No Double Dip Says Buffett

Buffet hasn't exactly been batting 1000 these last few years..

How about when Richard Berner says it? More or less credible?

http://www.bloomberg.com/news/2010-09-13/u-s-accelerates-in-2011-as-demise-of-consumer-is-exaggerated.html

Who?

Fuzzy Bear

Thanks for the links. Not trying to be a smart ass but when Berner bases his predictions on the falling percentage of debt to income, you have to wonder -- couldn't it be that disposable income is going down instead of debt dropping? Its incomplete info.

malthus, if incomes were going down and debt was flat wouldn't the % of debt to income increase? The only way the % falls is for debt levels to fall or incomes to rise.

Right.

And what would you have him say, JM? That business sucks and we're all going to sink?

What he said is true - things are better than they were. How could they not be?

Not sure I understand the question steve. I don't know Mr. Buffet so I don't have the power to have him say anything. Merely posting an alternative view to all of the fear mongering, world is ending, Charlotte will be the next capital of finance crowd.

Also Mr. jhx, this wasn't in reference to "things are better than they were" but rather the likelihood of a double dip recession. He is seeing growth in his core holdings which, may be telling us something don't you think?

Well I don't think Buffett can "Rule Out" anything - that would be like ordering the waves to stop, no?

But, Mr. J.M., he did say that things are better than they were a year to 18 months ago. Please read all the way to the bottom of articles before you post them.

His "core holdings" are insurance and reinsurance companies. I don't know if they're doing better because there are fewer hurricanes, or that fewer people are driving so there are fewer accidents.

Do you know?

"But, Mr. J.M., he did say that things are better than they were a year to 18 months ago. Please read all the way to the bottom of articles before you post them."

There is a lot of information in that article that I didn't mention, because it wasn't the point of my post. The title in the OP did not specifically say "Things are better than 18 months ago" because I didn't feel it was all that relevant of a discussion. Apparently you do, so you can start your own thread if you like.

"His "core holdings" are insurance and reinsurance companies"

and railroads, retail / investment banks. None of which could possibly be a barometer for the overall economy right?

"I don't know if they're doing better because there are fewer hurricanes, or that fewer people are driving so there are fewer accidents."

Or attracting a higher number of new customers than they had planned? You seem to have your P&L mixed up steve, have a quick look at the difference between revenue and profitability, it may clear up some confusion for ya.

Charlie Munger on US Economy: Pain Not Over

Munger, Berkshire's vice chairman, said the job market is likely to stay "lousy" for an extended period, and that he doesn't see anything that would prompt employers to hire in the immediate future.

Munger also warned that the pain is not over in many sectors, citing timber and commercial real estate as two sectors where there is "more pain to come."

http://www.cnbc.com/id/39180384

JuiceMan owned again.

Insurance and reinsurance fund Berkshire Hathaway, JM. You really need to understand how insurance works to understand why, though, and that is obviously beyond your ability.

And one difference between "revenue" and "profitability" is that the former is a "thing," and the latter is a "state." You mean revenue, income, and profit?

It's not I who has my "P&L mixed up," JM.

recession has a specific meaning--generally understood as two quarters in a row of economic contraction. i agree with buffett that we won't have a double dip in the sense of further economic contraction. but it takes moderately robust economic growth--not simply economic stagnation--to improve the employment picture and the economic well-being of individuals and families. and without a more aggressive fiscal policy, which will be absolutely impossible if republicans do well in november, it's just hard to see how we are going to experience robust growth any time soon.

in other words, we seem to be looking at an L recovery, not a V recovery.

This will disappoint a number of people here:

Warren Buffett to CNBC: "We're Still In a Recession"

http://www.cnbc.com/id/39320992

Poor JuiceMan, proved the tool again!

What did Buffett say about Gold?

Don't know, but George Soros called it an unsustainable bubble.

how could gold be a bubble if nobody believes in it?

Poor steve. Still waiting for his 50% off. It will happen next year right? After the bonus season?

Juicy, we're down 25%-30% already. I always said it would be a slow process. In fact, it happened faster than I thought.

Bonus season? What bonus season?

Buffet says one fking long recession.

Bubble as in, nyc re is still a bubble. Smaller yes. Still bubble.

"Juicy, we're down 25%-30% already."

I don't know about that steve. Based on recent posts on this site from people looking to buy, prices seem to be hovering around peak levels. That would be disastrous for your ego wouldn't it steve?

Wouldn't affect me at all, Juicy, or my "ego," but I don't take anonymous "buyers" at their word. The stats - also dubious - show 25% to 30% down from peak.

The discrepancy with market rents remains wide. When it's cheaper to own than to rent - which it should be, given the greater risk involved - then we'll have reached equilibrium. Only a fool would long pay more for the privilege of owning a greater risk.

I dont think owning should be cheaper to rent because, in theory at least, you should get all your money back when you sell. In essence having lived rent free.

Marco, weren't you wildly bearish up until recently?

Well, marco, you do demonstrate your lack of understanding of how buying property works. Based on what you say, no matter what price you buy at you come out in the end, because "you get your money back when you sell."

Maybe you do, maybe you don't. There's no guarantee.

