WARREN BUFFETT’S ANNUAL LETTER TO SHAREHOLDERS
Few things are more insightful in the investment world than Warren Buffett’s annual letter to shareholders (see this year’s letter here). When investors pick my brain for resources and educational tools I almost always recommend that they read the Buffett letters before reading anything else. When I was first getting into the business one of the first things I ever did was print up every single Buffett leader (including his partnership letters which you can find here) and read them thoroughly. I probably learned more from those letters than just about any other thing I’ve ever read in the investment world. And the best part is that you don’t have to pay a dime for the education….
This year’s letter is no different than the last. The opening section is particularly pertinent as it puts our current predicament in perspective. I know I spend quite a bit of time focusing on the risks that investors confront (because butterflies and rainbows don’t ruin your day), but on the whole I am an incredibly optimistic person. And that certainly applies to America. I am incredibly bullish about the long-term prospects for this nation. Yes, we’ve hit a snag, but it is not insurmountable. Buffett succinctly describes his perspective:
“Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.
Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.
We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.”
I won’t rehash the rest of the letter. It is a must read. But if there is one thing that you take away from the letter it is this lesson – nothing stopped so many innovators and entrepreneurs more than the fear of failure. If you allow yourself to be constantly scared into thinking that the world is doomed you will never take that risk which might result in great reward. And perhaps worse, if you never fail you will never learn to get up, brush yourself off, move on and succeed in the future. This does not man you should wander through this world with great complacency and blind optimism, but if you deny yourself the ability to maximize your full potential you will always come up short.
Maybe your most simple, but best post ever.
” Yet our citizens now live an astonishing six times better than when I was born.”
Perhaps, but on the other hand: real wages have not gone up in the US for average workers since 1971. So I guess this is just a matter of when Warren happened to be born.
how is the life quantitatively expressed?
Salary? Savings? SPX?
Air pollution? Death rate? Life expectancy?
Crime rate in your neighborhood?
I have to wonder….
Are you implying that it is down? If so, how?
it all depends on whom and how you value the life quality. Personally I don’t think GDP is the only indicator. And, how about if one evaluate GDP in gold rather than in dollar? and, what’s the price we paid for the 6x? skyrocketing debt?
talking about innovation… more and more advanced technology and manufacture are “born” outside the US. 30 years ago, many young and talent foreigners came to study in the US for its leadership in many scientific areas, but not any more.
Give me real example. I don’t think you can even come close to proving your point…because it is simply not true that the standard of living is declining in the USA….perhaps over short periods of time it falls, but you can’t seriously make an argument that the standard of living has fallen since the 70s….are you seriously saying that you would prefer to live in the 70′s than today? I doubt many people would agree with that….
A comment reflective of an ideological anchor rather than any sort of objective evaluation.
My comment was directed at cc, not TPC.
Wah Wah Wah!!!!
The following are facts about persons defined as “poor” by the Census Bureau, taken from various government reports:
Fortysix percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a threebedroom house with oneandahalf baths, a garage, and a porch or patio.
Seventysix percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded. More than twothirds have more than two rooms per person.
The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
Nearly threequarters of poor households own a car; 30 percent own two or more cars.
Ninetyseven percent of poor households have a color television; over half own two or more color televisions.
Seventyeight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
Seventythree percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.
http://www.heritage.org/research/reports/2004/01/understanding-poverty-in-america
Tough life we have here in America!
If the benchmark for quality of life is the amount of gold you can buy (as measured in gold to gdp) it has indeed decreased. Too bad.
Here is a case for higher stock prices, and it shows that businesses did a great job creating wealth the past 10 years:
http://seekingalpha.com/article/255201-the-case-for-a-higher-dow
Great news…corporations have enriched their shareholders as these corporations have traded middle class jobs and corporate intellectual knowledge to overseas contries…stocks are moving up.
The US economic system existence is dependant upon its ability to support a middle class through the systems ability to generate jobs thereby creating a symbiotic relationship between workers and corporations. In our current economic system this relationship is dyign irregardless of stock listings appreciating. Stock appreciation is a function of flooding markets with dollars.
