Originally Posted By Mr X So, I'll take his word over DAR on this one (him being a financial genius and all ;p). <a href="http://www.reuters.com/article/pressReleasesMolt/idUSTRE5683MZ20090709" target="_blank">http://www.reuters.com/article...20090709</a>
Originally Posted By WilliamK99 Buffett, a supporter of President Barack Obama during last year's election campaign,<< Wow an Obama supporter supporting his policies.... Who woulda thunk it....
Originally Posted By DAR Warren Buffett is but a small minority of Americans who can take the hit of another stimulus.
Originally Posted By Sport Goofy << Warren Buffett is but a small minority of Americans who can take the hit of another stimulus. >> Not really. The vast majority of Americans will suffer quite a bit if we fall into a deflationary spiral and the employment situation deteriorates further.
Originally Posted By WilliamK99 << Warren Buffett is but a small minority of Americans who can take the hit of another stimulus. >> Not really. The vast majority of Americans will suffer quite a bit if we fall into a deflationary spiral and the employment situation deteriorates further.<< The first stimulus has not helped at all, what happened to all the promised jobs? The Obama Presidency math of saying lost jobs are actual gains in jobs, is getting a little old.... The first stimulus has not worked, why are we going to attempt a second? Fool me once, shame on you, fool me twice shame on me....
Originally Posted By DAR Excessive spending that Bush started got us into this mess. So the solution shouldn't be to engage in more spending. DAR Pop Culture Reference. Years ago there was a Simpsons episode where Homer had his arms stuck in a tar pit. So how did Homer try to get his arms out? He used his face to pull himself out of the tar pit. But then had his arms and face in the tar pit. That's exactly what where doing now. We had our arms in there, now its our face. And another thing, in first stimulus bill any infrastructure, roads, bridges etc had to be shovel ready. How many right now are ready to go? And more importantly jobs those projects will create jobs but what happens when the jobs are done?
Originally Posted By Sport Goofy << The first stimulus has not helped at all, what happened to all the promised jobs? >> The first stimulus has barely been enacted. To quote a recent interview with Warren Buffett, "You can't make a baby in 1 month by getting 9 women pregnant." These things take some time. The rule of thumb for any economic stimulus activity, including interest rate changes, is that it takes at least 6-9 months for the monetary actions to work their way into the broader economy. << Excessive spending that Bush started got us into this mess. So the solution shouldn't be to engage in more spending. >> I would say it was excessive spending on things that don't produce any long term benefit to the economy was a factor -- like tax cuts on the wealthy, protracted wars in foreign countries, and giveaways to corporate America. Maybe if we actually spent some money on infrastructure and investment in future economic activity we wouldn't be in this mess.
Originally Posted By fkurucz Its getting to the point of having to put money into the hands of consumers. And I'm not talking about $600 tax rebates. Of course the challenge will be getting people to spend that money instead of socking it away or paying off debt with it. On a related note: Citibank has offered me a 20% rebate if I pay off the balance I have on one of their credit cards. I suspect that if I do that that they will cancel the account once the balance is zero. Still, a pretty good offer.
Originally Posted By hopemax You know that quote, "Democracy is the worst form of government except for all the others that have been tried." That's how I feel about stimuli. Since people are throwing analogies around, who would ever think that the way to make someone healthier is to give them a fungus (penicillin) or to irradiate their body and jam it full of chemicals (cancer treatments). Before we accepted them as successful treatment strategies how many people must have declared, "You are going to kill him if you do that!" I think part of our problem is that most people don't have any concept of how deflation would affect them, since it's not something we have had to deal with. Personal debt we understand, although for governments it works a bit differently, since we don't have printing presses we can turn on when needed. Inflation, our experience is that it is bad, but for government...not always so, since inflation erases debt faster. But since bad is all we know, that's what we focus on. With deflation we could all cheer prices going down 10%... but the celebration will be short lived if your personal income decreases by 25%, 50%, etc. at the same time (job loss, hours/salary cuts). I am worried, though, that a weak stimulus will be harmful. Or an improperly targeted stimulus. High debt load in a deflationary cycle is bad, so increasing debt load as we succumb to deflationary pressures doesn't seem smart. That's the rub...kind of like a hot dog eating contest, eat enough to win and the benefits are obvious. If you lose, was it a good idea to even enter, because I'm sure it makes you feel like crap. But this isn't War Games, I don't think, "the only way to win is not to play," is the winning move this time.
