CHARLIE MUNGER: “MORE PAIN TO COME”
Just a day after Warren Buffett expressed his optimism in the US economy Charlie Munger, his right hand man, said there is “more pain to come”. CNBC released the headlines late in the afternoon and details were limited:
A day after Berkshire Hathaway’s Warren Buffett made headlines about his views on the economy, his long-time business partner Charlie Munger is weighing in.
Munger, Berkshire’s vice chairman, said the job market is likely to stay “lousy” for an extended period, and that he doesn’t see anything that would prompt employers to hire in the immediate future.Munger also warned that the pain is not over in many sectors, citing timber and commercial real estate as two sectors where there is “more pain to come.”
Source: CNBC
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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11 Comments
I’ve always liked and respected Munger more than Buffett. Too few realize what an incredible person – and stock picker – Munger is. As well, he was hugely instrumental in Berkshire’s early successes. And unlike WEB, who over the past few years is all over the media, Munger prefers to stay out of the limelight.
The perfect hedge. The two of them are their own derivatives to each other.
2 differences between Munger and Buffet …
1. Munger has no desire to be liked. Buffet is obsessed with being liked.
2. A derivative of #1, Munger has little patience for politicians. Buffet likes sucking up to the ones with D after their name.
Munger is who Buffett wants to be when he grows up.
Munger very rarely comments, and has no agenda when he does.
munger’s opinions are much more reliable than buffet’s cheerleading.
Wonder what Buffet sees so optimistic.
US has provided China with 1 billion jobs in the last 35 years and the Chinese surplus of $ 2 trillion has come largely from the Americans who are now jobless and homeless.
The only way US can come out of this mess is for American citizens to take a vow not to use Chinese goods even if the equivalent American goods are more expensive.
There is not much time left. The naval excercises that China conducted with North Korea soon after the American excercises with South Korea are a show of strength and arrogance.
The Chinese have been buying US securities of 2-3 year maturities and selling their longer term securities. Another 3 years and China will stop accepting US $ in an attempt to finish USA.
And another thing. Even if every American man, woman and child goes to Afghanistan and fires a million bullets each, the war against terror will not end. It is fine to win a pawn off and on but to checkmate you have to find the opponent’s king. His address is ISI, Islamabad, Pakistan. The CIA should know this but then the ISI is their own creation and now the CIA is probably ashamed to admit its mistake.
Guys,
I side with Munger on many things and his comments above I agree with, but talk about confirmation bias. Buffett has an agenda/bias, really? Don’t all mortals? He’s less reliable? Really? Buffett has been very accurate on the economy both for and against. Personally, I think we are back (if we ever left) into a recession, yet like TPC says, Buffett is looking at a lot of indicators and actual businesses, actual cash hitting the bottom line. Buffett would not “risk” his forcast reputation on a hunch, he must REALLY feel there is no chance of a double dip. Think of the last time he said there is NO chance of something. Take your time. Google it. Cotton, copper, baltic dry index, railroad index, Libor-OIS spreads, etc. are not speaking of a recession (yet). Again, conviction in your opinion is great, but confirmation bias is a strong behavioral factor that I see in most of the comments here. Buffett is no Munger and Munger is no Buffett.
“Buffett would not “risk” his forcast reputation on a hunch, he must REALLY feel there is no chance of a double dip.”
He doesn’t have a “reputation” to risk anymore.
Not since he became a mouth piece for the government.
Is there anyone that truly believes that Buffett would intellectually support Keynesian economics and rampant deficit spending?
The guy that wrote about Squanderville?
Munger, Buffet. Who’s got more money? Sounds like Hunger, Buffet (as in smorgasbord, or if you put them together; Muppet. But that would be more Bill Gates– you know, Kermit THE Frog.
If you pars the words, instead of snap judgements, like on the air, Both could be right.
Buffett in optimism, and no “offical” double dip. Have we actually left the first? Maybe or maybe not?
Munger in saying there will be more pain, as in there will be pain in anything less than say 4 or 5% growth to really get out of the first dip. And especially in timber because that has only one market, new housing and that’s not moving anywhere back to where it was, and commericla real estate, where in we hav enot seen the actual mortgage defaults hit the system yet. So there will be pain.
Pain and losts of it can happen even if the long (as in years) term outlook is possitive and we avoid a double dip. Then there is segmentation. Remember that even during th depression, there were certain parts of the US (Not by region but by small segments) that never experienced any noticable change while other parts of the economy were suffering enormously.
Imagine: say 5 to 10 % of the country will be part of a permanant underclass, and the remainder has a “normal existance”. We could be heading there. The net would be no double dip, pain in spots, and for parts, doing very nicely thank you. It’s possible, although not very pretty or desirable. And unless we have some major changes, (and the parts that Congress need to do are very unlikely to happen) something like this (i.e not very preety or desireable) will happen sooner or later.