This is not about whether Americans have become timid at risk, hell, their being long the market should put that statement to bed.
Corporations have shifted more cost onto the public than at anytime in our countries history. What would a corporation be worth if it were to account for the cost they shift onto the public. Corporations are not paying their fair share of taxes, they are not made to account for the destruction of our environment, they are working toward re-engineer crops, they use coal ash in place of dirt for golf courses and claim there is no harm to humans, they have hijacked our governmnet representatives and usurping our laws, they’ve exported US jobs, defrauded investors across the globe, misrepresenting interest rate options to home buyers and Warren Buffets Wells Fargo was one of the most eggregious, turning the mortgage market into a used car lost and then getting preferred terms on debt as the taxpayer bails out Warren Buffets buddies on WS and his bank.
If corporations were to be made accountable for the true cost operations fewer corporations would exist but at least their stock values would accurately reflect the power of the intellect that created its wealth. For now we have the likes of Warren Buffet marquarading as investors in this charade.
Fantastic letter! Thank you very much for posting this.
@Wallyfurthermore – My cell phone is 1,000,000 times smaller, 1,000,000 times cheaper, and 1,000 times more powerful than the computers that were used on the Apollo 13 mission. I agree that income inequality has increased since 1971, but one can’t honestly say that living standards for the average American has not increased dramatically. It just keeps getting better (although our perceptions don’t). The level of wealth we enjoy today is absolutely incredible, and the beauty of Buffet’s message is that the human spirit will continue to achieve even greater things in the years to come. Too many people wish to point out the negative aspects of the world we live in (finding fault is the easiest thing to do), and too few people find positive things to say. Buffet is to capitalism what Lincoln was to politics – a genius that we should strive to emulate.
I think you are somewhat missing the point. Citizens may have a GDP per capita 6x greater than Buffett did, and technology may be 1,000,000x more powerful, but in many other aspects, America has only marginally improved, or is going backwards.
It is also worth noting that America is not the only one with its “best days ahead”. Every nation in the world is in the same boat. Whilst it is certainly wise to be bullish long term on America, it might be even wiser to be even more bullish on other countries.
It’s all relative. In a global economy where we all benefit from eachother to a larger extent than we did 100 years ago it is obviously wise to have exposure to emerging markets which are growing at a rapid clip in large part thanks to their relationships with developed nations. So yes, the USA is like an investment grade bond and China is like a high yield bond, but that doesn’t mean there isn’t enormous potential in front of us….No matter what you say America is still the most innovative and entrepreneurial nation on earth.
We have big problems now, but let’s not overlook all that is good…
I certainly agree that in modern times it is far easier for countries to catch up to one another, so inevitably countries that are behind tend to move forward faster. This gives the impression developed countries are stalling, when in fact they may not be.
There are some things that just can’t be ignored though. How are American high school students math results? Not very good I’d imagine. What percentage of college students study engineering, science or medicine? A lot less than in China, I’m guessing.
However, there is one thing that is certainly on America’s side, and this is perhaps more important than everything else added together. I bet that if you asked some bright but impoverished kids in Iran or Nigeria what country they would immigrate to if they could pick any one, maybe 75%+ would say America. That says it all, doesn’t it?
There’s an intangible here as well. It has never been the educational system that made us great. It is the freedom to explore. Many of our greatest innovators had meager educations. But they sat in a garage for years on end uninterrupted doing research. Einstein once said that he loved America because he was allowed to sit in silence and study whatever he pleased. No one bothered him or told him he couldn’t read this or that. That freedom is an incredibly powerful innovative tool.
China and many other countries in the world have attempted to copy the USA model, but they have not yet figured out this one key ingredient. Freedom is the innovators greatest enabler.
