Saturday, January 19, 2008

Brinker's Stock Market Comments Today

Moneytalk Commentary and Excerpts, January 19, 2008
Here are some excerpts of what Bob Brinker said about the stock market today:
Brinker placed the blame for the current stock market decline squarely on the shoulders of Ben Bernanke and the Fed. (Honeybee sez: More about this later.)
Brinker said that the stock market is going through a “rocky period in here,” and has declined about 15% on the S&P Index, which is “more than I expected.” He also said it was “trading on fear here,” but in his opinion there was “…no Armageddon scenario.”
In answer to a caller’s question, Brinker said: “I think the stock market is driven by the obvious that we’ve always talked about, the policy of the Federal Reserve, the economy, corporate earnings and all of those factors…….”
Caller: “Do you think we’re finally reaching a point where it’s time to maybe get out of the stock market like it was here a few years back and wait to see what’s going to happen?”
Brinker: “That’s not my opinion right now. I think there’s lots of fog out there right now. I think there’s very low visibility out there right now, and I think that low visibility has been caused by all of the things we’ve been seeing over the past several weeks—especially the last week……but it has not been my view that we would be looking to run for the hills and expecting the stock market to go down 50%. That has not been my view, and that is what it went down earlier in the decade. The S&P closed down 49.1% from closing high to closing low. Right now, we are looking at a 15% correction in the market as we speak. So to compare the two, at this point, is to compare apples and oranges."
Honeybee sez: Brinker did not offer any opinions about when he thought the current market correction might end. Neither did he mention MOABO or even a "gift-horse." But as you can see, he doesn't expect a 50% decline.... 8^)



rdk573 said...

...Yes it's interesting that he blames Bernake and company for the current market decline...H'mmm..why didn't his infallible indicators realize that the market would be neutral to bearish beccuase of it????...

In addition, he also stated that the market is trading primarily on fear now (if only the market would read BOB's newsletter and realize how naive they are and how undervalued the market is and that the S&P is suppose to be at 1650 not at the current level of 1325, then the market would know is the right time to buy stocks and replace it's fear with enthusiasim-perhaps bob should send his newsletter for free to all market participants and traders).

Finally, BOB forsees slow growth in the economy during the first two quarters of the year but to pick up steam during the second half...and since the stock market is a discounting mechanism 6 to 9 months in advance, the market will be very soon start trading much higher as it discounts and projects this recovery (Hmmm... I did not realize that Bob can not only forcast the market but the economy as well...perhaps he should be a the president's staff of leading economic advisors...)

What a pompus as$%^&*

absolutereturns said...

I've listened to Bob for a few years now and subscribed to his letter for 1 year. I like him, I think he offers a great radio program. That being said, I think he's 'off' on a few areas. I don't understand, at all, why he is so dismissive about the price of oil. We get the fact that the Fed doesn't control oil prices, but as a previous person noted, when the US$ declines, people who trade oil demand a higher price to compensate. Also, oil is entirely inflationary. Even when food and energy is stripped out, the cost of oil still bleeds through to the rest of the economy. Maybe or maybe not oil comes down as / when the economy softens up (like now) or contracts. I just don't get why Bob thinks oil is not inflationary. Also, is Sat's program 2 callers asked about the monoline bond insuring companys and Bob seemed to dimiss the issue or suggest it's only in the bond's a topic where i think, respectfully, Bob doesn't have a clue, and is looking at the market like it's 1980. If, when, one of these insurers goes under, the wall street banks and brokers are going to have to write down tens of billions of $'s more in losses.... bad for their stocks, bad for the market, bad for confidence, another chapter in the Credit Bubble collapse ( which was blown up by the former fed political hack Alan G. ) It will be interesting to see when and if Bob changes his thougts on the market. I'm wondering if his timing model is only geared towards a 'normal' business focused recession. If, and imo yes we are in and will have a recession, we have a recession, it will be a Consumer lead recession. Bob's timing info / models may not be geared to pick that up, i'm not sure. But the market has corrected 15.3% from Oct 9th 2007. Look at a long chart of the sp500, bigcharts dot com works well, the sp500 peaked in march of 2000 at approx 1535, it peaked at 1565 last Oct. If you adjust for inflation the sp500 never eclipsed the previous 2000 high, it should have hit closer to 1800. The average decline on the market from peak to bottom in a recession is 28%. We're off 15%+.....we'll see where we go from here.

