would then be used in their proprietary equipment to do rapid analysis for an amazing number of blood tests. Well, their equipment never worked properly and they skated around the needed regulatory approvals as he briefly described in the interview.

The founder, Elizabeth Holmes was featured all over the financial media because of her young age and the fact that she was on her way to becoming Silicon Valley’s first female billionaire. In her pitches to investors she’d make reference to a relative that died who, she implied, could have lived if her technology was available at the time. So, her company was out to save lives – but the author makes clear that in fact, their technology was so bad that if it rolled out on a larger scale, it could have cost lives and gives examples. Mr. Carreyou’s book documents the run up and then the unraveling of the whole thing.

Honey here: Thank you, Frankj! I think if anyone really wants to learn to be their own financial advisor, all the top-notch help they need is provided in your book reviews and comments above.

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July 29, 2018, Bob Brinker's Moneytalk: Summary and Commentary

2018-07-29T13:07:00.000-07:00

July 29, 2018....Bob Brinker mostly hosted Moneytalk live today.....

STOCK MARKET...Brinker commented that he is still for having 100% of your stock allocations fully invested, and for dollar-cost-averaging new money. He said that in spite of the auto companies complaints, the stock market had a "reasonable week" with the S&P 500 making fractional gains.

FINANCIAL MARKETS NOW

OIL: WTI crude oil lost $0.92 to $68.69 per barrel and wholesale gasoline shed $0.01 to $2.11 per gallon.

GOLD: The Bloomberg gold spot price inched $0.72 higher to $1,223.41 per ounce.

DOLLAR: The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.1% at 94.66.

STOCKS: The DJIA rose 1.5% (@ 25,451.06); the S&P 500 Index was 0.6% higher (@ 2818.82); the Nasdaq Composite declined 1.1% (@ 7737.42).

FACEBOOK HIT THE SKIDS THIS WEEK - not mentioned on Moneytalk today.

BRINKER SAID 4% GDP COULDN'T BE DONE, BUT THIS IS WHAT HE IS SAYING NOW....Brinker said: "Well some good economic news. Okay, it was expected. Okay, we said it would happen. We'll take it. Some good economic news in the second quarter of 2018. Total GDP had a very good second quarter. We talked about a nice bounce off that first quarter. We got that nice bounce. The first quarter was slightly revised to 2.2% annual growth. But the second quarter was the headline number coming in at 4.1% annual growth. And that brings the first half annual growth rate up to 3.1%. The advance estimate for Q2 GDP to one decimal, came in at 4.1% (4.06% to two decimal places), an increase from 2.2% for the Q1 Third Estimate. Investing.com had a consensus of 4.1%."

Honey: LOL! as I typed that. :)

LISTEN TO THE REST OF BRINKER'S ECONOMIC REPORT....==> dRahme's Audio Clip

BONDS, INTEREST RATES...No changes in Brinker's advice to stick to duration of one year or less in bond funds.

ROTH VS REGULAR IRA.... Brinker told a caller today that the only reason he would recommend paying taxes to transfer money from a regular IRA to a Roth IRA is if he was convinced his tax rate would be higher in the future.

HOUSING MARKET....Home prices are at high levels, and likely to stay high because there is a scarcity of available homes. There has been "under building for years," so there is a low inventory.

==> > dRahme Audio Clip: home prices; mortgage rate changes; durable goods gains;

CRYPTO-CURRENCIES - BITCOINS.... Lots of advertising because they are not regulated....extremely volatile....."CAVEAT EMPTOR"

NEXT WEEK IN THE CANYONS OF WALL STREET....dRahme's Audio Clip: pending home sales; PCE Index (watched by FOMC); ADP new jobs estimates.

FRANKJ'S ORIGINAL SUMMARY OF THIRD-HOUR REPEAT GUEST-AUTHOR AND BOOK FROM APRIL 2017. No new information was added in today's interview:

Bob’s guest today, April 2, 2017 was William D. Cohan, author of the book “Why Wall Street Matters.” Today was a repeat appearance for Mr. Cohan on the StarShip. He is a financial journalist and former banker. Mr. Cohan said the book is short, easy to read and it is his hope that people will gain a better understanding of Wall Street’s importance to their everyday life. (Editorial comment in italics as usual.)

A blurb on Amazon books describes this offering as, “A timely, counterintuitive defense of Wall Street and the big banks as the invisible—albeit flawed—engines that power our ideas, and should be made to work better for all of us.”

Mr. Cohan thinks Wall Street is bashed unfairly by politicians of all stripes and mentioned Bernie Sanders and President Trump in this regard. He cited an example of Elizabeth Warren blocking the appointment of Antonio Weiss to a government position simply because he once worked on Wall Street. Mr. Cohan said he knew Mr. Weiss was well-qualified for the job.

The guest believes Wall Street’s compensation model is to blame for financial disasters that result (naturally) in Main Street’s dislike and distrust. For decades, Wall Street investment firms were partnerships, meaning it was the partners’ capital that was at risk if investments went south. That changed in the 1970’s when Donaldson, Lufkin and Jenrette was the first firm to go public. Many more followed suit and the result was that risk was no longer confined to the partners, now it was spread among the shareholders at large.

He referred to the “bonus culture,” wherein employees of the firm take outsized risks with other people’s money, hoping for that big bonus at the end of the year.

Bob asked if he blamed Wall Street for 2008? The guest gave a long answer, beginning with the statement that there was a lot of blame to go around. Government policy and the actions of Wall Street, mortgage brokers and real estate agents pushed home ownership up from 61% to 70% (presumably these are percentages of households). As MoneyTalk regulars well know, there were a lot of people who had no business buying a home during this bubble, but they were accommodated by a greedy lending sector.

The bottom line was, no one on Wall Street was held responsible. The Dept. of Justice under President Obama did little or nothing to go after those responsible. Preet Bharara, former US Attorney in New York City has gone after hedge fund operators but not Wall Streeters involved in the housing debacle. Mr. Cohan said Bharara told him “stupidity and greed” are not grounds for prosecution and there is a lack of evidence that Wall Street firms acted illegally.

The guest pointed out that Dan Turillo, a former member of the Fed pushed regulations on Wall Street firms, “trying to turn it into a utility.” Because they tend to be monopolistic over broad geographical areas, utilities are tightly regulated.

The result of this regulation is that small and medium sized businesses on Main Street have found it difficult to borrow. He cited Larry Summers as someone who thinks these regulations are the reason we are stuck at about 2% growth of GDP.

Keith from Rochester called in. He’s getting to be a regular on the StarShip. Normally he is strident and argumentative and makes more of a statement than asks a question. But today his call fed right into what the guest said about the difficulty of getting capital flowing to Main Street. Keith cited the hit Rochester took when Kodak folded. The guest gave a long answer which basically agreed with what Keith said.

Bob wrapped up about 3:55.

Honey here: Thank you, FrankJ. I have never before known Brinker to have an author on to discuss the same book he had him on to discuss over a year ago. And as you pointed out to me, Brinker actually said the book was new. The book is available in paperback on Amazon for $1.30.

Mr. Cohan took a cheap shot at President Donald Trump today (something he didn't do a year ago, but that was just three months after inauguration). Very near the beginning of the interview, Mr. Cohan said that the reason people aren't much interested in the problems on Wall street was because they have a short memory and are focused on what's happening in the White House, where there is "a very strange individual who happens to be our President."

I would like to tell Mr. Cohan three things: 1. Of course President Trump seems strange to you. He's a genius and you're not. 2. If there was any chance of my buying any of your books, you did away with that with one word "strange." 3. You slam most investors with your "short memory" insult, but is your memory long enough to explain why on your prior Moneytalk appearances, you never once had a negative word for Obama. Why is that, hmmm?

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July 22, 2018, Bob Brinker's Moneytalk: Latest Advice and Commentary

2018-07-22T13:08:00.002-07:00

July 22, 2018....Bob Brinker was live on Moneytalk today.....(comments welcome)

EDIT: Due to severe weather issues in his area, dRahme was limited on making audio clips from Sunday Moneytalk. dRahme's Audio Clip: Brinker's comments on Fed, Economy and Debt

CURRENT STOCK MARKET NUMBERS: July 20th, the Dow closed at 25,058; the S&P 500 Index at 2802; and the Nasdaq at 7820.

BRINKER'S STOCK MARKET COMMENTS....."S&P 500 sitting in about the 2800 level, and since reaching its all-time-historic-peak close in January this year which was at 2872, it's basically been bouncing around. We had a 10.1% pullback over a period of only nine days when there was an inflation scare back in the first quarter. And since that time, its just bounced back and forth a number of times - and basically been in a trading range since January. And that trading range has been - there was a short time in the 2500 - but mainly, it's been in the 2600s, the 2700s, even a little bit around that 2800 level. It's bounced around a lot if you go back to January of 2018.

Honey's EC: Brinker has always defined a bear market as a decline of 20% or more, a major correction between 10% and 20%, and a "noisy" correction as 10% or less.

Based on Brinker's "Special Bulletin" in February 2018, he considered 10.1% a correction and was waiting for retest to issue a new buy-signal. Here are some excerpts:

In the February edition of Marketimer we continued to recommend a dollar-cost-average approach for investing new stock market money, especially during periods of market weakness. We also observed that we expected increased volatility this year, and noted that in every mid-term election year since 1962 the market has experienced a decline of at least 7.4%. We also noted that in seven of the last eight mid-term election years dating back to 1986, the decline has been within the category of a correction of less than 20%.

The initial stage of the current correction carried the S&P 500 Index into the mid-2500s range during the February 9th trading session as the index searches for the area of an initial bottom. Following the completion of the initial correction phase, we expect the S&P 500 Index to stage a short-term rally which is likely to run out of steam and roll over into a retest of the developing initial bottom area. For subscribers looking to add to stock market positions, our view is that the potential for a Marketimer buy signal would be highest in the event we see a successful test of an initial bottom area.

(SNIP)

Going forward, if all goes well, we hope to reach a point at which we can upgrade the market to "attractive for purchase" at a level close to the eventual closing correction low. However, this can only occur on a successful test of the initial bottom area, accompanied by confirmation based on our analysis of the technical market internals at that time.

(SNIP)

There are no changes to our model portfolios at this time and we continue to recommend a dollar-cost-average approach for investing new money, especially during periods of market weakness.

BOND FUND PERFORMANCE ACCORDING TO BRINKER.....Caller Jim asked about continuing to hold his Vanguard intermediate and long bond funds: Brinker replied......"We certainly have seen lousy performance from the intermediate and long term bond market since this whole thing (rate increases) has gotten under way in the summer of 2016.....Since then, the Federal Funds rate has gone from 3/8% average to 1 7/8%. So that's 150 basis points. And during that time, the ten-year has also gone up 150 basis points...…

Honey EC: The funds that Brinker sold beginning in 2013 with Vanguard Ginnie Mae Fund have done very well.

Jim sums it up well with these comments today:

Since Bob Brinker enjoys explaining to people how duration works with bonds maybe he could be so kind to explain to us how the Vanguard Long-Term Treasury Index (VLGSX) which has a duration of 17.2 years is only (-0.36%) over the past 12 months, after all the Fed rate hikes and after the yield on the 10 year Treasury has risen 150 basis points. I guess Vanguard must be lying about performance since Bob has said recently that long term bond funds are "getting taken to the woodshed".

July 22, 2018 at 5:52 PM

FEDERAL RESERVE....Brinker comments: The Federal reserve has a tremendous challenge ahead of it and we don't know yet how it's going to turn out.....The most difficult task that the Fed has had to deal with is how to move from accommodative policy to a normalized equilibrium policy.....One of the terms used in the Canyons of Wall Street to describe this is Managing a Soft Landing. …..