It’s impossible to argue with one who insists that the glass is half empty because they are absolutely right. But you can’t tell me it isn’t half full either. Never in the course of human history has humanity enjoyed a better standard of living. I had laser eye surgery. My dad has his knees replaced, which added years to his life. Do you realize what that’s saying? Penicillin was not available till after WWII. The polio vaccine came along in 1955. Every material item of consequence that I use or consume today is far superior to whatever was in existence in 1971. Who here would like to go back to dial up??? So much of what we believe is tied up in false nostalgia for a past that never existed. And budget deficits and the debt aren’t the end of the world either. Weren’t we running 25% deficits during WWII and the publicly held debt to GDP ratio exceeded 100% by the time it was over? And then it was steadily paid down until 1980 where it bottomed out below 40%. Today it stands at 70% and budget deficits are at 9%. We’ve paid it down before and will do so again. We’ve had 9% unemployment before and we’ll get out of it again. As Herb Stein put it, “If it can’t go on forever it won’t”. And taxes as a share of GDP is below the post WWII average. We sure as hell ain’t going down the tubes. So I don’t see that much that is marginally better or having gone backwards – in a material sense.
What I can see is that the level of social inequality has increased and that leads to a lot of dissatisfaction among people. Look at what CEO to average worker pay was in the 1950′s compared to where it is today. Socially our values have changed, and in many ways not for the better (and in others much better i.e. anti-discrimination laws). Government has become more of a pain in the ass to deal with. I don’t mind the taxes as much as the hassles to stay in compliance. You almost need to be a lawyer to get anywhere in this world. In many ways this world is more stressful economically as so many of the things that would be luxuries 25 years ago are necessary to keep up with society today. But things are always getting better, and it shows up in the capital markets. They were proclaiming the “Death of Equities” in the early 80′s, and look what happenned over the following two decades. Don’t forget the 70′s sucked for the stock market. We’ll be surprised by what we’ve yet to see. Warren Buffet has faith in the future, and that’s what you need to be a successful investor.
I agree. Most people who sell fear have a vested interest in scaring you. The political party that is not in power wants to scare you into thinking things are bad. The investment manager who doesn’t have your assets wants to convince you that you are being ripped off. We see it in everything. Even the media sells fear because it sells. That doesn’t make it our reality. As I said above, no one in their right mind can honestyl say that they would prefer to be living in the 70s. If so, then go jump in a time machine and be sure to take all of the other fear mongerers with you….
I am a rational guy. I recognize that this country has big problems. The biggest is likely the inequality you mention. And I attribute that in large part to govt’s failure to acknowledge that the Fed and the financial industry are doing more harm than good. These aren’t problems inherent in the American way. So yes, we have big problems, but we can and will fix them. It might take another crisis to make it happen, but it will happen….And when it does we will lay the foundation for another great economic boom.
I liken America’s entire economic state to that of the health care industry – America has the best doctors, hospitals, technology and medical schools, but the healthcare industry as a whole is a bit of a mess.
now 41st in health of newborn babies…..fact.
Dr. salk, in his autobiography, wrote that the polio vaccine was his worst mistake…..very few countries in europe used it and their infection rate was actually lower than ours…..he went on to say in hindsight, polio is a self limiting disease, sweeping thru populations affecting the small percentage susceptable to it…..our immune systems are all very different……i know people who NEVER get the flu….not me however.
just like 99% of cats, even more humans, and a certain lesser percentage of dogs are immune to heartworms.
This is patently ridiculous.
If this is the best Buffett can come up with, I am disappointed. If he did not receive 100 B free money he may have more truth to speak, just like Bill Gross, a man finally starts to make sense after being forced to take haircut as bondholders.
Buffett’s main points 1. you live much better than your grandfather 2. the future is bright. These are meaningless argument. I am sure Qaddaffi and Kim Rong II keep reminding their citizen same thing everyday, which are, hard to argue against even in Libya and North Korea . But the translation is: Do not challenge ruling class. You have no reason to ask economic and political re-ordering. Keep status quo.
In this country if you are not optimist you can’t find 15 dollars/hour job. People are trained to believe bullshit. But betting against them with negative thinking you can make a fortune. Remember what Marc Faber said, short America via dollar, it is the trade of century.
