Thanks To Fed, Buffet EARNED $44B Loss?

Even Houseman’s influence as America’s “favorite old fart” for Smith-Barney eventually waned, so no big surprise our “infallible investor” Buffet finally “EARNED” $44B loss as bets on Apple, BoA & AE soured? What recession?

Perhaps a better Q is whether “Anyone is safe in today’s increasingly roiled economy?” To be sure, Buffet’s bellwether Berkshire Holdings, which owns 90 businesses as well as invests in many others, still managed a 10% growth in revenue for the 2nd quarter, i.e., “as many of its businesses increased prices.” Exactly. As one giant company after another reports disappointing results for Q2, the saving grace has often been their ability to “pass their own rising costs” on to customers.

Not that things will get much better any time soon. Recall how many economists & pols blamed the Federal Reserve for waiting too long to bring inflation (and its costs) under control, especially after Congress fueled it with trillions in post-pandemic spending, largely paid for with newly “printed” dollars. Only in the last two months has the Fed aggressively begun to tighten the inflationary supply of money in the economy. And, if it raises its own interest rates another 75 base points in September as widely expected, this march toward a deeper recession coupled with lingering inflation (some may call it “stagflation”) will be because, as Mr. Houseman use to say: “They earned it.” Only problem is, “WE THE PEOPLE get it in the pocketbook aka butt.”

Davd Soul