Bob Brinker's Market Outlook for 2012

From the article "Moneytalk's Bob Brinker's Market Outlook For 2012," Moneytalk host Bob Brinker says:

“In our view, the S&P500 index has the potential to trade into the low-to-mid 1400s range in 2012. On a valuation basis, using our conservative operating earnings estimate of $101 for next year, a price/earnings multiple of 14 would enable the S&P 500 index to reach the low-to-mid 1400s level."

Today the S&P500 closed at 1,265.43 so a gain of 135 points the low 1400s would be a gain of 10.7% from here.

Market Performance (not counting dividends)

14,164.53	1,565.15	2,873.54	865.29	<=MAX
12,291.35	1,265.43	2,625.2	751.31	<= Yesterday
DJIA	S&P	NASDAQ	Russell	VTI
CLOSE	500	Comp.	2,000	W5000
12,151.41	1,249.64	2,589.98	735.21	63.96	Today
5.0 %	(0.6%)	(2.4%)	(6.2%)	(1.5%)	YTD

The article adds

Brinker says: “We continue to rate the market attractive for purchase in the event the index returns to the area of the correction lows in the low-1100s. Above that range we suggest a dollar-cost-average approach for new stock market money.”

and

"All of his Marketimer model portfolios are fully invested."

Before anyone gets too excited, remember that in late 2007 and early 2008 Bob Brinker predicted the market would reach the 1600s and he issued a "gift horse buying opportunity" in the mid 1400s to take advantage of a correction.   See

• "Thank Goodness for Index Funds" and 
• "Two of the Worst Stock Market Calls in History"

Brinker has had his model portfolios one and two 100% in equities since March 2003! 

Neale Godfrey Guest Host for "MoneyTalk with Bob Brinker"

On December 11, 2011 at 4:00 PM - 7:00 PM EST Neale Godfrey, author of Money Doesn't Grow On Trees: A Parent's Guide to Raising Financially Responsible Children, will be the guest host for "MoneyTalk with Bob Brinker." 

About Neale: Neale S. Godfrey is an acknowledged expert on family and children’s finances who has been in the financial field for more than 30 years. Early in her career, Neale became one of the first female executives at The Chase Manhattan Bank. Later, she became the president of The First Women’s Bank and founder of The First Children’s Bank. In 1989, Neale formed Children’s Financial Network, Inc., whose mission is to educate children and their parents to take charge of their financial lives. Neale is the author of 17 books that deal with money, life skills, and STEM education, and has been honored with a #1 New York Times Best Seller, Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children.

She is on the Board of Directors of UN Women and sits on Governor Christie’s Task Force for Gender Parity. Neale is the proud mother of two amazing children and two incredible grandchildren.

KGO Drops Moneytalk with Bob Brinker

Update Dec 7:  Bob Brinker hosted his last show on 50 kilowatt KGO on Sunday Dec. 4, 2011.  He found a new home on 5 kilowatt (less powerful transmitter) KSFO (Detailed Story).

December 2:  Today the San Francisco Examiner reported KGO dropped "Moneytalk with host Bob Brinker" and many of its other talk shows due to falling ratings.

 On Friday, December 2, Owens told listeners that he had "survivors' guilt" but is excited about the new format.   Owens told listeners he was "numbed" by the news and felt bad for his friends and former co-workers.    He brought on the station's news and program director, Paul Hosley, who told listeners that slipping ratings with the station's longtime all-talk format was the reason for the change.

Hosley told KGO-TV, Channel 7,  "We thought that there would be a better opportunity to build audience by going to a semi-all news format.  Our talk format has been wonderful over the years for KGO, but the audience really hasn't stayed with us. The audience isn't there. We believe that news will attract more listeners."

We knew ratings were bad when they dropped Moneytalk from Saturday, but now Sunday afternoons will be hosted by Brian Copeland and Stacy Taylor.

Weekend talk
The weekend shows will remain partially intact.  Karel will remain 7-10 p.m. on Saturdays and Sundays. According to the station's online schedule, Pat Thurston will take over 8 a.m. to 11 a.m. on weekends.   Spencer Hughes takes over the 10 p.m. to 1 a.m. weekend slot that had been occupied by Bill Wattenburg, according to the station's Web site.   Wattenburg apparently among those who have been let go.   Wattenburg's Web page on the KGO site had been removed.