I recently read “The Rational Optimist” and while I don’t agree with many of the opinions expressed therein, the primary message remains true, that trade underpins advancement of the human race and economic development.
Being a scientist by training, I’m naturally inclined to immediately look for flaws and errors, leading to a “default pessimism”. This training ALSO means I must look for the facts and where they contradict my beliefs, sacrifice those beliefs, which turns out to be something that is very hard to do (but essential to be a good trader/scientist/engineer). From observation of the human race I have to conclude that putting ego second to truth is NOT natural behavior.
So this creates an odd internal conflict. My head is full of data points showing how the US is doomed in so many ways, but I’m aware of my internal bias and realize that I have to actively look for the sunshine sometimes to get a balanced picture. That’s why I actively sought out this particular website, as it offers a greater balance to my net perspective.
In the end, I have to conclude that while the US remains a great trading nation with not so many barriers to innovation, there will always be a recovery of some form.
All true.
It seems that, by default, we follow a “hill-climbing” algorithm in our day to day lives. (See: http://en.wikipedia.org/wiki/Hill_climbing). These are good algorithms because they very cheaply produce a locally optimal result. Biologically, that translates to little energy expense for higher breeding success.
This is the NOW behaviour which works so well. An organism that conserves resources merely sets them aside for a competitor to use leading to the conserver disappearing over time.
The problem though, with hill-climbing algorithms, is that they rarely find the best global solution. Sometimes, in order to find the optimal solution, an algorithm must backtrack through poor solutions to plot a new path, to an entirely new solution-space. Evolution eventually finds such solutions (for example, finely-tuned food webs), but it takes a long, long time.
What I hate about investing is that, in many instances, I can see a path to a more optimal solution, but hill-climbing FORCES me into a less optimal one. For example, it would be better to invest in alternative energy development (leading to a more optimal / profitable outcome long term), but this requires backtracking through less-optimal solutions in the meantime (eating big losses). Meanwhile, just following a cheap hill-climbing algorithm leads to greater gains (chasing the oil momentum trade).
Thoughtless though of the weekend.
I like to think we didn’t come from apes.
Question to ponder – It we evolved from apes, why are there STILL apes? And where are all the transitional beings of the in betweens – you know – the ape/man. If ape/man is a higher form – they should be here instead of the apes.
Too much to ponder – I’m off to bed!
That sounded offensive to Cullen –
It should have read: “MY thoughtless thought of the weekend”
Yours wasn’t – my bad if it came across wrong.
No offense taken Tim. I’ll leave my discussions on evolution, etc for another blog for another lifetime….This isn’t the place for me to rant about my personal beliefs.
…as a happy 2% of the US population now receives an estimated 75% of the returns to wealth (interest, dividends, rent and capital gains), nearly double what it received a generation ago (thanks largely to the 13 trillion bail-out), the 98% rest of the population is being squeezed and foreclosed
…and to add icing on the cake, a two year extension of the tax cuts, as supported by Oh-Bummer, will add an estimated $700 to $750 billion roughly over the next decade into the coffers of the Super Rich
…of course Oh-Bummer really is worried about finances, as he asked Steve Croft’s advise on his Sixty Minutes CBS interview a while ago. But hang on, not really, as Oh-Bummer recently appointed the National Commission on Fiscal Responsibility and Reform to cure the federal budget deficit: by cutting back social spending, of course
However, providing tax incentives for debt leveraging drives most of the population deeper into debt to the rich, whose taxes are all but abolished; and the economy keeps shrinking
This will lead to even deeper financial crises, employer defaults and fiscal insolvency at the state, local and federal levels.
And more 2008_2009 emergencies are called for to keep the ‘Quantitative Easing To Rescue The Economy” Ponzis alive
-To The Bitter End My Friend-
…and in the meantime, Buffett will continue with his positive scribble. forever quipping that: ““his” side is winning without a real fight being waged”.
