The only economy that will be stimulated by the stimulus checks will be China's, as Americans head to Wally World and buy cheap Chinese goods. They don't make plasma screen TVs in Alabama.
Do you know if Buffett actually gave the interview in German, or this is their translation? (I wouldn't doubt Spiegel's translation from his English to their German at all, I only ask because it's actually somewhat impressive if he spoke German in the interview).
Got mine almost two weeks ago. It was direct deposited into my checking account, and spent all of two hours there before I discovered it and had it transferred directly into my brokerage account, where it was promptly invested in stock of a little financial holding company that's made some lucrative bets against the mortgage bond insurers. It's already earned 10%. Thanks for the stimulus!
"The only economy that will be stimulated by the stimulus checks will be China's, as Americans head to Wally World and buy cheap Chinese goods."
If we spend the money at Wal-Mart, all the money will go to China.
If we spend it on gasoline, it will go to the Arabs.
If we purchase a computer, it will go to India.
If we purchase fruits & vegetables, it will go to Mexico, Honduras, &
Guatemala.
If we purchase a good car, it will go to Japan.
If we purchase useless stuff, it will go to Taiwan.
None of which will help the American Economy. We need to keep that money
here in America.
The only way to keep that money here at home is to spend it at Yard Sales
since those are the only businesses left in the U.S.
The truth is the FED and our government don't care what it is spent on as long as it gets spent that is the only way it can enter our fractional reserve banking system.
Threw that check into the move hopper, helped defray the cost of a household move (oh for the days when a twelvepack, a pizza and a couple of friends with a pickup could do the job)...primary reason was to get closer to MIL but also cut commute by ~90%.
I'm with you. Married, don't own a home, no kids. Don't qualify. I like to think that my money was redistributed to someone here on this board who has a brain - but then I also realized it could have been redistributed to someone with 9 kids, who has cancer and still smokes and who went from Section 8 housing to buying a home for nearly $400K.
A group led by Mortimer B. Zuckerman, chief executive of Boston Properties, a publicly traded real estate company, is buying the General Motors Building and three other Midtown towers from the financially troubled Macklowe family for $3.95 billion.
red pill, I took a year of German in college - but that was many years ago. I recognize some words, and I look up others (like Giftgetränk) - I'm wondering if Buffett said "Kool Aid"!
Thank you for your kind gift of a WalMart voucher. However I wish you wouldn't have because unfortunately I am one of those stupid Amerikans that saves instead of spends. Because of your kind gift all the US pesos I previously owned have lost more value than the WalMart voucher you sent adds.
Anyway thanks for the stimulation and give George a big ol kick in the ass for me next time you se him!
I don't know but I would bet Buffett does not speak German and that what he said was translated. Boys born in Nebraska, even if they go to Columbia U., don't usually learn to speak German unless their parents are German and I don't think his were.
Re Buffett and banks: USB didn't get much into the subprime mess and neither did WFC, and I suspect in the latter case Buffett's being a big shareholder may have been a factor keeping them away from it.
The yields on many financial stocks are very tempting and most are down a lot from their highs, but I think they still full of poison and one should stay away.
Who needs high school German when you've got Babelfish?
The recession is "more deeply go lasting and longer, than many denken".
"They brewed a poison beverage and had it at the end trinken" , buffet said." The bankers make normally reluctantly such a thing, them sell it rather on andere" , it added sarkastisch.
In German a 'W' recession would be pronounced like a 'V', problem solved.
OT
These are peoples lives, said an investment banker in his 30s who was laid off in November from his job at a Bank of America office in New York. Its not head count. Were not cattle.
Bwaaaahahaha, suddenly the banksters feel the sting of being 'pink slipped', instead of the $$$ bonus for doing so to other people...
I don't think BRK is cheap (relative) at all. Too much domestic focus.He owns too many insurance businesses which will have to pay out an increasing number of liabilities as the country ages. Car insurance is getting more competitive. All other businesses are facing higher input costs whether is COKE or carpet of jet fuel. The Stock had maybe beaten the s&P by 5-10% over the past few years with no dividends. No I don't see the value here at all.
I personally think the it will be more of a VL shaped recession with a little bump in the second half followed by a sickening fall down...down...down. And then a leveling off.
I'm not sure what owning or not owning a house has to do with getting a stimulus check.
Mortgage interest deduction. The few of my co-workers who qualify for the stimulus check do so thanks to their AGI getting squashed by payments on their expensive houses...
Tim --
GEICO has actually been doing quite well lately, competition or no. Most of the businesses (e.g. Coke) have enough pricing power to pass costs through; Buffett has always favored inflation-resistant franchises.
But really, it is a call option on the greatest investor of all time finding opportunities in the current crisis. If the crisis blows over, I expect Berkshire to outperform the S&P 500 modestly. If everything goes to h*ell in a handbasket, I expect Berkshire to outperform significantly.
It is not a good investment to build wealth. But to preserve it, I know of nothing better than BRK-B at current prices.
Didn't get a stimulus check, although that's probably working as intended; I'm not a big spender, my wife works too so we can actually afford the things we buy with money instead of credit, we live within our means, and I have some savings. Pretty much the exact opposite of the all the types of behavior our government is encouraging.
Serves me right for being bad at living the American way of life, I guess... enjoy the stimulus on me too.
Nemo: "Mortgage interest deduction. The few of my co-workers who qualify for the stimulus check do so thanks to their AGI getting squashed by payments on their expensive houses..."
Your AGI isn't reduced by deductions ... your taxable income is reduced. I'm not sure what income the Gov't is basing the rebate on.
The government kicks our ass and takes $X in taxes and then throws us back a few nickels or OUR OWN money and we get excited. We're pathetic. It was our money to begin with.
We need a Boston Tea Party. The 65% that make this country have forgetten what our founding father's thought about corrupt government and high taxes.
Ok, so people paid car insurance(local), paid for a move (local), invested in a company (local), and helped a family member (local), or didn't get any money. We plan to pay some debt. Don't have much and want to try to keep it that way.
Or, they aren't getting any money, 'cause they're (relatively) rich.
No money going overseas here.
But then the posters on this blog are horses of a different color.
No stimulus here so enjoy! Frankly, though, I think they got this wrong, because I would have spent it
But I'm down Cape Cod this weekend and it doesn't look like people are hurting here. It's mobbed and everyone has bags of booty as usual. Maybe it's all that stimulus!
o stimulus check here either, I'm just a single RN with my house paid off. Living in Texas, I didn't expect to be stimulated. In the "Evilgelical Book of Economics", Debt is good (for the masses). glucklich ist wer vergisst, was doch nicht zu andern ist.
BRK owns property and casualty insurers and has no exposure to aging population. Auto insurance is competitive, but miles driven are down, which is a one time windfall.
Recent winning bets on railroads. Misunderstood accounting volatility on very long term index puts.
On the other hand, I am not arguing that it is cheap....if you don't like it, that's what makes markets.
As far as the quote,
"They brewed a poison beverage and had it at the end trinken"
gotta love it. I'm aware of him using the phrase , "eating your own cooking" which implies a lower likelihood of spitting in the soup. Not aware of him using either koolaid or bongwater, although equally appropriate.
Is there a reason, besides the law of course, that this wouldn't work?
Average Joe | 05.24.08 - 5:40 pm | #
Average Joe,
Check with your 401k. I can borrow against a max of 50k. The fund moves the money from whatever fund you choose to a separate account. This is the collateral for the loan. You never remove the money so no taxes. You pay yourself 8% back into the account. As the money is paid back it moves back to your designated accounts. I am pretty much in Treasuries so I will borrow a small amount if/when needed for a house/land.
AMEN! Despite my cynicism, I STILL can't believe they passed that damned farm bill. If that doesn't convince everyone that DC will always do whatever's worst for us then nothing ever will.
Your stimulus payment is a one-time tax cut - an advance on a credit you'll receive on your 2008 return. You will not owe tax on your payment when you file your 2008 tax return, and it will not increase the amount you owe or reduce your 2008 refund.
Since I was never eligible I didn't read it as closely as I should have. It wasn't an advance on next year's refund, it was an advance on next year's newly created tax credit.
Of course, that just pisses me off further, because that means (like others here not getting checks) that I'm paying for it.
Yeah, it's just a one time "gift" from Uncle Sam.
Of course in order to avoid the next leg down on the recession the rebate will have to be repeated. So we won't have a "w" recession, we will have a wwwww... recession. Kind of like the stock market.
The stimulus check I won't get, I'll just not buy some stuff and even it out. The crap I wanted but passed up comes to $125 so far this week. Will that cover it, or should I keep it up?
My wife and I aren't rich... ended up investing half of our stimulus into GLD (I suppose paper gold is better than paper money, not as expensive as bullion)... and half went to paying off bills and credit card debt. She has teeth problems.
Buffet was every bit as smart as CR and the rest. He saw "the long dark teatime of the economy" last Oct/Nov. Just his positions are so big it took him longer to redeploy before talking his new book. Now he is ready to speak freely. He never was a country bumpkim, that's just part of his strategy. That people still think he lives in a modest home in Omaha is a credit to how well it works.
