Sunday, November 18, 2007

Bob Brinker's Moneytalk Summary, November 17-18, 2007

Brief Summary, Commentary and Bob Brinker Excerpts From Moneytalk, November 17-18, 2007.
Bob Brinker began the Moneytalk monologue by saying that listening to the Star Ship Moneytalk is the way to learn how to become your own personal financial manager so that you can take charge and avoid becoming “shark bait,” and that this is one of the "greatest gifts" you can give yourself and "your loved ones."
CRITICAL MASS: Brinker said that the smart way to get to the Land of Critical is get there slowly “.......using patience and discipline along the way. Leave the fast-buck artists aside. You don’t need that kind of an approach – doesn’t work anyway.”

STOCK MARKET: Bob Brinker said: Well it’s been an interesting week in the stock market….remember last week the bad news bears were telling us, it’s all over now – we were in big trouble now. Well that’ what they were saying a week ago. Of course, it did not turn out that way. We talked about this last weekend. About those bad news bears and how wrong they have been for several years every year as they have been screaming fire in a crowded market only to find that their views were wrong again. This week the S&P 500 chalking up a gain to 1458.74 – a gain of about 1/3 of a percent. The Dow going up 1% to 13,176 and the Nasdaq gaining close to ½ percent, at the 2637 level…….”

QUALITY BONDS: Bob Brinker segued from the stock market to the bond market, saying, “.......quality bonds continue to lead the way.“ The GNMA Fund that Brinker recommends is trading within one penny of a 52 week high. And is "......acting in outstanding fashion for all GNMA investors.” The 3-month Treasury Bill Yield is at 3.3%; the 10-year note at 4.5%; the 30-year Treasury Bond at 4 1/2% -- creating a positive yield slope of 120 basis points. The low yield is partly due to “.......demand from foreign governments.....” but some of it is due the expectation of “.....lower inflation down the road.”

CORE INFLATION: Has held relatively steady despite the fact that the price of oil has risen into the mid-$90s. Brinker said: Now of course, the inflation junkies told us – they were totally wrong about this, but they told us that rising oil prices would drive core inflation. It has not turned out that way.” Brinker believes that rising oil prices rob consumers of discretionary income and make it impossible for consumers to drive up other prices and thereby cause inflation. He says that high oil prices “....act like a de facto tax on consumers -- and that is why the core inflation index has held relatively level. The housing recession has also been a contributing factor.

WHY SO MUCH PESSIMISM ABOUT THE ECONOMY: A caller pointed out that he didn’t understand why there is so much pessimism in the country in light of the fact that he has observed that there is often difficulty in hiring enough people because everyone is so busy. Brinker mentioned a guest that he had on Moneytalk a few weeks ago (the author of “Richestan”) and pointed out that if you are lucky enough to reside in Richestan with the extremely well off, then the caller would likely be correct. Bob Brinker said: "Things have never been better for the extremely well off, but if you are talking rank and file, you get a lot of disagreement about what you just said.” Brinker told the caller that he does not think that we are in an economic boom – and he added, Thank goodness, we are not in a boom, because the worst thing that can happen is economic boom, because that’s always followed by intense pain..


WHAT TO DO DURING THE HOUSING RECESSION: Brinker told the caller that all we can do is ride it out. He said that is what we have to do because, It’s not going away and there is nothing to make it go away. Brinker said that the best we can hope for is that the government will come up with some kind of a proposal to lessen the pain of all the foreclosures that are going to happen over the next year as mortgages reset. Sunday, Brinker said that the housing recession will last into 2008 and that housing starts are at a 14 year low.

GOLD: Bob Brinker said: Now a long time ago, when these shares were trading in the low to mid-$50s, I gave that recommendation on this program. That for listeners who desire to have a hedge in the gold market that I thought the security to use was the shares that trade under the ticker symbol GLD. Those are the Exchange Traded Fund Gold Shares. And at the time I first gave that recommendation to listeners that were looking for a hedge in gold, those shares were trading in the low to mid-$50s. They are currently trading at $77.75. So obviously, anybody that chose to put on a hedge in the gold market has done very well.”

