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Old 05-24-2008, 02:24 PM
 
1,851 posts, read 3,173,261 times
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Thoughts. Is the US Recession going to be "deeper and longer" than we are being led to believe? Will this particular recession cause Americans to embrace a new way of life, or resist it?

Here's a short read on what the "Richest Man in the World" believes:

US Recession (broken link)

Others have posted ideas on how Americans, our way of life, will change over the next decade, but, to hear "gloom" come from a well-respected investor might cause some to take a much needed pause and rethink the future of American Consumerism and wonder how American Businesses will operate in the future.
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Old 05-24-2008, 02:40 PM
 
Location: WA
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Warren is a master at valuing and buying enterprises to turn a profit but I'm not sure his economic outlook is the best. Although he is right that derivatives’ trading is a problem it seems that high energy costs will be the real drag on the economy.
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Old 05-24-2008, 03:16 PM
 
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Famed investor Jim Rogers (and my personal favourite) has been saying much the same thing:

Jim Rogers: 'It's going to be much worse' - Jan. 31, 2008
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Old 05-24-2008, 03:16 PM
 
Location: Charlotte, NC (in my mind)
7,946 posts, read 16,080,534 times
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This recession/depression is going to change the course of American history as it has not changed since the first Great Depression and World War II. If this were the 1930s, the improvement we just saw would be similar to the improvement in early 1930. The real ***** hasn't hit the fan yet but is about to. Prepare for 30% unemployment, mass civil unrest, and an unimaginable change in lifestyle. We are about to enter into the darkest time in American history. It ticks me off how most people continue commuting 50 miles in SUVs and think they have it bad if they have to miss an episode of American Idol. They are totally oblivious to the coming storm which is dangerous because this will be an excellent opportunity for a dictator to rise, promising Americans a return to their comfortable suburban lifestyle.
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Old 05-24-2008, 04:11 PM
 
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The only part of Buffets's report I disagree with is the term recession. I think it will be a long, deep DEPRESSION. All the writing is on the wall people. The end of times as we know it are fast upon us.
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Old 05-24-2008, 04:53 PM
 
8,317 posts, read 27,606,690 times
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Quote:
Originally Posted by bchris02 View Post
This recession/depression is going to change the course of American history as it has not changed since the first Great Depression and World War II. If this were the 1930s, the improvement we just saw would be similar to the improvement in early 1930. The real ***** hasn't hit the fan yet but is about to. Prepare for 30% unemployment, mass civil unrest, and an unimaginable change in lifestyle. We are about to enter into the darkest time in American history. It ticks me off how most people continue commuting 50 miles in SUVs and think they have it bad if they have to miss an episode of American Idol. They are totally oblivious to the coming storm which is dangerous because this will be an excellent opportunity for a dictator to rise, promising Americans a return to their comfortable suburban lifestyle.
I'm widely pilloried for stating pretty much the same thing over on the Colorado forum, but I pretty much agree with what is quoted above. Warren Buffett is nobody's fool--he's been around a long time. He knows when bad decisions are being made by consumers, business, and government--and that sure is hell is a target-rich environment now. I think Warren Buffett "gets it," and I greatly admire the fact that he--among very few in any kind of leadership position--has the guts to say that we are in trouble.

The US faces three very devastating problems, and nothing constructive is being done to solve any of them. In fact, what is now happening is making them worse:

First, the world in general, and the US in particular, is running out of cheap oil. That's troublesome for everybody, but it is devastating for the US because our whole stupid highway-dependent suburban lifestyle is completely dependent on cheap oil. Other countries began long ago figuring out how to live with expensive oil--we haven't. Conservation is going to have to be a religion in this country. Simply wishing for some "magic bullet" of cheap energy supplies suddenly appearing or some neat technology to bail us out, nice as those things might be, won't be enough--if it happens at all.

Second, we have buried ourselves in debt, both as individuals and as a nation. Most of that debt went to finance overconsumption or investment in non-productive assets like residential real estate. In order to solve the energy problem, we are going to need massive public and private investment in new infrastructure (and NOT more highways, for God's sake!) and revived industrial capability. We don't have the money to do it. We have got to cut consumption, start saving some money, and start investing in things that actually produce something.

Third, and maybe most depressing, we have an American public that has its collective head so far up its *** that it can't figure out a) that we are in a horrible, dangerous economic/social/political mess; and b) that is going to take a lot of pain and a diminished material standard of living (maybe lasting decades) to get us out of it. We have wasted, borrowed, and spent ourselves into second-class nation status and there isn't one presidential candidate (or virtually any other political or business leader) that is willing to stand up, admit that, and tell the American people, "No more--we have to change course, and it's going to hurt." They can't say that because the American people are too spoiled to hear the truth--they want "Mommy" to fix it for them. Won't happen. I'm afraid the American public is going to have to literally get hit right between the eyes with a 2x4 to get it. I hope we can actually get back up after the thumping we're going to take.

