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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerAccording to the AP, billionaire investor Warren Buffett told NBC that the U.S. is engaged in an "economic Pearl Harbor.".
Buffett also said that it never paid to bet against the against America. So, what did he mean?
Probably that Pearl Harbor was a catastrophe. But, it ushered in a period of four years of war. The US prevailed, but the cost was tremendous and there were no easy fixes. Pain and sacrifice were the currency for bringing the country back to a semblance of what it had been before the conflict began.
Buffett has made the comment before that the deleveraging of the broad credit markets would be a lengthy process and that part of the economy might struggle to survive in the process. He says he never believed that derivatives were safe and that banks that relied on them for earnings would eventually be faced with the balance sheet fiasco that has visited US financial firms over the last years.
Buffett had his own bad year in 2008. The return on his investments was not what his shareholders and the public have been accustomed to expecting. His comments about Pearl Harbor may also be a signal that he thinks even his own brilliance will be undercut. The breaking apart of the credit system may just be that bad.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
1-19-2009 @ 11:27AM
cmountaindave said...
Probably that Pearl Harbor was a catastrophe. But, it ushered in a period of four years of war. The US prevailed, but the cost was tremendous and there were no easy fixes. Pain and sacrifice were the currency for bringing the country back to a semblance of what it had been before the conflict began.----------------- I thought we were in a Depression prior to Pearl Harbor. We weren't in one when ww2 ended, and it generally believed that THAT was what got the economy going after failed attempts by FDR - the very same attempts that Obama will now utilize. They tried a Bailout too back then but just like today, the banks hoarded the cash
1-19-2009 @ 1:55PM
r. richard fusilier de la claire said...
One facet that seems to bear on the melting down of our credit. marketing and funding system is the calloused manner we have encouraged 'carpet baggers' to enter and do business in the USA along with the millions that illegally seeped in, changing the color of
the horizon (soon it may be shirts) in America.
1-19-2009 @ 2:11PM
Thomas said...
Nice comparison, but not actually realistic..
But if you really want to go that route..
Pearl Harbor was fought with guns, planes and balistic weaponry.
Today with trading stocks and related information on the internet at the speed of light (in this modern tech era'), you might say we are using the quick and absolute devastation of "Stockmarket Nukes!" --
Quick to destroy, much harder to repair..!