ECONOMY EXPANDING.... BB continued: Because we have an economy that has been expanding for many years...… (Honey Editorial Comment: Mostly the economy was clinging to about 2% for "many years." Now some are expecting Q2 to be up to 4%.)

INFLATION..... BB continued: "One of the triggers for raising rates is inflation. We already see inflation figures higher than we'd like to see them. Year-over-year headline Consumer Price Index number 2.9 - that's higher than we'd like to see.

EFFECTS OF TARIFFS SO FAR.... At least twice today, Brinker pointed out that so far, the effects of "tariffs have been very small - and no big deal."

SILVER COINS FOR INVESTMENTS.... Brinker strongly advised a caller against buying numismatic coins because of the exorbitant mark ups on them.

HOW MANY RATE HIKES ALREADY....BB continued: "They are watching all of this at the Federal Reserve, and at the same time, they are in this rate raising posture which started in December 2015. We've already seen seven rate hikes - with more to come.....They are also doing Quantitative Tightening. They are taking money off the balance sheet of the Federal Reserve - the money they piled up when they bought all those Quantitative Easing securities. On a maturity basis for now, they are taking these things and putting them back into the open market - where they to be absorbed...." There is no history for a combined program of raising rates and Quantitative Tightening - never happened. We are very early in QT - have to do $trillions.

UNEMPLOYMENT BELOW 4%....BB continued...."We've gone three years now with basically record low. It's been amazing...."

Honey EC: Brinker ignores his prior reports about the very high under-employment rate, and the huge numbers of workers that were cut to part time because of the ACA and gave up looking altogether, which increase welfare, food stamps and SSI (disability) claims. And he never mentions the racial demographics that have drastically changed this past year. Black and Hispanic unemployment are at HISTORIC LOWS.

ESCAPE VELOCITY.....BB continued: "Economic policy reaches a point that his described in the Canyons of Wall Street by the economic mucky-mucks as Escape Velocity......They are talking about the economy being able to grow on its own in a granular fashion without having the Federal Reserve driving it with low interest rates and highly accommodative monetary policy and financial liquidity....The prevailing wisdom is that we have already reached Escape Velocity. (Honey EC: So it looks like the current President is not going to have the Fed's help maintaining "Escape Velocity.")

WORKFORCE TRAINING PROGRAM....Brinker continued: "Right now, we have more job listings than qualified applicants.....Now you know that the government has a dreadful historical record of training citizens to take jobs - training citizens to get them to the level that they can qualify to take jobs. The government is pretty dismal. So there's not a whole lot of hope that is suddenly going to be solved overnight...."

Honey EC: Who's talking about Government doing it, Mr. Brinker?! You must not have heard about President Trump's plan that gets corporations to commit to training STUDENTS AND WORKERS for the jobs that need to be filled.

The White House said the "Pledge to America's Workers" would provide at least 3.8 million new career opportunities for students and workers over the next five years, including apprenticeships, work-based learning and continuing education.

Some of the companies signing the pledge include Apple, Boeing, General Motors, FedEx, The Home Depot, IBM, Lockheed Martin, Microsoft, Northrop Grumman and Walmart. Several trade associations also committed to the job training initiative, and Trump welcomed several members of Congress and state and local officials, including Wisconsin Republican Gov. Scott Walker.

FRANKJ'S MONEYTALK-GUEST SUMMARY:

On Sunday July 22, 2018, Bob piloted the MoneyTalk Starship back in time to September 2008 (once again) to discuss the economic meltdown with Lawrence Ball, a prof at Johns Hopkins University and author of “The Fed and Lehman Brothers: Setting the Record Straight on a Financial Disaster.”

The guest thus joins a long conga line of authors who have made a cottage industry out of writing books on this general subject. The book was issued in June 2018 and checking on Amazon (which is where I usually go for the subtitle) I see it has one review. Someone gave it 5 stars.

Bob pointed out that Moneytalk was on the air the weekend it became clear that Lehman would be allowed to go under. The Fed did not toss a life ring to Lehman Brothers like they did with Bear Stearns and AIG. (With Bear Stearns they helped broker a buyout). The powers-that-be claimed they did not have legal clearance to help Lehman. The guest said this “reasoning” came about after the fact; Lehman did in fact have collateral of sufficient quality to pledge against a loan from the Fed.

We know what happened next. Credit markets froze. Did it have to happen? No, was the guest’s answer. Lehman could have been saved by a loan from the Fed. The guest decried widespread use of the term, “bailout.” It implies free money. In fact, firms who received help from the Fed paid the loans back with interest. Bernanke, Paulson and others realized their mistake in not helping Lehman after they failed. The Fed help to major banks followed shortly thereafter in the interest of avoiding one bank failure after another which is what the guest speculated would have happened.

(Some banks took Fed money because to not do so it would appear to Wall Street that they were beyond help – the source on this is a banker I know).

Bob brought up the Dodd-Frank act. The guest said some parts of it are in need of revision but they probably won’t be, while parts that will be revised don’t need to be revised.

The guest did not completely agree with Bob on the risk of inflation. He does not see the labor market as being as tight as reported by Bob. Therefore he said it would be premature for the Fed to take actions that would slow the economy. He said the Fed should do less and/or do it more slowly.

Callers: Martin from Fairbanks asked the guest if he saw the movie, Too Big To Fail? The guest didn’t see it. Martin also asked what the guest thought of Larry Kudlow’s appointment as an economic advisor. Bob cut in after the guest answered the first question so we didn’t hear his opinion of Mr. Kudlow. Bob segued into tariffs.

Nathan from San Jose country seemed more interested in making a short speech about bailouts and telling us that he once wrote a paper on the Chrysler bailout. Did the guest think that this started a trend?

Paul in Louisiana asked if the reason Lehman didn’t get help was because Henry Paulson did not like Dick Fuld, head of Lehman. The guest said there have been a lot of stories to that effect but they’re somewhat exaggerated. Bob interjected that Paulson, etc. made the wrong call which was to let the firm go vs. making an emergency loan.

Bob wrapped up at 3:51.

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July 18, 2018: Honey's Moneytalk Communique to Bob Brinker Not Heard on Air

2018-07-18T20:11:00.000-07:00

July 18, 2018: Bob Brinker likes to get Communiques if they sing his praises. How about one that has some criticism?

Last Sunday during and after Moneytalk, the comments from listeners began pouring in to this Blog. Here are some of the best:

==> From Terry Steinbridge:

Bob is live and really mad at the world today it seems to me. He should just tell everyone how badly he dislikes Trump, and how mad he is at people who like him. Trump and everyone who supports him are "fools and losers" and other insults. The same "fools and losers" who thought Trump might create GDP growth and see the tax cuts result in wage increases.

Bob also harps on the deficit growing because of the tax cuts. He fails to mention that revenues to the government are up by many, many billions

==> From Jim:

Brinker is sure showing his Globalist colors today, calling those who favor protectionism idiots and morons. I guess I'm an idiot then because I think we should look out for #1. He said how low the unemployment rate is but if more people started looking for work again it would be much higher. That statistic is skewed. Brinker didn't want to let the caller make his point about NATO defense spending by saying that's politics. I'm sure the caller wanted to draw a parallel between NATO defense spending and trade. It may be politics but it's also financial too, just like trade that Brinker always talks about.

==> From MK:

Regarding Bob's comment about tariffs: If fools, morons and idiots are the only ones who are in favor of tariffs (or other protectionist trade policies) then at worst we are on a level playing field with other countries since other countries (particularly China) readily employ tariffs and other protectionist trade policies in their dealings with us.

I also suspect that Bob equates protectionism with isolationism.

I also suspect that China has more to lose in a trade war than do we since the balance of trade is currently in their favor. However in China the people really have no say in whether or how aggressively their government would conduct a trade war. They can't vote Xi out of office for making their lives miserable. In the USA on the other hand if we decide we don't have the intestinal fortitude to endure a little hardship in order to strengthen ourselves, we can vote our leaders out of office and elect an appeaser who will bow down to foreign powers.

==> From Tom Logue:

I am wondering if bobbrinker.com is a secure website. Bob states that all websites are now suspect in this digital age. Has he had his own checked? Has he paid for an hour’s time with a cyber security professional or penetration tester to evaluate it?

He also somehow conflates cyber security with free elections. The voters are free to look at any information and determine for themselves its credibility. Each political party for security reasons can elect NOT to use digital media connected to the Internet to store their sensitive information. Or decide NOT to use email for sensitive communications. They don’t have to store emails on personal servers. Eric Snowden showed us the folly in assuming security can be backfired onto the IPv4 network of protocols.

==> From TFB:

Da Brink has a liberal economics background. By that I mean people like Da Brink likely never actually read the primary source materials that macro economics is often predicated upon. What they learned was the Cliff note versions. By that I mean they learned a narrow subset of economic theory that seemed to model the economy of past times and seemed relevant at the time.

I have made this point before, but for those who never read it before: Free Trade is often credited to David Ricardo. It is sort of a Columbus discovered America thing. Ricardo essentially popularized the collective theory of economic theorist before him and added his own organization and insight. Hence he is credited with origination.

What is significant about Ricardo’s work is the entire theory of free trade. It covers comparative advantage and absolute advantage. What people were taught in college is free trade under the auspice of comparative advantage NOT absolute advantage. And what happened is, over time, by standing down on trade issues as the U.S. has up until Trump, comparative advantage economics morphed into free trade with nations who held an absolute advantage with predictable results.

Hence Da Brinks animist. You think you have an economics education only you find out what you were taught and believed does not have salient predictive power in the world around you. The issue is, you only learned part of the theory.

==> From Seattle Doc:

Wow! I've long written Bob Brinker off as irrelevant with a subpar return newsletter. His newsletter has been basically the same month after month. He is too lazy to offer opinions about why he recommends certain funds, their strategies, or what sets them apart. So, BB doesn't earn any of my time or money.

I followed your link this week and was shocked by his dialogue. The guy has turned into a mean old man. His treatment of callers that don't praise him is terrible and embarrassing. I wonder if his personality has been affected by his age and rather than addressing caller's concerns he talks over them and cuts them off. I never met the guy or listen anymore. When I played the cut for my wife she said he's the type of guy that tells Junior someone coming into his house and stealing his underwear while he sleeps. Mean Bob can you tell us what you had for dinner last night?

Disclaimer: no medical diagnosis is implied or assumed. I’m not that kind of doc anyways. As always this is just my humble opinion.

==> From Bluce:

Regarding Frank's guest summary on the front page, Honey wrote: Honey here: Thanks Frankj….It is a little scary when unelected people and bureaucrats have so much control over our lives, because there is no way to vote them out. And worse, it's almost impossible to get them fired.

It seems this practice is also seen running wild in the "justice" system.

Back to basics: The Constitution grants "specific, enumerated powers" to the government.

The Bill of Rights (the first ten amendments) were included because some of the framers worried that liberties could be infringed upon because they weren't mentioned in the Constitution -- which was, and is not -- the point of the Constitution. But they made their case and won the argument, and as we see now, they were absolutely right. Too bad a piece of paper doesn't stop "the devoted advocates of power."

So to make clear that the purpose of the Constitution was to grant specific, enumerated powers to the federal government -- and not to list specific rights of the people -- the Bill of Rights was included.