Wonder said...

Interesting Brinker did not talk about the inflation numbers that came out last week.

He sure tried to get the talk going towards politics with his "breaking, breaking, breaking" crap every couple minutes.

Wonder said...

I got to add to absolute's post. Brinkers says the "free market" controls the price of oil. I noted the actions of the Fed directly relate to the price of oil. They hike the USD goes up, oil goes down. They cut, oil goes up. Since oil is priced in USDs.

The second point; the largest traders of oil is the oil companies. They are in the options pit hedging themselves. The retail investor has very little to do with the price of oil. So, when the price is going up and the Fed is on a cutting bias, the oil companies hedge themselves at higher prices - driving the price of oil up.

Brinkler simply does not understanding trading. That is very clear to me. He has minimum understanding of real economics. He is like Larry Kudlow, who calls himself and Economics, however Kudlow only took one college level course in economics and has a BA in History from a third tier college. Kudlow only went to college to get out of Vietnam because his blue blood family could afford to send him.

harolder said...

"...He is like Larry Kudlow, who calls himself and Economics, however Kudlow only took one college level course in economics..." -wonder-

What does that mean wonder?

Mr. Kudlow is CEO of Kudlow & Co., LLC, an economic and investment research firm.

For many years Mr. Kudlow served as chief economist for a number of Wall Street firms. He was a member of the Bush-Cheney Transition Advisory Committee. During President Reagan’s first term, Mr. Kudlow was the associate director for economics and planning, Office of Management and Budget, Executive Office of the President, where he was engaged in the development of the administration’s economic and budget policy.

He is a trusted advisor to many of our nation’s top decision-makers in Washington and has testified as an expert witness on economic matters before several congressional committees. He has also presented testimony at several Republican Governors Conferences.

Wonder said...

Larry Kudlow does not have a degree in Ecomonics.

If you listen to his show he does not understand basic economics. He screams in one breathe oil, gold and Euros are in a bubble. Then the next breathe scream the Fed needs to do a "shock and awe" emergency rate cut.

If he understood economics. He would realize those are inverse.

Mr Kudlow is a shill. If a Democrat was the President he would be screaming for their impeachment for handling of the economy. Sorry but that is reality.

jumpnjoey said...

Harolder. You may not realize. Kudlow as paid by Enron to speak favorily of the company. However, he never disclosed that.

Also under media scrutiny, the pundits, who now admit getting Enron cash for making speeches or serving on an advisory board with former CEO, Kenneth Lay. They include: "Wall Street Journal" contributing editor, Peggy Noonan, $25,000 to $50,000; "New York Times" columnist, Paul Krugman, $50,000; Larry Kudlow of CNBC and "National Review," $50,000; "Weekly Standard" editor, Bill Kristol, $100,000.

I.E., He was bullish when speaking about Enron so normal investors would not sell.

There are many other examples. Use google search and you will find them.

Don't be fooled. Wonder is dead on. An Economist yet no degree. That is like calling yourself a Doctor and not having a degree.

harolder said...

"Don't be fooled. Wonder is dead on. An Economist yet no degree. That is like calling yourself a Doctor and not having a degree."

That's what I always thought too until I found out there are some folks around here who claim that a "Ph.D. Equivalent" is just as good!


jumpnjoey said...

Not sure what you mean by that. But rereading the Enron dealings, it gives me flashbacks of Kudlow having on the homebuilder CEOs on just about every night from April to September 2006.

Interesting there has not been on a homebuilder CEO since to explain why their stock prices have falling up to 90% when they were so bullish just six months ago. Even more important would to ask why they were insider selling all their shares if everything was so "good".

rdk573 said...