Bob Brinker's Moneytalk show, which had aired on Sundays at 1-4 p.m. is no longer on the station's schedule and neither is  Joanie Greggains.

Gene Burns' weekend Dining Around show has also been cancelled.  

Joanie Greggains did a show about exercise and Gene Burns' show was about eating out, usually at fancy restaurants.  I guess Brinker's show did so poorly helping people make money that they couldn't afford to eat out and thus didn't need to exercise! 

The good news for many is Ron Ownes, who was on weekdays from 9AM until Noon, will keep his popular, highly rated, show.  

New Sunday schedule as of Dec 6:

 

Start	Finish	Show Name
12:00AM	1:00AM	Spencer Hughes
1:00AM	5:00AM	Red Eye Radio
5:00AM	8:00AM	Brent Walters
8:00AM	11:00AM	Pat Thurston
11:00AM	2:00PM	Brian Copeland
2:00PM	5:00PM	Stacy Taylor
5:00PM	7:00PM	News Talk
7:00PM	10:00PM	Karel
10:00PM	12:00AM	Spencer Hughes

Bob Brinker Moneytalk Show Summary

Bob Brinker Moneytalk Show Review November 20, 2011
Our Bob Brinker Moneytalk Summary for November 20, 2011 is now available on our web site.  You can read it now at:

Recap of Moneytalk with Bob Brinker Host show

New Articles & Charts

• Nov 26 Gold Resistance and Support Lines NEW
• Nov. 11 Dow-Gold Ratio Rallies To Downtrending Resistance Line
• Nov. 11 PIIGS 10-year government bond spread versus the German Bund
• Nov. 7 Best Savings Account Rate Survey 
• Nov. 7 Best CD Rates Survey
  
• Nov. 2 New 3.06% Tax Deferred Rate For Low Risk Series I Bonds
• Oct 30 Did Jim Cramer Really Say Buy Netflix At $50 And Sell In High $100s?
• Oct 26 Mark Faber - "Gloom. Boom and Doom Report" Current Advice & S&P500 Trading Range

and have a Happy Thanksgiving!

.

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.

Moneytalk Summaries - November 6, 2011 Bob Brinker Market Outlook

Post and Read Comments

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


Support our Blog and Order TurboTax Here
---

Stagflation: Inflation at 3.8%; Core Inflation at 2.0%; GDP 1.0%

Stagflation is stagnant economic growth with inflation. With rates for safe investments in treasuries, CDs and GNMA near record lows, inflation is tough on savers as it erodes the value of their savings.  The Federal Reserve is trying to encourage savers to take more risk but they continue to pour money into safe investments.  As the returns at the bottom of the page show, TIPS (Treasury Inflation Protected Securities) have been the clear winner for safe, fixed income investments this year.

Thursday, September 15, 2011
Consumer Price Index for August 2011

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad- based, with continuing increases in the indexes for gasoline, food, shelter, and apparel. The gasoline index rose for the 12th time in the last 14 months and led to a 1.2 percent increase in the energy index, while the food index rose 0.5 percent, its largest increase since March.

All items less food and energy up 2.0% year-over-year.  You can read the full release at http://www.bls.gov/news.release/cpi.nr0.htm

Kirk's Explore Portfolio TIPS as of 09/14/11

CUSIP	Value	Paid	Buy Date	Interest	$ Gain	% Gain
912828PP9	$34,548	$30,846	3/24/2011	$173.86	$3,876	12.6%
912828MF4	$35,641	$29,847	1/11/2010	$631.65	$6,426	21.5%

Vanguard Funds YTD as of 09/14/11:
click the links for a current price quote and performance graphs

• GNMA Fund Investor shares, VFIIX, up 6.68% YTD
• Total Bond Mkt Index shares, VBMFX, up 6.33% YTD
• TIPS: Inflation-Protect Securities fund, VIPSX, up 11.20% YTD

  Learn the "Core and Explore" approach to investing
with "Kirk Lindstrom's Investment Letter"
Subscribe NOW and get the September 2011 Issue for FREE! !  
(Your 1 year, 12 issue subscription will start with next month's issue.)

Bob Brinker Moneytalk Summary for September 11, 2011

For a summary of this show, see:

• Moneytalk Summaries - September 11, 2011 MarketUpdate 

Key Topics include a Market Update, 9/11 Memorial, Gold, GNMA, Iraqi Dinar as an investment, Social Security and the Moneytalk Guest

Bob Brinker's Rules on Investing

Happy Labor Day Weekend!

