Buffett says recession may be worse than feared

Certainly I have a lot of respect for this man. I listened to him this morning and I must confess that I listened to him closely and he never said this was going to a long a deep recession. He did think we were in a recession and when asked how long it will be he said he something like he had a better track record of picking a good valued company to buy rather than economic forecasting.

BTW why is the stock market going up is the past several session. I think now the Dow is only down like 1.9% YTD. Does anyone have a quote for Citibank. Everyone was asking how my Citibank investment was doing so I'd like to get back to them on that.Thanks, in advance.

Then buy that sweet place in Brasil and ride it out Steve. I would stick with BA though. Gays still sometimes get hassled in the outer regions. And be ready to always discuss economics/Regan/how bad the US screwed South America. Actually, it might be your spiritual home now that I think about it! Endless debate where no one wins and then one day you just fall over and die.

Wow! Where's left field something just came out of there like a bat out of hell.

eah, if by BA you mean Buenos Aires, it is, unfortunately, in Argentina, not Brazil.

One more insult gone awry.

Wow--really Steve...I guess, uh, you didn't consider that I was suggesting BA instead of Brasil?

I am serious--South America - a place you're interested in - might be just the palce for your nature.

"Then buy that sweet place in Brasil and ride it out Steve. I would stick with BA though. Gays still sometimes get hassled in the outer regions."

It's clear what you meant, eah: buy in Brazil, but stick to BA, because gays get hassled in the outer regions.

As opposed to: buy in Argentina, but stick to BA, because gays get hassled in the outer regions.

I've been to Latin America many times. No desire to go back. I much prefer Europe, and in Asia, Istanbul.

Steve...you implied above that I had some challenges with geography..I was clarifying. But, ok, you can still be the smartest person in the room and assume I know nothing about South America.

If you don't like Latin America why have you said you'd buy in Brasil?

stocks, not properties.

and Brazil, not Argentina.

Wow this is awesome. Last week I sounded like a Nobel Prize winner and now I sound like MR Buffett. If I'm wrong in my predictions then i'll be in great company.

NEW YORK - 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. agreed to invest $6.5 billion in the takeover of chewing gum maker Wm. Wrigley Jr. Co. 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.

Makes me think of certain bloggers... doom and gloom sells..

http://home.comcast.net/~munsrat/doomandgloom.htm

Stocks, really...interesting. Why don't we blog on that? Focus on the positive and opportunity. Doom and gloom is only interesting for so long.

Warren Buffett reminds you of a blogger? Really?

Yeah--just like a blogger, Steve. That's exactly what I meant. I was commenting on your obsessive need to start threads. I love Buffett and he is right. But did he say naything new? Most of us agree we're in a recession. And that it is unique and likely nasty. But did Buffet sound hysterical? Is he running the entire TV circuit yelling about it like you do on here?

Investors don't usually freak.

There's something to self fulfilling prophecies. If you go around preaching gloom and doom, and the the sky is falling...the sky is falling, it might just come crashing down on you when you least expect it. Kind of a variation of what goes around, comes around.

This recession will be long and deep------ AS IT WAS WRITTEN "SO IT SHALL BE DONE!"

Thes idiot traders don't they know we are heading for a depression this stock market should be crashing

Yeah, I don't know why I get out of bed in the morning. Oh I just remembered... to read StreetEasy before I take my hypertension medication.

the stock market is a forward indicator, spunkster. It did tank, if you recall.

I still don't think there's a recession, but if Warren says so....

http://www.cnn.com/2008/TECH/04/24/close.call.ap/index.html

steve--think the same might happen because of the meltdown in RE?

traders I talk to are expecting a rally after fed meeting and told me that once 2YR rose above 2%, they all started buying. That explains the runup from 2-3 weeks ago. Its teetering out now they say, but if fed removes considerable risk phrase from statement, they may take this market higher. Until economic data points otherwise, recession fears wont be priced in to stocks. Thing is, it wont be sharp spikes, I thnk it will be slow and steady and longer than people think

Be smart and prepare and you will be ok.

Buffet also saidthis morning, rather explicitly, that he doesn't predict the stock market. He wasn't even asked about the real estate market on CNBC. He did say he enjoys candy. Draw your own conclusions.

It amazes me how people can actually dismiss the thoughts of one of the most successful investors in the world. The man is in his 80's and has been actively involved in the markets for about 60 years and still people can't handle the truth. How arrogant or perhaps foolish can someone be. Just listen and you just might learn something. This man has no reason to talk the markets down. I'm sure he has cash and if things look good he would buy a company like he did today, however his current holdings will take a hit if his predictions also hold true.

yes, verain, as usual, a useful post.

We're not talking about the stock market. "He wasn't even asked about the real estate market on CNBC."

We're talking about a recession.

And you believe that a man worth $62 billion dollars saying he enjoys candy. What he said was that the business he financed was easier to understand than a bank's balance sheet.

Draw your own conclusions.

Actually, property in BA remains a good investment. It's cheap. No leverage. Tourism is up. Economy's strong. Great food.
Oh, and they don't waste time complaining "how bad the US screwed South America". Boludo...

I'm not sure what the purpose of this thread was about a recession unless it had something to do with real estate. So I go back to Buffett this morning - said NOTHING with respect to real estate.

He did say he liked candy. And that he understood consumer products better than the financial service companies. Although it is true that Buffett is and has historically been heavy in branded consumer products - KO, G, See's Candy's, Dairy Queen, now Mars / WWY - he has also been a heavy investor in financial services, from his investment in Salomon Bros. to his investments and current 100% ownership in primary insurers like Geico and reinsurers. Certainly he hasn't been a proponent of exotic derivatives which can represent a lot of what is involved in some of the financial companies today including BSC.

