Buffett Says Economy Will Be "˜In Shambles"™ for 2009

[nodog]

Buffett Says Economy Will Be "˜In Shambles"™ for 2009 (Update1)

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By Rick Levinson
Feb. 28 (Bloomberg) -- Billionaire Warren Buffett said the economy will be "œin shambles"� for the rest of this year as financial firms take losses tied to reckless loans made during the housing boom.
The Standard & Poor"™s 500 Index will probably gain in three-quarters of the next 44 years, just as it did in the period since Buffett took over Berkshire Hathaway Inc. in 1965, he said today in his annual letter to the company"™s shareholders.
While Buffett and business partner Charlie Munger can"™t predict how stocks will perform in 2009, they"™re certain "œthat the economy will be in shambles throughout 2009 - and, for that matter, probably well beyond,"� he wrote.
Gross domestic product shrank at a 6.2 percent annual pace from October through December, the most since 1982, the Commerce Department said yesterday in Washington. Buffett said the consequences of the U.S. housing bubble are now "œreverberating through every corner of our economy."�
Home purchases should involve an "œhonest-to-God down payment of at least 10 percent,"� Buffett said. "œPutting people into homes, though a desirable goal, shouldn"™t be our country"™s primary objective."�
Buffett endorsed efforts by the U.S. government to prevent the failure of financial firms including Bear Stearns Cos., which was sold to JPMorgan Chase & Co.

"˜Immediate Action"™
"œWhatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown,"� Buffett said. "œHad that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat."�
Buffett"™s letter accompanied the release of Berkshire"™s fourth-quarter results, in which net income fell 96 percent to $117 million on losses from derivative bets tied to stock markets. Berkshire shares have fallen 44 percent in the past year as the value of the firm"™s top stock holdings dropped and losses increased on the derivatives.
By the fourth quarter of last year, "œthe credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country,"� Buffett said. "œA freefall in business activity ensued, accelerating at a pace that I have never before witnessed. The U.S. - and much of the world - became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear."�
To contact the reporter on this story: Rick Levinson in New York at rlevinson22@bloomberg.net.
Last Updated: February 28, 2009 11:18 EST

Hear what you want to here in this quote. What I here is nothing is going to change, the principle players have no desire to make things right.

They allwere thinking "it's just a bad dream and any second now they'll wake up", Seems they're starting to realize they were living in their "dream world" and are now waking up to thereality they created by going around all druged up on gold dust.I'll tell you just how bad this "dream" is, the 4th largest law firm just layed off/let go 190 lawyers and 250 paralegals. Not that it means much more than it already did but Lawyers are the worst at paying off their student loans and in a climate like the one Buffet iswaking uptoo the "times" just took a sizable hit I'd say.

Buffet sounds scared to me, means a lot of people are about to be tossed in the ditch.

[Fieldmouse]

He forgot to mention that his boy in the White House isn't capable of leading or making sound business decisions.

[bergall]

ORIGINAL: Fieldmouse

He forgot to mention that his boy in the White House isn't capable of leading or making sound business decisions.

I take no small measure of mean-spirited pleasure when I hear the negative effects of
Obamacide on his idiot supporters. They voted for change...well....here's a whole
trash-bag full of it. Their wails are like music to my overtaxed and overstressed ears.

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[Fieldmouse]

but your very patriotic in Biden's eyes.

[nodog]

ORIGINAL: bergall

I take no small measure of mean-spirited pleasure when I hear the negative effects of
Obamacide on his idiot supporters. They voted for change...well....here's a whole
trash-bag full of it. Their wails are like music to my overtaxed and overstressed ears.

----------------------------------

"Obamacide" is just the mixture of the crap that's been dumped in the pot for many years. I don't even think he's the final product, just a taste to see what else the dish needs.

It was a shock to me to see that lawyers are being let go, I'm guessing people don't even have enough cash to sue somebody, that's saying something. It's not an economic indicator I've ever read about historically speaking except as far as they being enemy one in any uprising.

Those 190 and the others maybe kicking themselves for being dumped without realizing it could be their salvation. The first to go at the hands of an angry mob is the law, clergy and politicians round out the top 3.[8D]

As for myself I'm finding the guys who designed the Sebring convertable.just kidding.

[Doe Dumper]

With the GE sweetheart deal Buffet got.. heres to hoping that ends up being trash as well... Immelt/OBama/Buffet....partnersto the end... Green energy anyone?

[stealthycat II]

Home purchases should involve an "œhonest-to-God down payment of at least 10 percent,"� Buffett said. "œPutting people into homes, though a desirable goal, shouldn"™t be our country"™s primary objective."�

Obama says that banks HAVE to increasing lending and credit to people so people will spend more money and thus we'll all thrive and the world will be at peace

What the hell does Buffet know about things like this anyway? I'm following the guy who was born to polygamous parents and abandoned as a child, he'll lead us to the land of milk and honey ..........

[DougMD]

Buffet won't directly say stocks will continue to tank, because his word alone can drive the market. But read between the lines here. The stock market is pricing in a rebound in the second half of 2009 that will not come. Bad data, such as the GDP figures for Q4 '08has ACCELERATED downward much lower than anticipated, so how can you call a bottom withno signs of a turnaround? Buffet is indeed scared, and rightly so. The bad economycould last well into or beyond 2010 despite Obama's mega trillion pork stimulus and bank re-bailouts.

[Fieldmouse]

ORIGINAL: stealthycat II

Obama says that banks HAVE to increasing lending and credit to people so people will spend more money and thus we'll all thrive and the world will be at peace

What the hell does Buffet know about things like this anyway? I'm following the guy who was born to polygamous parents and abandoned as a child, he'll lead us to the land of milk and honey ..........

Worst than that stealthy, Obama says Fannie and Freddie should continue exactly what they did to drive us into this hole by continuing lending people who can't afford it money. If that wasn't bad enough, he also want the courts to be allowed to rewrite loan terms. Your the idiot now for not buying twice the house you bought because your stuck yet your neighbor has options.

[Centauri]

It looks like we have to world war our way out of this. Look out Iran, here we come!