We have TWO special treats for you this weekend:

1. Bob Brinker's Rules on Investing - Become Your Own Money Manger
   This is an article David Korn and I just finished that summarizes what we believe is the best of Brinker's advice on how to become your own personal finance manager.
   
   
2. FREE August 2011 Retirement Advisor Newsletter.
   
   • Visit our website and you can download the full issue FOR FREE.
   • No Strings.
   • No email addresses required.
   • Kirk's Two Investment Letters

Bob Brinker's Retirement Portfolio #3 vs Our The Retirement Advisor" Alternatives

David Korn and I started "The Retirement Advisor" in January 2007 partially because we believed people like Bob Brinker were recommending too much equity risk to their retired audience. Lets see how we've done.

Our "Balanced Model Portfolio #1" should be compared to Bob Brinker's "Balanced Model Portfolio #3" since both typically have 50% in equities.

Brinker's "balanced" Portfolio #3 on 1/1/07 was $197,794.

Brinker's "balanced" Portfolio #3 on 8/31/11 was $221,835, up 12.2%.

"The Retirement Advisor "balanced" Portfolio since 1/1/07 is up 19.1%, 57% higher than Brinker's balanced portfolio!

Even better, we thought there were "safer" ways to guard a portfolio against inflation (mostly using TIPS in place of equities) so we had two other "retirement portfolios" with less than 50% in equities.

Our two "safer portfolios are up 23.5% and 29.9% since 1/1/07! See Retirement Advisor Performance where we, unlike Brinker, are not afraid to show our returns by year.

The KEY for us is we believe people who have retired should look to maintain buying power over taking added risk to increase their standard of living. Brinker seems to target higher risk and volatility to advertise higher long term returns. We think OUR APPROACH IS BETTER but we know not all agree.

Make sure you read "Kirk's Two Investment Letters"

Bob Brinker Moneytalk Summary for August 28, 2011

This weekend KGO radio in San Francisco played spliced together parts of past Moneytalk shows with Bob Brinker answering general questions. Reports say KGO did not announce it was a "best of Bob Brinker show" like they do for the other shows they produce themselves.

This inspired us to write a New  article:

Brinker's Rules on Investing - Become Your Own Money Manger  

Feel free to add to that list here if you know of any "rules" we left off.

Bob Brinker Moneytalk Summary for August 21, 2011

This weekend Bob Brinker said the markets were "volatile."  I summarized the market volatility below.  Other than that, Brinker didn't have much to say about the stock market nor his bragging just weeks ago when the S&P500 was at 1290 and he was buying.   See:

August 6 Market Update and Bob Brinker's Recent Advice to not Sell

Bob Brinker Buy Levels in graphical form

All Time High Market Statistics 08/21/11

S&P500 Chart
Last Market High 10/11/07 at 1,576.09
Current S&P500 Price 1,123.53
Decline in Points = 452.56
Decline in percent = 28.7%

2011 Intraday "Correction" Statistics 08/21/11

S&P500 Chart
Recent Market High 05/02/11 at 1,370.58
Last Market low 08/08/11 at 1,119.28
Current S&P500 Price 1,123.53
Decline in Points = 247.05
Decline in percent = 18.0%
Max Decline = 18.3%

So, despite all the noise from Brinker about a 1030 buy for the market, he was fully invested at the very top at 1576, issued a "gift horse" buying opportunity in the mid 1400s and has been calling "buying opportunities" all along yet the market is still down 28.7% from four years ago and down 18% from his recently bragging about buying.  ALL WHILE FULLY INVESTED IN STOCKS SINCE 2003!

Brinker's guest was Bob Lutz, author of the book, “Car Guys v. Bean Counters: the Battle for the Soul of American Business"

In 2001, General Motors hired Lutz out of retirement with a mandate to save the company by making great cars again. As vice chairman, he launched a war against the penny-pinching number-crunchers who ran the company by the bottom line, and reinstated a focus on creativity, design, and cars and trucks that would satisfy GM customers.

.

Gold, I-Bonds, CDs & Savings Account Rates

Gold (chart and Quote) is going crazy! 