They knew they could not possibly list all natural rights held by "the people," so the Ninth Amendment says: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

And the Tenth Amendment: The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

So the question: Where in the Constitution is the power granted to the federal government to set the price of money, resulting in the endless manipulation of the economy by government bureaucrats?

Here is the key: If free markets (as in the price of money) are regulated, then they are no longer free and fall under the idea of "central planning," a massively failed idea that never works in the long run, as the history of socialism and other authoritarian regulated economies show.

Freedom -- if it can be retained -- always works.

==> From Stinky:

About your communique - Dissent is clearly not tolerated in Brinkerland.

==> From Trees:

From what I've read on HB, Bobbies market timer is unreliable and to date doesn't work. Nor does anyone else have a reliable market timer. However, I do like his VTI choice for a general stock fund, but that is common knowledge. His other portfolios? My guess not really worthy of the monthly entrance fee. Has anyone concluded Bob's portfolios are unique and above average? A hidden gem that continues over time to beat the markets?

Bob does have a huge political bias. This will always spill over into investment advice. Not good to mix the two. There is so much of this going on currently. Notice how the partisan financial experts are willing to risk your money for their politics. It is very common. This is a big reason why investment advisors are a poor choice. I want to see their portfolio. What are they risking their wealth on?.....

From J. Wales:

The housing markets are on fire nearly everywhere. I don't think a down turn is immenent. The fed is normalizing rates as they call it. BBs fear of bond fund duration is probably prudent but he was about 3-4 years early ringing the alarm. No value added that I can see. Its wellesley a CD ladder & Ibonds for me.

==> From Daddy Paul:

Honey thanks for your blog. I want to know what Bob says but can't stand to listen to him anymore.

==> From Irwin in Skokie:

Brinkers opinions, contentions and tariffs op-eds make for a better show. Rather hear some debate than the rich callers worried if their 5 million will last IRWIN in Skokie

==> From Frankj:

Irwin, I think the millionaire callers are a stealth advertisement for his newsletter insofar as they mention they have been a subscriber.

==> From Birdbrain:

After reading Schwab's "What Happened to the Bond Bear Market?" this may be a good time to revisit Mr B's low duration bond recommendation. It has been close to five years (Honey will correct) since the old standby Vanguard GNMA was pushed aside in favor of Double Line Low Duration Bond due to Cap'n Starship's fear of impending rising interest rates.

So, with figures from Morningstar, let us view the annualized five year returns of said funds, shall we?

Growth of $10000:

VFIIX 11280
DLSNX 10866

Only over the last year and a half the price of Vanguard GNMA has declined 5.6% from 10.85 to its current 10.24 NAV. Granted, the Fed may raise rates two more times this year and beyond. Eventually this switch may prove profitable but I suspect nowhere near the magnitude the host imagined at the outset.

I guess you could say that as of now, Mr B's love of low duration has suffered from (ahem) premature infatuation.

==> From Ken Branson:

I've detected a conspiracy.

For the first time, the radio host's screener-producer-shill allowed well-grounded callers to present and debate a little. Apparently, the host was not ready for that.

So why the change? Is the network time slot more valuable to the media company as a paid infomercial for vitamins? Are they trying to gracefully convince the old man to quit?

Seems the host is flipping the bird to many fans of the current President. Fair enough. He has that forum, and can retire comfortably at a moment's notice.

But I think the host's sourness toward the chief executive might be personal.

I can imagine a moment in time when both were traversing "the Canyons of Wall Street" and the host was inadvertently shoved into a deep freezing slush puddle in January near the corner of Wall and Broad as Trump Sr. and Jr. hustled past in the brisk winter wind.

The host might still have the scars on his shin and his water-logged wingtips to prove it. He's kept them in a cold tub of ice-water all these years to preserve the evidence, in case it goes to trial.

Pure irony that Mr. Host's greatest claim to fame is as a NYC financier but he can't stand another of the same who has done it better than him.

Honey here: Here's the link to all of these and other interesting comments about last Sunday's Moneytalk.

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July 15, 2018, Bob Brinker's Moneytalk: Latest Advice, Summary and Commentary

2018-07-15T13:07:00.000-07:00

July 15, 2018....Bob Brinker's Moneytalk: LIVE SHOW today....(comments welcome)

HONEY'S MARKET REPORT:

=> The S&P 500 Index is back above 2800 - up 4.78 YTD - and is only about 3% below all time high. The 10-year Treasury is still below 3% - 2.85. Inflation, according to the CPI-U is at 2.87% - still below where it was at the end of WWII.

STOCK MARKET...Brinker opened the program by completely ignoring the 10.1% correction that happened in February this year, while mentioning the S&P 500 all-time-high in January. He then pointed out that the Index is now only about 3% below the high. Then he launched into an opinionated diatribe about proposed tariffs.

Honey EC: Since the S&P has recovered so much of its losses, Brinker may think it would make him look pretty silly if he claims any decline that happened now is a "retest" of the February lows - so better to go back to January and call it a "trading range."

==> Thanks to dRahme AUDIO CLIP you can hear some of the opening comments.

MARKETIMER MODEL PORTFOLIO MAJOR HOLDING.....Rick from Iowa, who is retired, asked Brinker about moving out of 100% equity model portfolios I and II into balanced (1/2 fixed income) portfolio III.

Brinker replied: "I would have a balanced portfolio and that should be easy for you to do because you are going to find in looking at (Marketimer) portfolios I, II, and III, that there are funds in there that are compatible with one another. I'll give you an example - the (Vanguard) total stock market index fund - we have a significant weighting (50% in I and II) of that in all three model portfolios.....So you see, you would be able to count that toward your weighting in model portfolio III. I really would feel that model portfolio, balanced portfolio would be appropriate for someone who is entering or is in retirement. I think it is appropriate and risk level at that stage of your investment cycle."

BUDGET DEFICIT..... dRahme AUDIO CLIP: deficit, paying back national debt

NOREEN AND THOSE WHO AGREE WITH HER ARE FOOLS, MORONS AND IDIOTS.....Noreen said she believed that the proposed changes in tariffs would help ordinary working Americans, and said that some steel mills had already opened up again, providing more jobs.

After screaming about Harley-Davidson, Brinker said: "I believe that protectionism is for fools only......I want to be very clear on this. I don't want to be misunderstood. I think that the only people that protectionism works for the country are fools, morons and idiots. nobody else."

Honey EC: The problem is, MISTER Brinker, President Trump is not for protectionism. He is for FAIR TRADE. The United States has been the piggy bank for the world far too long.

==> dRahme's Audio clip: Noreen's call and Brinker's response starts at 6.5

VICKIE'S CALLS.....Honey EC: Vickie may be one of the most eloquent callers I have ever heard on Moneytalk. Brinker was furious, and told her what she said made no sense and was complete nonsense! He added that her opinion (and those who agree with her) was for "losers." If he would have allowed her to continue rebutting him, she would have made him look even more like that "loser" than she did.

==> dRahme's Audio Clip: Vickie's call shortly after Noreen's

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Bob’s third hour guest on Sunday July 15, 2018 was Paul Tucker author of the book Unelected Power, The Quest for Legitimacy in Central Banking and the Regulatory State. (published May 2018). Mr. Tucker is a former governor of the Bank of England. From Wikipedia:

“In December 2015, Tucker became chair of the Systemic Risk Council, a body set up in 2012 by former regulators and central bankers to promote financial stability. Its first chair was Sheila Bair, former Chair of the FDIC, and its members include Paul Volcker (former Chair of the Federal Reserve) and Jean-Claude Trichet (former President of the European Central Bank). Since Tucker became chair, the SRC has issued a statement to G20 Finance Ministers and Governors on financial reform and, among other things, intervened on various US Treasury proposals to roll back financial regulation.”

Mr. Tucker said he wrote the book because he was worried that more power has shifted from political leaders to central bankers. Today we do not see presidents and prime ministers at the forefront, instead we see central bankers. During our recent financial crisis Paulson, Bernanke and Geithner were in the news, trying to deal with the problems. He contrasted this with the situation in the US during the Great Depression when Pres. Roosevelt was front and center trying to deal with the economic problems.

Bob asked if there is a disconnect between central bank monetary policy and what the typical taxpayer/citizen knows about such policy. Being British, the guest was diplomatic in his answer which was: people in the UK know more about economic policy than people in the US. Part of the reason is more TV exposure for Britain’s central bankers, going back 15 to 20 years when the Bank of England made an effort to get its people in front of the cameras.

There was some talk about Mario Draghi but I missed most of it because I got a phone call.

After the financial crisis here, did the Fed get any help from Congress? This is a favorite theme of Bob’s. Starship regulars know the answer is “No.” Mr. Tucker agreed and suggested that Congress could have launched infrastructure projects. He said Congress could have paid for it by raising taxes, not borrowing. Both agreed in the political atmosphere at the time there was no way this was going to happen.

Remember when Bear Stearns melted down in March of 2008? Bob said this was a “gift” to the regulators and securities crowd – meaning it served as a warning of things to come, yet no one did anything for 6 months. The guest seemed to agree and did not know why no action was taken.

Caller Bernie from Westlake Village, CA wanted to know if nationalism is dead in Europe. The guest gave an answer that wandered around and ended with the statement that the EU is still developing.

A caller from El Paso TX asked if monetary policy is so complicated that members of Congress cannot comprehend it, so this is why they leave it to unelected experts.

Editorial comment: Think of the Congressmen and women in your own state. Now decide which one of them is the biggest dope. Now picture that person having anything to do with monetary policy.

Bob from North Hollywood, CA said if he has a heart problem he wants a cardiology specialist on the case, not a general practice doctor. Likewise, the economy: keep the politicians (generalists) on the sidelines and let the specialists deal with monetary policy.

The guest said that it is OK for politicians to delegate tasks to central bankers but they need to be specific. For example, part of the reforms after our financial crisis were that banks should not engage in speculative activity. This was Congress’ wish. The regulators ended up writing 800 pages of rules. Overkill.

Bob wrapped up at about 3:52.

Honey here: Thanks Frankj….It is a little scary when unelected people and bureaucrats have so much control over our lives, because there is no way to vote them out. And worse, it's almost impossible to get them fired.

NEXT WEEK.....==> dRahme AUDIO CLIPS: economy, inflation, treasuries, quantitative tightening-which has only just begun.

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July 8, 2018, Bob Brinker's Moneytalk - NOT Live: Reruns and Spliced Old Calls

2018-07-08T13:09:00.001-07:00

July 8, 2018....Bob Brinker's Moneytalk was not live today, so as usual, there was no third-hour guest author.....(comments welcome)

HONEY'S FULL UPDATE ON BRINKER'S LATEST STOCK MARKET ADVICE

This week's numbers: Friday, July 6, 2018. Dow closed at 24,456.48; S&P 500 Index closed at 2759.82; Nasdaq closed at 7688.39. (Last week: S&P 500 = 2718.37; Dow = 24,271.41; Nasdaq = 7501.30)

So we see that as the time-distance from the February correction low keeps growing, the Dow, S&P and Nasdaq keep climbing.

Since February, Bob Brinker has been looking for the S&P to test the February 2018 10.1% correction low so he can proclaim a "buying opportunity" - without raising any cash to take advantage of it.

In the July 2018 issue of Marketimer, Brinker explains that most off-presidential year corrections usually happen in the second half of the year - most likely in October. In the meantime, his advice (as usual) is to dollar-cost-average new money - all Marketimer portfolios are fully invested.

However, if 2018 goes by without any further corrections, then he says the "door opens" for him to "shift the risk" to 2019, and begin looking for a "buying opportunity" next year.