Kind Regards
gotta say i agree with klaus…….there are more and more problems that there are just not a solution to.
i just do not see how it is all up from here…..sure there’s investing money to be made alright…..but this isn’t 1968 kansas anymore, toto.
we are basically right back to 1987 only the current bubble in equities i guess never heard of Reagan’s ‘trickle down effect’ as main street has been left out…one bubble after another for 25 yrs. now…….the next one to pop will be the big one my gut tells me.
8 yr.shadow housing inventory sitting(11% of all homes) vacant (our last big manufacturing sector)……didn’t i learn in economics 101 that to only real wealth development occurs when adding labor value to raw materials?……i apologize if MMT has negated that concern….sincerely.
we had our chance to take the swedish bank model and we picked up the street walker instead(and she n her pimp took our wallet)…..and the wife’s best friend saw her get out of the car carrying her teeth.
small cheap cellphones a sign of a better life?……really?….i would say the opposite from looking at the 16-yr. old texting in my rearview mirror.
agreed there Klaus. Cellphones? REALLY?
that was in ANOTHER car in my rearview mirror.
You really shouldn’t comment here while driving, it’s dangerous
Bufet lost all credibility, because he was bailed out this last crisis. His track record in a real capitalistic world would be no different from that of LTCM or Taleb’s turkey at Thanksgiving. And to top that he continues his arrogant ways.
InvestorX
There are 2 trends that keep me pessimistic about our future. 1) Our growing IQ deficit that is created by population growth amongst ethnic groups that clearly show a genetic bias towards sub 100 IQs 2) A culture of crime and laziness; not totally unrelated to item 1, but a consequence of leisure time, and addictive technology. The best and brightest will do well, but I fear the underclass will eventually pull us all down. I pride myself in taking an intellectually honest look at things and factoring in all relevant information; and I just can’t seem to see a prosperous future, even with the optimism that MMT has open my eyes to.
Geez, what a meandering conversation.
The fact is we are in an economic induced downturn and the 98% are losing more everyday. For those of you not around in the later part of the 70′s to early 80s, it was not good. At that time people took jobs at a burger stand for min wage and a meal, and the meal a day was the seller. So in that instance we are better. I cannot believe that someone used a cellphone as an indicator of “it is better”, that show you the level of denial in people that analyze events and issues and how evaluations are shifted of what apparently is “important”.
It comes down to the people, the majority and the question “Are you better off than you were X years ago?” And that answer outside of the corrupt “manipulated trend is your friend” market investors and that 2% are all happy ….NOW, but it is all about to change and it is about that central commodity,…. OIL.
We have real Unemployment around 20%, and all the prices are going up and those prices are NOT reflected in GDP, so you can STOP USING GDP as your argument because that is EX-oil and EX-food. Same for CPI. ALL of these “facts’ are from the goobernmint and most of those facts are from the same prognosticators that failed to see the housing bubble coming or the pensin crises currently unfolding. Did you see all the protests from the Public workers?? Tell them their Living standard is better when they are losing 8% of their income for a tart and are now having to pay for their benefits whole or in part. What do you think their answer will be?
the point is the living quality IS down is America and will go down even more as food and commodity prices inflate, and coupled with deflation of assets from Homes, Harlies and Hummers, it will anger the masses.
IT will also be even worse, because with “free money” and ZIRP and the credit that has evaporated in consumer land, the people cannot continue to get their stuff with “nothing down and low payments”. The credit will soon be all gone and it will turn back to layaway and cash down.
Yes it has changed and the living quality is going down, and it will be based n energy costs and the price of food and commodities, always has and always be that way.
I can’t help but think that those who are quick to knock the 70′s weren’t around in the 70′s or if they were they were in diapers. Back in the 60′s and the first six or seven years of 70′s you didn’t have to lock your doors at night or even close em for that matter and we had never even heard of a deadbolt lock. Your car sat in the drive at night unlocked and with the windows down . If you didn’t have a car no problem, you simply hitchhiked with no concern over who was picking you up because it wasn’t a concern. When we got out of school we went to the corner and played baseball or football with the other kids in the neighborhood and no one worried if some sicko was going to try to pick us up. Granted we had our usual once every three year recession but when it was over getting a job was easy, with or without a college degree . Of course if you wanted a college degree you could pay for it out of current wages even if you were a blue collar worker. I know because I did. There was no Patriot Act, no cameras at street corners spitting out traffic tickets, no patdowns at airports, I could go on but I suspect you see where I’m coming from.
