From a live interview on CNBC today:
"Buffett says he's not concerned at all about deflation, but does think inflation will be a problem in coming years".Also,
Buffett at 9:14 on the video:"I don't worry about deflation at all . . . we won't see deflation in any significant amount in your lifetime".
"[W]e are monetizing the debt. We are using printed paper to pay our government."Hm . . . I guess Buffett is one of Paul Krugman's "bullies":
"All of this raises the question: If inflation isn’t a real risk, why all the claims that it is?
Well, as you may have noticed, economists sometimes disagree. And big disagreements are especially likely in weird times like the present, when many of the normal rules no longer apply.
But it’s hard to escape the sense that the current inflation fear-mongering is partly political, coming largely from economists who had no problem with deficits caused by tax cuts but suddenly became fiscal scolds when the government started spending money to rescue the economy. And their goal seems to be to bully the Obama administration into abandoning those rescue efforts."
Pull up a chair . . .
26 comments:
got popcorn?
Contrarian isn't going to be happy having both the fed and Buffet tell him deflation isn't going to happen in one day.
Yes, the Fed seems to think that the Fed has things under control. Lots of "price stability" in their statement. The markets don't seem to like the statement though. Had been up all day and are now falling.
Wonder what they didn't like?
I don't think it was anything they didn't like just nothing particularly exciting. The fed basically just took a pass on this meeting. They more or less said we will keep doing exactly what we have been doing. With no real guidance on how long things will be this way...
People may have also wanted more certainty about rates. I don't know if you followed the 10 year, but the yield moved bu 10 basis points almost as soon as the meeting ended.
Whatever happened to the guy that used to always end his comments with "got popcorn?" I think he posted under "neil"?
Neil lives in Cali & has his own blog as well.
You'll see his name pop up from time to time on various house-bubble blogs.
"tiredbubblewatcher said...
Whatever happened to the guy that used to always end his comments with "got popcorn?" I think he posted under "neil"?
The guy you were thinking about was Neil/AKA WANNABUY. He ran away once he realized Arlington wasnt going to fall into the "blood in the streets/40% down category" as he predicted in the early going.
I should say, he eventually atoned for that by admitting on his own blog that he was very wrong about Arlington. He eventually admitted 40% down just wasnt in the cards. He didnt say that here because of the near certain insults to be hurled from lance. However, he did admit as much so I give him some credit.
Contrarian,
I haven't followed all investments by Buffett but his investment in Goldman Sachs must have given him a large profit already. I think eventually GE will work out too. Once the dust settles over the next few years, Buffett should still come out strong.
It doesn't particularly matter what the stock of Goldman Sachs or GE does - Buffett locked in 10% on the warrants he bought. They have to pay him I think 120% of his cost to buy them back. He managed to leverage his reputation to get an awesome deal in both of those cases.
contrarian said: "I like Buffett, but...He's getting on in his years and has not made many good investment decisions lately."
Well, it's obvious that you don't follow or know much about Berkshire Hathaway. Preferreds and fixed incomes in Wrigley, GE, GS, TIF, Harley, Swiss RE, Dow, Vulcan, USG (some with equity kickers) in the last 9 months. Brk stands do very well with these investments. And let's not forget about the zero cost strike repricing on the puts he wrote - cost free float for years.
contrarian said: "So... do you "Buy America," or is the economy in shambles?"
It seems you lack a basic understanding of premise of value investing. Maybe a quote from Buffett himself might shed some light on the two statements and why they are not at odds as you believe them to be:
"You pay a very high price in the stock market for a cheery consensus."
Need an extra clue? If you pay a very high price for a cheery concensus on wall st., what price do you pay (for securities) when nobody is cheery, such as when the economy is "in shambles?"
"White supremacist Hal Turner arrested, charged"
http://tinyurl.com/ncnax2
Could this be an attempt by the Government to prevent him from releasing the REAL stress test results?
I wouldn't rule it out!
"You don't even make any sense. :-)"
I see that smile.
JF may have said it poorly but his point is a good one.
In today's economic climate, someone with cash might find a few ten-baggers. There is a discount for the overall bad news, market psychology.
That said, there were companies that fell large percentages in 2000-2001 and are lower today.
Other companies rebounded strongly and made fortunes for wise or lucky investors. Robert has been making that point with his optimistic statements on RE.
"contrarian said...
Buffett says the same thing I said - that it will be many years before we see inflation:"
Buffet also said we wont see deflation in any significant amount in your lifetime.
Buffett is hugely long bonds and cash, his portfolio would perform very, very well if there was to be deflation (all those insurance contracts are like senior bonds). On the other hand he is very, very exposed to high inflation. His public commentary is meant to shift policy makers to benefit him and him alone, anyone else is incidental.
Unfortunately the FED and our government MUST inflate our way out of this mess.
The problem is that when you aim for 10% inflation, you often get 100%, and when you aim higher - like 30% - which we need to do - you might get 1000%.
Another salvaged deletion:
"contrarian said...
p.s.,
And since Buffett was right when it came to Buy America, S&P options, ConocoPhillips, etc., etc., etc., he MUST be right when it comes to inflation/deflation, huh?
It's DEFLATION from here on out, until - banks have collapsed, derivatives are out of style, homes are a place to live instead of invest, oil has collapsed, and the stock markets have collapsed - then inflation will take over.
6/24/09 10:44 PM"
The Anonymous,
How bored are you?
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