Wife and I got the max "stimulus", though we paid off mortgage last year and have zero outstanding debt. Apparently our AGI and other formula parameters are not out of bounds. We don't need to consume much of what we receive as income (and this "stimulus" will be handled no differently), i.e., it was immediately converted from the official melting-down fiat currency to our favorite "commodity asset". So it will be counted as "spent" although it remains within our household's economy. Suits us.
As for Berkshire-Hathaway, it is indeed a mature organization and the "option on world's best investor" angle is increasingly problematic given the age of said investor. No offense to Mr. Buffet, but he won't live, or be in charge of investing at B-H, forever, and when he gets "promoted", B-H will tank, although it may take a while. Think "Magellan Fund".
From what I've been told, Buffet has a big stake in USBank and it is the 6th largest in this country. Credit to him, then, that at least on this blog I've never seen a negative word about its exposure to RE problems.
Salmon P.: "Buffett = The Orifice of Omaha. He never shuts up. Put a microphone in his face and he'll talk your ear off."
I like hearing what he has to say. To some extent I tag along for the ride on stocks he has recommended (like the railroads).
Rob Dawg: "He never was a country bumpkim, that's just part of his strategy. That people still think he lives in a modest home in Omaha is a credit to how well it works."
I had read not so long ago that the bottom 30% of workers in the San Francisco Bay Area - one of the most expensive regions in the U.S. - earns less than $8.30 per hour.
Are they in a recession w/ this income and no health insurance, no paid vacation or sick leave, and possibly only part time work?
Hey - I'm not trying to hijack the topic, just a little food for thought: Do you think these people will even notice the coming "depression"? And if most of their jobs somehow dry up (if that's possible), what becomes of the tensions between the bottom third of workers and day laborers (no doc aliens)?
Oh, and muchos gracias to all you whose children will be paying for this stimulus check. We are spending ours installing a wood stove in the house to offset heating oil bills.
The way prices are headed, it should pay for itself in one winter. Lots of cut firewood out back.
Anyone else think the AARP is evil? No one lobby's for people under 30... so yes, we are screwed... or maybe just our children. I hope we end up like Britain, Spain, Germany or France and not worse...
He does live in the same house in Omaha where he has lived for decades. But the aww shucks routine is certainly an act. After all, he doesn't even write his annual letter (C. Baum writes it - complete with folky style).
The least country bumpkin thing about Warren is his personal life - although I guess polygamists often live in the country.
Act or not, the man is brilliant and wise - a rare combo.
I intend to donate my stimulus check to the Obama campaign and the Democratic party. The irony of using Bush's money to fund his enemies is too sweet to pass up.
Anonymouse
California has been a nasty proposition for low end workers for a long time. I had some family out that way in the 80s (2 sets of aunts and uncles, both finally gave up and moved east with not much more than the clothes on their backs). I doubt those on the bottom noticed the "prosperity" in the past few years (at least if they had the good sense to stay away from mortgage brokers bearing gifts).
Reminds me of the fact that in the UK, the Society for the prevention of cruelty against animals was founded several years before the Society for the prevention of cruelty against children. Moreover, the RSPCA filed the first case of child endangerment by claiming the child was a small animal, because there were no laws on the matter in Victorian England.
Anonymouse: Many of the low-key services are at least somewhat discretionary, which is one reason why they don't command higher prices. When they become too expensive, people will cut down on them. You can always hang out at home instead of going out (or "downgrade" your going-out choices), bring your lunch to work instead of heading out to a restaurant, do your own weekly yard maintenance instead of hiring a landscaper, etc. Likewise for other things that I won't list.
Then the jobs are not necessarily around the corner from where you live, and workers are exposed to transportation costs. Owning and renting around here costs real money. I don't know how a local household would sustain itself on commodity service wages alone. Many stores have Help Wanted signs, and/or noticeable staff turnover.
NC Jim: "I intend to donate my stimulus check to the Obama campaign and the Democratic party. The irony of using Bush's money to fund his enemies is too sweet to pass up."
Of course it's not Bush's money -- it's the taxpayer's money
"nobody lobbies for anyone under 30." This old boomer will lobby for you kids. S.S. and Medicare should be means tested. Funny how the Gov. has screwed my Dad for 20 years with their 'inflation' adjustments. He is getting back at them by failing to die on schedule.
The AARP is a joke. Just a bunch of insurance salesmen with a non-profit/no tax status.
Ross: " This old boomer will lobby for you kids. S.S. and Medicare should be means tested. Funny how the Gov. has screwed my Dad for 20 years with their 'inflation' adjustments. He is getting back at them by failing to die on schedule."
Actually Medicare is already means tested. The Medicare premium you pay depends on your income.
On behalf of all the dis empowered paper pushers who have been laid off over the years, let me say BOO-FUCKING-HOO to the investment bankers who were profiled in the NYT article.
Ok, so now we are spending on fixing teeth, paper gold, a wood burning stove that I think has a high probability of being made here, the Obama campaign, and paying off debt. No chinese windfall here.
My daughter said she was going to spend the $300 of some years ago for a pro choice action group. Don't know if she did.
A commenter on another blog figured up that the amount of stimulus money sent out will only amount to about 52 billion. The total cost of the package(I've seen different numbers 13? to 16? billion) shows what will have to be(whenever) paid back to cover the 52 billion.S/he had their numbers all laid out........Anyone here want to crunch the numbers and see how they come out?
Regular gas is now over $4 here in SoCal, right in time for the Memorial Day weekend holiday. My bet is that OPEC is the biggest beneficiary of the so-called stimulus.
Paid some bills, bought some collector silver coins, and contributed to college investments.
Kinda boring really.
"Das ist das Problem: Sie können so etwas nicht steuern, nicht mehr regulieren."
Money quote, not enough taxes or regulation.
Funny thing is, he knows that he is right. What we need is steady and real levels of taxation supporting adequate regulation to protect consumers, and allow the private sector to provide solutions to the energy crisis that make sense in the current situation.
But hey, instead we get stupidity.
What happened when Buffett told the truth during the Ahnold campaign?
He was villified by all the pols, and A.S. dropped him like a hot potato.
Now Kalifornia is sinking faster than under Gray Davis, and a lot of folks in Sacramento still have no fricking clue what to do.
Professional pols are morons, reflection an average man in society, and pandering to that poll rating above all, including things that are unpopular, but necessary.
No wonder the Romans worshipped the memory of Cincinatus.
" . . .It wasn't an advance on next year's refund, it was an advance on next year's newly created tax credit."
Sorry, right on the first idea, but wrong on the second idea. It was a 2008 tax cut, which for many of you will feel like getting a refund, but it isn't. It's your money.
I don't think there's any new tax credit or tax reduction of any kind for the 2009 tax year.
"Now Kalifornia is sinking faster than under Gray Davis, and a lot of folks in Sacramento still have no fricking clue what to do."
Oh, they have a fricking clue -- the Republicans want to cut spending and the Democrats want to raise taxes. - EngineerJim
It isn't that easy. California has has has to trim spending. There is absolutely no scenario where taxes alone can help. The legislature needs a supermajority to pass a budget. This means the Reps are in a position to actually get some meaningful cuts for the first time in close to 9 years. The kinds of solutions being proposed by the Dems includes eliminating the deductibility of mortgage interest. The mere possibility alone IMO is partly responsible for recent price declines. Worse is the old style static revenue projections. The Dems have no clue how close so many businesses are to moving.
Are we still connected to the other economies, will they follow us into long and deep?
They will feel our pain. But, they will eventually realize that we are all washed up and that theyll have to get along without us. Think of it as fledging, they will have to do it, its for their own good.
Thanks tj & nemo- next year, if you want to cut out the middle man, you can send it to us directly. Remember, inflation is running a little high, so put a little extra in
Professional pols are morons, reflection an average man in society, and pandering to that poll rating above all, including things that are unpopular, but necessary.
Is that better or worse than doing things that are both unpopular AND unnecessary (cough Iraq cough)?
No wonder the Romans worshipped the memory of Cincinatus.
"Cincinnatus". And he even renounced his power and returned to his farm when he was done. (Although he did not traipse off there for weeks at a time to clear brush before he was done. Details, details...)
Renunciation of power is surely one of the defining characteristics of greatness. But I do not believe we have seen it in the U.S. since Washington.
Being poll-driven would be OK if the average man was not, as you say, a moron. For the first time in history, nearly every U.S. citizen has at his/her fingertips the entire collective wisdom of the human race. How then can it be that we seem to keep getting more stupid?
Rob Dawg, I hear what you are saying regarding possible spending cuts, but I doubt that it will be done. I have lived in CA for more than 40 years, and all that happens is that various financial stunts are performed to kick the can down the road, or move the problem out of sight. This goes on year after year. For example, the proposed selling off of the lottery -- what a joke.
Heck, the lottery itself is a joke. I voted against it back in 1985 (or whenever it was first proposed). But, you know it was money for the schools (our children).
But, we will see what happens this year. There's always hope.