So what that means in a nutshell in Honey's own words: The stock market fluctuates. And Brinker will tell you after the fact if it declined 10%, 20% or goes into a full blown bear. But in my opinion, he will never again raise cash to prepare for it. The last time he raised cash before a market decline was in year-2000.

FINANCIAL MARKET REPORTS FROM CHARLES SCHWAB

STOCK MARKET:

U.S. stocks finished the final trading session of the holiday-shortened week higher, courtesy of the June labor report that seemed to tamp down some concerns of a possible acceleration to the Fed's rate hike campaign. Some upbeat economic data aided in countering the tension in regard to global trade as the U.S. implemented its previously announced tariffs on China, which immediately retaliated with levies of its own. Treasury yields dipped and the U.S. dollar was also lower, while crude oil prices were mixed and gold experienced a minor decline.

TRADE:

The trade balance showed that the deficit shrunk more than expected to $43.1 billion in May, compared to forecasts of $43.6 billion. April's deficit was revised lower to $46.1 billion. Exports were up 1.9% m/m at $215.3 billion, while imports increased 0.4% to $258.4 billion.

TREASURIES:

Treasuries ticked higher, with the yields on the 2-year note and the 30-year bond dipping 1 basis point (bp) to 2.54% and 2.93%, respectively, while the yield on the 10-year note was nearly unchanged at 2.82%.

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July 1, 2018, Frankj: Advice for Preparing Financially for Cognitive Decline

2018-07-01T18:05:00.002-07:00

July 1, 2018....Bob Brinker took today off to celebrate the 4th of July week. (comments welcome)

FrankJ has summarized and added to a treatise about making a financial plan for later years that might include cognitive decline. Frankj wrote:

I referenced an article I read on the SeekingAlpha.com website. The title is: Defending Your Retirement Financial Plan From Cognitive Decline. The author is ISTJ investor which is a screen name he (or she) uses, so I don’t have the actual name. It was posted about June 20^th and unless you subscribe to SeekingAlpha (which I do not) it is no longer available since they put articles behind a paywall once they’re over 10 days old. I downloaded the article though and summarize parts of it below.

About half the article covered medical information on cognitive decline: Alzheimer’s, dementia, etc. Who was susceptible and at what ages. Interesting but too lengthy to go into here.

I’ll put my comments in italics to distinguish them from the actual author’s writing.

As background, society at large recognizes that cognitive decline is something to face when people get into their 60’s and 70’s. From the article:

· A 2016 Harvard Business Review article notes that more than a third of S&P 500 companies have a mandatory CEO retirement age.

· A 2017 study found that about 40% of S&P 500 companies disclose a mandatory retirement age for board members, with 72 being the most common age.

· Over 30 States have mandatory retirement ages for judges, with 70 being the most common age.

· Air traffic controllers are normally required to retire at 56.

· Although there is no mandatory retirement age for doctors, this article reports that 5-10% of hospitals have begun mandatory evaluations for doctors at 70 or 75. At one hospital, 7 of 35 doctors over 70 gave up hospital privileges rather than be evaluated.

· And finally, the Financial Industry Regulatory Authority has adopted rules 4512 and 2165, which encourage fiduciaries to identify a Trusted Contact and apply additional oversight to specifically to accounts held by people over 65.

Tradition - distilled empirical observation - suggests that cognitive risk increases somewhere around 70. It's worth pointing out the relatively tight grouping of ages in the above policies. If there is a cognitive performance retirement policy at all, it's almost unanimously before age 75. People today can reasonably expect to live into their 80s, and arguably their retirement plans should accommodate living into their 90s. It looks like a risk.

We are all subject to Normal Aging. The probability of this is 100%. With regard to financial planning the impact is none to very little. Symptoms might be slower processing speed, memory and slower decision making.

Mild Cognitive Impairment might affect 15 to 20% of us. The impact is reduced capability to manage even routine financial activities. The symptoms are noticeable declines in memory, information processing, decision making, and risk assessment.

Dementia might affect 10-35% of us. The impact is a catastrophic loss of capability. The symptoms are a decline in memory and other areas, increasingly unable to care for oneself

The author’s operational assessment is:

· The risk of material cognitive impairment during retirement is real

· The risk should be explicitly considered in retirement financial planning

· The probability is > 10%, perhaps > 20%

· The probability increases with age

· The impact can be moderate to catastrophic

· Plans should anticipate mild impairment of 5 or more years

· Plans should anticipate significant impairment of 2-3 years

· Basic precautions should be in place by age 70

· Precautions should be finalized by age 75

The author’s recommended plan:

Critical legal documents

Perhaps most importantly ensure that you have the legal documents that appoint and empower an agent to manage your medical care, your financial affairs, and your estate, should you no longer be able to do so.

This will include at a minimum an advanced medical directive, a healthcare power of attorney, a durable financial power of attorney, a will, and potentially one or more trusts.

An amazing number of people don't even have a will. According to a 2016 Gallup poll, 44% of those in the 50-64 age group, and 32% in the 65+ group, and 25% of age 55+ with income of $75,000+ do not have a will.

I'll just close this section by saying that in the event they are needed, each of these will be extremely useful to the agent trying to take care of you and carry out your wishes.

Good Housekeeping

Life is easier if things are in good order. This may become particularly important if your agent is trying to step in to handle your affairs.

Put your financial status and plans in writing. I personally have a Financial Plan document in Word and a multi-tab Excel spreadsheet. Between the two, everything from the location of my safe deposit box to projected RMD distributions is readily available.

Other housekeeping things to consider:

· Ensure all financial accounts are correctly titled.

o Maybe your spouse passed away and you had joint investment accounts. You want to put them in your name only.

· Ensure beneficiaries on accounts are correct and current

o Very important. I’m not a lawyer but I know that you do not need to put anything about beneficiaries to an IRA account in a will because the beneficiaries that the custodian has on file are the ones who’ll get the dough.

o Keep a hardcopy of the beneficiary designation form.

· Document - financial accounts (checking, savings, investments), pensions, annuities, trusts, alimony, real property, insurance policies (life, medical, long term care, house, renter, auto, umbrella, flood), debts, credit cards, safe deposit boxes

· Clean up your physical files (buy a shredder ?? and if you do, don’t buy an el Cheapo).

· Write down login and passwords; keep them secure but accessible to your agent.

· Ensure you have backups for digital files

· Name a Trusted Contact for each of your fiduciaries

o I think you’d want to include your tax preparer as one of these fiduciaries and let them know who your agent is and that he or she has your ok to work with the tax preparer if needed. Tell your agent who your tax preparer is, if you use one.

· Review security; freeze your credit.

· Create a checklist for the surviving spouse on death of first-to-die spouse

· Put desired funeral/burial arrangements in writing

· Review all this with your agent, by age 70

· To this list I would add having hardcopies of the last few years of tax returns available. Three years is good, seven is better. What if someone passes away and by coincidence a letter arrives from the IRS questioning a past return?

Simplify

Consider simplifying your financial affairs where it makes sense, and meets your objectives. You may be able to reduce the burden on yourself, operating at less than 100%, or a surviving spouse, or your agent.

I'll give two examples from personal experience. In the first case, a surviving spouse was left with critical retirement assets tied up in a closely held company. While growing and profitable, it yielded little income, and was not routinely liquid. In the second case, the surviving spouse was left with a portfolio of difficult-to-manage rental properties.

And I’ll add one of my own. The sister of a friend died and her IRA went to three people, two of them were her nephews in their 20’s. The third one was her mother, about 80. Her executor was not financially aware. He could have had the mutual fund company split the assets into three beneficiary accounts – each with its own mandatory withdrawal rate. There is a time limit for this and it passed without the accounts being split up. So, the mandatory withdrawals were based on the OLDEST beneficiary’s age, in other words, the Grandma. Their distributions are higher than they would be if they inherited separately. Both the young men are working so they don’t especially need the extra income, which is taxed as ordinary income.

Some specifics actions to consider while simplifying:

· Cancel unneeded credit cards

· Consolidate 401(k)s, IRAs, and other retirement accounts

· Consolidate accounts to fewer fiduciary institutions

· Simplify portfolio

· Sell non-liquid or difficult to manage assets

· Sell out of state property

· Set a schedule to sell your residence

As an example, simplifying your portfolio might mean consolidating four mutual funds and a dozen individual stocks into a single target date fund.

Today, July 1, 2018 in a repeat show, Bob Brinker told a caller that he thought target date funds were for people who didn’t know what they were doing. I don’t agree with Bob although I do not use them myself.

I would add instead of a target date fund,

· A balanced fund or,

· A large cap fund and a bond fund or,

· A total market fund and a bond fund.

The point is, the fund or funds need to satisfy YOUR needs if income generation is an objective. You’re not dead yet, so don’t worry too much about what your heirs might be faced with in the funds they inherit. They can always change things, just don’t stick them with some high expense ratio funds in case inertia takes hold.

The author did not go down all the rabbit trails of types of accounts and tax ramifications. Probably not enough space or it might be grist for a future article or because the focus was on a living person-- in decline. I’ll add here that someone may not want to convert holdings in a personal account to one, or just a few mutual funds. The tax consequences are not appetizing. If this account is inherited, the heirs can liquidate if they wish, and probably owe very little in taxes because they get a stepped up basis.

A spouse gets to treat an inherited IRA as his/her own. So they can change the type of fund it is in if they wish. The biggest risk is an inexperienced spouse falling into the clutches of a greedy financial planner. A solid agent can help with that especially if the deceased left behind clear instructions.

Put your financial affairs on auto-pilot

Once your financial affairs are in order, and appropriately simplified, consider automating them to the extent feasible; the model here is to put your financial affairs on auto-pilot.

Your agent may be trying to act in your interest for several years. Plan ahead to make it easy on them; in the meantime, make it easy on yourself.

Some specifics to consider:

· Automate bill payment - utilities, rent, insurance, credit cards

· Pay recurring bills with a bank draft where possible

· Automate re-investment and asset allocation changes

· Add your agent to your safe deposit box signature list if you have one.

· Add agent to checking account signature list

· If you have an in-home safe, your agent should have the combination.

Communicate

Talk to your agent. They need to know they ARE your agent, and agree to take on the task. They need to understand at least in general your plans and wishes, what documents and files you have, and where to find things.

The author does not go into how to pick an “agent” or what the skills of the agent need to be although they are implied. Here are my thoughts.

· The agent must be WILLING as mentioned above and they must KNOW they are the agent.

· They are going to be acting as a fiduciary so it follows they must be honest to the max.

· It should be someone who will outlive you, or at least not go down the track of cognitive decline in parallel.

· It should be someone who understands your goals – this means you need to state them clearly.

· Your executor might make a good agent, if willing.

· A responsible child might make a good one. If there are a number of kids, explain why one is being chosen over others. Along this line, if you haven’t taught your kids about money management, maybe now is a good time to start. If they are grown up you probably know which one would make a good “agent.”

Honey here: Thank you so much, Frankj!

(My market and Bob Brinker update is below this post.)

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July 1, 2018, Bob Brinker's Moneytalk: Rerun Monologues and Old Spliced Calls

2018-07-01T13:11:00.003-07:00

July 1, 2018...Bob Brinker's Moneytalk : NOT a live program today..... (comments welcome)

Honey market commentary and Brinker's stock market advice update:

The S&P 500 ended this week at 2718.37....it is up 1.67 YTD (but still about 5% below its record close).

The Dow ended the week at 24,271.41.

The Nasdaq ended the week at 7501.30
The U.S. Treasury closing yield on the 10-year note @ 2.86%.