• Gold made an all time new high today of $1,818.90 per ounce!
• If you want to buy gold for your portfolio as an investment or to trade , my recommendation has been to buy the exchange traded fund, GLD (chart and quote).  This is the same advice Bob Brinker gives.  Most other methods to buy gold involve high expenses.
• Note: I own gold and silver coins and misc jewelery but currently don't hold GLD. 

Buy i-Bonds: New Series I Bond Rate:

• Now yielding a 100% safe 4.60%, I think Series I-Bonds are very attractive for cash in taxable accounts.  You can buy up to $10,000 per Social Security number.  $5,000 from TreasuryDirect.gov and $5,000 in paper form at your local bank.  This is the last year paper iBonds will be sold so get them while you can.
• The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate.  Series I Bonds Explained and 
• Note:  I own a lot of Series I Bonds, some with base rates as high as 3.00%!
  See Earning Rates for Older I-Bonds

Best CD and Savings Rates:   Best CD Rate Survey

Bob Brinker recommends CDs on his show for those who don't want to take any interest rate risk with GNMAs or any other bonds.  That is bonds will lose net asset value if interest rates go up. 

• I'd keep the term to 2 years or less.  Perhaps make a CD ladder with
• a 6-month, 1.05% CD at Nexity Bank
  
• a 1-yr, 1.40% CD at Nexity Bank and
  
• an 18-month, 1.32% CD at Aurora Bank  and
  
• a 2 year 1.45% CD at Aurora Bank

Kirk Lindstrom's Investment Letter

• Subscribe to my service NOW and get the August 2011 Issue for FREE! !  
  
• Get email alerts when I buy or sell securities for my explore portfolio
• "Auto Buy" and "Auto Sell" levels set ahead of time for target buy and sell levels for my securities.  This allows you to place "limit orders" with your broker in advance so you can go about your business.  I send email alerts after these execute as reminders.
  
• All questions about what I write answered by Email.  If what I write is not clear to you, just ask!
  

Your 1 year, 12 issue subscription will start with next month's issue.

Long Term Results that Speak for Themselves

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 200%
vs. the S&P500 UP only 21% vs. NASDAQ UP only 17% (All through 8/15/11) 
(More Info & Portfolio Returns)

"Highest CD RatesSurvey" 
as of August 15, 2010

Term	Highest Rate (APY)	Where? (Click link for Full Rate Sheets)
Vanguard Daily	0.02%	Vanguard Prime Money Market Fund
Vanguard Tax Exempt	0.05%	Vanguard Tax Exempt Money Market Fund
FDIC Daily Savings	1.15%	Best Savings Account Rate Survey
6 Month CD	1.05%	AloStar Bank merging into Nexity Bank
6 Mo US Treasury	0.07%	US Treasury Rate Quote
1 Year CD	1.40%	AloStar Bank merging into Nexity Bank
1 Yr US Treasury	0.10%	US Treasury Rate Quote
18 - Month CD	1.32%	Aurora Bank
2 Year CD	1.45%	Aurora Bank
3 Year CD	1.98%	Security Service CU
4 Year CD	2.07%	Melrose CU & 2.06% @ TAB Bank
5 Year CD	2.57%	Security Service CU
5 Yr US Treasury	0.95%	US Treasury Rate Quote
7 Year CD	3.30%	Security Service CU &  2.75% PenFed CU
10 Year CD	3.00%	Discover Bank
10 Yr US Treasury	2.25%	US Treasury Rate Quote
30 Yr US Treasury	3.73%	US Treasury Rate Quote

 

Marketimer Special Bulletin - A New Low in Marketing?

We are getting word that Bob Brinker sent out a "special bulletin" to subscribers of his "Marketimer" newsletter as well as those who don't subscribe.

A subscriber tells us that when they logged in they were told "there is no bulletin."

We got an email last night asking us "Does anyone know what Brinkers 8/9/11 bulletin said?" We assume this means news of the bulletin went out to non-subscribers and/or expired subscribers too.

Why send out a bulletin to paying customers then not offer them some insight into the market after it has fallen drastically since telling your audience at much higher levels that you were not selling?

"Of course, the market is now at 1292, a couple of percent higher than when that call came in at the end of June. So this is what happens. If that individual would have sold out at 1270 at that time, he would be faced now with either sitting it out or re-entering at a higher level."   July 31st Advice

We can see why you would advertise a special bulletin to those who did not renew your newsletter. You can hope they will pay again to renew just to see if you advised selling stocks after a huge decline.