I honestly believe we are at the brink of World War III--not a shooting war yet, but at a point where countries are posturing themselves over ever-more scarce resources. This is not unlike Germany and Japan, both facing resource-scarcity, preparing themselves in the mid-1930's for the war they knew they would have to launch. In that war, much of America would have liked to have slept through it until Japan attacked us at Pearl Harbor and people woke up to the fact that the bad guys were after us, and that we could lose. I fear the wake-up call may not come in time this go-around, or Americans--in their now fat consume-without-thought coma won't wake up at all.

Last edited by jazzlover; 05-24-2008 at 05:09 PM..
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Old 05-24-2008, 05:14 PM
 
Location: Los Angeles Area
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Quote:
I'm afraid the American public is going to have to literally get hit right between the eyes with a 2x4 to get it.
Many already have been and others will continue to get "hit right between the eyes" then their lender cuts their HELOC, gas prices continue to go up etc.


Regardless, I wouldn't listen to what Warren has to say on this too much. Not because he is stupid, but because he is an investor. He knows very well his comments effect the very markets he makes money in.
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Old 05-24-2008, 06:25 PM
 
1,851 posts, read 3,173,261 times
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Quote:
Originally Posted by travelmate38 View Post
The only part of Buffets's report I disagree with is the term recession. I think it will be a long, deep DEPRESSION. All the writing is on the wall people. The end of times as we know it are fast upon us.
I won't be too surprised if we go into a depression either. The Fed Rate is too low, and I'm not confident that Bernanke knows what he's doing. He seems a little lost, IMO.

I am now pretty confident that Greenspan cut too much from the rates, and the full consequences of doing so have yet to be felt.


Jazzlover...I must admit your assesment is accurate in a lot of ways. I'll have to digest much of what you wrote though before I agree with every "prediction" you've made. Americans are spoiled, and, we are the world's largest consumers. This will definitely need to change!
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Old 05-24-2008, 09:18 PM
 
1,831 posts, read 5,002,556 times
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No, I don't agree. Now that pessimism has reached it's peak (afterall ... the Oracle has spoken)

To me, that's a sign that we've turned a corner ....

Time for me to start buying stocks and real estate again.

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Old 05-24-2008, 11:18 PM
 
Location: Charlotte, NC (in my mind)
7,946 posts, read 16,080,534 times
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Quote:
Originally Posted by jazzlover View Post

Third, and maybe most depressing, we have an American public that has its collective head so far up its *** that it can't figure out a) that we are in a horrible, dangerous economic/social/political mess; and b) that is going to take a lot of pain and a diminished material standard of living (maybe lasting decades) to get us out of it. We have wasted, borrowed, and spent ourselves into second-class nation status and there isn't one presidential candidate (or virtually any other political or business leader) that is willing to stand up, admit that, and tell the American people, "No more--we have to change course, and it's going to hurt." They can't say that because the American people are too spoiled to hear the truth--they want "Mommy" to fix it for them. Won't happen. I'm afraid the American public is going to have to literally get hit right between the eyes with a 2x4 to get it. I hope we can actually get back up after the thumping we're going to take.

I honestly believe we are at the brink of World War III--not a shooting war yet, but at a point where countries are posturing themselves over ever-more scarce resources. This is not unlike Germany and Japan, both facing resource-scarcity, preparing themselves in the mid-1930's for the war they knew they would have to launch. In that war, much of America would have liked to have slept through it until Japan attacked us at Pearl Harbor and people woke up to the fact that the bad guys were after us, and that we could lose. I fear the wake-up call may not come in time this go-around, or Americans--in their now fat consume-without-thought coma won't wake up at all.
I totally agree. I have trouble sleeping at night over this. I try to bring up this subject and nobody wants to hear it. Everybody says "quit being so negative." Well sometimes the truth isn't sunshine and rainbows, and nobody in this country wants to hear it. All the non-issues that people care about today - universal healthcare, gay marriage, abortion, they will be nothing soon. We aren't far from a time when most Americans are going to have to worry about where their next meal will come from or where their next drink of water will flow from. We've polluted our streams and rivers so it wont be as easy as it used to be when the tapwater turns off. I predict the US population to fall to somewhere between 50-100 million by 2020, due to starvation, civil unrest, and war.

Hopefully I am wrong and these oil prices are just a bubble, but everything points to the peak oil theory. Why doesn't anybody in this country want to hear the truth?
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