Granted, many things are better today then 40 years ago and I still think Americans are by and large some of the most fortunate people in the world. We have attained many conveniences, bigger and nicer homes and cars. Jazzy electronic gadgets, better medical car, etc. But I really have to question whether for many, our economic lives or our quality of life has improved in any meaningful way. Maybe I’m wrong but it really doesn’t appear that way to me and I haven’t even touched on the stagnant wages and tremendously increasing income disparity over the last 20 or 30 years. But then again we do have cellphones!
You know what this post shows (I am not american), the stratfication of wealth in the US society. There are poor in the ghettos, that breed crime and there are very wealthy and in the middle there is a narrow slither of struggling middle class. It sounds like 30 years go american society was more uniform in regards to wealth.
This is the evolution of the mind. There is no greater danger to leaving your doors unlocked or your cars in 2011 then there was in the 70s. There’s not more crime per capita. It’s the mass flow of negative information from the advent of the Internet and cable news. The only stories you hear are negative so it implies that things are getting worse because they never get better. Violent crimes per capita has actually dropped 50% since the 70s.
Tons of old ladies who watch Nancy Grace run a story on one kidnapped child for 6 months, people start worrying about their children. They become more cautious because they imagine if it happened in that little neighborhood in Florida it can happen here.
Buffett typically does his buys when “everyone’s fearful”, so he will likely sit and wait for that moment.
For a world where half the population lives on $2 a day there sure is a lot of griping going on around here. Check out Rogoff & Reinhart, read Kindleberger and tell me how what it is we are experiencing is a departure from our experiences over the last 200 years of capitalism. There were massive financial panics in 1873, 1893 and 1907. 20 years apart between the first two and only 14 between the latter. 1921 was significant and then there was 1929. The 80′s and 90′s were unbelievable decades. The nation lived incredibly well. A lot of it was squandered. Yet the collective wealth of the USA is far greater than it was in 1980 (although not as much as it was in 2007). As George Bush put it, America is experiencing a hangover.
Capitalism from the beginning has been a series of booms and busts. Is this time really any different? I agree w/ Buffet. We will experience another boom, and sure enough another day it will bust. Think about it – it had been over 70 years since the financial crisis of the Great Depression. Prior to that, financial crises and massive failures of the banking system were a regular recurring thing. The world was coming to an end in 1933 and look how far we’ve come today.
And as far as the 16 year old texting in my rear view mirror goes…..well I suppose you’ve got to pay some kind of price for everything. Few things are ALL good, and I readily admit that in SOME ways life has gotten worse. I rarely use mine, but it sure is nice to have (along w/ my portable computer, GPS, e-mail, Wifi internet access, HDTV and DVR) – it is definitely an improvement. BTW – loved the comment.
Most Americans have no idea what it means to be poor. You want to see poverty? Go to just about anywhere in Africa. And don’t forget to see your doctor first. Us Americans have to immunize before venturing into such a horrid place. O woe is America!
We whine about our children losing their standard of living. Meanwhile, the average child is obese because they eat too much. We whine about all the foreclosures because homeownership is near record highs. We whine about inflation yet we can’t seem to stop buying TVs, cell phones, ipads, ipods and every other leading tech gadget on the market at deflated prices….I could go on and on and on….
Buffett is an idiot, he may be rich but he is so out of touch with reality it is sick. The only people that would say that quality of life has improved in the last 40 years are those with either no children, or those that measure quality of life by how much fucking lazier and fatter they can be now compared to then. In Chicago, you can’t go down the street without seeing Out of Business signs on every other giant retail space. This weekend it is Borders and Bellini going under, selling everything including their shelving and toilet seats. The neighborhoods are destroyed as every single small retailer is driven out of business by the tax dodging internet insider selling assholes. Yes, with all of these internet attached devices, we can watch the world burn in real time, that is an improvement for sure. God forbid my daughter gets even a sliver of a real childhood before she is inundated by fear of everything from internet freaks to law suit frightened principals.