The all-time closing high for the S&P 500 Index was 2872.87. The closing low for 2018 was on February 8th at 2581 - that was a 10.16% correction.

Brinker remained fully invested, and did not issue a buy signal - for new money. However he continues to watch for a retest of that February low before he calls a buy signal. Right now, he recommends dollar-cost-averaging.

Brinker views off-presidential election-year corrections as possible buying opportunities. He has his Marketimer subscribers and Moneytalk listeners standing by for a "special bulletin" that the correction is over and all (spare) equity money should be invested.

In the meantime, his Marketimer model portfolios are fully invested.

Is the correction over? Did he miss an opportunity? It's still six months until the end of the year.

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June 24, 2018, Bob Brinker's Moneytalk: Summary and Commentary

2018-06-24T13:07:00.001-07:00

June 24, 2018....Bob Brinker was live on Moneytalk today....(comments welcome)

STOCK MARKET....Today, Bob Brinker indicated that there has been no change to his fully invested position in equities. He also recommends dollar-cost-averaging any new stock market money. He recommended Vanguard Total Stock Market Fund for long-term investing to a caller for his grandchildren's education. And he also repeated his recommendation for those in or near retirement to stay near a 50-50 (stock, fixed income) balanced portfolio.

Honey's Market Reports: The S&P 500 had three days of losses and two days of gains this week and ended down 0.88% from last week. The index is now up 2.19% YTD, and is 4.11% below its all-time-high record close......The 10-year Treasury Note is now at 2.90%.....

BOB BRINKER TALKED ABOUT STOCK INVESTING:

Caller Bill from Florida, who said he is heavy in stocks in his taxable funds, wanted to gradually reduce his stock holdings over time.

Brinker replied: "That's going to work as long as the market holds together, Bill. You mention you are a subscriber and I strongly recommend that you stay close to that because this thing has been going on for many years. We are way down the road and long in the tooth of this economic recovery. And there is a big time connection between what the stock market does and the economy does - and economy-wise growing.....

Brinker continued: …...This is not going to last forever......If that changes, there could be a lot of pain in the stock market down the road. In fact I think there will be a lot of pain in the stock market down the road. It's a question of when. I don't think that when is right now, and therefore, we are staying with it......At this time, I would not see that a person would have to go below a 50-50 balance (in retirement). There may come a time when a person would have to go below a 50-50 balance......

Brinker continued.....Anything is possible with this stock market going forward when the time comes......We've had a tremendous run in this stock market. I think sometimes complacency can bleed into the investment culture and can be very dangerous......Someone who has been in the business ten years now has never seen a bear market....One thing we have to be aware of is, nothing is forever in the stock market - not something we want to forget."

BRINKER "RECIEVED A COMMNUNIQUE".... Brinker read what he called a "communique" from a "Ms.M" in the San Francisco Bay Area. Thanks to ==> dRahme, you can hear Brinker read it in this Audio Clip: Hour 1 Ms M. from SanFran, Russell 2k Rebalancing

OIL PRICE DISCUSSION.....==> dRahme's Audio Clip: Hour 2 - OPEC, ARAMCO IPO,

BOND FUNDS..... Brinker still recommends only very short duration bond funds - one year or less. He repeated that advice a couple of times today. He explained to a caller that he does not have any of Vanguard's balanced funds in Marketimer right now because the duration in them is too long. However, they have been included in the past (Vanguard Wellesley) and may be again in the future.

TARIFFS, $17 BILLION HERE - $17 BILLION THERE.....Brinker turned his monologues into political diatribes and name-calling sessions as he talked about possible tariffs on Canada. He made the claim that somehow the fact that Canadian soldiers have fought alongside Americans in various wars that we owed them something. (Honey will try to keep her lip-zipped about this.)

Jim said...

While discussing trade with Canada Brinker failed to mention the 270% tariff Canada charges the U.S. on dairy products. If he's going to discuss this topic he should give listeners ALL the facts, not selective facts.

June 24, 2018 at 2:00 PM

STOCKS THAT WENT UNDER YEARS AGO-INFLATION-THE WEEK AHEAD.....==>dRahme's Audio Clip: Hour 3 - Kind of Jumbled - Equity Funding and the Week Ahead

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Author Brad Stone made his second appearance on the June 24, 2018 interview hour of MoneyTalk. Brad was on a while back discussing a book, “The Everything Store,” a book about Jeff Bezos and Amazon.

I went back through my archives, such as they are but could not find this write-up. I blame Russian hackers who must have deleted it.

This new book is titled “The Upstarts.” Like many books published these days, it has an annoyingly long subtitle. Most of the interview concerned Uber and Airbnb.

Cities are trying to figure out how to cope with Airbnb. Short term rentals in apartments, condos and houses are something new. Direct competition to the hotel industry. New York City started discussing regulations in 2010 and they’re still at it. Neighbors don’t like Airbnb if the comings and goings of guests or their parties are disruptive. The guest said that it is not unknown for film crews to move in for a short time … and he made it clear that these film crews are NOT necessarily filming G-rated, PG-rated stuff.

Not mentioned on the show, but pertinent: there was a lengthy article in today’s paper on the disruption that Airbnb rentals have had on the community of Joshua Tree, CA. This town is in eastern San Bernardino, CA near Joshua Tree Nat’l Park. Short term visitors running all over; home prices drive up by speculators who buy and then start renting them out.

How do you list on Airbnb? The guest said you go through a registration process, and upload pictures you’ve taken. Airbnb advises you to comply with local regulations. Airbnb collects from the tenant when they book the place and the host gets paid only when the booking is over. The “float.”

The guest said there was little or no vetting. That was contradicted by a caller who rented his Cape Cod place through Airbnb. He said the vetting is thorough on hosts. And Airbnb encourages (requires?) both tenants and hosts to post reviews of each other. Airbnb looks for valid phone numbers, e-mails, and presence on social media in their vetting. John from Cape Cod said he gets his money paid into his PayPal account.

Earlier Bob had asked the guest what Airbnb’s fee was. The guest stumbled all around and finally guessed 10% with Bob pushing him. With an actual Airbnb host on the line, Bob asked John what the fee was, but the telecom gremlins intervened and we lost John’s phone signal, so we await the answer.

Uber has hit some speedbumps recently. In the fatal accident that took place recently in Arizona, the Uber driver (of the self-driving car) was watching an episode of The Voice on her cell phone. There have been incidents of drivers assaulting passengers and vice versa. Uber got off to a fast start under an aggressive CEO and they ended up with problems. He was gone after the video came out showing him yelling at an Uber driver who was complaining about reimbursement rates.

The guest thinks there is a better management team in place, a new CEO came in from Expedia. He recently went to London to smooth over the city officials who were ready to kick Uber out.

That’s about it, other than Charlie’s call from Colorado Springs who asked about insurance with Lyft and Uber. The gremlins struck again. The guest’s answer was, initially, neither company gave it much thought (!) but states began to require minimums.

Bob wrapped up about 3:52 or so.

Brinker's guest-author Brad Stone: The Upstarts: Uber, Airbnb, The Battle for the New Silicon Valley

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June 17, 2018, Bob Brinker's Moneytalk: Stock Market Summary and Commentary

2018-06-17T13:11:00.000-07:00

June 17, 2018...Bob Brinker was not live on Moneytalk - Pre-recorded reruns and old calls today....(comments welcome)

WHAT'S AHEAD FOR THE STOCK MARKET IN 2018

My opinion and synopsis of what Bob Brinker said about the stock market in the June 2018 issue of Marketimer:

The all-time closing high for the S&P 500 Index is 2872.87. The closing low for 2018 was on February 8th at 2581.

The big question right now is, will the S&P 500 Index 10.16% correction in February be the low for this "mid-term election year" selling pressure. Brinker is "attuned" to the possibility that it will not be, and is prepared to post a "Special Subscriber Message" at bobbrinker.com if he should "identify" a new buying-opportunity.

Of course, all of Brinker's buying opportunities are for those who do not follow his advice to remain fully invested and dollar-cost-average new money, or for those who may come into some new money they want to get into the stock market.

There is a very low probability of a recession beginning this year, so that likely means that any further market declines will not exceed beyond 20% that would be considered a bear market.

History shows that after the mid-term election year correction activity ends, market action is highly favorable, therefore Marketimer model portfolios are remaining fully invested. Going back to 1962, the S&P 500 has rallied at least 27% after the correction ends.

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June 10, 2018, Bob Brinker's Moneytalk: Stocks, Bonds, Economy and Investing

2018-06-09T16:15:00.005-07:00

June 10, 2018….Bob Brinker's Moneytalk....(comments welcome)

ADDED From Hour One dRahme: AUDIO CLIP.... FED winding, unwinding, CPI, Tariffs, Interest Rates

Honey was doing a handbell and choir concert Sunday, but Frankj has done a complete 3-hour summary of Moneytalk.

FRANKJ WROTE:

Moneytalk June 10, 2018

First hour

Bob’s first hour monologue focused on what the Fed has been up to. He expects another FOMC interest rate increase of 25 basis points this coming week. This will bring the short term (overnight) rate up to a range of 1.75 to 2.00%. He speculated that there will be two additional increases in 2018. These raises pose a headwind for stock prices as people sell securities and move funds to fixed income.

Bob reviewed the gyrations that the Fed went though, going back to the Great Recession. First they lowered short term interest rates to near zero. Then they launched the quantitative easing program, buying Treasury notes, bills, and bonds. QE was designed to create liquidity and (hopefully) stimulate the economy, especially the housing sector.

Last year the Fed announced they’re reversing course and will be quantitatively tightening. They’ll sell those treasury securities now on their books at an annual rate of $600 billion per year. At the same time they’re raising interest rates as mentioned above.

So, all this is a review for Moneytalk regulars but might be useful to those who are just now discovering the show.

Despite all the talk about tariffs and trade wars, they really haven’t taken place. The market is jumping up and down in response to the talk. The actual tariffs in place represent a tiny fraction of the overall amount of trade. He referred to the market as “trendless,” and this was about his only reference to the market.

He gave out the toll free number at the end of the monologue which has become the norm lately.

· Headwinds for preferred stocks: Ron from St. Mary’s GA is in the land of critical mass, invested in Portfolio 3. He asked Bob about putting some separate money in preferred stocks. Bob cautioned him pointing out that the payout is fixed, making them bond-similar. As such they’ll be subject to headwinds caused by rising interest rates.

· A refinance question: John in Crown Point, IN has an adjustable rate mortgage which is pegged to a short term rate he expects to go up. He wanted to know what he should do, hang on, pay off, etc. Turns out he has a net worth of $ 4 MILLION. Bob said “the amount of the mortgage represents a tiny part of your net worth.” Implication: it doesn’t matter what you do. John then praised Bob for his past advice about 529 programs and how his grandkids are benefitting citing some dollar figures. One wonders what was the real purpose of the call?

· Short term interest rates: Johnny called in from El Paso, TX on a scratchy phone line. He’s having angst over the rates he’s getting on fixed income investments. Bob told him to watch what the Fed does. He said “normal” 10 year rates ought to be about equal to real GDP plus inflation.

I think we originally heard this in a 3^rd hour interview with the guy who runs the Doubleline funds.

Bob said, if GDP is 3% and inflation 2% then the ten year rate ought to be about 5%. The 10 year rate is now at about 3%.

· Stick with stocks and roll the dice? John from Lake City, FL seemed to be seeking Bob’s blessing on his 85/15 stock/bond allocation. I didn’t get his age but he is still working and expects to live a long time yet. Bob basically wished him well, acknowledging that John seemed to understand the risks associated with his allocation.