Barack Hussein Obama: Bob Brinker pointed out that at the most recent Democrat debate, Obama made a proposal to raise the income limit for paying Social Security taxes above $97,000 a year. Obama implied that his proposal would tax only the "upper class.” Here is an excerpt of what Obama said:

“I've heard you say this is a trillion dollar tax cut on the middle class by adjusting the cap. Understand that only 6 percent of Americans make more than $97,000 — (cheers, applause) — so 6 percent is not the middle class — it's the upper class.”

“Hillary Diane Evita Christine Rodham Clinton” (that is Brinker’s title for Hillary—I do not know where he gets the “Christine”) did not agree with Obama. 8^)
ESTATE TAX: Over the weekend, there was a lot of talk about the estate tax and Warren Buffett’s comments to Congress. Warren Buffett said: "A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy." As Brinker pointed out several times, the very fact that Buffet can fly to Washington D.C. and try to persuade congress to adopt his views on the estate tax proves that we are already in a plutocracy. Bob Brinker pointed out that Buffett has chosen to give a large percentage of his assets ($37BILLION at last count) to the Gates Foundation. (It was reported in 2006 that Bill Gates will retire from Microsoft in 2008 to “manage” the spending of his Foundation’s huge resources. I can’t find anything more recent about Gates plans.) A caller also pointed out that Buffett is giving huge amounts of money to his own family foundations.
Honey comment…(sorry, can’t help myself): So while Buffett wants others to be taxed, he gets his choice about how to dispose of his own wealth. Many don’t get to make their own choices, especially if their assets are in family businesses or family farms. If Buffett wanted to be intellectually honest, he would simply put his money into the Federal coffers and let Congress choose who to pass it out to..... 8^) Instead, Buffett whines about others forming "dynasties" and then proceeds to give the Bill Gates dynasty (the largest in the U.S.??) the power to decide where the Buffett $billions will be spent. Personally, looking at some of Gate’s philanthropic choices, I think some are good, some not so good. I guess it’s not so different from government after all.
ESTATE TAX EXEMPTIONS: Estates worth up to $2million are exempt in 2007 and 2008. The exemption slated for 2009 will rise to $3.5million, and by 2010 it will be repealed – but only for a year. Unless Congress acts, in 2011, the tax will roll back to $1million with a top tax rate of 55 percent. Brinker pointed out that there is a movement to abolish the estate tax completely, but it doesn’t sound like he would be for that happening. Bob Brinker said: I’m comfortable with 3-$5 million as the cap on it.” But he believes if the democrats are in power, they will “......probably shoot lower than that."
REVERSE MORTGAGES: Brinker said it boils down to the terms--such as what value will be placed on the property, and what time line the payments cover. He recommends getting some comparables and then checking with a CPA or enrolled agent.

DATA FLOW COMING UP THIS WEEK: Market is open on Friday; expect light trading. Housing starts for October on Tuesday morning – estimated to be 1.17million. Leading indicators Wednesday morning – expected to be down “perhaps” 3/10 of 1%.




Bobby said...

Bob sounds a lot less bullish than he did a week ago!!

TossIt said...

Great summary of the Saturday show.

I don't quite understand comments I hear from Honeybee and others who imply Buffett is trying to pull a fast one by donating his money while, at the same time, saying there should be an estate tax so we don't have generations of trust fund babies.

Anyone can donate their money while they are alive and avoid the estate tax.

I am for around 5 million exception and the estate tax to inflation. This will allow people to plan for their estate. If the family will need additional money to keep their company or farm, the family should buy life insurance or make some other plan.

The caller who called Buffett a socialist is plain crazy. Buffett doesn't say that the gov't will best decide where wealth should be re-allocated.

Buffett just doesn't want to create generation after generation of people who never have to work. I bet Buffett would be fine if people donated a lot of their wealth to whatever worthy charity they deemed appropriate just so long as they didn't pass a ton of wealth down so his/her great great grandkids never had to work.

Honeybee said...


Yep, Brinker's market-talk was pretty much like it was last week.

So do you think he will get his "mojo" back?

Honeybee said...

Tossit said: "Buffett just doesn't want to create generation after generation of people who never have to work...............just so long as they didn't pass a ton of wealth down so his/her great great grandkids never had to work."

Hi Tossit,

Is it your understanding that Buffett is not leaving $millions (more likely $billions) to his children/grandchildren?

Thoughts of a genius mind said...