Originally Posted By EighthDwarf <<Inflation, our experience is that it is bad, but for government...not always so, since inflation erases debt faster. But since bad is all we know, that's what we focus on.>> Exactly. Inflation is generally beneficial to borrowers (which most of us are, not to mention the government) and bad for lenders. While deflation is bad for borrowers and good for lenders. A little inflation right now would not be a bad thing. <<I am worried, though, that a weak stimulus will be harmful.>> Me too.
Originally Posted By EighthDwarf By the way, returning to the OP, Buffett is a legend and there is no doubt about that. But he is not always right, expecially recently. For instance, he made a big bet on oil last year that cost him billions. <a href="http://www.gurufocus.com/news.php?id=50143" target="_blank">http://www.gurufocus.com/news....id=50143</a> Take what he says with a grain of salt.
Originally Posted By Mr X Well, if you read the article carefully though, the only true "mistake" was that he bought SO MUCH they had to sell off a lot to raise cash. Now, if Conoco continues to falter it will be an even bigger mistake, but since it's only been a year in the midst of a commodities crash (one that appears to be temporarily reversing at the moment), it's entirely possible that his "bet" was dead on but the timing sucked. Which, since he's famous for being a multi-decade investor, wouldn't have been such a big deal if he hadn't bought so much (wow, even Warren Buffet succumbs to greed...amazing). But anyway, point well taken. Do note however, that was a bad bet in the midst of a crapstorm..there WERE no "good bets" really (except shorting, which isn't realistic for him), and his own Berkshire Hathaway has shed nearly 50% of its' shareholder value since the peak (so is it a "bad bet" to invest in Buffet, or simply unfortunate timing?).
Originally Posted By WilliamK99 Do note however, that was a bad bet in the midst of a crapstorm..there WERE no "good bets" really (except shorting, which isn't realistic for him), and his own Berkshire Hathaway has shed nearly 50% of its' shareholder value since the peak (so is it a "bad bet" to invest in Buffet, or simply unfortunate timing?).<< I do notice, he has suffered tremendously financially since "supporting" Barrack Obama, makes you think...
Originally Posted By Mr X ***I do notice, he has suffered tremendously financially since "supporting" Barrack Obama, makes you think...*** Oh, brother. That has to rank among the dumbest WE statements EVER (I sincerely hope you were joking!). Yes, because the economy crashed and burned on OBAMAS watch, and Berkshire Hathaway was doing just GANGBUSTERS under Bush. <---rolls eyes a million times
Originally Posted By WilliamK99 Oh and Mr. X you have made far dumber comments when you were having your flame wars many many years ago....with the man who shall remain nameless.
Originally Posted By EighthDwarf <<Now, if Conoco continues to falter it will be an even bigger mistake, but since it's only been a year in the midst of a commodities crash (one that appears to be temporarily reversing at the moment), it's entirely possible that his "bet" was dead on but the timing sucked.>> But timing is the most important aspect. Buying oil stocks at $150 thinking it was going to continue up indefinitely was a pretty major mistake (which Buffet admits himself). <<I do notice, he has suffered tremendously financially since "supporting" Barrack Obama, makes you think...>> To be fair, we all have, but I don't think that's all Obama's fault. <<Do note however, that was a bad bet in the midst of a crapstorm..there WERE no "good bets" really (except shorting, which isn't realistic for him), and his own Berkshire Hathaway has shed nearly 50% of its' shareholder value since the peak (so is it a "bad bet" to invest in Buffet, or simply unfortunate timing?).> Fair point. But at $150, oil is the last place I would've put my money (as my posts around that time frame will attest). And I'm no Warren Buffett!!
Originally Posted By WilliamK99 <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=a0StZd9y2rCY" target="_blank">http://www.bloomberg.com/apps/...Zd9y2rCY</a> Why would we need a 2nd stimulus package when the first plan worked "as intended"... Obama, in his speech, said the stimulus program is helping state governments save jobs. Were it not for the program, the president said, “state deficits would be nearly twice as large as they are now, resulting in tens of thousands of additional layoffs -- layoffs that would affect police officers, teachers, and firefighters.” << That is awesome! Imagine the shape California would be in if there was no stimulus....
Originally Posted By fkurucz My problem with any stimulus program is regarding what it stimulates: the consumption of imported goods.