· Worried about your junk bond fund? Keep an eye on small cap stocks. Who knew? Bob told Fred in El Paso that just as credit markets affect junk bond funds, so too do they affect small cap stocks. When the credit environment is friendly small caps do well and they are doing well right now. But… Bob cautioned that this can change quickly.

2^nd hour

Bob pointed out the grim projections for Medicare and Social Security. Medicare funding is slated to run out in 2026, three years sooner than previously estimated. Social Security is doing a little better with 2034 as a critical date. Together, both programs account for 40% of federal government spending. Bob that solving the fiscal problems of these two programs is one of the major issues facing Congress but given the level of partisanship in Washington DC no one is addressing them.

ADDED....dRahme AUDIO CLIP....Medicare and Social Security (Honey wrote some personal EC's in the comments section here.

· 529 plans. Jennifer in Sacramento better adjust the allocation in the 529 plan devoted to her 16 year old grandchild since he’s only 2 years from college. Then do the same as the other four approach college age.

· Don’t pay back that loan! Dennis, a government employee is about to retire. He borrowed from his retirement account years ago and has not paid it back. With interest he owes $97K and the gov’t says if he doesn’t pay it back they’ll dock his pension by $8400 per year. What should he do? Bob did some ciphering and told him not to pay it back, take the hit on the monthly checks.

· Is that $250 or $250,000? Jim has $250K in two different banks in Bend, OR. He needs to find a home for another $500K when he sells a house soon. (Nice problem to have). Bob told him to put it in Vanguard’s Prime money market fund and earn about 2% with check writing at a minimum of “two-fifty.” The caller asked if that was $250 or $250,000? A good question for the MoneyTalk Final Exam.

· Three great fears. Bob answered John in Michigan’s question: 1) that the Fed will make a mistake; 2) that inflation will heat up in light of the tight labor market; 3) growing protectionism.

· Vanguard gets the nod again. Mark in Virginia Beach: take the $160K sitting in your bank earning practically nothing and stick it in Vanguard’s Prime Money Market, or build a CD ladder.

· Risk averse in Nevada. Tessa has some money from a home sale and she doesn’t want to risk it in stocks. She said she has a 403B account that she’s had for 30 years and asked if she should put it in there since it has earned 4.5% per year, steadily.

This was a strange call, I thought. Bob did not at first pick up on the fact of this 403B. It was not clear whether she was still working and it wasn’t clear that she could contribute “outside” money from the sale of a house into a 403B account. This is what he seemed to be telling her to do.

· Shark attack on Virginia Beach. A financially secure, 85 year old woman was the victim of a shark attack. This shark didn’t have fins or teeth but was seen departing the scene of the attack with a signed, Whole Life insurance contract and check in his briefcase. A male friend of the woman reported the attack to Bob who was on duty in the lifeguard stand. Bob advised him to contact the shark and see about unwinding the sale before reporting the incident to the insurance commissioner.

· A first for MoneyTalk? Have we ever had a lottery winner asking advice? Warren and his wife won a $5 million jackpot in Flint, MI. After taxes they are looking at $2.4 million. Warren seemed to be saying they were ok financially before the win and now they were sitting on a total of $4.5 million. He wanted to know what he should do in light of future federal estate tax changes.

Warren mentioned gifting, setting up a foundation and having various advisors in the background (which sounds scary). Bob said no one has a crystal ball with regard to estate taxes. They seem to change with whichever party is in control in DC. The current exemption is $11,200 for individuals and double that for married couples, so Warren and his wife are OK, for now.

ADDED...Thanks to dRahme AUDIO CLIP: The Week Ahead

3^rd Hour interview

Jacques Peretti, a journalist from London was the interviewee on the third hour of the June 10, 2018 edition of MoneyTalk. Like most guests he wrote a book. The title is: “The Deals that Made the World.” The subtitle is … annoying. You’ll have to look it up yourself.

Ostensibly, the book is about deals that transformed different industries. The interview consisted of him giving examples from the book and Bob’s questioning him about the state of affairs in the UK regarding Brexit.

Bullet points only (and not because I’m exhausted from the first two hours, I’m not, but this interview just wasn’t that interesting).

· Pharma: a Merck CEO in the 70’s told other pharma CEOs that the future is in treating the “well” not the sick. So as a result, we have lots of preventative drugs (statins for example). Treating the “well” widens the net of people that want/need prescriptions for what ails them.

· It was Great Britain that invented the off-shoring of business to the Cayman Islands for tax purposes. They did this to invigorate their own economy.

· Robots: All jobs fit into one of the following categories: Cognitive/Manual; Cognitive/Non Manual; Non-cognitive/Manual; Non-cognitive/Non Manual. Robots will someday take over 3 ½ of these classifications.

· Peter Theil and Elon Musk were principals at Paypal before selling it to eBay. Paypal was a monetization of the internet. Theil and Musk became aware of some brain research that revealed a “flinch response – i.e. neural pain, when someone making a purchase handed over the money. Brain scans apparently documented this very slight hesitation.

They should do a scan on my spouse, I don’t think any such flinch response exists with my darling wife.

So, if the payment could be handed over with the click of a mouse, people would spend faster and more often. And Paypal was off to the races.

· Planned obsolescence: There is a light bulb in Livermore, CA that has been burning continuously for 115 years. Lightbulbs were originally designed to last a very long time. In the 1930’s makers of bulbs and other equipment decided to “fix” this problem.

· There was mention of a Japanese researcher who was messing around with extracts from corn, trying to make an adhesive. He had some extract on his fingers, licked them and it tasted sweet. The extract led to corn syrup, something that is hard to avoid in many types of food today. Good thing it wasn’t the precursor to Super Glue he had on his fingers.

· Some guy from MetLife messed with the Body Mass Index tables in such a way to make more people appear to be obese according to the tables. This prompted a diet craze in this country.

· Finally Brexit: the liberal elites, about 10% of the population are in a panic over it. Another 10-15% are hard line in favor of it and wonder why GB hasn’t done it long before. The rest don’t care and are tired of hearing about it. They’re more worried about wages and crime in London which is at an all-time high.

Bob wrapped up the interview at about 3:50.

Honey here: Frankj, thank you so much for coming to my rescue with that fabulous, educational, summary of Moneytalk today!

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June 3, 2018, Bob Brinker's Moneytalk: Stocks, Interest Rates, Economy and Investing

2018-06-03T13:08:00.000-07:00

June 3, 2018….Bob Brinker was live on Moneytalk today....(comments welcome)

STOCKS....Brinker comments: "Obviously lots of volatility in the stock market this week. We had two up days, and we had two down days, following the holiday on Monday...….For the week the S&P was up 0.5% and the Dow was down 0.5%. Obviously, the investors are trying to evaluate a number of things going out there that are very important. One of them is the enormous increase in yields that we have seen in the sovereign debt of Italy this week. Also investors evaluating the imposition of the steel and aluminum tariffs by the U.S. against the EU, Canada and Mexico....."

Honey EC: Brinker has made no changes to his position of fully invested in equities, and recommends dollar-cost-averaging new money.

FOMC RECONVENE ON JUNE 12th and 13th...… Brinker comments: "....a two-day pajama party…..that will finish with a media conference by Fed Chair Jerome Powell. And we are expecting another rate increase to be announced on the 13th...."

INTEREST RATES GOING UP....Brinker believes that the Fed will raise rates again June 13th.

BOND DURATION IN MARKETIMER....Brinker said that the duration of Marketimer bond fund holding is less then one year. He does not recommend holding bond funds with durations longer than that because of rising interest rates.

Honey EC: Brinker only has two bond funds in Marketimer now because he sold Metrowest (MWCRX) back in February 2018, and put that money into Vanguard Prime Money Market Fund.

BRINKER ADMITS INVESTING GIANT VANGUARD DISAGREES WITH HIM.....Caller Karen from San Francisco said that Vanguard had recently put a large percentage of her investments in Vanguard Total Bond Market Index and in Vanguard Total Bond Index Funds. She said: "After listening to you, all of these are way too long duration...…."

Brinker replied to Karen: "There is a fundamental difference of opinion between Vanguard and yours truly about the issue of interest rate risk. Vanguard has its own opinion of this, and they function with that opinion, which they are entitled to do. I have my own opinion and I function with that opinion as I am entitled to do. And my opinion is that in a rising interest rate environment, I do not want to take an undue amount of interest rate risk in a fixed income portfolio. What that means is, in my investment letter, I have reduced the risk to an average duration of less than one year, and that is as far as I'm willing to go on an average duration basis because of the rising interest rate trends that we are seeing."

Honey EC: Brinker NEVER tells the whole truth about his "opinion" of rising interest rates. He made the big call to short duration back in 2013! At that time, he made huge (and costly) changes in Marketimer for his subscribers and talked about it on the air. That included selling all Vanguard Ginnie Mae Fund and all Nasdaq holdings. So now FIVE YEARS later, he is claiming to be "right." (What is that saying about a stopped-clock?)

HEADS UP ON THIS ONE.....Brinker comments: "The low employment figures that we now have. This 3.8 number, they do have a strong correlation with the later stages of an economic cycle. This 3.8 number is really way down there on a historical basis.....The last that U.S. unemployment was 3.8%, the 10-year Treasury yield was around 6 1/2%.....The 10-year Treasury right now is about 2 7/8%......It has not been up to that level of 6 1/2 anytime since year-2000. You may recall the stock market peaked back in the first quarter of year-2000 and the Dow topped in January, and the rest of the market topped out in March 2000....."

ECONOMY…..Brinker said: "We are now in an economy where we are seeing moderate growth. The second quarter looks better than the first quarter. The first quarter is currently at 2.2 in real GDP...I'm expecting a higher number when it is released in late July."

JOBS AND ECONOMY REPORTS.....Brinker's opening monologue in hour one: dRahme AUDIO CLIP

Honey EC: Brinker used to often give the racial demographics of unemployment. It always showed that Black and Hispanic unemployment was much higher than Whites. Well, the great news now is that Black unemployment has been declining and is now below 6% - AN HISTORICALLY LOW NUMBER.

HOUSING MARKET...Continues to grow at a moderate pace.

BRINKER'S NEGATIVE SYNOPSIS ABOUT TRUMP'S PUSH TOWARD FAIR TRADE FOR THE UNITED STATES....dRahme's AUDIO CLIP (Honeybee sez: That is one side of the subject and is peppered heavily with Brinker's unchallenged biases.)

DON'T BE A SHARK-VICTIM OF ANNUITY SALESMEN.....Brinker recommended checking out these three things before buying an annuity: 1. Surrender charges. 2. Expenses. 3. Commissions for selling it to you. After you know those things, then go to Vanguard and take a look at what they offer - much less cost to you!

THE WEEK AHEAD IN THE CANYONS OF WALL STREET: dRahme AUDIO CLIP

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Bob’s guest on this first weekend of June 2018 was Wall Street Journal reporter John Carreyou, author of the book, "Bad Blood: Secrets and Lies in a Silicon Valley Startup" Mr. Carreyou is a two-time Pulitzer prize winning reporter.

The topic of the book is the company Theranos and the founder, Elizabeth Holmes. Holmes dropped out of Stanford University in 2003 to start a company that would specialize in new technology for blood testing. Her idea was to use proprietary equipment that would only require tiny amounts of blood to analyze blood. (Tiny as in 1/100^th to 1/1000^th the normal amount). Blood testing by diagnostic labs is a $70 billion industry in the U.S.