"The Dems have no clue how close so many businesses are to moving."
Rob Dawg | 05.24.08 - 9:26 pm | #
I am really surprised it has taken this long. When I lived there 14 years ago most all my friends were moving the small companies they owned out of state. There are plenty of rural areas is the US that would LOVE the mfg influx from Califoria.
Until I woke up to hear a friend had totaled my cherry 85 Silverado pickup last night, my check was staying in the bank. Now it's paying the $500.00 deductible.
Engineer Jim, over these next few years here in California, revenues are going to fall so much that there will be no choice but to slash spending.
Just compare household debt to GDP ratios for '29 and '07, and realize what is upon us.
I look forward to the slashing of stupid spending.
Oh, sure, they will raise income, corporate, and sales taxes. But, with withering activity, it will be largely fruitless, and will merely accelerate the exodus of folks of means.
California has perfected living on the far side of the anti-Laffer Curve. Right now any increase in taxes is likely to be revenue neutral within a year and very likely to be revenue negative beyond. 9.3% income, 7.25% sales taxes. $0.14 res electric. Insane.
The Legislature thinks this is just another budget cycle. They have no idea the forces being arrayed against their usual plans. They want to permanently attach another$4.5b in transportation funds but I can guarantee a successful Constitutional Challenge. Just a few weeks ago a judge handed them a 4x larger than expected $6b bill for mandated prisoner health care. The Presidential candidates will not promise anything to this State especially concerning money and unfunded mandates.
""Ross: " This old boomer will lobby for you kids. S.S. and Medicare should be means tested. Funny how the Gov. has screwed my Dad for 20 years with their 'inflation' adjustments. He is getting back at them by failing to die on schedule."
Actually Medicare is already means tested. The Medicare premium you pay depends on your income.""
No, no, NO!!!!... These programs should be ELIMINATED... ZIP, NADA, ZERO.
Where in the Constitution does it say I have to pay for old codgers to sit on their asses????
If you can't work or be likable and elicit charity on your own, then that's your life. I'm sick up to here with the socialist bullshit in this country.
Herr Buffett sprechen das obviousen schiesse; Kudlow und companien ein nincompoopen. Mein stimulus checken ist poofen der debten, der petrol und der grocierien. Nein flatscreen, nein vacationen. Ach.
About five years ago, "99cents only" stores came here (to Houston). I LOVED em! Had never seen a dollar store so great.
I've been getting my long distance from them - for a penny a minute! On occasion I have gotten brand name lunch meats (Oscar Meyer shaved ham, for example, Hebrew National Hot Dogs - over 5 bucks a pkg right across the street) Not past the due date and always good to eat. Ya never knew what you were gonna find. I got electronic parts (a 50' phone cord I priced at $7.50 at office max) kitchen knives - old movies on DVD - top quality Italian pasta - cheap tools - I could go on and on.
The catch, of course, was that the really juicy meats were always in short supply (I learned what day the truck came in - and what time - often there was only one box of the good stuff). Another problem was that the place was always jammed with merchandise - NOT always very well organized.
That last is no longer a problem at all. Everything is meticulously organized and there is plenty of space on the shelves. Matter of fact, it is beginning to resemble one of those state stores in the old Soviet Union. This transformation has been a gradual process - but it only began in JANUARY.
The business model no longer works.
If they don't become the $1.99 of less stores very soon, they'll be another story I tell that no one believes.
tj & the bear writes:
Since I was never eligible I didn't read it as closely as I should have. It wasn't an advance on next year's refund, it was an advance on next year's newly created tax credit.
Of course, that just pisses me off further, because that means (like others here not getting checks) that I'm paying for it.
tj & the bear | 05.24.08 - 7:21 pm | #
We are all going to be paying for this mess for a long time. That should piss everyone off! Not much we can do about it. Thats the really sad part.
On the subject of the stimulus check, can anyone answer this question? Based on my wages, wife and children I would seem eligible for $1,200. However, a company I'm part owner of suffered losses that left my taxable income at a mere $270 for the year. Does this seem to exclude me? The crappy thing is that making so little money means I not eligible for the earned income tax credit either (would have been about $5,000) Last year the company made money and even though I left that gain in the business, that gain disqualified me from the earned income tax credit. I'm getting hit from all directions here.
You guys that are POed about those puny checks to people with less income than you should be more upset about payin for Cheney's healthcare - or the huge tax breaks for big oil, when Exxon makes 11 billion a quarter these days, or that 60-70% of the "stimulus" went to business, or that Republicans killed the most effective part of the package (extending unemployment benefits) while refusing to pay for it by nicking just a bit of those oil subsidies, or the enormous transfer of wealth still taking place from the lower classes (ya - If your name ain't Rockafeller, that probably means you) to the rich.
Really folks, everybody here is smarter than that!
At least Exxon makes it's money purveying a useful product. Ever hear DC grilling those Wall Street types about the zillions in bonuses they've skimmed off marketing fraudulent securities?
mp writes:
After reading all this German, it makes me feel like invading France or something.
mp | 05.24.08 - 11:14 pm | #
Not me - we ate bratwurst & drank beer overlooking the Mississippi River from Wisconsin - after that I was barely motivated enough to drive home and re-invade Minnesota. France will have to wait until tomorrow (got some nice cheap beaujolais in the basement and stakes in the fridge).
re the comment: "...Where in the Constitution does it say I have to pay for old codgers to sit on their asses????"
i consider "my" social security pmts, when i finally start getting them to be re-payments of monies i've put in, as agreed, for the last many 40 plus years
expand legal immigration, as has been done countless times in the past when needed, and before the usual periodic racist fear flares up, and the paying base will expand
quit taking (and repay) the monies contributed via social security taxes, and there'd be no shortage
beyond that, i don't blame anyone for being angry thinking they're "paying" for someone else to do nothing
El Cliffo writes:
There's a 10.3% top income tax rate in California, and a 44.4 cents a gallon state gas tax, and a 8.5% general sales tax in San Francisco.
Of course but I was going with Statewide typical figures. That said your figure of 44.4 cents is State and Federal combined excise tax.
And I hope you're feeling better, Dawg.
Thanks, lots of work left to do and I'm just too irritating to go away. Nothing like going off high powered meds to give an edge to your "Tantatude."
The real danger to California as an ongoing enterprise is the possibility of a revolving credit freeze out. Certificates of Participation may go begging at credit card rates. The possibility of a "Fed window" for municipalities is conceivable result at the expense of any remaining monetary policy credibility.
Didn't get a check. Cashed in some Apple stock to buy a hybrid, and that pushed me over the top.
With people starting to talk about $7 gas, though, I'm not too sorry. And hey, I'll probably qualify for the next stimulus. It'll be a doozey, I'm sure.
I hear you, same thing down south in the OC. Hey, I would have happily consumed more, I've saved prudently and have no debts, so why not stimulate my bank account? I feel discriminated against. (end sarcasm)
Last post in reply to Nemo: "
I did not qualify for the stimulus. That is what happens when you are single, do not own a house, and work as a senior engineer in Silicon Valley..."
There is absolutely no scenario where taxes alone can help.
If I recall correctly, what Buffet told Californians is that they need to repeal Proposition 13 in order to restore their local tax bases and return their overall tax structure to sanity. (For those not familiar with Prop 13, it is basically rent control applied to property taxes).
CR, Rob Dawg, and Paul-- don't give Buffett a pass on the current crisis!
Berkshire is the largest shareholder in Moody's, a firm that did as much to "poison" the financial system as probably any other actor. Indeed, there were revelations this week in FT that Moody's was deliberately mispricing some European debt for nearly a year.
The mortgage securitization bubble does not happen without incompetence (and perhaps worse) at the ratings agencies, and that business made billions for BRK.
On borrowing from 401Ks, I admit its looking attractive to get money out at 7%. The only drawback is that you pay yourself the interest with after-tax dollars, and those dollars are taxed again when you withdraw the money at retirement.
Not just singles getting the shaft without a peck on the cheek.
Married with wife and child, but got screwed because I cashed out most my stock holdings last year after accepting the opinions here that things were going to get bad. Many were held 20-25 years.
But the tax man does not index for inflation. Instead he said "give me another 25 grand and no check for you".
Enjoy your checks folks. At least all my debts are paid for and I have a pile of money ready to jump in where I intend to get it all back plus some. And I am still 80k ahead on the price I sold versus where it stands today.
Last buffetstock in oOmaha he said the US economy is fine BUT today he says fine but their will be a deep long recession (depression?) What gives? Outlook changed? Things get worse?
What to do with Moody's? Oh yeah rate Muni bonds you buy with a AAA or Aa3 or A+ whatever.
Dass der Standort Deutschland im Gegensatz zu anderen Nationen keine Konjunkturprobleme habe, zeige, "dass die Deutschen was von Wirtschaft verstehen".
That Germany has no growth problem compared to other nations shows, he said, that the Germans understand something about business.
vtcodger writes: There is absolutely no scenario where taxes alone can help.
If I recall correctly, what Buffet told Californians is that they need to repeal Proposition 13 in order to restore their local tax bases and return their overall tax structure to sanity.
