Buffett says recession may be worse than feared

[NoGOPZone]

Source: Reuters via Yahoo! News.

Warren Buffett, the world's richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.


Buffett made his comments on CNBC television after his Berkshire Hathaway Inc (BRKa.N) (BRKb.N) agreed to invest $6.5 billion in the takeover of chewing gum maker Wm Wrigley Jr Co (WWY.N) by Mars Inc in a $23 billion transaction.

"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow.

"I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."



Read more: http://news.yahoo.com/s/nm/20080428/bs_nm/buffett_recession_dc

[mbperrin]

1. Aw, what the heck does HE know? He even thinks he oughta

pay more in taxes!

Thanks, Warren Buffett, for telling the truth! One of the very very few capitalists I admire.

[Stuart G]

12. Yes, a commidity in very short supply from the wealthy...the truth. nt

[customerserviceguy]

19. Sorry, but I gotta wonder

what his ulterior motive is, maybe he just wants to drive stock prices down to make a killing.

[Winterblues]

22. He has already made his "killing"

He is the richest man in the world. He doesn't have to scare anyone into anything. His assets continue to earn on a level hardly conceivable..

[customerserviceguy]

25. All I can say is

he had more than enough to live comfortably when he was the world's hundreth richest man. Something propelled him on to become the richest, maybe he's played the game so long he doesn't know when it's time to stop...

[Winterblues]

26. All his stuff is on auto-pilot. He doesn't have to do anything

His earning are still over five percent every year without him even getting out of bed. How much is five percent of forty billion anyway? I bet I could get by just fine with one tenth of a percent. :shrug:

[customerserviceguy]

29. I was just suggesting

that perhaps his money-grubbing ways were on autopilot, as well.

It's funny, around here, when a rich person says something we agree with, many rally to his defense, when he's just being his usual greedy self, we all have righteous indignation. It's not unlike the situation of lauding Catholic bishops when they make an antiwar statement, but condemn them when they make an antiabortion statement.

[JerseygirlCT]

31. Smarts, for one thing

Why should he stop doing what he does so well?

It also has afforded him the opportunity to speak out and be listened to on issues like our unfair tax system. And to give very generously to charity.

The reflexive dislike of anyone with money is silly, I think. He's one of the good guys.

[PassingFair]

27. When did he overtake Gates? n/t

[dysfunctional press]

32. last year or so...but there's a mexican guy that's going to pass him soon, anyway.

nt

[notesdev]

2. If people knew economics

then they wouldn't need to 'fear', as they'd be able to make sober, non-emotional calculations and come to their own conclusions.

As far as those of us who have been making such calculations, I doubt this "recession" will be worse than I expect. A rough analogy of what I expect is that the Great Depression will be to the depression we are entering, as World War I was to World War II.

After all, our economy is already Fascist, and that didn't happen until the NIRA during FDR's term.

[truedelphi]

7. You need to figure into your rhetoric the fact that for many people

The pension plans that are set up by their employer might capture as much as 9% of each of their paychecks - and the average person has no ability to influence how those pension plan funds are invested.

So there will be many people in this country who don't think that the "mortgage" crisis or the "this or that" crisis will afffect them, but they think that way only because they really don't know where those funds (That is, their life savings) are invested.

[notesdev]

8. Pensions are a generation-gap thing

I'm in my mid-30s, and I don't know anyone my age who expects anything along the lines of a pension or a return on their Social Security taxes. It's pretty much either cover your own ass for retirement, depend on your family, or die poor - I don't see any other realistic possibility. Then again, being on the losing end of various baby boomer Ponzi schemes, we GenXers tend to take a little more cynical view of things than the average person.

[truedelphi]

10. Believe me - I relate.

The Ponzi schemes set up by people my Baby Boomer age era cohorts are disgusting - and yet it is not possible to steer people out of them.

I had friends who refused to diversify during the dot com scam era - and they lost millions of dollars.

And friends who were heavily into the housing boom bubble who lost out just now.

[N4457S]

15. My Wife And I...

...just left Los Angeles for two jobs with a large urban university in the Bay Area, specifically because (1) they're both stable opportunities and (2) they offer a defined benefit pension plan plus the opportunity to have (each) and 403B and 457 plan.

No, we don't have kids. We can't possibly afford them.

I'm a seasoned unix admin and she's an Oracle DBA with PeopleSoft experience. We feel fortunate to be working at something we enjoy, even if we can't own a home right now.

[truedelphi]

17. Well housing prices are going down even in some Bay area neighborhoods

So congrats on the new jobs and the new life in The Bay Area.

If you decide to come up to Konocti for some rock n roll weekends, give me a PM and invite yourself over. (We are abt two and a half hours from the bay area.)

[kineneb]

24. then there are those who had illnesses

who no longer have any savings.

We had to cash out everything to get on CMSP/MediCal when Hubby's kidneys were failing. Now I am left with property, but no money, and no retirement except Hubby's Soc.Sec. benefit. So all the planning in the world will not help if one becomes very ill; the money goes away quickly.

