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Warren Buffett Says We're Already In A Recession


houstonmacbro

Economic Poll  

36 members have voted

  1. 1. What are your thoughts on whether we're in an economic recession

    • Yes, I agree with Buffett ... we're already in a recession
      18
    • No, we're a long way off from a recession
      6
    • Not in a recession ... yet ... but we're headed into one
      9
    • Not sure
      3


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I'm feeling good enough to hardwood my stairs next week!

This "Recession" is nothing compared to the .com and Enron bust.

And Stagflation is a mindset that can be beat. Start spending, y'all!

I think the country is dipping a toe in it. But you can't tell that in Houston, spending is going full force in the areas I frequent. Keep it up H-town!!!!

We continue to remodel, landscape, dine out and support the local. economy.

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Guest danax

Wall St. already believes it, that's a lot of the reason why the market's been down this year, and is heading lower for sure.

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Wall St. already believes it, that's a lot of the reason why the market's been down this year, and is heading lower for sure.

My retirement portfolio has lost 5% this year already. The bad part is that when I looked at my elections, NONE of them (bonds included) are doing well any more. That is down from 22% returns from some of the choices I had last year.

Dammit!

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Recession has no common sense definition. The definition is actually very strict: two consecutive quarters of negative GDP growth. I think that it is more likely than not that we will get a quarter of negative growth or possibly two or more non-consecutive quarters with intermitent quarters of very slow or no growth. A technical recession is unlikely, IMO.

Another thing to bear in mind is that there are regions of the country that are already in a recessionary slump. Other parts of the country, like Texas, aren't in bad shape.

And on top of that, the push/pull of housing vs. exports means that labor markets may not be in all that bad of a shape as compared to something even like the 2000/2001 non-recession (which, btw has since been revised into technical oblivion).

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Always on the Late Show, Hey TJ "Dallas" and "Knots Landing" are in Re-runs Too!

I don't like Barnake at all. What do I give a hill a beans what Warren Buffett and his Billions have to say, HE ain't hurtin' for money. I understand that Greenspan is gone, but he does pop his head up from time to time. I can't blame him for being out of the game, too much pressure, and I think Andrea Mitchell told him to spend a little more time with her.

I think only certain businesses are going into a recession, not the economy as a whole. I.E. car business, housing market. Mark, you know as well as I that the oil business is BOOMING!!!

Coog, you got a link for Greenspan ?

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If we are in a common sense recession, then why is unemployment practically non-existant?

Probably helps to know what definition the US uses to define "employed".

Who is counted as employed?

Not all of the wide range of job situations in the American economy fit neatly into a given category. For example, people are considered employed if they did any work at all for pay or profit during the survey week. This includes all part-time and temporary work, as well as regular full-time year-round employment. Persons also are counted as employed if they have a job at which they did not work during the survey week because they were:

On vacation;

Ill;

Experiencing child-care problems;

Taking care of some other family or personal obligation;

On maternity or paternity leave;

Involved in an industrial dispute; or

Prevented from working by bad weather.

So, if a person works ONE HOUR in a week at minimum wage, the government says you are employed. By way of contrast, France considers one unemployed if they have worked a total of less than 78 hours in the previous 4 weeks. In actuality, the US unemployment rate is a farce. We condescendingly deride France's unemployment rate, when the reality is that we are giving a false rate to make ourselves look and feel better.

Additionally, the US does not count those who do not fit their strict definition of who is actively seeking employment. This results in an artificially low unemployment rate as well, since those who are so discouraged from not finding a job that they stop looking are not counted. In hard economic times, these discouraged workers soar, yet the rate remains unchanged. In 2004, during our supposedly great economy, the percentage of EMPLOYED Americans was 86.3%, while France's was 86.7%. Yet, France's official unemployment rate was 7.4% to our 4.6%.

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Come on Red. Forget the stats, becuase we all know they are lies and can be manipulated.

How about your world? During the .com/Enron bust I knew tons of people out of work. Bodies were everywhere.

I can't think of a single person looking right now.

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Greenspan is the one who told everyone to get Adjustable Rate Mortgages before he started raising interest rates again. Afterr that, he's not really a good voice to listen to.

Greenspan's speech about the ARM was meant for those who planned to stay in their homes for a 2 to 3 year only period, if they were to stay longer then they were to refi to a fixed rate mortgage. An ARM was never meant for subprime lending advances. The ARM drastically changes for those who can't make or haven't made on time payments as the risk goes up for the lender with these people. Greenspan isn't the cause for the housing ARM decline. Over zealous lenders and mortgage brokers are to blame for giving credit challenged people, who will sign ANYTHING without reading it to get into a house, loans without explaining the rules to them fully.

Oh, btw, the .com bust forced me to leave Austin because all the Dellionaires cashed in their stocks and moved on, Austin's economy dried up for a time, but has regained within the last couple of years, and the family and I are thinking about going back in a few years.

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yea, yea, yea, but even an ill-conceived stat, as long as its used consistenty, shows trends... and today's trend is unemployment is virtually zero.