Just goes to show legendary sophisticated and smarter than me doesn't equal knowing everything. The concept of local control of property tax rates and/or revenues has already been deemed racist. No rich schools or poor schools. Instead we have level funding that in practice rewards worse schools and has resulted in uniform mediocrity. The reform he was talking about was concerning non-residential properties that can take advantage of loopholes to avoid reassesment.
(For those not familiar with Prop 13, it is basically rent control applied to property taxes).
No, Prop 13 inhibits arbitrary and capricious property taxation.
Angry Renter writes:
CR, Rob Dawg, and Paul-- don't give Buffett a pass on the current crisis!
Berkshire is the largest shareholder in Moody's, ... and that business made billions for BRK.
Cannot speak for the rest but this is part of my view as well. Buffet says he doesn't invest in things that cannot be explained in one sentence but he does in companies who do. Linguistic gradations at best. Think about the Moody's example. Moody's rates for a fee, commercial and municipal debt offerings as to relative safety. Classic Buffet investment not much different and complimentary to his core insurers.
Even though a lot of us may not love Warren Buffet, it's interesting that Buffet has a lot more credibility than Chairman Bernanke or Secretary Paulson.
awgee said: "Has Sebastian weighed in on Mr. Buffett's opinion?"
I've been trying forever to make the case that "ordinary" people can "beat" the Big Boys when it comes to making reasonable calls on the economy, because it's not about who you are or what your reputation is, it's about what you know and what you understand.
Warren Buffett is just another in a series of people who are favoring their own personal opinions over the facts, and he'll get it wrong, too.
JP Morgan Fires 200 Executives to Counter Business Slowdown -- Shares Down
(Midnight Trader Via Acquire Media NewsEdge) Boston, May 23, 2008 (MidnightTrader via COMTEX News Network) --
JPMorgan Chase & Co (JPM) is down nearly 2% in morning trading following reports that at least 200 executives, mostly junior bankers, are being fired today to cut costs in the face of declining investment banking business.
As many as 1,000 executives work in the firm's investment banking unit, putting the reduction at 20% at a minimum, a firm spokesman told the Associated Press.
Up to half of the mergers and acquisition department was fired, one executive told CNBC. Other Wall Street firms have made similar cutbacks, but none are as thought to have been as deep.
Chalk me up as a self-employed who's sending my stimulus check right back to the good ol' USA IRS. If it gets here by June 15, that is. I have a tail end SS#.
Anonymous wrote, No, Prop 13 inhibits arbitrary and capricious property taxation.
LOL!
Intelligent economists have known for literally centuries that taxing land in particular is both efficient and equitable. Efficient, because the elasticity of supply of land (in response to price) is zero, so there's no deadweight loss in taxing land. Equitable, because the landowner as landowner makes zero contribution to production, as John Stuart Mill and probably Adam Smith understood.
Want a robust, productive economy? Jack up land taxes and cut taxes on income and sales. Want a stagnant economy and growing inequality in wealth? Cut property taxes.
Adam Smith, The Wealth of Nations, Book 5, Chapter 2, Article 1:
Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them.
John Stuart Mill, Principles of Political Economy: The ordinary progress of a society which increases in wealth, is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer, as it were in their sleep, without working, risking, or economizing. What claim have they, on the general principle of social justice, to this accession of riches? In what would they have been wronged if society had, from the beginning, reserved the right of taxing the spontaneous increase of rent, to the highest amount required by financial exigencies?
My stimulus check buys as much Gold as it can. That should piss Wall Street off. Was a toss up, putting it all into USO,GLD,SLV or holding an Eagle. I Really want to remember the failed attempt at making people feel better and fixing a problem soo big this tiny amount of money cant even put a dent in one hours interest. Doomed, Fraking DOOMED I tell ya
Stimulus check just flopped through the slot today.
Unanimous decision was to stimulate our car insurance payment.
Anonymous Bosch, yeah, I've been simulated too.
I guess I'll can fill up my car (just kidding, I have a high gas mileage car).
Best Wishes.
The only stimulatin I'm a doin is gettin that there thing invested before its worth less than the paper it's a printed on.
Got ours this week. We are using to offset expenses for a broke family member.
Back on topic: Is Buffet a greedy banker since he owns several banks (WFC & UBS?)? Or does he get a pass?
The only economy that will be stimulated by the stimulus checks will be China's, as Americans head to Wally World and buy cheap Chinese goods. They don't make plasma screen TVs in Alabama.
MiTurn, I'd add the oil producers ... of course they are getting all the stimulus they need already!
Best Wishes.
CR,
You can read German?
Not so surprising. Millions of people can read German!
Do you know if Buffett actually gave the interview in German, or this is their translation? (I wouldn't doubt Spiegel's translation from his English to their German at all, I only ask because it's actually somewhat impressive if he spoke German in the interview).
Got mine almost two weeks ago. It was direct deposited into my checking account, and spent all of two hours there before I discovered it and had it transferred directly into my brokerage account, where it was promptly invested in stock of a little financial holding company that's made some lucrative bets against the mortgage bond insurers. It's already earned 10%. Thanks for the stimulus!
"The only economy that will be stimulated by the stimulus checks will be China's, as Americans head to Wally World and buy cheap Chinese goods."
If we spend the money at Wal-Mart, all the money will go to China.
If we spend it on gasoline, it will go to the Arabs.
If we purchase a computer, it will go to India.
If we purchase fruits & vegetables, it will go to Mexico, Honduras, &
Guatemala.
If we purchase a good car, it will go to Japan.
If we purchase useless stuff, it will go to Taiwan.
None of which will help the American Economy. We need to keep that money
here in America.
The only way to keep that money here at home is to spend it at Yard Sales
since those are the only businesses left in the U.S.
The truth is the FED and our government don't care what it is spent on as long as it gets spent that is the only way it can enter our fractional reserve banking system.
I did not qualify for the stimulus. That is what happens when you are single, do not own a house, and work as a senior engineer in Silicon Valley...
So your checks are on me. Enjoy!
So the Oracle of Omaha predicts now, what others here have predicted for months.
So, 4$ gas, record forclosures, double digit housing price collapse, rising gold and commodities....hmmmmm
I recall a few people like Peter Schiff, Marc Faber, Schilling, CR to some extent, making these calls when the DOW was at 14000 last summer.
And these guys aren't called Oracles but nut-job gloom and doomers.
Geez, Jas Jan is more of an Oracle.
Threw that check into the move hopper, helped defray the cost of a household move (oh for the days when a twelvepack, a pizza and a couple of friends with a pickup could do the job)...primary reason was to get closer to MIL but also cut commute by ~90%.
I framed my check and sent it to Hugo Chaves for kicks.
OK readers its time to step up and subscribe or tip!
CR should not be eligible for stimulus.
Jas Jain is no light weight but his attitude is annoying. I suspect my world view is more extreme than Jain's...I'm just not rude about it.
Nemo -
I'm with you. Married, don't own a home, no kids. Don't qualify. I like to think that my money was redistributed to someone here on this board who has a brain - but then I also realized it could have been redistributed to someone with 9 kids, who has cancer and still smokes and who went from Section 8 housing to buying a home for nearly $400K.
...I need a drink if it's the latter.
OT,
A group led by Mortimer B. Zuckerman, chief executive of Boston Properties, a publicly traded real estate company, is buying the General Motors Building and three other Midtown towers from the financially troubled Macklowe family for $3.95 billion.
and,
The deal was struck about 2 a.m. Saturday
Sounds like it was an arranged marriage a while ago and it was the dowry that the yargued about until 2am..
Macklowes Sell G.M. Building For $2.9 Billion - NY Times
if it's not clear who I'm worred my wealth was redistributed to...
check it out here:
http:// http://www.newhavenindependent.o...eowners_sue.php
Oracles know their audiences.
Imagine this getting coverage in the USA...which it won't. There is a massive disconnect between the USA and the rest of the world (e.g. reality).
"Double dip" sounds so unsanitary.
"W shaped" is much better. More accurate, too...
Squeezed:
I suspect Jas has a more forthright culture than you, and sometimes tone gets lost in translation.
5.5 Billion people are not Americans..
red pill, I took a year of German in college - but that was many years ago. I recognize some words, and I look up others (like Giftgetränk) - I'm wondering if Buffett said "Kool Aid"!
Best Wishes.
Mr Paulson,
Thank you for your kind gift of a WalMart voucher. However I wish you wouldn't have because unfortunately I am one of those stupid Amerikans that saves instead of spends. Because of your kind gift all the US pesos I previously owned have lost more value than the WalMart voucher you sent adds.
Anyway thanks for the stimulation and give George a big ol kick in the ass for me next time you se him!
Sincerely
Sequoia512
I don't know but I would bet Buffett does not speak German and that what he said was translated. Boys born in Nebraska, even if they go to Columbia U., don't usually learn to speak German unless their parents are German and I don't think his were.
Re Buffett and banks: USB didn't get much into the subprime mess and neither did WFC, and I suspect in the latter case Buffett's being a big shareholder may have been a factor keeping them away from it.