[killbotfactory]

3. Everything in our society is effected by oil prices

They way it has been set up is that our food is fertilized with oil products. They are farmed with machines that burn gas or diesel. They are packaged with plastics derived from oil. They are shipped from hundreds or even thousands of miles away to your local store or restaurant, which requires you to travel by car which burns gas to get there.

Every time the price of oil goes up, everything along the chain gets effected, and the price of oil is not going down anytime soon.

[yardwork]

5. Oil powers the mills that make steel from ore.

Everything is made of steel - the trucks that move our products across the country, the big box stores and groceries that stock the products, the cars we drive to the stores to buy the products, the appliances we use to cook and refrigerate and freeze the products and clean the products from our clothes.

Heck, even the grocery carts are made from steel. Steel is heavily dependent on oil.

We're screwn.

[Dr.Phool]

6. Ever been in a steel mill?

Not fueled by oil. Basic iron making is fueled by coke. natural gas, and pressure. Then shipped to Basic Oxygen Furnaces, which use, oxygen.
Some furnaces use plain electricity to melt scrap.

[N4457S]

13. I Always Thought...

...it was coke and natural gas that fueled the mills.

[N4457S]

11. The Oil...

...is high because our currency isn't worth a damn, and our currency isn't worth a damn because of our misguided monetary policy.

I've seen this movie before, about thirty five years ago. Professor Plum did it in the library with a candlestick.

Actually, Professor Greenspan did it. He was trying to avoid a depression in the wake of 9/11. Now we're gonna have one anyway.

The only way to get things back under control is to have a 1980-1982 style recession (ala Paul Volcker) and raise the interest rates back to the point where saving makes sense again and the banks can build their reserves back up. We'll also have to have a change in tax policy to go with this...and all you high income folks can say goodbye to the Bush tax cuts. We can't afford them. We never really could.

Real estate and the auto industry are gonna take a huge kick in the shorts over this but there's no other way.

I suspect Bernanke will head for the door when his term is up, probably to be replaced with Bob Rubin no matter who is President, whether it's Obama, Hillary or McCain.

Rubin could clean it up but does he really want the job?

[davekriss]

20. Your history and analysis is a little off

Paul Volcker did indeed induce the recession of 1981-1982, but not to get "the interest rates back to the point where saving make sense again and the banks can build their reserves back up". Volcker's purpose was to squeeze inflation out of the economy by basically freezing economic activity. Inflation was at a record 13.7% at the start of the Reagan administration and crumpled to 3.2% by 1983. The cost of this correction was of course the worst recession since the Great Depression, with "official" unemployment (always understated) reaching 10.8% in 1982. But all Volcker was doing was correcting the economy crippled by Republicans.

What's amazing is how the right wrongly frames events of these times, even creating the egregiously wrong perception that somehow Republicans are better stewards of the economy. In 1975, during the Gerald Ford administration, unemployment peaked at 9% and inflation was running 9.1%, nearly as bad as Reagan's record. That's the economy Carter inherited from a Republican administration, and why Carter eventually appointed Volcker with expectations that Volcker would correct it.

[CC]

4. More severe than who expects since

most people I know are already hurting and worried it will be worse than the Depression on them.

[truedelphi]

9. Especially bad times for a Depresion - there are many places in the USA where Community is non-

Existant.

And laws are very strict now about things like tent cities.

I remember as a teenager in the mid-sixties how one of the older people in our Chicago neighborhood was walking me through the neighborhood and explaining which tracts of land (At that time occupied by home and apartment bldgs) had been wide open fields, used for tent cities during the nineteen thirties.

My local "housing association" would be fining anyone in a tent city $ 500 a day!

[Bigmack]

21. Like casualty reports....

"Casualties in the operation were light." Unless, of course, you were one of the casualties.

[RufusTFirefly]

14. Mix yourself a drink with an umbrella in it..

... and everything will be cool

[kestrel91316]

16. He's the smartest rich man out there, IMHO.

Ma Buffett didn't raise no fool for a son.

[unkachuck]

18. worn buffer....

"I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."

....you are truly a financial wizard!

[AnneD]

23. He IS an economic wizard because he has the whole picture...

He is an old school capitalist. He knows that if the average person has a good job and a good paycheck, they are apt to spend and his profits will increase.

Take Henry Ford. In the Depression, he was hiring and paying good money to the workers. He let them buy autos on an installment plan and shortened the work week. Let's see... good salary, time off, affordable cars. And his business grows. Buffett makes the same connections. I know of few wealthy men that say he should pay more taxes than his secretary or gives more of his wealth away.

Too bad there aren't more folks like him-he gives capitalism a good name.

[yellowcanine]

28. Doesn't he know that Obama's former pastor said mean things? Why is he reporting this when there

are so many important stories out there like whether or not Obama wears a flag pin or puts his hand over his heart during the national anthem?

[davsand]

30. "...recession may be worse than feared." Nah, I've been pretty worried about it.

"Worse than feared" my ass. Most folks who work for a living got "worried" a couple of years ago. Anybody that pays bills or buys groceries on a budget got REALLY f*cking worried about it a long time ago...


:puke:


Laura

[mdmc]

33. Buffet is in the know