So DCO, no one is ignoring Buffett, but what his statements about a recession have to do with the price of your NYC real estate or monthly rental is hard to figure.

I think the word is spelled, "Voludo."

But I could be wrong.

verain- If you can't figure out how a recession will hurt NYC real estate prices than there is no way that I or anyone else could possibly explain this complex formula to you.

dco, verain is a self-declared "expert" at corporate finance who is certain that technology causes real estate prices to rise in Manhattan. He also convinced that the financial leverage on a company's balance sheet is the same as the leverage used in purchasing residential real estate, fully ignoring the fact that the debt on a company's balance sheet produces income, whereas mortgage debt produces an expense.

Therefore, you should believe everything he says.

Yes, Warren said NOTHING about real estate (caps are verain's). He did say he didn't understand bank balance sheets, though, which is where all that real estate is booked, isn't it? This from a man who not only seems to understand a broad range of consumer industries, but also insurance and reinsurance, which are some of the most complicated industries out there.

But they can rely on actuarial calculations, which banks can't because they don't know how their CDO's will perform.

But of course he really only sells Dairy Queen. Unless you look at his past statements about how is real-estate brokerage business is doing right now.

dco. you don't agree that a recession can hit the country in a completely asymmetrical way? Maybe that's what verain is referring to? A recession in Detroit does not hurt me. A recession in the tech industry in California does not hurt me. A biotech blow up in Cambridge, MA does not hurt me. Maybe that is how a recession can skip over our RE values.

yes, eah, the recession will completely skip Wall Street, bounce right over it.

Good analysis!

umm.... "A recession in Detroit does not hurt me. A recession in the tech industry in California does not hurt me. A biotech blow up in Cambridge, MA does not hurt me."

how about the worst credit crisis in Wall Street in half a century? no?

Of course not!!! Wall St. has nothing to do with Manhattan real estate silly. LMAO.

The lemmings are getting tastier and tastier!

eah. How about a recession on wall street? ~30% nyc income, plus each wall street job supports multiple other jobs.

Ah, keep the fear coming kids. Having been in banking you see this fairly regularly. Will some young bankers who overstretched find themselves screwed. Yep. But, for the large majority of us we're fine. By the time a recession hits the lives of most bankers (and i mean bankers..not analysts or back office people) it is in ways that are fairly minor. More inconvenience than anything. There is always money to be made. Always.

Actually, MMAfia, no. I am not worried. At all. I love the way you shriek in your posts though. Like a little girl. how about the worst credit crisis in Wall Street in half a century? no? lololol
Did you piss your frilly panties?

If someone made a one off investment in 2005/2006 maybe they will find themselves hurt but for those of us who invested over the years and in multiple areas this is just great table conversation.

"I love the way you shriek in your posts though. Like a little girl. how about the worst credit crisis in Wall Street in half a century? no? lololol
Did you piss your frilly panties?"

nice- textbook response from the overleveraged homedebtor / soon-to-be ramen eating realtor people.

Here's another good one: "By the time a recession hits the lives of most bankers (and i mean bankers..not analysts or back office people) it is in ways that are fairly minor."

ROTFLOL! missed the boat again i see. how about if I tell you that most bankers right now are very nervous about this credit crisis at the moment? they do not consider it as "fairly minor".

Yes, and these are not backoffice or analysts- there are PM, high level trader and brokers. Go ahead, ask them if they think what is going on in the financial system "fairly minor".

Lemming.

(:~

eah, it's not about the "hurt" of anyone, or everyone. It's what will happen to prices when people must sell. Most people will lose money on paper from the peak, but still make money in the end.

What we're talking about is price, not profit.

MMAfia, whats funny is that I get the feeling that you are the lemming on these boards, trolling around gloating over any negative news you can find while you sit in your 4th floor walkup in jersey city dreaming of the day that you might be able to afford that 1BR in manhattan. Who knows, that day may come in a few years, or maybe never. All the while, people like eah are enjoying their properties.

Also, I don't get the feeling that you have any connection or insight whatsoever into the minds or mood of "PMs, high level traders, and brokers" that you talk about, aside from what you read in the papers.

OK MMAfia, you're very right. We're all crapping ourselves. We've saved no money and all purchased homes last year with ARMs. The whole world is going to go into a Depression. Jesus Christ. What to do!? My friend, I would say you're the chicken little lemming.

In terms of "ask them" I don't "ask them" anything..when we drink and dine we typically discuss it. When there is a gnarly deal or a toxic trade we laugh, have another drink, secretly hope to god it doesnt unwind to our desk and move on. There really is little fear. It's not a great time but no one is going under. Not even close.

Ramen Noodles, though, might remind me of myt college days. I suppose I will have to get another bong too.

"Did you piss your frilly panties?"

We need a quote of the day section.

steve: it's boludo, as in che boludo! http://www.amazon.com/Che-Boludo-Gringos-understanding-Argentines/dp/9872173125

Amazing discussion.

The states doesn't have a real economy anymore than Argentina did in the 90's. Take away spending via 1) the housing ATM (MEW debt) and 2) our bogus "war on terror" (government debt), and there's been NO growth now for several years. Only reason system hasn't crashed yet is cause we own the fed. Or the fed owns us, or...

Talk to people in the street and there's a fair amount of pain out there. Truth is, we're due for much more pain. Will it come full gale? Who knows...

Heaven help us all.