The yields on many financial stocks are very tempting and most are down a lot from their highs, but I think they still full of poison and one should stay away.
Chris,
I don't think Buffet would need to speak German, as english is compulsory at school for a number of years.
Who needs high school German when you've got Babelfish?
The recession is "more deeply go lasting and longer, than many denken".
"They brewed a poison beverage and had it at the end trinken" , buffet said." The bankers make normally reluctantly such a thing, them sell it rather on andere" , it added sarkastisch.
See? Much clearer than CR's weak attempt.
P.S. Berkshire Hathaway stock is cheap.
OT,
But I have more money in my 457 plan than I owe on my house.
I sure wish I could borrow money from myself and pay me 10 or 12% interest.
That way I'd get a good return in my retirement and have a large tax deduction on my mortgage.
Is there a reason, besides the law of course, that this wouldn't work?
Ah, a "W" recession. Very apropos.
By the way, I'm not sure what owning or not owning a house has to do with getting a stimulus check.
In German a 'W' recession would be pronounced like a 'V', problem solved.
OT
These are peoples lives, said an investment banker in his 30s who was laid off in November from his job at a Bank of America office in New York. Its not head count. Were not cattle.
Bwaaaahahaha, suddenly the banksters feel the sting of being 'pink slipped', instead of the $$$ bonus for doing so to other people...
Wall Street Exodus: Fear, Panic And Anger - NY Times
Nemo,
I don't think BRK is cheap (relative) at all. Too much domestic focus.He owns too many insurance businesses which will have to pay out an increasing number of liabilities as the country ages. Car insurance is getting more competitive. All other businesses are facing higher input costs whether is COKE or carpet of jet fuel. The Stock had maybe beaten the s&P by 5-10% over the past few years with no dividends. No I don't see the value here at all.
I personally think the it will be more of a VL shaped recession with a little bump in the second half followed by a sickening fall down...down...down. And then a leveling off.
For a long time.
l 1
l 1 1
l 1 1
l 1 1
l 1
11111111111111111111111
EngineerJim --
I'm not sure what owning or not owning a house has to do with getting a stimulus check.
Mortgage interest deduction. The few of my co-workers who qualify for the stimulus check do so thanks to their AGI getting squashed by payments on their expensive houses...
Tim --
GEICO has actually been doing quite well lately, competition or no. Most of the businesses (e.g. Coke) have enough pricing power to pass costs through; Buffett has always favored inflation-resistant franchises.
I grant it is a very hard business to value, although John Kish's Intrinsivaluator is not a bad start, IMO.
But really, it is a call option on the greatest investor of all time finding opportunities in the current crisis. If the crisis blows over, I expect Berkshire to outperform the S&P 500 modestly. If everything goes to h*ell in a handbasket, I expect Berkshire to outperform significantly.
It is not a good investment to build wealth. But to preserve it, I know of nothing better than BRK-B at current prices.
I was under the impression insurance weathers economic storms well.
No stimulatin' check here. Didn't qualify. Guess that means this round of drinks are on me.
CR: do you speak German?
O-Joe
Didn't get a check either. I must be defective.
CR: sorry, saw your reply.
Didn't get a stimulus check, although that's probably working as intended; I'm not a big spender, my wife works too so we can actually afford the things we buy with money instead of credit, we live within our means, and I have some savings. Pretty much the exact opposite of the all the types of behavior our government is encouraging.
Serves me right for being bad at living the American way of life, I guess... enjoy the stimulus on me too.
Nemo: "Mortgage interest deduction. The few of my co-workers who qualify for the stimulus check do so thanks to their AGI getting squashed by payments on their expensive houses..."
Your AGI isn't reduced by deductions ... your taxable income is reduced. I'm not sure what income the Gov't is basing the rebate on.
The government kicks our ass and takes $X in taxes and then throws us back a few nickels or OUR OWN money and we get excited. We're pathetic. It was our money to begin with.
We need a Boston Tea Party. The 65% that make this country have forgetten what our founding father's thought about corrupt government and high taxes.
Ok, so people paid car insurance(local), paid for a move (local), invested in a company (local), and helped a family member (local), or didn't get any money. We plan to pay some debt. Don't have much and want to try to keep it that way.
Or, they aren't getting any money, 'cause they're (relatively) rich.
No money going overseas here.
But then the posters on this blog are horses of a different color.
No stimulus here so enjoy! Frankly, though, I think they got this wrong, because I would have spent it
But I'm down Cape Cod this weekend and it doesn't look like people are hurting here. It's mobbed and everyone has bags of booty as usual. Maybe it's all that stimulus!
Boston Tea Party was about taxation without representation. We have representation, it just sucks.
This is the second time in a week someone's brought up the BTP. Wazzup with that?
P.S. Berkshire Hathaway stock is cheap
Probably because the appreciation potential is poor. As Mr. B has said himself, BKR.A is too big to grow very fast any more.
o stimulus check here either, I'm just a single RN with my house paid off. Living in Texas, I didn't expect to be stimulated. In the "Evilgelical Book of Economics", Debt is good (for the masses). glucklich ist wer vergisst, was doch nicht zu andern ist.
Tim.....
BRK owns property and casualty insurers and has no exposure to aging population. Auto insurance is competitive, but miles driven are down, which is a one time windfall.
Recent winning bets on railroads. Misunderstood accounting volatility on very long term index puts.
On the other hand, I am not arguing that it is cheap....if you don't like it, that's what makes markets.
As far as the quote,
"They brewed a poison beverage and had it at the end trinken"
gotta love it. I'm aware of him using the phrase , "eating your own cooking" which implies a lower likelihood of spitting in the soup. Not aware of him using either koolaid or bongwater, although equally appropriate.
No stimulus here, either. Not that I'd want it, since it's just (part of) next year's tax refund one year early.
BTW, it's highly unlikely a majority of Americans know that, so they're in for a rude surprise next year.
Extending on that thought... positive stimulus this year will be negative next year. Ought to accelerate that "second dip" somewhat.
Is there a reason, besides the law of course, that this wouldn't work?
Average Joe | 05.24.08 - 5:40 pm | #
Average Joe,
Check with your 401k. I can borrow against a max of 50k. The fund moves the money from whatever fund you choose to a separate account. This is the collateral for the loan. You never remove the money so no taxes. You pay yourself 8% back into the account. As the money is paid back it moves back to your designated accounts. I am pretty much in Treasuries so I will borrow a small amount if/when needed for a house/land.
Chris
We have representation, it just sucks.
AMEN! Despite my cynicism, I STILL can't believe they passed that damned farm bill. If that doesn't convince everyone that DC will always do whatever's worst for us then nothing ever will.
tj & the bear: "No stimulus here, either. Not that I'd want it, since it's just (part of) next year's tax refund one year early.
BTW, it's highly unlikely a majority of Americans know that, so they're in for a rude surprise next year."
I don't think that's true.
Not to mention that circus wherein Congress grilled "big oil". Never before have I seen such political idiocy paraded publicly.
EngineerJim,
What part? That it's their own money early, or that they don't know?
tj & the bear:
I don't think its true that it's just (part of) next year's tax refund one year early.
Where did you hear that?
You're right, EJ, getting the stimulus check this year will in no way affect your refund for the 2008 tax year.
Okay, EJ, you're right and I'm wrong.
Here's a quote from money.cnn.com:
Your stimulus payment is a one-time tax cut - an advance on a credit you'll receive on your 2008 return. You will not owe tax on your payment when you file your 2008 tax return, and it will not increase the amount you owe or reduce your 2008 refund.
Buffett says long and deep.
Are we still connected to the other economies, will they follow us into long and deep ?
Or just sell us oil that we can dearly not afford.
Since I was never eligible I didn't read it as closely as I should have. It wasn't an advance on next year's refund, it was an advance on next year's newly created tax credit.
Of course, that just pisses me off further, because that means (like others here not getting checks) that I'm paying for it.
I think you're wrong on that too, TJ.
The Chinese are paying for it.
BTW, "long, deep recession" sounds a lot like "depression" to me.
Yeah, it's just a one time "gift" from Uncle Sam.
Of course in order to avoid the next leg down on the recession the rebate will have to be repeated. So we won't have a "w" recession, we will have a wwwww... recession. Kind of like the stock market.
The stimulus check I won't get, I'll just not buy some stuff and even it out. The crap I wanted but passed up comes to $125 so far this week. Will that cover it, or should I keep it up?
EngineerJim --
Your AGI isn't reduced by deductions ... your taxable income is reduced. I'm not sure what income the Gov't is basing the rebate on.
You are right; my mistake. The rebate cut-offs depend on AGI, so homeownership does not matter. (Being married and having kids does, of course).
It is still sickening, but not as bad as I believed. Thanks for the correction.
My wife and I aren't rich... ended up investing half of our stimulus into GLD (I suppose paper gold is better than paper money, not as expensive as bullion)... and half went to paying off bills and credit card debt. She has teeth problems.
Buffett = The Orifice of Omaha. He never shuts up. Put a microphone in his face and he'll talk your ear off.