…just updating:
The US House of Representatives voted early Saturday for legislation that would impose $61 billion in cuts in current federal spending, the vast majority of it slashed from domestic social programs. It was a near party-line vote of 235 to 189, with no Democrats supporting the measure, and only three Republicans opposing it because they wanted even deeper cuts
…it’s really simple. Wall Street, which extracted trillions in federal subsidies for the bailout of the banks is now demanding that working people pay the cost.
…the political axiom at work is “Big fish eat little fish.”
Kind Regards
“…the political axiom at work is “Big fish eat little fish.” ”
I like this axiom:
“Democracy is two wolves and a sheep voting on what to have for lunch. Liberty is a well armed sheep contesting the vote.”
Wait till the sheeple have enough of the wolves. They will be targets and rightfully so for the social and economic theft thay have perpetrated via bailouts and their unquenchable greed.
I will laugh my butt off the first one that gets offed.
Wow that is a great quote. I’ll be using it for years to come! Thanks.
Do you know where its history or where it comes from?
Buffett is a sugar high. We’ll get his qtrly CNBC talk…”patient is out of ICU and recovering….” Great.
Ask him a simple question. Has the patient seen his hospital bill? Has he seen how much debt he is in? Most have and they are right back into shock, Warren.
We bought most of this prosperity on OPM and the margin call is coming.
Somewhere between Marc Faber and Warren Buffett lies the American economic reality. The bailouts of 2008-09 destroyed hero capitalism.
When do we stop crying like lambs at the slaughter and stand up and do something. The only group to start standing up is the Unions, and most of them are socialists. The world has changed, our dominance in world politics and influence is about to end abruptly. Why? Because we (the people)were drunk at the wheel! We allowed politicians to scam us, Wall street to scam us, the IRS to scam us!
We have fought to get where we are in the world. We fought wars, developed technology, innovated every industry known to man, and for what? So we can let the slime who manage our government take it away from us and give it to the weak and lazy. Screw that!!
Stand up or shut up!
I would love to be as optimistic as Cullen is. But i awlays want more. When i read Citigroup note about plutocracy i can’t stop thinking that even though everybody has a air conditionner today, i expect more from the system. The means are here, the intellectual force are here, the will is here…but corrupted human nature is wasting it.
When you say, that this crisis has been wasted because no lesson were applied (and i suspect that if China has problems, it will be use as an argument to to erase the half inch we have taken in the rigth direction) I FULLY AGREE WITH YOU. Now i can’t stop thinking that the last 30 years were ALSO A WASTE since we could have reached a much more better situation.
I am expecting much more than people having cell phones etc. I want an healthcare system and an educationnal system that erase social/wealth considerations in order to capture the BEST from ALL components of the nation. From a statistical standpoint, people benefiting from best education are sons of bankers and they’ll end up in a bank ! I want longer term mindset, i agree we are human at the end but timeframes such as “next bonus” or “next election” are flawed by nature.
I do not want to sound black or sounding like Cullen is saying White but i feel that what we are linving in is a “less worst” system and it could be fixed with a few rules avoiding capital misallocation that result from this “next bonus” mindset. It could be fixed by having everybody that benefits orm the game play by ALL the rules of the games (offshore tax “optimisation” à la google and goldmans sachs). Games are never fair bu we are rachign a situation where winners change the rules to win even more…even though it become counterproductive (i mean at the very end money will lose its value..and i am not refering to QE but to a way longer term).
Additionnally, Cullen i think that we are at a turning point where things such as education but mostly healthcare are on the path of regression (in terms of numbers of people benefiting from it). It’s quite recent and will accelerate since the deficit run to save bankers is now pointed at by those same bankers (who then will, oh irony, get fees to work on privatisation of so called ‘useless’ stuff).