Let me ask this then. Did the government change the math in the last few years as to HOW they come up with the % of the unempoyment rate, or is it the same equation they have been using for the last 50 years ?

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yea, yea, yea, but even an ill-conceived stat, as long as its used consistenty, shows trends... and today's trend is unemployment is virtually zero.

Not true. You missed the part about the discouraged workers not being counted at all. This group grows drastically during recessionary times (as does part-timers), causing the unemployment rate to actually drop while the true number of unemployed goes up. The reality is that the unemployment rate is virtually useless, as a 5% rate during a down economy and a 5% rate during a good economy can be millions of workers different.

Of course, this means little unless you are one of the unemployed, or the wrong guy (or gal) is president. THEN, you'll pay attention to the definition.

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Not true. You missed the part about the discouraged workers not being counted at all. This group grows drastically during recessionary times (as does part-timers), causing the unemployment rate to actually drop while the true number of unemployed goes up.

According to the BLS, the workforce participation rate has only been fluctuating within a span of 1.1% since 1989. And it is for all intents and purposes unchanged since 2003.

While I'm not about to claim that your criticism of the employment measurement methodology is entirely without merit, it isn't exactly a slam dunk, either. A lot of the effect that you describe, as evident from this table chronicling the previous 13 months, is among younger workers. This reflects that they tend to drop out of the labor force and go to college when employment opportunities dry up.

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the push/pull of housing vs. exports means that labor markets may not be in all that bad of a shape

I know that the weak dollar is good for anyone in the export business, but I've seen no evidence to suggest that manufacturing jobs have ratcheted up due to increased exports. And certainly not to the extent that would offset job losses in the construction and banking industry tied to the mortgage issue.

Perhaps I'm way off base, but as a percentage of the economy, how much manufacturing do we do for export anymore that could absorb job loss in other sectors?

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Let me ask this then. Did the government change the math in the last few years as to HOW they come up with the % of the unempoyment rate, or is it the same equation they have been using for the last 50 years ?

Let me ask you something.

Do you believe that we have an unemployment problem in the United States today?

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You know, I was tempted to look at the 14% drop in the stock market, the drop in housing prices and sales, drops in construction, the mortgage crisis, skyrocketing foreclosures, the rising inflation rate, the rising unemployment rate, and the plummetting dollar, and think, hey, maybe Warren Buffet is right. But, then I saw saw some dude on an internet forum say that the economy was great, and decided, what the hell does Warren Buffet know anyway?

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I know that the weak dollar is good for anyone in the export business, but I've seen no evidence to suggest that manufacturing jobs have ratcheted up due to increased exports. And certainly not to the extent that would offset job losses in the construction and banking industry tied to the mortgage issue.

Perhaps I'm way off base, but as a percentage of the economy, how much manufacturing do we do for export anymore that could absorb job loss in other sectors?

I've queried a lot of very competent people what they believe to be the core comparative advantages where international trade is concerned. The responses I've come up with pretty consistently talk about: 1) ultra-high-tech (i.e. not just computer assembly), 2) aerospace, 3) biotech/pharma, 4) oil & gas (upstream and downstream), and 5) agriculture.

Don't get me wrong, there's still a trade deficit (and I tend to believe that that is the long-term natural state for the U.S.), but it has declined 27% in two years, and that is contributing significantly to the net change in GDP. The back-story is that while the rate of import growth has pretty much leveled off, export growth is driving the trend. Its pretty hard to prove up the employment impacts, though, on account of that the success of these industries have secondary impacts within other sectors of the economy that exceed the direct impacts.

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Let me ask you something.

Do you believe that we have an unemployment problem in the United States today?

Answer my question first, and I will GLADLY answer yours, please.

Red, I think Warren is feeling a recession, and those that are also playing the stockmarket heavily, unless they are knee deep in oil and gas or pharmacutical stocks. Didn't anybody learn anything from the .com bust that you should not rely so much on tech stocks ? Wasn't it Enron's "broadband" stock futures that became their Achilles heel ?

Banks are hurting because they didn't learn from their S&L mishaps of the 90's. You don't give credit challenged people money they can't pay back. Flippers of houses are getting just as bad as the bad credit folks because alot of them have decided to just walk away from a house "mid-construction", or have finished and can't afford the 2, 3 or 4 mortgages.

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I know that the weak dollar is good for anyone in the export business, but I've seen no evidence to suggest that manufacturing jobs have ratcheted up due to increased exports. And certainly not to the extent that would offset job losses in the construction and banking industry tied to the mortgage issue.

Perhaps I'm way off base, but as a percentage of the economy, how much manufacturing do we do for export anymore that could absorb job loss in other sectors?

Manufacturing jobs? What manufacturing jobs? They don't call it the rust belt for nothing. We lost our manufacturing base to the Chinese and Japanese, years ago. That's why some think that the high cost of oil won't affect our economy as much as in the 1970's (because we don't have to haul around parts and pieces of everything we make and sell in this country, burning up oil, driving up prices, on everything.) It's all done overseas now, limiting the benefit we get from the dollar decline.

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