Brinker sold AFTER the 1987 Bear Market decline so he has a history of selling near bottoms after big declines. See:

• Bob Brinker's Asset Allocation History.

What we don't understand is why he would risk reminding his current subscribers that he has had nothing to say since bragging about not selling with the S&P500 at 1292 less than two weeks ago? See:

• Moneytalk: August 6 Market Update - July 31st Advice

S&P500 with April 29, 2011 peak

S&P500, DOW & NASDAQ Since April 29, 2011 peak

Click images to see full size graphs

Market Update - Brinker said Remain Fully Invested

July 31, 2011 Moneytalk Update:

Bob Brinker remains fully invested. Last Sunday, July 31, 2011, Bob Brinker said it was amazing how the stock market had taken all of the debate over the debt ceiling in stride. He said the S&P 500 was "setting about 5% below its closing high for the year, which is truly amazing."

Of course, the market is now at 1292, a couple of percent higher than when that call came in at the end of June. So this is what happens. If that individual would have sold out at 1270 at that time, he would be faced now with either sitting it out or re-entering at a higher level.

Bob Brinker went on to say he was not part of the "panic crowd"

New article August 6 Market Update and Bob Brinker's Recent Advice to not Sell

August 6, 2011 Market Update:

S&P 500	Intraday		S&P 500	Closing
Date of last bull market high	05/02/11		Date of last all time high	04/29/11
Last Market High	1,370.58		Last Market High	1,363.61
Date of last low	08/05/11		Date of last low	08/05/11
Intraday Low	1,168.09		Closing Low	1,199.38
Decline in Points	202.49		Decline in Points	164.23
Decline in %	14.8%		Decline in %	12.0%

S&P500 YTD with my "auto buy" level shown with a dashed blue line

click image for full size graph

August 6 Market Update - July 31st Advice

August 8 Market Update:

A devilish decline in the S&P500 today, 6.66%!
Makes you wonder if it was on purpose.

Bob Brinker Moneytalk Summary for July 24, 2011

Sunday Bob Brinker started the show by saying "Our Toll Free Line 1-800-934-2221. That is our contact number."

Brinker then summarized the debt ceiling issue. Brinker said there is an interest payment due on August 4 that is large enough to put the Federal Government beyond the debt ceiling unless the government can find a legal way to extend the debt ceiling. He said on a "technical basis" we are beyond the debt ceiling but the Treasury has found various ways to extend this.

Brinker said the question we are debating is "how much government will Americans be willing to pay for?" He said the voters will have an opportunity to give their opinion on this issue in the next election.

Near the middle of the show Brinker made what I believe is an excellent point. That is .....

For more, read Moneytalk Show Review - July 24, 2011

Bob Brinker Fan Club Home Page

>>Bob Brinker's Asset Allocation History<< 

Best Savings Account Rates

This survey updated this weekend shows the highest savings account rates we can find with FDIC or NCUA (National Credit Union Administration) insurance.

Savings Account Rate Survey

Latest Survey - Last (June 2011) Survey 

Savings Account Rates (APY) as of July 16, 2011

1.15% at at CapitalOne through Costco
10% Interest Bonus on Interest earned & up to $60 if bought through Costco.com
InterstPlus Online Savings - $10,000 Minimum Balance for the bonus

1.15% at at Discover Bank
  Online Savings Account, No Monthly Fees, $500 Minimum Balance

1.10 % at CapitalOne
InterstPlus Online Savings - $1,000 Minimum Balance for this Rate

1.00 % at American Express Bank, FSB
Online Savings Account -No Monthly Fees, No Minimum Balance

1.10 % at Sallie Mae Bank
High Yield Savings Account, No Monthly Fees, No Minimum Balance
10% intrest rate bonus with "Upromise" match (see restrictions and rules to qualify)

1.05% at Nationwide Bank
Access your cash anytime via ATM, check or online, $1,000 Minimum Balance

1.04 % at Ally Bank
Online Savings Account - No minimum, no monthly fees.

1.01 % at EverBank
Yield PledgeSM Savings Account, $1500 Min Balance

1.00% at StarOne Credit Union
Money Market Savings Account, $50 minimum, no monthly fees.

1.00% at ING Direct
Orange Savings Account. No Fees. No Minimum Balance.