This makes me mad since one would have guessed that crisis would have “recentered” opinions about what was really going on but at the end it only served to push us further and faster in that flawed direction…
I am not a big Buffet fan, but I must agree on the points above – greatest country on the face of the earth right here. There isn’t a single place on the planet where human beings have more opportunity to achieve their God-given potential. What a wonderful idea, America.
If you rate quality of life by materialism, there is no denying that we have more material possessions than at any time in history.
If you rate quality of life by personal freedoms, the story is quite different.
We have less personal freedoms that at any time in our history, and they are deteriorating by the day.
Now comes the chicken and the egg question.
Is our freedom a result of our ability to amass material wealth?
Or is our material wealth the by product of a free and ethical society?
If it is the latter then we have much to worry about.
What personal freedoms are you referring too? 40 years ago black people had almost no freedoms. How did we have more personal freedoms back then?
I can only assume you were not alive 40 years ago. There are literally thousands of laws on the books now that did not exist 40 years ago. The truth is it is almost impossible for any of us to live our lives without breaking laws everyday. The fact that you are not being prosecuted at this point in time does not mean they cannot prosecute you any time they feel like it. What about your rights to privacy. They do not exist anymore. You have fewer rights than an artificial entity called a corporation. Your rights have been reduced systematically until people believe in the existence of victimless crimes. If you really believe any of us have more rights now than we did 40 years ago, you need to study the law, and the Constitution.
We have a lot more stuff, and better stuff in some ways, particularly technology. But we also have a lot more debt, more stress, more anxiety, more job insecurity, more fear. Every one of us has passed homeless people on the street, and we know that could be us, because we have so little in savings, so much debt, and a job that could be eliminated or shipped overseas in the next round of cuts. Many of us are one credit card payment away from losing all that stuff, and most families must have two paychecks, and two cars, to get by.
It’s a relentless rat race that breeds class warfare, family breakdown, and abandonment of the civic realm. That’s why people are so unhappy, because much of what makes life worth living comes from friends, family, and community, and society, which we don’t have time or energy for anymore.
I’m 54 years old and I have never seen people more unhappy and fearful than they are today, not even during the worst moments of the Cold War. That’s not whining, it’s real– we have sold our souls, and very nearly brought the global economic system to its knees, for a mountain of junk and debt. How on earth is that a “better quality of life?”
Yeah, I do love my cell phone. But I swear that I am not one of those annoying types yakking away in restaurants or on the can in public restrooms. And for those who so readily put them down I would have to guess that they don’t own businesses. I have found it to be an invaluable tool in mine and it has contributed immensely to my productivity and profitability (which is the point in economics).
But just to be clear to some who may have missed the point, that comment was not to praise the wonders of cell phones, but to illustrate how far we have advanced in a material sense. Again, the computer technology in the cell phone I own is 1,000,000 times smaller, 1,000,000 times cheaper and 1,000 more powerful than those in the computers used to launch Apollo 13. This technology is ubiquitous and permeates our lives and has done wonders to our living standards. Things just keep getting better and it shows up in our capital markets.
Sadly, we don’t seem to be any happier. I wholeheartedly agree w/ Sonny. My childhood took place in the 60′s and 70′s and it seemed to be a much safer world. The social fabric is thinning out. The rapid changes and intense competition leads to even greater stresses in our lives. And though our material existance has improved in absolute terms, we adjust to the new realities and if we aren’t keeping up with the rest of society it breeds dissatisfaction with life. And akphidelt is spot on. We are bombarded with negative news and this erodes our sense of well being. But this is social commentary and I question how much (not that there isn’t any) relevance this has to economics, markets, and investing.
Far be it from me to deny anyone their misery. If that is how one chooses to see the world (and it is a choice!) there is little that can be done to change it. There is no shortage of misery in this world for those who choose to look for it, but there is a whole lot less than there was 40 years ago. Our greatest leaders never succumbed to that kind of thinking. America is in a slump and we’ll get out of it. Buffet is a successful investor because he has faith in the future. And I will adamantly disagree with anyone who says that the problems we have today are insurmountable, that America is going down the tubes, and thinks the solution is to complain all day long about it.