Bob Brinker's Moneytalk Summary and Commentary, November 25-25, 2007

Bob Brinker's Guest Host for Thanksgiving Weekend: Bill Flanagan

.

Here is an excerpt of Bill Flanagan's opening comments:
.

“Well, not a lot of cheering on Wall Street this week as the bad news about the credit crunch crisis continues and some other nasty problems persist as the Dow slid below 13,000. Course, Friday was an encouraging half day – closing up 181 points for the day. In fact, since most recent sessions of the market day have started off very good, very strong, and then plunged in the later hours. Some have joked that we should only have half days of trading. I don’t know about that, but certainly anything to stop the carnage. So where do we stand? For the year, Dow Jones Industrials still up 4.15%; Standard and Poor’s 500 stocks up 1.58%; the Nasdaq 100 up 15.48% for the year, the Composite Index, 7.51% to the plus for the year; the Russell 2000, off 4.14%; and the Dow Jones Wilshire 5000, up 1.83. Those are not the greatest numbers on Earth and they were quite a bit better just a few months ago – before we started this plunge. But it’s hardly worth slashing your wrists over, folks.”

.
Flanagan made some rather lengthy comments about Warren Buffett, labeling him "the $57billion man” (Honeybee sez: According to gurufocus.com that should be $65Billion). Flanagan went on to say that since Buffett and Bill Gates had gotten together it’s become "a bit too much.” That Buffett had gone from being the “sage of Omaha” to being the “Donald Trump of investing.” Flanagan said he wouldn’t be surprised to see Buffett pop up on Dancing with Stars one of these days since Buffett seems to be popping up everywhere else – even in TV ads. Even so, Flanagan says “good for Warren,” but thinks he might have recently gone a “bit strange” with all of his tax talk.
.
(Honeybee sez: Many who left comments here last week about Warren Buffet feel a lot more strongly--both pro and con-- than Flanagan does.)
.

.
Flanagan pointed out that if more tax increases are coming, they will no doubt be directed at “that big lump in the middle,” because that is where the most money can be raised. His reasoning goes like this: you can take everything away from the poor (1/3 pay no tax at all) and make nothing, while the top 50% of earners already pay 97% of Federal taxes, so raising taxes on the rich won’t generate that much income.

.
Here are some miscellaneous points Bill Flanagan made that might be of interest:

• .
  * The AMT is going to hit millions more middle-income tax payers this year.
• .
  * Steve Forbes has written a book on the flat tax. Forbes' is similar to the FairTax, but Flanagan thinks it would be better.
• .
  * If elected, expect Democrats to change capital gains and dividend tax rates, which will “throw a monkey wrench in our economy.”
• 
  * Stockpickr.com was purchased in excess of $10million by thestreet.com, which means that Warren Buffett owns it now. (Correction: Jim Cramer owns "stockpickr.com." Please see Kirk's comments below.) However, it is a good site to view the portfolios of Buffett, Soros and others. Here is Buffett’s portfolio:

.
http://www.stockpickr.com/port/Warren-Buffett/
.
* Another site that gives lots of stock picks and big guru portfolios:
.
http://www.gurufocus.com/
.
The subject of estate taxes came up a few times and every person that called had their own idea about what would be a fair level. It occurred to me that when it comes to taking money away from people in the form of taxes, that anything beyond what the Constitution allows is nothing but legalized theft—and opinions largely depend on whose ox is being gored—so to speak. It seems to boil down to a matter of degrees/amounts, and who has the POWER to make the choices.
.
For the first 137 years the United States existed, the Constitution did not allow for the income tax. It began in 1913 with the passage of the 16th Amendment. Originally the income tax only affected a handful of people. (Take a look at what it has led to in the past 95 or so years -- it’s astounding.)
.
http://caselaw.lp.findlaw.com/data/constitution/amendment16/01.html#2

.

As Professor Walter Williams often points out (paraphrase): "When is it ever right to take money away from one person and give it to another?"

.
http://gmu.edu/departments/economics/wew/index.html
.

Most of Flanagan's Moneytalk calls this weekend were lengthy, repetitive and for the most part, so esoteric that they were of little interest to most people. Here are three that were somewhat fascinating--for various reasons. 8^)
.
* A caller offered a definition of the “rich”: “If you are debt-free and you can write a check up to $20,000-$50,000, you are a rich person.”
.
* A caller said that people should not be allowed to give their money to their own kids as an inheritance—that it should all have to be given away to charity or paid in taxes.
.
*The very next caller disagreed and said that to be forced to give all of one's money to the government to spend was “absolutely ridiculous” and that it’s foolish to think the government can spend your money more wisely than your own children can spend it.
.
Sunday, Flanagan talked about wanting a wireless reading device and he mentioned that Amazon offers one called an Amazon Kindle. It sells for about $400 now, and seems to have a lot of pros and cons according to some of the customer reviews. It looks like something I might like to own as soon as some bugs get worked out and maybe the price come down a bit. 8^) (Amazon Kindle is out of stock at the present time.)
.
In hour-two on Sunday, Flanagan’s guest was Jason Swieg , author of “Your Money and Your Brain.” Way too far out to be of interest to me____Honeybee
.

Kirk Lindstrom wrote:

"James (Jim) Cramer owns TheStreet.com, not Warren Buffett.http://finance.yahoo.com/q/mh?s=TSCMJim has about 2M shares at $12.80"TheStreet.com's proprietary network includes RealMoney.com, Stockpickr.com, TheStreet.com Ratings, TheStreet.com TV, and Promotions.com."I heard a little bit of the show this weekend (while changing a fluorescent light in the garage) and I think I heard Bill say something like "and you know who owns that" for this call. Perhaps he was told to not discuss Jim Cramer on Bob's show so he didn't mention him by name. Bob has been "a bit sensitive" about his competition be it someone tiny like me with a competing newsletter and small but loyal subscriber base or a major media figure like Jim Cramer with far more popularity with the young demographic advertisers covet. Here is a link showing how many search for Cramer vs Brinker It is amazing how you only get Jim Cramer if you have cable yet his much smaller audience is much more active on the internet.... probably 30 years or more younger, thus the demographic advertisers want."

.

(Honey here: Please click on "comments" to read all of Kirk's comments .)

.