What you do when you buy is you capitalize a stream of expected rent payments. That is, you pay them up front. Why would you want to prepay an expense - rent - at a price higher than the actual rent? And then risk losing some of that prepayment in devalued property, transaction costs, repair costs, etc.?

Makes no sense.

"you should get all your money back when you sell. In essence having lived rent free."

steve still thinks his landlord will give him money back after renting for 15 years.

"but I don't take anonymous "buyers" at their word"

Why would anonymous buyers make this stuff up? Funny thing is, if they were anonymous bears, steve would lap it up.

juiceman severely housed

we laughed at buffet's clarification
aint no double dip cuz the first recession lives on!!

sorta like yesterdays news--no double dip cuz the last one ended a year ago...so it will really just be two separate recessions

and the fed has become a disinflation fighter

and this economy is off to the races

its all about recovery rates and probability..if you rent, you know for a fact the money is gone..if you buy and hold for long enough, the probability that that you get your money back increases with time ..in my opinion. obviously if you bought between 2007 and 2009, you may never see day light again...but buying right now....might not be so bad.

100% salvage value on a depreciated asset is nice...real nice

Or...

If you rent, you know that at the end you walk away free and clear.

If you buy?

After over a decade of being a “naive” Berkshire “partner/shareholder” who always defended you, I have sold every single share I ever owned as I sadly witnessed you violate far too many of your own guidelines in the Berkshire Owner’s Manual. This was a tiny dollar amount by your standards, but at one time more than 50% of my family’s net worth.

You may be interested in knowing more details as to why I sold my shares, as the majority of letters that continue to pour in to Kiewit Plaza surely share a similar tone to this one. You and Charlie “Fear” Munger continue to misrepresent history, and that is why the public’s rage at you and at Wall Street grows with every passing day. And that level of anger will remain elevated and growing and directed at the miscreants known as the “bailout sympathizers” for as long as the unemployment rate does. We could and should have wiped out the “too big to fail” equity holders before we wiped out the tax payer. But that would have meant Berkshire’s precious book value would have taken a major hit, and so you used up all of a billionaire’s political capital and traded the ethics and morals you seemingly worked a lifetime to build, to prevent that from happening. Was that trade a good one?

And I have a big problem with that sir. When a select group of super-wealthy, elite, politically connected insiders are allowed to transgress a nation’s various moral, securities, and bankruptcy laws under the falsely dramatized “emergency” threat and guise of an Economic Pearl Harbor or a new Adolph Hitler (have you scolded FearMunger yet for his Antoinette moment to the University of Michigan kids?) to deplete its national treasury, and gets away with it....well then it is time for the “great unwashed” to be very concerned. And the guilty bailout offenders are very right to be worried of the social chaos that FearMunger warns us about, if WE are unable to “suck it up and cope!”

In perpetrating the greatest illegal transfer of wealth in the history of the world, you have lowered the capitalistic bar to an all-time historic low. This much I know: Despite your charitable efforts and investing acumen, history will not be kind to you for these repugnant actions, and your true legacy is:THE FATHER OF ALL MORAL HAZARD AND THE U.S. ZOMBIE ECONOMY

You will probably not be around to see it devolve into this state first hand, but I can assure you that as the lead architect of the immoral bailouts, you have sent me and my kids and the rest of us right into SQUANDERVILLE hell. Shame on your bailouts, shame on you for remaining silent while we failed in crafting effective financial reform, and shame on your world-class hypocrisy. There is so much more to life than the compounded annual growth rate of your book value!

source: That was the exact letter "JL", an asset manager sent to Warren Buffett

"steve still thinks his landlord will give him money back after renting for 15 years."

I do? Good of you to inform me of what my thoughts are, JuiceMan.

I had paid you a compliment - saying that even YOU understood the risk in buying property. Apparently you don't.

"Why would anonymous buyers make this stuff up?"

Uhm - because they're not "buyers"?

OMG, JuiceMan, you get sillier by the day.

except we were facing an armageddon. unintended consequences may have put money in banker pockets but the govt earned return on much of the bailout monies (aig obvious exception) and there are no breadlines or the 20% plus unemployment rates that most economists predicted if the bailout did not happen. and the lack of effective financial reform cannot be laid at buffet's feet.

jl sounds like a speechwriter for sarah palin.

Seem like buyers to me. Steve, why don't you have a look at the inventory thread and challenge those folks who are just banging their head against the wall for the hell of it.

What, JuiceMan? I have no idea what you're talking about? People are banging their heads against the wall for what? Not jumping at the opportunity to overpay?

Is that what you're saying?

only thing is, you have to be in the market before it actually does move...otherwise ur paying up.

marco, buying in 1998 was a great idea. Buying in 2008, not so much.

Maybe those are the people the Juice is referring to as banging their heads against the wall - the ones who bought in 2008.

Buffett Says `Pain Will Be Felt for a Long Time' Amid Recovery

http://www.bloomberg.com/news/2010-10-12/buffett-says-pain-will-be-felt-for-a-long-time-amid-recovery.html

One more JuiceMan theory down the drain.

Meaning that Juicy's batting a thousand!

Those Obama borrow and spend policies don't seem to be working very well . . .

Poor steve, still trying to make 1 + 1 = 3