0.85 % at FNBO Direct
Online Savings Account. No Min Deposit. No Maintenance Fees.

0.80% at HSBC Direct
Online Savings Account. No Fees. $1 to open, $0.01 Minimum Balance 

WTDirect 0.76 %
Personal Savings Account, $10,000 minimum balance for this rate

If you are aware of any banks with better rates, please let me know so we can add them to the next survey. 

Old updates:

• 2011:  June 9, May 24   
  
• 2010:  Dec 10   Feb 9  
• 2009: Jan 13 Dec 3 Nov 24

Moneytalk Summary for July 17, 2011

Today Bob Brinker started the show out by saying his Moneytalk program is "the longest running investment broadcast in America and for that to you we say thank-you very much."

Debt Ceiling:

Brinker's first topic of the day was declaring that the debt ceiling must be increased. He says we have 14.4 trillion dollars  in national debt with well over one trillion dollars in annual treasury sales. He said some "so called presidential candidates out there stomping in Iowa" who are "calling for the US government not to raise the debt ceiling." Brinker said you can cross these off your list as "a person who is not qualified to run the country."

Who to Tax to Pay for Debt we have?
 
Brinker said he doesn't want to see tax rates go up on the middle class but he would not care if they raised the rates on top earners from 35% back to 39.6%.

For more, see Moneytalk Show Review: July 17, 2011 at the Bob Brinker Fan Club

Bob Brinker's GDP Growth Forecast

In the July 2011 Marketimer, Bob Brinker projects US GDP will grow by two to three percent in 2011.  He says he is "slightly more conservative than the revised Federal Reserve forecast of 2.7% to 2.9% growth in 2011."

Brinker seems to not understand what "central tendency" for GDP growth means.  "Central Tendency" is  2.7% to 2.9% but the full range of estimates that includes the three highest and three lowest estimates from FOMC board members is 2.5% to 3.0%.   

You can read the exactly what the FOMC forecasts in their June 22, 2011 release at Projections Materials (80 KB PDF)

Brinker's forecast for GDP growth matches that of the International Money Fund (IMF)

In the June 20, 2011 "Concluding Statement of the 2011 Article IV Mission to The United States of America," the IMF makes the following forecast for US GDP growth:

• 2011: 2.5 percent
• 2012: 2.7 percent
• 2013: 2.7 percent
• 2014: 2.9 percent
• 2015: 2.9 percent
• 2016: 2.8 percent

 See "IMF Economic Outlook for US GDP growth, Inflation, Unemployment &Current Account" and "MF Economic Outlook for the US"

 Also, by claiming he predicts "two to three percent" he'll be "correct" if growth comes in between 1.50% and 3.49% when rounded to a single digit. It is a nice trick perfected by the Wizard of Oz since 1.50% rounds up to 2% and 3.49% rounds down to 3% when you only use one digit of precision!

The Fed and the IMF are far more precise in their predictions since they are not trying to sell "market timing newsletters."

Moneytalk Show Review for June 5, 2011

Excerpts from Moneytalk Show Review for June 5, 2011:

EMPLOYMENT REPORT

Brinker Comment:  The big economic news this week was the employment report that came out on Friday morning.  Private payroll rose in May by 83,000 jobs.  However, government payrolls continue to shrink.  The number of government jobs lost in May was 29,000.  That means the total number of nonfarm payroll jobs net was 52,000.  The previous three months averaged gains of 220,000, so this is a significant decline. This month is a light number in a slow-growing economy.  Bob said if he had to point to the biggest problem the Obama administration has had now in its third year, it was not prioritizing the economy from the get go. Instead, they tried to do something about everything, such as health care.  They took the eye off the ball and now 2-1/2 years and they are still looking at numbers they cannot be happy with.  The national unemployment rate is 9.1% - just 1% below the peak!

GOLD

Caller:  This caller is worried about hyperinflation and is considering switching some of his Portfolio III which is held in a 403(b) plan into gold.  He contacted a company on TV to get some literature and since then has been bombarded with telephone calls, some with high pressure sales tactics trying to persuade him to invest half of his portfolio in gold.  Bob said there are a lot of gold sharks on the prowl right now, and if you want to implement a hedge in gold for your portfolio, use the GLD exchange traded fund for the investment.  That will get you into gold without mark-ups.  If you purchase gold coins, you can be paying up to 100% in mark-ups.  The profits are huge for the gold numismatic coin sellers. It is an unregulated market and that is one of the reasons there is so many sharks in this area.