Buffet was every bit as smart as CR and the rest. He saw "the long dark teatime of the economy" last Oct/Nov. Just his positions are so big it took him longer to redeploy before talking his new book. Now he is ready to speak freely. He never was a country bumpkim, that's just part of his strategy. That people still think he lives in a modest home in Omaha is a credit to how well it works.
"Rabbit warren" buffett. Sounds like hedonics or substitution for the Memorial Day BBQ. Enjoy.
Long and deep. That was Archie Manning.
Wife and I got the max "stimulus", though we paid off mortgage last year and have zero outstanding debt. Apparently our AGI and other formula parameters are not out of bounds. We don't need to consume much of what we receive as income (and this "stimulus" will be handled no differently), i.e., it was immediately converted from the official melting-down fiat currency to our favorite "commodity asset". So it will be counted as "spent" although it remains within our household's economy. Suits us.
As for Berkshire-Hathaway, it is indeed a mature organization and the "option on world's best investor" angle is increasingly problematic given the age of said investor. No offense to Mr. Buffet, but he won't live, or be in charge of investing at B-H, forever, and when he gets "promoted", B-H will tank, although it may take a while. Think "Magellan Fund".
From what I've been told, Buffet has a big stake in USBank and it is the 6th largest in this country. Credit to him, then, that at least on this blog I've never seen a negative word about its exposure to RE problems.
Salmon P.: "Buffett = The Orifice of Omaha. He never shuts up. Put a microphone in his face and he'll talk your ear off."
I like hearing what he has to say. To some extent I tag along for the ride on stocks he has recommended (like the railroads).
Rob Dawg: "He never was a country bumpkim, that's just part of his strategy. That people still think he lives in a modest home in Omaha is a credit to how well it works."
I think he does live in a modest house in Omaha.
I had read not so long ago that the bottom 30% of workers in the San Francisco Bay Area - one of the most expensive regions in the U.S. - earns less than $8.30 per hour.
Are they in a recession w/ this income and no health insurance, no paid vacation or sick leave, and possibly only part time work?
Hey - I'm not trying to hijack the topic, just a little food for thought: Do you think these people will even notice the coming "depression"? And if most of their jobs somehow dry up (if that's possible), what becomes of the tensions between the bottom third of workers and day laborers (no doc aliens)?
Oh, and muchos gracias to all you whose children will be paying for this stimulus check. We are spending ours installing a wood stove in the house to offset heating oil bills.
The way prices are headed, it should pay for itself in one winter. Lots of cut firewood out back.
Kudos to Buffet. This recession is courtesy the bankers. As much as I hate to think about it, the write downs and haircuts are well deserved.
Anyone else think the AARP is evil? No one lobby's for people under 30... so yes, we are screwed... or maybe just our children. I hope we end up like Britain, Spain, Germany or France and not worse...
And if most of their jobs somehow dry up (if that's possible)
Not only possible, but likely.
what becomes of the tensions between the bottom third of workers and day laborers (no doc aliens)?
"Immigration Reform" will become politically radioactive.
No one lobby's for people under 30
And people wonder why there's so many references to the Boston Tea Party.
R dog
He does live in the same house in Omaha where he has lived for decades. But the aww shucks routine is certainly an act. After all, he doesn't even write his annual letter (C. Baum writes it - complete with folky style).
The least country bumpkin thing about Warren is his personal life - although I guess polygamists often live in the country.
Act or not, the man is brilliant and wise - a rare combo.
I intend to donate my stimulus check to the Obama campaign and the Democratic party. The irony of using Bush's money to fund his enemies is too sweet to pass up.
Jim
Anonymouse
California has been a nasty proposition for low end workers for a long time. I had some family out that way in the 80s (2 sets of aunts and uncles, both finally gave up and moved east with not much more than the clothes on their backs). I doubt those on the bottom noticed the "prosperity" in the past few years (at least if they had the good sense to stay away from mortgage brokers bearing gifts).
"No one lobby's for people under 30"
Reminds me of the fact that in the UK, the Society for the prevention of cruelty against animals was founded several years before the Society for the prevention of cruelty against children. Moreover, the RSPCA filed the first case of child endangerment by claiming the child was a small animal, because there were no laws on the matter in Victorian England.
National Society for the Prevention of Cruelty to Children - Wikipedia, the free encyclopedia
Anonymouse: Many of the low-key services are at least somewhat discretionary, which is one reason why they don't command higher prices. When they become too expensive, people will cut down on them. You can always hang out at home instead of going out (or "downgrade" your going-out choices), bring your lunch to work instead of heading out to a restaurant, do your own weekly yard maintenance instead of hiring a landscaper, etc. Likewise for other things that I won't list.
Then the jobs are not necessarily around the corner from where you live, and workers are exposed to transportation costs. Owning and renting around here costs real money. I don't know how a local household would sustain itself on commodity service wages alone. Many stores have Help Wanted signs, and/or noticeable staff turnover.
NC Jim: "I intend to donate my stimulus check to the Obama campaign and the Democratic party. The irony of using Bush's money to fund his enemies is too sweet to pass up."
Of course it's not Bush's money -- it's the taxpayer's money
"nobody lobbies for anyone under 30." This old boomer will lobby for you kids. S.S. and Medicare should be means tested. Funny how the Gov. has screwed my Dad for 20 years with their 'inflation' adjustments. He is getting back at them by failing to die on schedule.
The AARP is a joke. Just a bunch of insurance salesmen with a non-profit/no tax status.
Ross: " This old boomer will lobby for you kids. S.S. and Medicare should be means tested. Funny how the Gov. has screwed my Dad for 20 years with their 'inflation' adjustments. He is getting back at them by failing to die on schedule."
Actually Medicare is already means tested. The Medicare premium you pay depends on your income.
On behalf of all the dis empowered paper pushers who have been laid off over the years, let me say BOO-FUCKING-HOO to the investment bankers who were profiled in the NYT article.
Ok, so now we are spending on fixing teeth, paper gold, a wood burning stove that I think has a high probability of being made here, the Obama campaign, and paying off debt. No chinese windfall here.
My daughter said she was going to spend the $300 of some years ago for a pro choice action group. Don't know if she did.
A commenter on another blog figured up that the amount of stimulus money sent out will only amount to about 52 billion. The total cost of the package(I've seen different numbers 13? to 16? billion) shows what will have to be(whenever) paid back to cover the 52 billion.S/he had their numbers all laid out........Anyone here want to crunch the numbers and see how they come out?
Peter Schiff again, enjoy it.
YouTube - Peter Schiff & Don Luskin - CNBC - Kudlow & Company - 7/2/2007
Regular gas is now over $4 here in SoCal, right in time for the Memorial Day weekend holiday. My bet is that OPEC is the biggest beneficiary of the so-called stimulus.
Paid some bills, bought some collector silver coins, and contributed to college investments.
Kinda boring really.
"Das ist das Problem: Sie können so etwas nicht steuern, nicht mehr regulieren."
Money quote, not enough taxes or regulation.
Funny thing is, he knows that he is right. What we need is steady and real levels of taxation supporting adequate regulation to protect consumers, and allow the private sector to provide solutions to the energy crisis that make sense in the current situation.
But hey, instead we get stupidity.
What happened when Buffett told the truth during the Ahnold campaign?
He was villified by all the pols, and A.S. dropped him like a hot potato.
Now Kalifornia is sinking faster than under Gray Davis, and a lot of folks in Sacramento still have no fricking clue what to do.
Professional pols are morons, reflection an average man in society, and pandering to that poll rating above all, including things that are unpopular, but necessary.
No wonder the Romans worshipped the memory of Cincinatus.
Someday this war's gonna end...
Vie Geits?
And here I am, conversant in Spanish.
AllenM: "What happened when Buffett told the truth during the Ahnold campaign?
He was villified by all the pols, and A.S. dropped him like a hot potato."
What truth did Buffett tell ?
"Now Kalifornia is sinking faster than under Gray Davis, and a lot of folks in Sacramento still have no fricking clue what to do."
Oh, they have a fricking clue -- the Republicans want to cut spending and the Democrats want to raise taxes.
And what are we really going to do ?-- well we'll sell off the lottery to raise a few billion, and if that doesn't work we will raise the sales tax.
"Meanwhile, on Friday, Goldman Sachs forecast a "double dip" recession,"
What does "double dip" means?
" . . .It wasn't an advance on next year's refund, it was an advance on next year's newly created tax credit."
Sorry, right on the first idea, but wrong on the second idea. It was a 2008 tax cut, which for many of you will feel like getting a refund, but it isn't. It's your money.
I don't think there's any new tax credit or tax reduction of any kind for the 2009 tax year.
wawawa,
Double dip means the economy will go into recession, recover a bit, and then dip into recession again.
"Now Kalifornia is sinking faster than under Gray Davis, and a lot of folks in Sacramento still have no fricking clue what to do."
