Buffet Says US Economy Close to Recession

[Jeff In Milwaukee]

Source: Reuters

NEW YORK (Reuters) - Billionaire investor Warren Buffett said the United States could slip into a recession if the jobless rate increases, he told CNBC television on Tuesday.

In a series of interviews throughout the day, Buffett, who built Berkshire Hathaway (BRKa.N: Quote, Profile, Research) into a $205 billion conglomerate, gave a sobering view of the economy's prospects, including the assessment that holiday retail sales were not looking good despite a post-Thanksgiving holiday burst.

Consumer spending is seen as a key buffer preventing a weaker U.S. economy from sliding into recession as the housing market continues its free-fall and the banking sector remains challenged by a credit crisis.

"If unemployment picks up then we could be in for a recession," Buffett said.


Read more: http://www.reuters.com/article/bankingFinancial/idUSN1155908120071212

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In related news, H&R Block announced 2nd Quarter losses of a half billion (that's "Billion" with a "B" there, kids) dollars due to its Option One subprime mortage business, which it can seem to give away these days. And they were just a minor player in the subprime market.

In other bad news (if you're a Republican candidate), a CNN poll out this week shows that economic issues are the top concern of voters as we go into 2008. Now that we've made it illegal for two guys to kiss in public, people seem to have other priorities -- like keeping the jobs and their homes.

Oops..

[MikeNearMcChord]

1. Close? I'd say we are in it.

[Jeff In Milwaukee]

3. There's the technical, economists' definition of a recession

which IIRC is two months of negative growth in the GDP (a real economist is welcome to correct me on that one). But I know what you mean -- the last seven years have been a nightmare for the middle class and working poor. First the "real" recession and then the "phoney" recovery.

[papau]

15. 2 qtrs - 6 months - is WSJ, OFFICIAL CALL is 5 guys looking at 4 trend lines.

[Jeff In Milwaukee]

27. Much as I hate to agree with the WSJ

Remember Harry Truman and his one-armed economist? One who wouldn't go around saying, "But on the other hand..."

And I recall on "The West Wing" when Jed Bartlett says that God created economists in order to make astrologers look good.

[papau]

28. LOL - but grad classes in the 60's at Harvard & MIT taught that it was a science! :-)

:-)

[Double T]

7. Warren is somewhat insulated BUT certainly has a REAL grasp on reality.

The WH aided and abetted by the FED are doing every pea and shell move possible to make our tanking economy 'look' different. Reality will overcome the WH/FED smokescreen sooner rather than later.

[greyghost]

17. It would be funny if it weren't so sad...

The young punk talking heads like Erin Brown and Ally Valshi can't lie long and hard enough to cover this mess up anymore.

The wise money on the Street knows what's coming and it will be the closet thing we can have to a depression not recession.

[WCGreen]

24. Buffet owns companies that deal with stuff that he would buy or

use...

That has always been his benchmark for investing...

If he is sensing a downturn in his stable of companies, I would say he is close to being on the mark with his prediction..

Remember, his caveat was if the jobless rate inches upward...

[greyghost]

16. AMEN n/t

[flycessnas]

20. It Depends Upon...

...where you live and what you do.

If you're a blue collar guy in a big automotive state, it's a recession for sure. That's not the case if you work for Toyota or Honda but there aren't as many of those people.

If you sell residential real estate, forget it. You're toast at least for a few years. Go teach school or paint houses. (Some do, actually!)

If you're an IT guy in southern California who just got laid off from one of the mortgage companies, it's also a recession even though the job market is big enough that you might find another gig without relocating. Lots of people live here and work in San Francisco during the week because it's only three hundred miles and you can drive it in four hours. There's a lot of work up there for those who are qualified. I did it for awhile.

If you're an IT or other tech professional in Dallas or Houston, these are boom times. Oil is going crazy, at least for now.

Frankly, I think the government is lying to us to keep us spending for the holidays. They'll revise the figures next month and finally tell us the truth.

[CaliforniaPeggy]

25. Welcome to DU!

Enjoy yourself in our crazy, addictive little community!

:hi:

[Delphinus]

26. Yes, welcome!

And your last statement is way too true. :(

[Old_Growth]

31. Welcome to DU

My Bro just got laid off (IT) there in Cali. He likes to fly cessnas too.
Hmmmmmmm.....could it be? :hippie:

[flycessnas]

33. Yeah, Well...

...I just got deferred on my physical due to a blood pressure problem. The AME told me to go back to my family doctor, get the problem fixed and then try again.

