Warren Buffett Says U.S. Economy Will Be `Shambles' in 2009, Likely `Well Beyond'

[marmar]

Buffett Says Economy Will Be ‘In Shambles’ for 2009 (Update1)
By Rick Levinson


Feb. 28 (Bloomberg) -- Billionaire Warren Buffett said the economy will be “in shambles” for the rest of this year as financial firms take losses tied to reckless loans made during the housing boom.

The Standard & Poor’s 500 Index will probably gain in three quarters of the next 44 years, just as it did in the period since Buffett took over Berkshire Hathaway Inc. in 1965, he said today in his annual letter to the company’s shareholders.

While Buffett and business partner Charlie Munger can’t predict how stocks will perform in 2009, they’re certain “that the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond,” he wrote.

Gross domestic product shrank at a 6.2 percent annual pace from October through December, the most since 1982, the Commerce Department said yesterday in Washington. Buffett said the consequences of the U.S. housing bubble are now “reverberating through every corner of our economy.”

Home purchases should involve an “honest-to-God down payment of at least 10 percent,” Buffett said. “Putting people into homes, though a desirable goal, shouldn’t be our country’s primary objective.”

Buffett endorsed efforts by the U.S. government to prevent the failure of financial firms including Bear Stearns Cos., which was sold to JPMorgan Chase & Co. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a1L50vuf_HiM&refer=home

[MrPerson]

1. Wasting away again in Margaritaville.....

[aquart]

2. How about building decent, affordable homes

instead of ridiculous McMansions?

[Sarah Ibarruri]

5. I think that would be a great idea - and do away with the suburbs that cause people

to have to commute hours to work in the downtowns.

[cherokeeprogressive]

11. So what then, move them all closer to downtown and house them in "hives"?

Screw that.

[Sarah Ibarruri]

15. I think I might have to send you one or two of the million websites about SPRAWL

and dead suburbs.

[northernlights]

23. suburbs would be just fine...with

decent commuter transportation into town.

[Sarah Ibarruri]

3. Question - since nothing is being purchased, not even from China, what will happen to outsourcing?

Will it continue once the U.S. gets back on its feet?

[mwooldri]

16. The outsourcing will just get outsourced again.

Who's next?

[Sarah Ibarruri]

19. I understand our stim package includes tax reductions for manufacturers who

manufacture in the U.S.

[Catch22Dem]

4. I agree w/ him on those home purchases. Folks should have to put down 10% on their McMansions

in order to get a loan for them.

[cherokeeprogressive]

7. I'm sure you understand that he meant ALL home purchases.

And I agree with him.

[Catch22Dem]

13. Yeah, that's exactly my point

Those of us who are responsible enough to save what it takes to get into a home that is practical for our needs and budget, are suffering in an economy partly brought on by douchebags who got in WAY over their heads buying homes that made no sense.

[JerseygirlCT]

24. And the brokers who pushed them to do so with

"sure thing" mortgages, and the bankers who gave them loans they couldn't possibly secure... there's guilt aplenty to go around, I'm afraid.

I thought a bank wouldn't look twice at you unless you were providing at least 20% down... my how times have changed.

Heck, even Habitat for Humanity looks for "sweat equity".

[Catch22Dem]

26. You're right!

Lot's of blame to go around. I just wish more people, even despite the predatory lending, were smarter about what they were getting into.

[JerseygirlCT]

27. Me too.

I'm just naturally cautious about these things. And in CT, it's customary to have an atty, as well, and a friend did that for us.

We put 20% down. I couldn't have thought about a house if we hadn't saved enough for that. I couldn't sleep at night for the worrying!

[Deja Q]

6. Having jobs that keep the economy going seems more important than shoving all of us into mccmansions

:shrug:

Education at a reasonable price ($50k for education to land a job making... $15/hr would otherwise be laughable, if not impossible to pay back.)

[Mike 03]

8. He ought to be ashamed of himself for urging Americans to buy stocks back in Autumn of 2008.

I wasn't the only person here who posted that he was out of his fucking mind.

[chill_wind]

22. One of the things I won't forget about him, ever, is

that he was all over CNBC during the bailout crisis calling for Obama to keep Goldman Sachs Paulson on for a couple more years.

[Mike 03]

9. I hate to rub it in, but he was such an irresponsible dumbass, it's unbelievable.

He was one of the people WARNING about the hazard of derivatives in the first place. For him to get screwed by derivatives is just... I can't find the words.

[tyne]

10. I wish he would have said

20%.

[stray cat]

12. For a cheap one bedroom condo in NY thats 60,000 someone has to have saved

Most of us on the coasts will be lucky to have 30,000 or 10% down.

[ogneopasno]

14. Gosh, I wonder if buying up manufacturing companies and shutting them down might have had anything

to do with it too, Warren...

[SoCalDem]

17. Shame on them all for not having a thorough audit in September

and taking all those losses THEN, and firing & indicting the CEOs and having a giant perp-walk..

As long as the ones who DID it are still there, the "public" will have no faith in any of it.. THAT's what's holding people back,,

The crooks are still running the place..

Like our former president once said.. "Fool me once, can't get fooled again" :rofl:

[glitch]

18. What I don't get is why more people don't get this. nt

[TWiley]

20. Well, Buffett was wrong last year also.

There is probably and equal possibility that the stock market will recover in the 3rd quarter.

Quote: can’t predict how stocks will perform in 2009, they’re certain “that the economy will be in shambles throughout 2009 End Quote

Remember, the stock market is forward looking. Recovery will start in stocks before it does in the broader economy.

[lib2DaBone]

21. Anyone know tax law? Are we still rewarding companies to go offshore?

..it would seem a simple thing to end the tax breaks for companies going offshore? Strike the old laws in addition to making new ones. (I know..common sense and CONgress are oxymorons)

Also end the tax breaks for companies who claim their headquarters are a mailbox in the Cayman Islands.. then pay no tax.

[GeorgeGist]

25. As one of the economy's most well known owners ...

Warren should express some shame at his destructive greed.