Oh, they have a fricking clue -- the Republicans want to cut spending and the Democrats want to raise taxes. - EngineerJim
It isn't that easy. California has has has to trim spending. There is absolutely no scenario where taxes alone can help. The legislature needs a supermajority to pass a budget. This means the Reps are in a position to actually get some meaningful cuts for the first time in close to 9 years. The kinds of solutions being proposed by the Dems includes eliminating the deductibility of mortgage interest. The mere possibility alone IMO is partly responsible for recent price declines. Worse is the old style static revenue projections. The Dems have no clue how close so many businesses are to moving.
Cartoon of the Week.
Of course it's not Bush's money -- it's the taxpayer's money
EngineerJim | 05.24.08 - 8:21 pm | #
Taxpayer's money was already spent. In the era of budget deficits, additional spending is borrowed from the Chinese or ME savers BY Bush.
But your point is well made. There is no free lunch.
Jim
Are we still connected to the other economies, will they follow us into long and deep?
They will feel our pain. But, they will eventually realize that we are all washed up and that theyll have to get along without us. Think of it as fledging, they will have to do it, its for their own good.
Thanks tj & nemo- next year, if you want to cut out the middle man, you can send it to us directly. Remember, inflation is running a little high, so put a little extra in
AllenM --
Professional pols are morons, reflection an average man in society, and pandering to that poll rating above all, including things that are unpopular, but necessary.
Is that better or worse than doing things that are both unpopular AND unnecessary (cough Iraq cough)?
No wonder the Romans worshipped the memory of Cincinatus.
"Cincinnatus". And he even renounced his power and returned to his farm when he was done. (Although he did not traipse off there for weeks at a time to clear brush before he was done. Details, details...)
Renunciation of power is surely one of the defining characteristics of greatness. But I do not believe we have seen it in the U.S. since Washington.
Being poll-driven would be OK if the average man was not, as you say, a moron. For the first time in history, nearly every U.S. citizen has at his/her fingertips the entire collective wisdom of the human race. How then can it be that we seem to keep getting more stupid?
Rob Dawg, I hear what you are saying regarding possible spending cuts, but I doubt that it will be done. I have lived in CA for more than 40 years, and all that happens is that various financial stunts are performed to kick the can down the road, or move the problem out of sight. This goes on year after year. For example, the proposed selling off of the lottery -- what a joke.
Heck, the lottery itself is a joke. I voted against it back in 1985 (or whenever it was first proposed). But, you know it was money for the schools (our children).
But, we will see what happens this year. There's always hope.
"The Dems have no clue how close so many businesses are to moving."
Rob Dawg | 05.24.08 - 9:26 pm | #
I am really surprised it has taken this long. When I lived there 14 years ago most all my friends were moving the small companies they owned out of state. There are plenty of rural areas is the US that would LOVE the mfg influx from Califoria.
Chris
Until I woke up to hear a friend had totaled my cherry 85 Silverado pickup last night, my check was staying in the bank. Now it's paying the $500.00 deductible.
Engineer Jim, over these next few years here in California, revenues are going to fall so much that there will be no choice but to slash spending.
Just compare household debt to GDP ratios for '29 and '07, and realize what is upon us.
I look forward to the slashing of stupid spending.
Oh, sure, they will raise income, corporate, and sales taxes. But, with withering activity, it will be largely fruitless, and will merely accelerate the exodus of folks of means.
California has perfected living on the far side of the anti-Laffer Curve. Right now any increase in taxes is likely to be revenue neutral within a year and very likely to be revenue negative beyond. 9.3% income, 7.25% sales taxes. $0.14 res electric. Insane.
The Legislature thinks this is just another budget cycle. They have no idea the forces being arrayed against their usual plans. They want to permanently attach another$4.5b in transportation funds but I can guarantee a successful Constitutional Challenge. Just a few weeks ago a judge handed them a 4x larger than expected $6b bill for mandated prisoner health care. The Presidential candidates will not promise anything to this State especially concerning money and unfunded mandates.
thanks transient.
""Ross: " This old boomer will lobby for you kids. S.S. and Medicare should be means tested. Funny how the Gov. has screwed my Dad for 20 years with their 'inflation' adjustments. He is getting back at them by failing to die on schedule."
Actually Medicare is already means tested. The Medicare premium you pay depends on your income.""
No, no, NO!!!!... These programs should be ELIMINATED... ZIP, NADA, ZERO.
Where in the Constitution does it say I have to pay for old codgers to sit on their asses????
If you can't work or be likable and elicit charity on your own, then that's your life. I'm sick up to here with the socialist bullshit in this country.
There's a 10.3% top income tax rate in California, and a 44.4 cents a gallon state gas tax, and a 8.5% general sales tax in San Francisco.
And I hope you're feeling better, Dawg.
Herr Buffett sprechen das obviousen schiesse; Kudlow und companien ein nincompoopen. Mein stimulus checken ist poofen der debten, der petrol und der grocierien. Nein flatscreen, nein vacationen. Ach.
Those who haven't gotten their stimulus check may
still have one coming. They are being mailed out
starting with the lowest last 2 digits of your SS#.
Has Sebastian weighed in on Mr. Buffett's opinion?
Buffett said this on CNBC a couple of months ago and I posted it that morning. Its nothing new.
Off topic - sorta - but please bear with me.
About five years ago, "99cents only" stores came here (to Houston). I LOVED em! Had never seen a dollar store so great.
I've been getting my long distance from them - for a penny a minute! On occasion I have gotten brand name lunch meats (Oscar Meyer shaved ham, for example, Hebrew National Hot Dogs - over 5 bucks a pkg right across the street) Not past the due date and always good to eat. Ya never knew what you were gonna find. I got electronic parts (a 50' phone cord I priced at $7.50 at office max) kitchen knives - old movies on DVD - top quality Italian pasta - cheap tools - I could go on and on.
The catch, of course, was that the really juicy meats were always in short supply (I learned what day the truck came in - and what time - often there was only one box of the good stuff). Another problem was that the place was always jammed with merchandise - NOT always very well organized.
That last is no longer a problem at all. Everything is meticulously organized and there is plenty of space on the shelves. Matter of fact, it is beginning to resemble one of those state stores in the old Soviet Union. This transformation has been a gradual process - but it only began in JANUARY.
The business model no longer works.
If they don't become the $1.99 of less stores very soon, they'll be another story I tell that no one believes.
tj & the bear writes:
Since I was never eligible I didn't read it as closely as I should have. It wasn't an advance on next year's refund, it was an advance on next year's newly created tax credit.
Of course, that just pisses me off further, because that means (like others here not getting checks) that I'm paying for it.
tj & the bear | 05.24.08 - 7:21 pm | #
We are all going to be paying for this mess for a long time. That should piss everyone off! Not much we can do about it. Thats the really sad part.
After reading all this German, it makes me feel like invading France or something.
On the subject of the stimulus check, can anyone answer this question? Based on my wages, wife and children I would seem eligible for $1,200. However, a company I'm part owner of suffered losses that left my taxable income at a mere $270 for the year. Does this seem to exclude me? The crappy thing is that making so little money means I not eligible for the earned income tax credit either (would have been about $5,000) Last year the company made money and even though I left that gain in the business, that gain disqualified me from the earned income tax credit. I'm getting hit from all directions here.
You guys that are POed about those puny checks to people with less income than you should be more upset about payin for Cheney's healthcare - or the huge tax breaks for big oil, when Exxon makes 11 billion a quarter these days, or that 60-70% of the "stimulus" went to business, or that Republicans killed the most effective part of the package (extending unemployment benefits) while refusing to pay for it by nicking just a bit of those oil subsidies, or the enormous transfer of wealth still taking place from the lower classes (ya - If your name ain't Rockafeller, that probably means you) to the rich.
Really folks, everybody here is smarter than that!
After reading all this German, it makes me feel like invading France or something.
LMAO! Perhaps we can pillage their nuclear plants & the TGV. [Although I'm with Dawg on public transportation, that's one bitchin' train.]
UnEasyOne,
At least Exxon makes it's money purveying a useful product. Ever hear DC grilling those Wall Street types about the zillions in bonuses they've skimmed off marketing fraudulent securities?
Let Google translate the article.
mp writes:
After reading all this German, it makes me feel like invading France or something.
mp | 05.24.08 - 11:14 pm | #
Not me - we ate bratwurst & drank beer overlooking the Mississippi River from Wisconsin - after that I was barely motivated enough to drive home and re-invade Minnesota. France will have to wait until tomorrow (got some nice cheap beaujolais in the basement and stakes in the fridge).
If you want to pillage Minnesota or France in style, you've got to do it in a Mercedes G4.
re the comment: "...Where in the Constitution does it say I have to pay for old codgers to sit on their asses????"
i consider "my" social security pmts, when i finally start getting them
to be re-payments of monies i've put in, as agreed, for the last many 40 plus years
expand legal immigration, as has been done countless times in the past when needed, and before the usual periodic racist fear flares up, and the paying base will expand
quit taking (and repay) the monies contributed via social security taxes, and there'd be no shortage
beyond that, i don't blame anyone for being angry thinking they're "paying" for someone else to do nothing
El Cliffo writes:
There's a 10.3% top income tax rate in California, and a 44.4 cents a gallon state gas tax, and a 8.5% general sales tax in San Francisco.