Hillary Diane Evita Christine Rodham Clinton” (that is Brinker’s title for Hillary—I do not know where he gets the “Christine”) did not agree with Obama.

Honey Bee - Bob Brinker gets the Christine from the newly elected Christine Kirchner from Argentina, a Peronista. She will enact the same populist policies that her predecessor Evita Peron enacted. Christine is actually the first elected president of Argentina, and rode in the presidency on the shirttail of her husband. She has been compared to both Hillary (although much more attractive) and Evita and won the Argentina Presidency by a large margin. I wrote about her here.

Who ever said Buffet is not a socialist. He is a huge socialist, and a big believer in the redistribution of wealth, and he makes no qualms about. I simply do not understand it.


Noto said...

For the past two weeks, Moneytalk on Demand has edited out Bob's opening monologue on the Saturday show. Has anyone else noticed this?

TossIt said...

Buffett stance on estate taxes is the complete opposite of a socialist. He wants to reward people who will increased productivity. He doesn’t think kids of the super rich parents should be rewarded with vast wealth because there is no indication that they will increase productivity like their parents did.

Buffett believes the sons and granddaughters of the super rich shouldn’t be super wealthy just because they won the ovarian lottery. After the successful people die, he would rather some of their wealth be used to create an environment so that the next generation who are hard working and good at generating revenue or increasing productivity are rewarded. He wants to promote meritocracy rather than aristocracy.

Anyway, his stance on estate taxes is explained minutes in this video. Fast forward to 30 minutes to hear what he plans to leave for his kids. I’ll paraphrase it: He wants to leave enough to his kids so they could choose whatever career they would want to choose. But he doesn’t plan to leave them so much money that they could no nothing.

TossIt said...


Last week the opening dialogue was missing in the one hour downloads but it was on the 3 hour download.

I didn’t notice it was missing this week. I’ll have to see about that.

jeffchristie said...

Warren Buffet is a hypocrite working in his own self interest. Who profits from the estate tax? 1. Government. 2. Life insurance companies. Yes wealth people purchase huge amounts of life insurance to pay their estate taxes. Guess what business Warren Buffet is in. That's right insurance. The man is a snake just like Bob Brinker.

Honeybee said...

Noto...I do not subscribe to Moneytalk on Demand. KGO now offers free downloads of the program.
However, it seems odd that the opening monologues would be edited out. Do you have any ideas why that might have happened?

Honeybee said...

Hi Thoughtsofagenius,

Thank you..."Christine" mystery solved! 8^)

I really enjoyed reading your comments about Hillary and thanks for posting the link to your article. VERY INTERESTING!!

And about Buffett: I wholeheartedly agree with you and like you, I don't understand how anyone could think that he is not just another limousine liberal who wants to tell others what to do with their money while he so obviously channels VAST wealth into mostly socialist-agenda programs.

If anyone believes that his children, grandchildren or any future generation of Buffetts will ever work at anything just to earn a livelihood, they are very mistaken. How disengenuous of him to say he is against the forming of "dynastys."

Happy Thanksgiving________Honeybee

Honeybee said...


Thanks for your comments. You certainly drilled down to the crux of the "Buffett" agenda.

Happy Thanksgiving... 8^)

Honeybee said...


Thanks again for your interesting comments. I hope you don't feel picked on because you are outnumbered. 8^) Diverse opinions are always welcome here.
I tried to watch the video at the link you posted, but it would not work. Would you try to post it again?

John said...

Thanks for taking the time to write up the summary of Bob's show.

I must disagree with your criticism of Warren Buffett on the Estate Tax, however. Choosing to donate to charity is not at all the same as "keeping it in the family", and a charitable foundation is certainly not a "dynasty".

Warren Buffett is not a hypocrite.
He is concerned about ensuring equality of opportunity in US society.



Ambrose said...

Warren Buffett is the world's second richest man and one of the greatest philanthropists ever known to mankind.

He has made it abundantly clear that he intends to give away virtually his entire fortune to benefit the needy.

For an internet loudmouth to call Buffett a hypocrite and a snake because he favors the death tax is despicable and beneath contempt.

Mr. Christie should be ashamed.

Honeybee said...

Hi John and welcome!

I'm certainly glad to hear that your enjoy the summaries.

