Billionaire Warren Buffett said Monday that the U.S. economy is essentially in a recession even if it hasn't met the technical definition of one yet. Buffett said in an interview with cable network CNBC the reports he gets from the retail businesses his holding company owns show a significant slowdown in purchases. The chairman and CEO of Omaha-based Berkshire Hathaway Inc. said millions of people have also lost equity in their homes because home prices have dropped. The technical definition of a recession most economists use is two consecutive quarters of negative growth in the nation's gross domestic product. "I would say, by any commonsense definition, we are in a recession," Buffett said on CNBC. But Buffett said it's not clear how far the recession will go because that is difficult to predict. More: http://news.yahoo.com/s/ap/20080303/ap_on_bi_ge/buffett_economy;_ylt=AjcoCfyZVJ7_KCbrVcwumFCs0NUE
I wish he had gone on to say that that's not such a bad thing. The system needs a good flushing, but instead we have a Fed that wants to avoid a recession at all costs.........even though the cure is worse than the disease. Oh yea, lets not forget a Congress that wants to bail out people so dumb that they A: signed a contract they DID understand but didn't care or B: signed a contract they DID NOT understand. Listening to the talking heads and politicians, you would think a comet was headed for Earth.
And C: like a lot of people I know; people have found an opportunity to escape personal responsibility, they are tired of making the most important payments when there are so many fun gadgets, trinkets and toys to buy instead.
Spot on! In spite of the genuine NEED for a cleansing recession, the Fed is likely to DESTROY the US in a blizzard of inflation and currency destruction. Why? 1. A recession AT ANY TIME is likely to be longer and more severe than can be turned around before the next election. (No politician wants to run for reelection during a time of economic distress.) 2. Bernanke promised he'd "play ball" when he pleaded and begged for the job. 3. An inflationary attempt to avert recession will likely POSTPONE the day of reckoning such that someone later gets the blame. (And as far as politicos are concerned, "a problem postponed is a problem solved".)
Whoa, now... way too much common sense for this forum. You're supposed to say that because most of the people in mortgage trouble are low-income, that they, by definition, don't have the mental capacity to understand complicated verbage such as "balloon payments," "amortization," "interest-only," "ARM." Uh, at least that's what the MSM and the democrats keep telling everyone. (Also, on a side note: why do these foreign posters, who contend that they have no interest in the U.S. and view us as irrelevant, continue to obsessively create threads about the U.S.? Very strange).
But Buffett said the U.S. economy will be fine in the long run. "Over time, my children are going to live better than I do, although they don't believe it," Buffett said. Translation: Buffett wants you to dump your shares, so he may buy them cheap. Be aware that large companies like Berkshire Hathaway take weeks or months to buy because of the massive amounts they manage, so recovery may take 6 months.
If one is allowed to make up their own definition of what a recession is, as Warren apparently thinks, then I say we are not in one.
Correct me if I'm wrong - but the government said that inflation last year was annualized at 2.6% If we look prior to the Boskin Comission and prior to the other "tweaks" of inflation and CPI - and go back to how inflation used to be counted back in the 1970s - THEN YES WE HAVE A RECESSION. By constantly changing CPI, we overestimate GDP. Luckily, we have a war going on and we have incarcerated a lot of people - more so than "unfree" countries like China and Iran - that helps with employment numbers as well. Look beyond the Orwellian government stats and trade accordingly. We are in some deep shit and it fascinates me how many people believe the government today. It could be snowing 3 feet deep, and if the government said the sky was clear, people would believe it. Reality always has a way of catching up - you can only fudge the numbers for so long.... I'm trading with that philosophy.
I laughed when cnbc kept reiterating buffets statement about recession.. CEO's make lousy economists.