Of course but I was going with Statewide typical figures. That said your figure of 44.4 cents is State and Federal combined excise tax.
And I hope you're feeling better, Dawg.
Thanks, lots of work left to do and I'm just too irritating to go away. Nothing like going off high powered meds to give an edge to your "Tantatude."
The real danger to California as an ongoing enterprise is the possibility of a revolving credit freeze out. Certificates of Participation may go begging at credit card rates. The possibility of a "Fed window" for municipalities is conceivable result at the expense of any remaining monetary policy credibility.
Ich bin fleißig, du bist faul -- the only German retained from high school German class . . .
"If you want to pillage Minnesota or France in style, you've got to do it in a Mercedes G4."
Nah, I'd rather annex the Sudetenland in a Panzer.
Didn't get a check. Cashed in some Apple stock to buy a hybrid, and that pushed me over the top.
With people starting to talk about $7 gas, though, I'm not too sorry. And hey, I'll probably qualify for the next stimulus. It'll be a doozey, I'm sure.
expand legal immigration
That assumes there'll be jobs for them, and given recent employment trends I'd say that's a bad assumption.
AllenM writes:
...
"Das ist das Problem: Sie können so etwas nicht steuern, nicht mehr regulieren."
Money quote, not enough taxes or regulation.
'steuren' also means to control. Buffet is speaking about the problem of not having effective controls and regulation of derivatives.
>
I hear you, same thing down south in the OC. Hey, I would have happily consumed more, I've saved prudently and have no debts, so why not stimulate my bank account? I feel discriminated against. (end sarcasm)
Last post in reply to Nemo: "
I did not qualify for the stimulus. That is what happens when you are single, do not own a house, and work as a senior engineer in Silicon Valley..."
There is absolutely no scenario where taxes alone can help.
If I recall correctly, what Buffet told Californians is that they need to repeal Proposition 13 in order to restore their local tax bases and return their overall tax structure to sanity. (For those not familiar with Prop 13, it is basically rent control applied to property taxes).
He's probably right of course.
http://www.bbc.co.uk/worldservice/meta/tx/nb/analysis_tue_au_nb.ram
Listen (9mins)
At a time of gloom in many of the major western economies, Germany seems to be doing well.
On the way up, the USA may have to compete against Germany or work for them.
CR, Rob Dawg, and Paul-- don't give Buffett a pass on the current crisis!
Berkshire is the largest shareholder in Moody's, a firm that did as much to "poison" the financial system as probably any other actor. Indeed, there were revelations this week in FT that Moody's was deliberately mispricing some European debt for nearly a year.
The mortgage securitization bubble does not happen without incompetence (and perhaps worse) at the ratings agencies, and that business made billions for BRK.
On borrowing from 401Ks, I admit its looking attractive to get money out at 7%. The only drawback is that you pay yourself the interest with after-tax dollars, and those dollars are taxed again when you withdraw the money at retirement.
Stimulus? Yep- helps pay for my property taxes due July 1st.
Not just singles getting the shaft without a peck on the cheek.
Married with wife and child, but got screwed because I cashed out most my stock holdings last year after accepting the opinions here that things were going to get bad. Many were held 20-25 years.
But the tax man does not index for inflation. Instead he said "give me another 25 grand and no check for you".
Enjoy your checks folks. At least all my debts are paid for and I have a pile of money ready to jump in where I intend to get it all back plus some. And I am still 80k ahead on the price I sold versus where it stands today.
Gomer
Last buffetstock in oOmaha he said the US economy is fine BUT today he says fine but their will be a deep long recession (depression?) What gives? Outlook changed? Things get worse?
What to do with Moody's? Oh yeah rate Muni bonds you buy with a AAA or Aa3 or A+ whatever.
Dass der Standort Deutschland im Gegensatz zu anderen Nationen keine Konjunkturprobleme habe, zeige, "dass die Deutschen was von Wirtschaft verstehen".
That Germany has no growth problem compared to other nations shows, he said, that the Germans understand something about business.
When I was a kid, double dip was a GOOD thing.
Who knew?
vtcodger writes:
There is absolutely no scenario where taxes alone can help.
If I recall correctly, what Buffet told Californians is that they need to repeal Proposition 13 in order to restore their local tax bases and return their overall tax structure to sanity.
Just goes to show legendary sophisticated and smarter than me doesn't equal knowing everything. The concept of local control of property tax rates and/or revenues has already been deemed racist. No rich schools or poor schools. Instead we have level funding that in practice rewards worse schools and has resulted in uniform mediocrity. The reform he was talking about was concerning non-residential properties that can take advantage of loopholes to avoid reassesment.
(For those not familiar with Prop 13, it is basically rent control applied to property taxes).
No, Prop 13 inhibits arbitrary and capricious property taxation.
Angry Renter writes:
CR, Rob Dawg, and Paul-- don't give Buffett a pass on the current crisis!
Berkshire is the largest shareholder in Moody's, ... and that business made billions for BRK.
Cannot speak for the rest but this is part of my view as well. Buffet says he doesn't invest in things that cannot be explained in one sentence but he does in companies who do. Linguistic gradations at best. Think about the Moody's example. Moody's rates for a fee, commercial and municipal debt offerings as to relative safety. Classic Buffet investment not much different and complimentary to his core insurers.
Even though a lot of us may not love Warren Buffet, it's interesting that Buffet has a lot more credibility than Chairman Bernanke or Secretary Paulson.
Bankers didn't drink it themselves. They made their shareholders drink the poison, after making the shareholders pay for their huge bonuses.
english version of buffet's interview
Buffett sees long, deep U.S. recession
| Reuters
awgee said: "Has Sebastian weighed in on Mr. Buffett's opinion?"
I've been trying forever to make the case that "ordinary" people can "beat" the Big Boys when it comes to making reasonable calls on the economy, because it's not about who you are or what your reputation is, it's about what you know and what you understand.
Warren Buffett is just another in a series of people who are favoring their own personal opinions over the facts, and he'll get it wrong, too.
Sebastia
Did you see this one? Not widely reported.
JP Morgan Fires 200 Executives to Counter Business Slowdown -- Shares Down
(Midnight Trader Via Acquire Media NewsEdge) Boston, May 23, 2008 (MidnightTrader via COMTEX News Network) --
JPMorgan Chase & Co (JPM) is down nearly 2% in morning trading following reports that at least 200 executives, mostly junior bankers, are being fired today to cut costs in the face of declining investment banking business.
As many as 1,000 executives work in the firm's investment banking unit, putting the reduction at 20% at a minimum, a firm spokesman told the Associated Press.
Up to half of the mergers and acquisition department was fired, one executive told CNBC. Other Wall Street firms have made similar cutbacks, but none are as thought to have been as deep.
JP Morgan Fires 200 Executives to Counter Business Slowdown -- Shares Down
Warren Buffett is just another in a series of people who are favoring their own personal opinions over the facts, and he'll get it wrong, too.
Sebastian,
Can you point out the facts Buffett is getting wrong? Much appreciated.
"But he said that won't stop him from investing in selected companies and said he remained interested in well-managed German family-owned companies."
Why family-owned companies ?
FT Woods asked: "Sebastian,
Can you point out the facts Buffett is getting wrong? Much appreciated."
If you read the article, it has nothing but his own assertions and opinions, which is my point.
Sebastia
Chalk me up as a self-employed who's sending my stimulus check right back to the good ol' USA IRS. If it gets here by June 15, that is. I have a tail end SS#.
Anonymous wrote, No, Prop 13 inhibits arbitrary and capricious property taxation.
LOL!
Intelligent economists have known for literally centuries that taxing land in particular is both efficient and equitable. Efficient, because the elasticity of supply of land (in response to price) is zero, so there's no deadweight loss in taxing land. Equitable, because the landowner as landowner makes zero contribution to production, as John Stuart Mill and probably Adam Smith understood.
Want a robust, productive economy? Jack up land taxes and cut taxes on income and sales. Want a stagnant economy and growing inequality in wealth? Cut property taxes.
Adam Smith, The Wealth of Nations, Book 5, Chapter 2, Article 1:
Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them.
John Stuart Mill, Principles of Political Economy: The ordinary progress of a society which increases in wealth, is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer, as it were in their sleep, without working, risking, or economizing. What claim have they, on the general principle of social justice, to this accession of riches? In what would they have been wronged if society had, from the beginning, reserved the right of taxing the spontaneous increase of rent, to the highest amount required by financial exigencies?
liberal writes:
"[Rob Dawg]wrote, No, Prop 13 inhibits arbitrary and capricious property taxation."
LOL!
Intelligent economists have known for literally centuries...
Well there's your answer right there. LoL myself.
My stimulus check buys as much Gold as it can. That should piss Wall Street off. Was a toss up, putting it all into USO,GLD,SLV or holding an Eagle. I Really want to remember the failed attempt at making people feel better and fixing a problem soo big this tiny amount of money cant even put a dent in one hours interest. Doomed, Fraking DOOMED I tell ya