Theranos raised $700 million from private investors after they announced in 2013 that their equipment and technology would be available in Walgreens’ stores. Among the financially well-off who invested were Carlos Slim (Mexican billionaire and owner of the New York Times); one of the Murdochs, (owners of the Wall Street Journal); Betsy DeVos; the Walton family (WalMart).

In the interview, Mr. Carreyou described how he got interested in this story after coming in contact with a group that was watching developments at the company and had their doubts. He spoke with a lab director who had left the company and initially, was very leery of talking to a reporter.

This scheme unraveled starting in 2015 when Mr. Carreyou’s investigative findings on the company were reported in the Wall Street Journal despite heavy pushback and intimidation from lawyers representing Theranos. The lead lawyer for the company is David Boies, who is a high-profile guy and head of his own firm.

The state of Arizona figured prominently in the story. I’m guessing that Theranos installed their equipment in Walgreens’ and other places in the state. The guest said that 80,000 patients in AZ had questionable results and 900,000 tests had to be voided or corrected in AZ.

Elizabeth Holmes went from being the youngest woman billionaire in the US to being on the outs. She settled with the Security and Exchange Commission for $500,000 and gave up stock in the privately held company as well as voting control. The government is not finished however, there is a criminal investigation underway and the guest implied there would be something resulting from that pretty soon. Today the company is virtually worthless and the people who put up big bucks have only cold comfort of very large capital losses to write off.

Ken from IL called and asked “How did the FDA drop the ball?” The author explained that Theranos, with its so-called proprietary equipment squeezed between the cracks, that is, they fit into what he called a “regulatory no-man’s land” between the Food and Drug Administration and the Center for Medicare Services. What he called “lab developed tests” were exempt from oversight by both agencies.

Over the past few years I recall seeing many articles on Theranos in the Wall Street Journal but I confess I didn’t pay much attention—probably because the company was not publicly traded. This interview was interesting I think, and I will probably read the book if it shows up at our local library. If anyone is interested in reading about Holmes, here is a link to Business Insider:

http://www.businessinsider.com/theranos-founder-ceo-elizabeth-holmes-life-story-bio-2018-4#by-august-2015-the-fda-began-investigating-theranos-and-regulators-from-the-government-body-that-oversees-laboratories-found-major-inaccuracies-in-the-testing-theranos-was-doing-on-patients-28

Honey here; Great summary, Frankj! And a fascinating topic. Brinker mentioned that this kind of scam is fairly rare. He mentioned "Equity Funding" in 1970, and "Enron." But this one seems more egregious to me because it could have cost many lives - or so it appears.

THERANOS SCAM....For those interested in reading a bit more about this get-rich scam, Bloomberg article from March 2018.

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May 27, 2018...Bob Brinker's Moneytalk: Re-runs

2018-05-27T13:08:00.001-07:00

May 27, 2018....Bob Brinker is not live on Moneytalk today....(comments welcome)

As usual, the reruns and old calls are not announced. Sadly, most listeners are deceived and may even make mistakes because of outdated information being dispensed.

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May 20, 2018, Bob Brinker's Moneytalk: Stocks, Bonds, Investing and Economy

2018-05-20T13:09:00.001-07:00

May 20, 2018...Bob Brinker hosted Moneytalk LIVE today.....(comments welcome)

STOCKS....Brinker did not discuss or even mention the stock market today.

Honey EC: Brinker is fully-invested and basically bullish, but still looking for a retest of S&P lows so he can declare a new-money buy-signal. In the meantime, he is recommending dollar-cost-averaging on weakness.

Honey EC: According to the May 2018 Marketimer, Brinker is maintaining a conservative $163 operating earnings for now, but moving toward 2019 and higher projections, believes the S&P can trade into the 2900s.

Honey's market report: The S&P 500 Index dropped on Monday but recovered slightly by Friday, to a loss of 0.54% from the prior Friday. It is up 0.64% YTD and is 5.57% below its record close in January.

TREASURIES....The yield on the 10-year note ended Friday at 3.06% and the 30-year bond closed at 3.20%. The 2-10 yield spread is now at 0.51%.

FEDERAL RESERVE'S POWERFUL NEW HEAD.... Brinker said: "The Federal Reserve has a new head chief right now. His name is Jerome Powell, also known as J. Powell. J.Powell is going to stick to his guns. And his guns are that as long as this economy is growing and at full employment - we are lower than that now at 3.9 - then he is going to stick to his game plan.....His game plan is firstly, to continue to increase the Federal Funds short-term interest rate....until it gets to a level considered normalized....A normalized FF's rate right now would probably be between 3 and 4%.....based on what we know right now......So we will continue to get rate hike after rate hike after rate hike into next year if the economy continues to expand. .....By doing that, they will basically be providing a headwind to the economy.....They don't want the economy to grow too fast, they don't want to much inflation......"

Honey EC: I sometimes wonder why we have a government at all if the Federal Reserve has all the power....

VANGUARD PRIME MONEY MARKET FUND....Caller Gus from LA asked about putting a $million into the Fidelity Prime Money Market Fund. Brinker danced a bit and then recommended that Gus check out the money market fund he has in Marketimer's fixed income portfolio and Marketimer balanced portfolio III, which is the Vanguard's Prime Money Market Fund, VMMXX.

MARKETIMER'S DOUBLELINE BOND FUND (DLSNX).....a caller from Oregon said he was going to inherit $430,000 and wanted to follow Marketimer's balanced model portfolio III, but had a question about the DoubleLine Low Duration Bond Fund. This caller asked why there was a $100,000 limit on purchases. Brinker immediately set the record straight and told him that the $100,000 was not a limit but a minimum to qualify for lower expenses.

MARKETIMER'S LOW DURATION APPROACH.... Brinker said: "We take a portfolio average approach to duration. For example right now, we have an average duration in our fixed income portfolio of roughly 9/10 of 1%, which is less than a year. As part of that we have some high yield bonds in the portfolio which enhance the yield. Our average yield right now is over 3%.

Honey's EC: The high yield bond fund that Brinker said is in the Marketimer fixed income portfolio is: Osterweiss Strategic Income Fund (OSTIX).

RISING DOLLAR....Brinker comments: "In recent weeks we have seen some strength come into the U.S. dollar in foreign exchange dealings....The dollar has been gaining ground against other currencies. When that happens, our exports become more expensive in foreign markets and less competitive. Meanwhile, the products pouring flowing into the country become more price competitive in the U.S. marketplace.....This places pressure on corporate profit margins......The dollar has rallied about 3% after having a decline of about 10% last year....."

TARIFF ON CHINA.... Brinker waxed eloquent about tariffs, but only later must have been informed that a tentative deal has been made between China and the U.S. Here are the latest headlines:

Mnuchin Says US Has Deal With China to Cut Trade Deficit, Will Hold Off on Tariffs: Treasury Secretary Steve Mnuchin said Sunday that the U.S. and China -- the world’s two biggest economies -- have reached a tentative deal to cut trade deficits that includes the U.S. putting China tariffs on hold, an agreement that potentially averts an economic standoff that would have global impact.

CORPORATE TAX CUT STOCK BUYBACKS.... Brinker railed against how corporations are using money from their large tax cuts to buy back stock. Somehow he missed ever mentioning all of the money many corporations have already shared with their employees.

Honey EC: When corporations buy back their own stock, isn't that a good thing for the price of shares - consequently for shareholders?

UTILITIES.... Caller Bill from San Rafael asked about utility stocks. Brinker replied: "I think utility stocks can be considered conservative investments. They are slow growers....But there is one other factor in play right now..... the interest rate environment for a variety of reasons.....Federal Reserve monetary policy and fiscal policy which has bounded higher with deficit spending and has to be funded with Treasury sales.....That's a stiff headwind because of higher interest rates."

REITS.... Caller Dennis in Pa asked about REITS....Brinker applied the same principles of higher interest rates competing with dividends that he did to utilities.

ECONOMY......Looking for a growing economy to continue in 2018.....

INFLATION....The CPI is currently at 2.5%.... wage growth is up to 2.5%

HOUSING PRICES.... There is a shortage of housing..... Prices going up about 6 or 7% in one year.

DUTCH AUCTION Abbevie ABBV).... A caller from Oregon asked about the Abbevie Dutch Auction. Brinker commented, but Frankj's explanation is more comprehensive:

"The call about the Dutch auction being conducted by Abbevie (ABBV), a pharma company. It is a share buyback. I got a letter from them with a number to call if I wanted to sell shares. The range in price was 104 to 114 per share if I remember. I'm going to hold onto my shares."

FRANKJ'S MONEYTALK GUEST-SPEAKER SUMMARY

Princeton professor Alan Blinder was Bob’s third hour guest on May 20, 2018. The occasion was to discuss his latest book, “Advice and Dissent, Why America Suffers When Economics and Politics Collide.” (Published March 2018). I looked at the Amazon website, so far there is one review rating the book 5 stars.

The professor is like Bob’s designated hitter it seems. His last book was discussed on Feb. 17, 2013. Then he was a third hour guest in May 2015, Dec 2015, and Apr 2016. Did we go the whole of 2017 without him as a guest? I looked through my “archive” such as it is, and didn’t find an interview. They seem like two peas in the same political pod and could probably fill out each other’s ballots with no problems.

Economists would make lousy politicians and politicians don’t know enough about the dismal science: economics. The guest’s notion is not to convert either profession, but to nudge them a little closer in understanding. Bob posited that “most US economic policies rank between bad and disgraceful.” Dr. Blinder agreed to an extent, using the bank bailout as an example. He indicated that was OK but the government didn’t do enough to help families hurt by the Great Recession.

On the topic of campaigning for president, Walter Mondale’s name came up – the candidate who said he would raise taxes. Bob and Alan shared a moment guessing whether he won only one state or two. He won his home state and the District of Columbia in the 1984 presidential election against the incumbent, President Ronald Reagan.

The professor said that “Republicans cut taxes, …. and then leave a budget mess for the Democrats to clean up.” Echoing what Bob said earlier in the show, he said we should avoid cutting taxes when the budget can’t bear it. He was alluding to the tax reforms of 2017 – not needed he said, given that the economy was growing.

On trade, he disagreed with the current administration’s efforts to seek bi-lateral trade parity. He said he doesn’t maintain bi-lateral trade with his grocery store. Instead, we all (the US included) maintain multi-lateral trade. International trade does not create or destroy net jobs in the US, he said.

Bob asked the rhetorical question, “Is it asking too much for us to elect a president with some economic background?” Blinder’s answer, “Yes it is.” Voters are not astute economists. “A politician who runs for office and talks like an economist would lose.” Voter yell that they want things fixed but when pressed for specifics they fall apart. Foreign aid is something the Great Unwashed want reduced for example. It could be reduced to zero and it would make little difference.

Marian from South Bend, Indiana came in hot over the lines as a taxpayer who is fed up with government inefficiency and she started in on Medicaid. There was some crosstalk as she and Bob tried to talk at the same time. Bob got the upper hand and passed along to Alan that she was calling for an end to Medicaid. We’ll probably not know if that’s what she said but Alan said that would mean that the poor people who receive Medicaid benefits would just be showing up, sick, in hospital emergency rooms. Overall, though, he agreed with her point that government or any big organization is inefficient.

Paul from Connecticut said society is so complex today, how can we expect any president to solve the problems we face? He said paying off the debt is mathematically impossible. Alan Blinder commented that we could get rid of the deficit.

For those of you in Toutle, WA, the deficit is how much more the Federal gov’t spends in ONE year over what it takes in. The debt is the accumulated amount of previous deficits and it stands at about $21 trillion dollars now.