And thank you for weighing in on the Buffett debate. I guess you and I could agree that Buffett can do whatever he wants to do with his money. I just happen to want everyone to be able to do that and have money left over to give to "family foundations."

However when you said: "Warren Buffett is not a hypocrite.
He is concerned about ensuring equality of opportunity in US society,"
you seem to be giving your blessing to ONE INDIVIDUAL having the right to make decisions for what is "equality of opportunity" in the U.S.--from HIS VIEWPOINT!

That is a very alarming thing, if it is truly what Buffett is doing. That would mean that instead of the vote of the people, we have a plutocracy and not a Republic.

I totally agree with Bob Brinker that Buffett's vast wealth afforded him the amazing privilege of giving his opinions directly to Congress.

So what I am saying in summation, is that if what you said about Buffett's motives are true, then everything Brinker, Jeffchristie, Mark and others have said is true. It's just a matter of whether you are for or against Buffett accomplishing his goals.

matt said...

Charitable foundations certainly CAN BE "dynasties," if they have the money, and therefore the power (choice) of how and where and when to use that money.

The Bill & Linda Gates Foundation decides what to do w/ the money, so what is wrong with others deciding what to do w/ their OWN money? It's theirs! They should have the right to decide where it goes, tax free as well! IF not, then it's socialism, indeed.

Warren Buffet may be a wonderful person AND a hypocrite. The two are not mutually exclusive! Just because he may be a hypocrite does mean he is not generous and wonderful, simply that he believes that his choices are more important than others. Maybe it does make him a little "less-wonderful," but still quite wonderful.

matt said...

I'm sorry. I meant "does NOT mean..." in the previous comment.

This is quite a difference, and i apologize for the typo!

John said...

Pretty much everyone dislikes paying taxes, myself included. But for all the services that the electorate demands, i.e.,

$586.1 billion - Social Security
$548.8 billion - Defense
$394.5 billion - Medicare
$367.0 billion - Unemployment and welfare
$276.4 billion - Medicaid and other health related
$243.7 billion - Interest on debt

United States federal budget, 2007

the question is, what tax policy will we have to pay for these services? Do you want to raise income taxes in order to eliminate the estate tax? Do you think that is better for society? I think we rely too much on income tax. It is reducing people's incentive to work and be productive. The estate tax is reducing people's incentive to pass on multi-million dollar estates to their children. If you have to have one, which produces a better and stronger country?

And I don't buy the argument that we don't have to have any taxes and that "deficits don't matter". That's irresponsible, and it's why we're paying $244B each year for interest on the debt.

jeffchristie said...


It is you and Mr. Buffet who should be ashamed. The idea of an estate tax would be a call to arms for the founding fathers of this nation. It is that type of government tyranny that caused them to break away from England. One of the last things they would want to see is their family farms being sold in order to pay an estate tax.

As to Mr. Buffet being a hypocrite Bob Brinker did an excellent job of pointing that out on Moneytalk. Bob said Mr. Buffet flew to Washington to talk to congress. Mr.. Buffet told them that we need the estate tax to prevent a plutocracy. Bob went on to point out that the mere fact that Mr.. Buffet has the means to influence congress is in itself Plutocracy.

I did not call Mr. Buffet a socialist because I feel he is something far worse than that he is a democrat.

Honeybee said...

(Post content edited at author's request)
Jeffchristie wrote:

One of the things that Bob Brinker failed to do was show that Warren Buffets argument for the estate tax doesn't hold water. If I were on that senate committee I would have ask him this..

Thank you Mr. Buffet for appearing here today. We all know how valuable your time is. I would like to make sure I understand your argument for keeping the estate tax. You seem to feel that without it a small group of families will have a disproportionate influence on setting government policy. I would like to ask you about two men. One is Joseph P Kennedy the father of the senator on my left and Prescott Bush the grandfather of the president of the united states. Both men were extremely wealthy and influential. Your argument is that by taxing their estates it would prevent their decedents from have an unfair amount of influence in the government. Well both men have passed away and their estates were taxed. Could you tell this committee how well those estate taxes limited the influence of those families. I think not Mr. Buffet because your argument is clearly fallacious. Thank you again Mr. Buffet for appearing here today. If this committee needs anything further from you we will be sure to call.
November 22, 2007 1:03 PM