Monday, November 14, 2011

Warren Buffett on What is Going on in the Economy

Warren Buffett was interviewed this morning by a crew from CNBC. In one segment he stopped most of his Howdy Doody antics and actually made some very important observations with regard to the eurozone crisis and the US economy (In another segment, he had CNBC anchors guessing what new large stock position he had bought. His clue: "Harold". Turned out the stock was IBM and the clue had to do with the IBM computer nicknamed, "Hal")

One thing you should keep in mind,though, while watching the clip below, is that Buffett was in full oligarch mode during the interview. He stated that the Ben Bernanke and Hank Paulson bailout of US banks was a great thing, and longed for the same type financial leader to save the EZ. He doesn't, in other words, discuss the economic distortions such bailouts cause, the inflationary ramifications of the bailouts, etc. That said, Buffett's insights about the EZ are detailed and help make the crisis much more understandable.

As far as the economy, Buffett says that only 5 out of his 70 businesses held through Berkshire Hathaway are performing poorly and that many of the others will show record earnings this year. Bottom line, outside of residential housing, Buffett sees the economy as much stronger than what you would expect by just reading MSM headlines about the economy or reading Keynesian analysis about the economy. This coincides with my view that Ben Bernanke printing is resulting in the development of a manipulated boom. So far its me, Jamie Dimon and Warren Buffett, who see things improving. Do you really need any other opinions on the matter?

1 comment:



    "Composite leading indicators (CLIs) for September 2011 continue pointing to a slowdown in economic activity in most OECD countries and major non-member economies. Compared to last month’s assessment, the CLIs point more strongly to slowdowns in all major economies. In Japan, Russia and the United States the CLIs point to slowdowns in growth towards long term trends. In Canada, France, Germany, Italy, the United Kingdom, Brazil, China, India and the Euro area, the CLIs point to economic activity falling below long term trend.",3746,en_2649_34349_49024420_1_1_1_1,00.html