Tax Reform as Quicksand: There is a chapter in his book on this. Everyone agrees we need tax reform but not everyone agrees on what to do. We end up with making some changes but the result is an even more complicated tax code. Obviously the professor is not a fan of the Dec 2017 tax legislation.

Mike from Nevada City, CA said he was 60 and asked when we’ll pay the price for mortgaging our children’s future. He’s been hearing this for a long time now. The guest said we’re able to run up our debt because people are will to lend us money, i.e., buy our government bonds. I didn’t hear him say when we’ll pay the price.

Here’s a website for those interested in the debt.

https://fred.stlouisfed.org/series/GFDEGDQ188S

After you’ve looked at the graph on the above website, you might need some cheering up, so here’s a website with some economist jokes. Scroll down.

https://www.equities.com/news/a-look-at-some-of-the-best-jokes-about-economists

Honey here: Thank you Frankj. Brinker knows exactly what he is going to get when he has Alan Brinker on, doesn't he? To me, the problem is political bias and simplistic thinking - and neither ever saw a tax they didn't love.

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May 13, 2018, Bob Brinker's Moneytalk: ReRuns of Old Monologues and Calls

2018-05-13T13:09:00.001-07:00

May 13, 2018...Bob Brinker was NOT live on Moneytalk today. It was three hours of rerun monologues and old spliced calls and never once announced as such...(comments welcome)

HONEYBEE'S MARKET REPORTS AND BRINKER'S LATEST ADVICE:

STOCKS THIS WEEK: The S&P 500 Index ended with a gain of 2.41% from last Friday and 0.17% gain from yesterday. It is down 1.18% YTD and is 5.05% below its all-time-high record close.

STAY FULLY INVESTED.... On Moneytalk Brinker recommended dollar-cost-averaging for new money - with one exception. Brinker said: "Assuming the market outlook is favorable - obviously we don't know years ahead - yes, I would prefer certainly when you ate in retirement and moving toward retirement to get to that 50-50 goal.....Let me give you a scenario that we don't know will happen. Let's make an assumption that over the next couple of years the market outlook remains favorable. Now we don't know that right now, we have to wait and see, but on that assumption, I would move toward 50 to 60% equity ratio to prepare for an asset allocation that makes sense to me in retirement."

INTEREST RATES/TREASURIES: Closing yield on the 10-year Treasury note is at 2.97%.

BRINKER'S BOND FUND ADVICE.... Brinker said: "I'm comfortable with investing in the 50% of that portfolio that is in the bond market, which is in short duration bonds with an average duration of less than one year...... "

INFLATION: The Consumer Price Index released yesterday puts the year-over-year inflation rate at 2.46%. It is substantially below the 3.76% average since the end of WWII and above its 10-year moving average of 1.64%.....

RECESSION PREDICTIONS:

From Advisor Perspectives (dshort): "The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely......The bond market agrees with the macro data. The yield curve has 'inverted' (10 year yields less than 2-year yields) ahead of every recession in the past 40 years...."

From Bob Brinker's May Marketimer: "....we do not see indications that a recession is on the horizon."

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May 6, 2018, Bob Brinker's Moneytalk: Stocks, Bonds, Economy and Investing

2018-05-06T13:08:00.002-07:00

May 6, 2018....Bob Brinker was live on Moneytalk today.....(comments welcome)

STOCKS....(The S&P 500 ended this first week of May with a small 0.24% loss - down 1.2% YTD and 7.3% below its record close.)

Today, Brinker repeated his current stock allocation advice for retirees - maintain a balanced approach of about 50% stocks and 50% fixed income. Otherwise, Marketimer advice is 100% all in, with dollar-cost-averaging new money on "weakness."

Honey EC: Brinker is still looking for an S&P 500 level that he considers "attractive for purchase" so that he can issue a "special bulletin buy-signal." Theoretically, since Brinker has his followers fully invested AND dollar-cost-averaging, a buy-signal would only apply to those that suddenly come into a pile new money.

BONDS....(The U.S. Treasury closing yield on 10-year notes at 2.95%.) There were no calls today about bond funds and BB did not repeat his advice to keep duration very low, but he has made no changes in Marketimer.

GOLD....Vince in Delaware asked about buying gold. Brinker did his usual disclaimer about not recommending gold because it is "speculative." He does not recommend buying numismatic coins or bullion. But if you do decide to buy gold, he recommends the Exchange Traded Fund GLD. (BB said that Bitcoin is also speculative.)

Honey EC: Brinker actually had a recommendation for gold (GLD) in Marketimer's off-the-books list of "individual issues" for several years. However, he never gave any reason why, how much to buy or what price range to buy it. Then all of a sudden one month, with no comment whatsoever, GLD disappeared.

INFLATION....2.4% year-over-year

JOBS REPORT.... Brinker gave his usual long-winded report about the latest job report and unemployment numbers, along with the educational and racial demographics. (BB did not say this, but: Black and Hispanic unemployment rates have hit record lows.) BB has concerns about a tightening labor market. Not only is unemployment lower than it has been since the turn of the century (3.9%), but even the other numbers are way down too. The current U6 unemployment rate as of April 2018 is 7.80.

BB EXPLAINS OPTIONS MARKET: COVERED CALLS AND PUTS..... Brinker's reply to caller David from Virginia Beach: "This is a reasonably sophisticated operation. The vast majority of investors do not get into the options market.....What you are doing with writing covered calls is basically you are trading off the potential for upside in the stock, and in return you are getting current income. The current income you are getting is the premium that you receive on the calls that you sell on the stock that you own.

Keep it simple. Let's say that you own 100 shares of a stock that is trading at $50. And let's say that you are a long-term owner of the stock - that you really don't have any plans to sell the stock......but you are willing to sell the stock if it is called away from you, so you write a covered call. So you sell to somebody else for a price, the right to buy your stock at what's called the strike price for a limited period of time.....Let's say a three-month call-option.

So you own the stock at $50, somebody is willing to buy it from you at $55 and they will pay you cash money to buy it from you at $55 over a three-month time frame. So if the stock goes up beyond the cost, they are going buy it from you and you are out at $55, plus you get to keep the call-option money that you made when you sold the call. So you return is, you get the gain to $55 from $50.......and you keep the premium that was paid to you for that option.

On the other side, the buyer gets to buy the stock at $55 and anything above $55, minus the cost of the call option. That is the trade off that you make. Yes, you get cash income for selling that option but at the same time, you only have upside up to the strike price. After the strike price is realized, they are going to call the stock away from you and it will be out of your portfolio. And it may be that you are going to have to pay capital gain on the stock if you had one.....

So it's really a trade off. Do you want the gain potential or would you rather have the current income. Now if you get lucky and the stock stays at $50 or anything below the $55 strike price, you get to keep all the cash income that you make....That is the ideal outcome when you get to keep the call premium that you sold. That's the ideal outcome."

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Well, I got my wish: a break from the Conga line of futurists. And what a break! Bob’s third hour guest on May 6, 2018 was venture capitalist Bruce Cannon Gibney, author of the 2015 book, “A Generation of Sociopaths, How the Baby Boomers Betrayed America.”

Editorial comments in italics, as usual.

That book title is designed to attract attention, for sure. What is a sociopath? There are definitions all over the web, here is one of the milder ones: “a person with a personality disorder manifesting itself in extreme antisocial attitudes and behavior and a lack of conscience.” I’m a boomer but I’m not a sociopath. I don’t know any sociopaths either.

With regard to the national debt and fiscal irresponsibility on the part of Congress, Bob and the guest could be joined at the hip, with the guest being the more strident of the two. The guest said that fiscal responsibility (in DC) “died in the 80’s.” (He was born in 1976 he said). The Republican party was known for its fiscal conservatism but no longer. Bob chimed in that he has seen no fiscal responsibility from either party.

The entitlement regime (Social Security and Medicare in this context) is not sustainable. He mentioned later in the interview that Social Security cannot continue past 2030 with some major changes. Bob asked why hasn’t there been more pushback in Congress against these out of control programs?

Bob knows quite well and so do regular listeners – he was lobbing a softball for the guest to knock out of the park.

He said 1) boomers want to spend more; 2) this portion of the electorate (boomers) have high voting rates; 3) politicians are focused on maintaining entitlements. Bob added that fooling around with either one is “the third rail of politics.”

If you are a newcomer to this country, and unfamiliar with that term it refers to the rail in a subway system that carries the electrical current. Touch it and you die. Propose cutbacks to entitlement programs and you will lose your next election.

The guest said he favors a progressive federal tax system like we have. The result though is a relatively few people end up paying the bulk of taxes. He pointed out that despite various tax reform measures over the years, the “percentage take” in taxes has remained “shockingly constant.” My guess is, he meant taxes as a percent of GDP. In the same breath he said boomers benefitted from the 2008 bailout. I would have liked for him to elaborate on this point. Maybe Bob would have too, but he held the reins loose for most of the interview.

After the break Bob asked about state, county and city funded public pensions – will they be paid? The guest gave a long answer which included the fact that California has the highest state tax rate on high earners, (him) equaling 13.3 percent. Public pension plans verge on fraud. Assuming a 7.5 percent return on assets as plans have done throughout this extended period of low interest rates is an example of the type of fraud he meant. The long term returns are not that high and the result is “wild underfunding.” The Netherlands is doing things right, requiring that pension funds be funded at a 105 percent level. The Dutch have always been good with money, even Tulipmania worked out well for some.

He bashed Illinois (which deserves to be bashed) but didn’t mention California’s public pension system that I heard.

He mentioned wealthy people, like himself, who get in on the ground floor of a tech company (in his case, PayPal) then make a pile when it goes public, get rich and move (out of California presumably).

Callers did not get much useful information because there were no pat answers to their questions.

Joe, listening on WLS in Chicago wanted to know how to protect assets when the national debt becomes a problem in 8 to 10 years. The guest rambled all over the place – I don’t think he was really prepared to answer such a question. He said there is no easy place to hide and cash is the “least pleasant” place to be.

Caller James said he took his pension as soon as he could and when he discusses fiscal issues with friends they don’t seem interested. There is no great place to earn a good return. The guest advised investments in tech – something that is truly growing. He mentioned Google, Apple (“a utility company”), Facebook. He said you want to invest at a reasonable price in a growing company.

Well, duh!

Keep a large stockpile of cash so that when there is an opportunity “to buy America on sale,” you’ll have the dough. Wait, he just told Joe that cash was … never mind.

Jerry from Green Bay, WI took exception to the guest’s description of Social Security and Medicare as entitlement programs. To him, they are his pension and it is no different than a government entity paying out a pension to retired public employees. Gibney rattled off a bunch of statistics from a government website that he encouraged Jerry to visit. This site reported that people pulled out $1.53 in benefits for every $1 they paid into Social Security and Medicare. Does this include the employer’s portion? Inquiring minds want to know.

The take away? Vote out the politicians who made this happen. Bob wrapped up a little early at 3:50.

Do you agree with me that the subtitle is just a way to attract attention? Would you be interested in the book if the subtitle was: How CONGRESS Betrayed America. No, that would be a big Ho Hum to most people. The blame doesn’t rest with the Jims, Joes or Jerrys who called the program today. If anyone should be blamed it is Congress who set up Social Security and Medicare on AUTO PILOT. Congress does not vote on appropriating the money for these programs. How convenient for them! So I’m clear, if anyone cares, both parties are to blame.

Honey here: My apologies to FrankJ and to readers. I failed to add the last page of Frankj's summary last night - some of the best parts. It is now complete! Very sorry!

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