Moneytalk Summary December 15, 2007

Brief Summary, Commentary and Moneytalk Excerpts, December 15, 2007
.
Most of the program was devoted to talking about how the United States struggles with the need to import oil. Brinker thinks it’s ridiculous, and that it didn’t have to happen. He talked about the oil embargo that happened 33 years ago and how we are in the same “pickle” we were in back then – thanks to politicians and radical environmentalists who have successfully blocked us from using nuclear. He thinks it’s shameful that we have to use coal. He thinks it’s ridiculous that we don’t have an energy policy like France does – mostly nuclear.

.
Stock Market: Bob Brinker made no comments about stock market activity.
.
Federal Reserve: FOMC meeting (December 11th) lowered the Federal Funds target rate by 25 basis points, down to 4 1/4%. They will re-convene on January 29th and 30th. Ben Bernanke is “the most powerful man on Earth.”
.
Economy: Slowing--as expected because of energy prices and housing market. Expect slow growth rate in 2008.
.
Inflation: The key rate of inflation is the core rate of inflation, and continues to “behave remarkably well.” The Personal Consumption Expenditure Core Index, which is “the most important” has risen 1.9% --YOY. . Energy Prices and Headline Numbers: Up over 21% over the last year – gasoline prices up 37% over the last year. Fed focus is on the core rate: "as they should, to find out what kind of leaking or seepage is occurring from the energy complex into the core complex, and so far it’s been very little – 2.3 year over year on the CPI; 1.9 year over-year on the Personal Consumption Expenditure Index. The headline numbers are higher than anybody wants to see them. But they are driven directly by what’s going on in the energy complex because they are in the energy complex. So if energy goes up 21% YOY, you are going to see that in the headline – and you do, because the headline is up 4.3 on a YOY basis.”
.
Interesting Caller and Reply: I found this caller's point (he didn't ask a question), and Brinker's reply to be the only interesting call of the day. There isn't any way to know for sure what this caller was referring to, but it was not necessarily what Brinker seemed to think it was.
.
All of Darryl's words are here, so judge for yourself. I think it's very possible that he was talking about trying to time the market. Or was he talking about penny stocks as Brinker so conveniently jumped on the band-wagon about? The caller certainly never mentioned penny stocks or even individual stocks. Instead he referred to the "long haul."
.
And who was Brinker preaching to when he said that "betting on horses" would take a "documented certified genius"? Living there near Las Vegas, has Brinker seen some horse players "die broke"?
.
Darryl from Chico said: “Well, to avoid digressing the conversation from what I was originally going to call in for –we are kind of going in a different direction. Let me just make a comment about investing. If you’re not in it for the long haul, then what you are doing is, you keep becoming more and more aggressive in your investment. And instead of it being an investment, it really does turn into gambling. Now the investors, they call it a risk. Well, this is risk, but it’s gambling. And you reach a point to where, you know what’s the difference between going to the race track and taking all of these gambles with all the money you’ve earned in your life trying to make something out of it right now. It’s no different than pulling the handle on slot machine or buying a ticket at the race track.”
.
Bob Brinker's reply: “Darryl, I think you’re absolutely correct about this, and we’ve tried to warn people on this program about the penny stock hucksters out there that will drag you down – sooner or later, you’re going over the wall with penny stocks. We’ve talked about this. Sooner or later, they’re going to come back and they’re going to get you. That’s the way it works. We’ve talked about it. I mean that’s a perfect example right there of how hucksters get their way with your money, by talking you into speculating in bizarre ideas like penny stocks. And I think that it’s very, very clear what happens in that case. And you’re also correct when it comes to speculation in general. People are just out there taking speculative, risky positions. You’re absolutely right. Eventually, the market is going to come back and it will drag them down. It’s certainly no place to be doing that, and it is similar to playing a slot machine which is a losing game, big time losing game. Or for that matter, like you say, betting on horses – there’s another one. By the time you are finished with the state and the track take-out, you would have to be a documented, certified genius to overcome the drain on the pool at any racetrack. It’s ridiculous. There’s that old saying in Saratoga, New York – they still say it, all..horse…players…die broke."