Regarding Kudlow...
Kudlow was educated at the University of Rochester in Rochester, New York, (graduated 1969 with a degree in history) and Princeton University's Woodrow Wilson School of Public and International Affairs in Princeton in central New Jersey, where he studied politics and economics but left before earning his degree. While at Rochester, he was an active member of the left-wing Students for a Democratic Society (SDS.) He was more interested in politics and took only one economics class.

After listening to Kudlow for many years, I am convinced that the guy is clueless.

• Regardless of what happens in today’s economic environment, he always claim its good time to buy stocks. He is the only individual that I know that can contend that US stocks are in a perpetual state of being 20% undervalued
• He claims that basis of all economic activity revolves around business; that in order to get any get any economy moving that any and all economic policy (taxes, laws) should be geared toward giving incentives for investment in and by business and the consumer should be secondary. He continually contends this fiction despite the fact that close to 70% of GDP is attributed to consumer. If his contentions were correct, business would provide the lion’s share of GDP not the other way around.
• He has spoken ad nauseum that practically all of the growth in economic activity during the prior years can be attributed to the Bush tax cuts and what this has done for business, and that interest rates were less of a factor.…Its interesting that lately he has done a 180 and now is on the interest rate bandwagon to get the economy going again…What happened to the goldilocks economy that he so proudly indicated that were in ? ..(as of now, goldilocks is on life support)
• If his knowledge in economics had any substance, he would of realized that a lot of the growth in economic activity during the last few years was due to excess speculation or bubbles…From the tech bubble in the late 90s to the housing and credit bubbles that are currently unwinding… Not once has he ever talked about any excess speculation being the primary driver of economic activity. Instead , he spews his crap about the “goldilocks economy” or “greatest story never told”

This guy lives in his own little world were everything is wonderful. He’s deluded…I used to call him a permabull…”Permafool” would fit him more properly…

octavian said...

I think Honey has some kind of a psychological problem with Bob Brinker, or a need to have a
"cause," or some such thing.

jeffchristie said...


"I think Honey has some kind of a psychological problem with Bob Brinker, or a need to have a "cause," or some such thing. "

You know that's funny since I had the same felling about the pompous a$$*%@# Bob Brinker when it come to his treatment of Ben Bernanke.

griffin12 said...

In response to octavian's comment that "Honey has some kind of a psychological problem with Bob Brinker", should we then say that Enron shareholders had some sort of psychological problem with Kenneth Lay's leadership?

Brinker has often used the phrase, "It isn't in my nature to ..." (criticize someone by name, etc., etc.) What apparently isn't in Bob's true nature is the ability to set his gigantic ego aside and honestly admit his errors. His "Q's call" in 2000 is legendary. A lot of people took his advice, and a lot of people were hurt. Yet to this day, he does not reflect that disastrous call in any of his portfolio performance numbers.

At issue at the moment is a 15% drop (so far) that caught Bob entirely by surprise, and NOT the factors that led to the drop. Bob's claim to fame is the ability to time the market, but his indicators failed to predict this problem. The rational and honest response would be for Bob to admit that his predictors failed, and to discuss factors that that were either not picked up by his indicators, or were picked up, but not properly interpreted. He did not do that, and he will not, either on his show, or in his newsletter. Instead, he goes on and on about how good ol' Ben Bernanke screwed up, despite the many pleas that Bob made for the Fed to be more aggressive with their cuts. If Ben had only listened, Bob could have saved him. Never mind that Bob has continued to call for new market highs, knowing what the Fed has done with rates over the last year.

Bob gives a lot of absolutely great advice, but his inability to deal with his misses in a forthright manner diminishes his credibility. This is not a psychological problem ... it is an issue of character.

jumpnjoey said...

Brinker is begging for a rate cut. As in: pleading. Isn't this how we got into this mess to begin with?

Brinker says oil is not inflationary then talks about the rise of corn because of ethanol. With his logic wouldn't that mean corn would be deflationary?

Pig said...

Octavian said: "I think Honey has some kind of a psychological problem with Bob Brinker,..."

I would say that quite a few people have a psychological problem with Brinker .........especially if honesty, trust, and truthfully admitting your mistakes can be considered a psychological problem for him.