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Tuesday, November 08, 2011

No Recession Says Bob Brinker Moneytalk Summary -

From the summary of the November 6, 2011 "Money Talk with Host Bob Brinker" radio show, Bob Brinker shared his Market Outlook.
Bob was adamant that he is not predicting a recession, that these forecasters are wrong and they will owe him an apology!
"My estimate is that we will see growth again in the fourth quarter, which means, where's the recession?.... I think these forecasters are wrong, but I'll look forward to their apology.... This is Moneytalk."
Sept 30, 2011 Jobs To Get Worse Under Recession-Bound U.S. Economy

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  1. Brinker Comment: Bob said our economy has been recovering. The broadest measure of our economy is the Gross Domestic Product which measures the total goods and services in our country. We saw a GDP annual growth rate of 1.3% in the second quarter and the preliminary reading for the third quarter is that we have a 2.5% real GDP. Bob reminded listeners that his forecast is 1-2% for the entire year in 2011 and Bob said he stands by that forecast and believes we will see a positive real GDP number reported when all the data is collected in the fourth quarter of this year.

    EC: Bob’s 1-2% forecast for this year seems very reasonable to me given where things stand right now. It bears noting that even as late as July of this year, Bob was forecasting real GDP to grow 2-3% this year.


    Brinker Comment: Bob said given his believe that we will see growth again in the fourth quarter, that would by definition mean that there is no recession this year Bob said we have these private forecasters out there going around beating the drums of recession warning everyone that the US is going back into recession. The rhetoric is one of alarm, that we need to get into the bomb shelters because this recession is going to produce tons of economic trouble. That is what they say, but not what we see. So far, we see an economy that continues to grow slowly. Bob said one of the things that amazes him about the private firms that are forecasting a recession is their conviction because they talk about it like it’s a fait accompli. Bob said he thinks those forecasters are wrong and he looks forward to their apology!

    EC: Pretty cocky words by daBrink. I have to hand it to him, he seems to have his ego back in place for now, despite being wrong in 2008 when he lambasted anyone making a recession forecast. Actually, I think Bob is being pretty clever these days as all he has to do is revert back to the definition of recession he is using (2 consecutive quarters of negative GDP growth), and it is lock that we don’t have a recession this year.

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  2. Bob: We've entered a bear market. As a 'MarketTimer' you should know this. Look for a significant correction into December and/or January. After January, perhaps a healthy bounce, but this bear could carry to 2016. Your Total Stock Market Index recommendation was okay in March, 2009, but not here. Bonds? Maybe a temporary haven, but if there was ever a bubble, you're seeing it in bonds and they should also be avoided.

  3. i am following both brinker and sy harding. after reading both newsletters, it has become very apparent that even though both believe in the overall direction(that is: we are in a secular bear- which started 2000 and will probably stay in the secular bear for sometime to come) they are on very different pages when it comes to short term direction. at times they seem to intersect, but one is slow & steady not giving much info, the other pouring out reems of paper ....

    so my point? they are having the same discussion about where do we go from here. recession vs up, up up?

    it strikes me that after all their discussions, we have followed the same pattern that we have in the 70's. wow, even though the financial forces have been incredible since 2008. History is repeating itself. i should start an investor letter.

  4. I have listened to Bob Brinker and subscribed - on and off - for the last 20 years. Yes, he blew it in 2008 and never admitted it - pretty annoying for someone like me who teaches his kids to take personal responsibility and also accept that they are not perfect. He is condescending and talks way too much about political garbage on his show that will have no influence in the long or short term or will have no effect on an individual listener's own investments.
    In short, I rely on Bob for major trends and usually it works out well (like 2000 & 2003) - occasionally it doesn't . Today (Sept 22. 2011), he put out a bulletin advising subscribers to go all in again in to equities(instead of dollar cost averaging back in) as he is predicting the S&P will be into the 1400's in 2012.

    Chris from Rocklin
    1:53pm on September 23rd, 2011

  5. I am a subscriber to Marketimer and have followed BB since 1999.

    Although his model portfolios have performed well over the years, I really think he needs to incorporate such things as liquidity and the number of investors on margin that could influence equity prices in a big way, as they have recently.

    I must give him poor marks for missing the latest bear market and the current swoon. I give him even poorer marks for not admitting his mistakes. I stopped listening to him when hearing no admission from him to missing the bear market in 2008.

    I was notified of a special message to subscribers at his website recently. I was disappointed that the message did not warn of the current swoon in the equities markets, but advised to continue dollar cost averaging.


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