[BeatleBoot]

2. Wow you think?

Everyone living in Michigan is puzzled at these kind of articles because we are living in an Economic Depression - not a Recession.

It's like, wow, no one gets it...

(Not so) Glad to see the rest of the country getting up to speed...


Welcome to George W. Bush's Race to the Bottom...

[Jeff In Milwaukee]

6. No arguments here...

But to be fair, WB is talking about the entire U.S. economy. Not that what's been happening in Michigan is anything less that a slow-moving train wreck and a financial catastrophe -- people will be paying for this Administration's folly for the next generation.

[Double T]

9. Didn't bushco sell Michigan to China?

[BeatleBoot]

10. No, That was Dick DeVos. His brother -in-law owns Blackwater.

Dick DeVos - owner of Amway - and failed Republican candidate for Governor - sent a ton of Michigan jobs to China.

Little Dick's brother in law, Erik Prince owns Blackwater. You know, the mercenary security firm in Iraq that's in big trouble.

Blackwater USA.

[Jeff In Milwaukee]

11. What hasn't he sold to China...

But as much as I love the Big Dog, I'll never agree with him over NAFTA and MFN status for China. We've been selling off chunks to this country for decades. Sadly, the Democrats have often been enablers.

[Double T]

12. Yep, that's exactly WHY we don't need another clinton or bush in the WH.........

to finish US off.

[Jeff In Milwaukee]

21. HIllary is better than any Republican alternative...

But not by a lot, at least in that regard.

[gasperc]

32. I know, things have sucked ass in MI for years now

and these wise asses come out of the woodwork, we might be in a recession, no ya think?

[Selatius]

4. Unemployment looks low simply because people who are underemployed are considered employed.

That is, you may have a degree from college but because of the slim job prospects, you're working at a fast food restaurant on minimum wage and no benefits.

[Jeff In Milwaukee]

8. It also doesn't count those who have simply given up...

Two income families struggling to get by on one income, because the unemployed spouse can't find a job that pays enough to cover the cost of daycare and commuting expenses.

It also doesn't count people who are working parttime, but would rather be working fulltime.

[BeatleBoot]

13. Actually, we've learned to not let the fast food joints know you have a degree

They'll say you're over-qualified.

Nope. Leave the college degree off of the job application. Otherwise, you're S.O.L. as they say.

Welcome to Bush's Race to the Bottom: Last one there wins!

[samplegirl]

5. Ohio has been in a recession.......

after the first year of Bush!

[flycessnas]

34. My Wife And I...

...are from Wayne and Medina counties (respectively) and I don't think it's been good there for a very long time. We left in 1995.

Ohio's problems are less about Bush than they are about Taft and the governing culture in Columbus and the refusal of people who've been born and raised in the state to allow cultural changes of any kind. It's the stiffest place I know of.

[AX10]

14. It's here.

[unkachuck]

18. recession?, yikes!....

....like most patriotic Americans, I worry about our billionaires with their vast holdings and fortunes....

....I truly hope Worn Buffer's in Euros, this could be serious....

[olddad56]

19. the impending inflation will make you dream of a recession.

recessions last on average 18 months, inflationm last for ever. Infaltion further divide dthe haves and the have-nots. These rate cuts aren't helping anyone but the wealthy. If they raised interest rates, the dollar would increase in value and people would spend less. Not such a bad thing.

[Hissyspit]

22. I said pretty much the same thing two months ago - can I be extremely weathly now?

Jeez...

[Puppyjive]

23. I'm contributing to the recession

I guess I am contributing to the recession because I have chosen to lend the environment a hand and buy mostly used goods and food for holiday gifts this year. I find it harder and harder to support corporations that only take care of their upper crust and screw the working class. I think more and more people are getting fed up with the widening gap between the rich and the middle class. Unfortunately, by not spending, it hurts the economy, and the working class seems to get shafted in the end. When CEO pay comes down to earth, I may shop more. For now, my greenback looks pretty good in the cash registers of thrift stores and the tummies of those less fortunate.

[Doctor_J]

29. In much the same way as Bush is "close to corrupt"

[Xenotime]

30. How long before we go into a depression?