EC:  The SPDR Gold Trust (GLD) is the biggest player in this area.  Other ETFs to look at if you are interested in gold include the iShares Gold Trust (IAU), Market Vectors Gold Miners ETF (GDX) and Market Vectors Junior Gold Miners ETF (GDXJ).

Charts and price quote for Silver ETF SLV

SLV Quotes and charts

BANK STOCKS

Caller: This caller wants to know why the government is not investigating the banks for what they did in connection with mortgages that led to the financial crises.  Bob said he thinks they are doing that and noted that the financial stocks have been under pressure lately.  Bob said the stories about banks not having the proper mortgage paperwork, having “robot-signers” and the like have legs.

Read the rest of the summary at  Moneytalk Show Review for June 5, 2011:

Bob Brinker and Jim Rogers Differing Opinion on US Treasuries

This weekend Moneytalk host Bob Brinker was asked if the US could default on its debt.  He told the caller they won't default because they won't be able to issue more debt and it would be all over and  "I will say this, if the United States defaults on its debt, I can't give you any reason why anybody in the world should lend a penny to the United States Treasury.....If they actually do that, I can't give you any reason why anybody should invest in a US Treasury." 

A caller asked Brinker if owning US Treasuries was save given the uncertainties with the debt ceiling.  Brinker said he personally doesn't own any US Treasury debt but he would not make a decision to sell or hold based on this debt ceiling issue.

Jim Rogers, the man who correctly predicted the boom in commodities and told Maria Bartiromo on TV years ago to buy farm land in the US, has a completely different view than Bob Brinker .  

From Here's why Jim Rogers says his timing is terrible

Published on Mon, May 23, 2011 at 13:00
Though now known primarily for his bullishness about commodities and China, he has had other investment passions. He was a champion of emerging markets in the 1980s, from Austria to Argentina to the Ivory Coast.
...
Rogers also timed the US property market almost perfectly convinced a bubble had built there. He and Parker sold their home on Riverside Drive, a deal for USD $16 million that closed in December 2007. He had bought the home in January 1977 for USD $1,806,000, at a time the city teetered on bankruptcy and was at its nadir. "They were giving things away," he recalls.
...
Rogers says he is currently long on commodities and currencies, having started to buy the US dollar in the form of Treasury bills in November 2009.
....
He believes the current correction in commodities is a short-term blip in their upward run. That may have years to continue, just as the 1987 crash was a brief respite in a decade-long bull run for stocks.

"What will probably happen is that I will sell my commodities, and they'll double again, then I'll sell them short, then they'll double again because all bubbles go up farther than you expect," he says. "And then, if I don`t get wiped out, they'll fall and I'll make some money."

I find Roger's honesty, compared to Brinker's radio informercial to promote "Moneytalk on Demand" and his "Marketimer" newsletter, refreshing.


Note, I am NOT saying if I agree or disagree with either Brinker or Roger's here.   I am just reporting facts.  You'll have to subscribe to one of my two newsletters to get my opinion on what to do with your fixed income, which depends on your risk tolerance.

BTW, you can save "Moneytalk On Demand" fees by downloading the show for free at the KGO radio archives.

1. Right click 1 - 2 p.m. then "Save Link as" somewhere on your hard drive
2. Right click 2 - 3 p.m. then "Save Link as" somewhere on your hard drive
3. Right click 3 - 4 p.m. then "Save Link as" somewhere on your hard drive

Then listen to it from your hard drive when you have time.

Brinker's guest was Andres Ross Sorkin, author of the book "Too Big to Fail."  The movie debuted on HBO which I recorded on my DVR but have not had time to watch yet.  If anyone would like to write a review of the movie, I'd be happy to publish it here.

Too Big to Fail

"Sorkin's prodigious reporting and lively writing put the reader in the room for some of the biggest-dollar conference calls in history. It's an entertaining book, brisk book...Sorkin skillfully captures the raucous enthusiasm and riotous greed that fueled this rational irrationality." -The New York Times Book Review

"Sorkin's densely detailed and astonishing narrative of the epic financial crisis of 2008 is an extraordinary achievement that will be hard to surpass as the definitive account...as a dramatic close-up, his book is hard to beat." -Financial Times