I would never bet against Rommel. With the first quarter housing prices falling like they did, it won't be long before few people have any equity left. When that happens, then what? Shock and awe.

Men like Buffet and jim Cramer make a living from finding and promoting the posititve aspects of the market. So, when in their most upbeat manner, they issue cautions about the ecession "worsening beyond the expectations of the average citizens and investors, it is merely advice tot he investors to use their most prudent cautions in their market investments.

Those forever "optimistic" individuals who thinkthat "ptimism" will overover the rality of the market and our national economy try to undermine the integrity of sound advice. (Wasn't that overly "optimistic" attitude, in part, what perpetuated the subprime mortgage loan debacle?)

Isn't it past time for people to try to balance "optimism" with reality; and adjust their finances and investments towards the long term anticipations of the reality of our situation? Is there a problem with conservative optimism? (Wasn't it the unbridled, overly liberal and unrealistic "optimism" that fueled the melt down of our national economy?) Isn't it time for a return to basic sound business practicesand principles?

We've seen and are experiencing what "nrealistic optimism" can result in. The aftermath of the phony "economic boom should be a lesson for everyone. It's a version of the tortise and the hare. A steady progressive consevative growth would have certainly been a lot better than the collapse of the pyramid scheme that went bust; and has ruined our economy. A lot can be said for the conserative to moderate prudent economic plans.

Warren Buffett himself has said that his economic forecasts aren't his expertise so you are totally right on this. I would add that the media reports often don't provide reasons for his views and I don't see an explanation of why he thinks the "recession" will be deeper than people think. I do agree that the slowdown will be longer because housing won't come back that fast. However, the evidence so far does not seem to point to a "deeper recession than people think". There is a lot of fear due to high oil and food prices and the housing crisis but there are many areas of economic strength including exports and the agricultural, mining, energy sectors and health care. Many companies have turned in better than expected earnings and in some areas there are surprises such as contractors getting work in maintaining foreclosed homes. The jury is still out on how deep the slowdown will be.

His ression comments may or may not be correct but his views on derivative trading is spot on.

I disagree about your analogy, i.e. Buffett:Economy :: Einstein:Fashion Tips. A more appropriate analogy might be
Buffett:Economy :: Einstein:Fluid Dynamics.

Ie the economy is fairly related to Buffett's area of expertise, just as Fluid Dynamics was to mine. Each of us would know more than the average person about the related area (ie Buffett, from owning over 50 companies, probably has a pretty good pulse on things). Also, he didn't give a reason for why he thought the recession would be deeper and longer than most people thought because he probably thought it was so obvious any idiot could figure it out. Clearly he is unable to forecast the level of idiocy out there...Hint: equity withdrawals, savings rate, % of economy that is consumer-driven.