Most shocking economic indicator I've seen yet, bad news
 

Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) reported a 64% drop in quarterly profit late Friday. At the company's annual meeting this past weekend, the legendary investor warned investors to lower their expectations.

Quoted from a CNN article..

Warren Buffet... Berkshire Hathaway... SIXTY FOUR PERCENT DROP, in a SINGLE QUARTER????

I mean it's just profit, they're still raking it in, but that's huge.

Whoah.

I thought you were going to say Jaime Hammer Quit


:: shrugs ::


that is crazy though

He stated profits will be slow to come, in the next couple of years, but that they are happy with lower profits... Hint Hint, they are not crying about going under, just not makeing as much as before.

They have so much cash at hand that they can easily purchase something that can make them MORE profit. The question is what will it be?

WHAT WHAT WHAT??????? :(

jk lmao :p

Good time to learn some technical analysis skills :)

Derivatives the new 'ticking bomb'
Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen

Market Watch
March 10, 2008


ARROYO GRANDE, Calif. (MarketWatch) -- "Charlie and I believe Berkshire should be a fortress of financial strength" wrote Warren Buffett. That was five years before the subprime-credit meltdown.

"We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."

That warning was in Buffett's 2002 letter to Berkshire shareholders. He saw a future that many others chose to ignore. The Iraq war build-up was at a fever-pitch. The imagery of WMDs and a mushroom cloud fresh in his mind.
Also fresh on Buffett's mind: His acquisition of General Re four years earlier, about the time the Long-Term Capital Management hedge fund almost killed the global monetary system. How? This is crucial: LTCM nearly killed the system with a relatively small $5 billion trading loss. Peanuts compared with the hundreds of billions of dollars of subprime-credit write-offs now making Wall Street's big shots look like amateurs.

Buffett tried to sell off Gen Re's derivatives group. No buyers. Unwinding it was costly, but led to his warning that derivatives are a "financial weapon of mass destruction." That was 2002.

Derivatives bubble explodes five times bigger in five years

http://www.marketwatch.com/news/stor...&dist=printTop

Berkshire net income falls 64 percent because of derivatives
http://biz.yahoo.com/ap/080502/earns..._hathaway.html

thats exactly why BSC was saved before BK by JPM by a deal which was backed by FED aka US taxpayer. Derivate bubble simply cant explode since it would bring down whole financial system, therefore any other bank with high derivate exposure wont be allowed to go BK and will be backed by FED. The incured losses of FED will be transfered on the US taxpayer. You should thank to Wallstreet and FED (by zero regulation policy) for a mess they created.

I always thought it was pretty ridiculous that companies can have 10+, hell, 50+ years of crazy profits, make billionaires out of people, branch their company off into 100 small pieces or "divisions" and then when they fuck up and lose a shitload of money, they just sever an arm of their business and lose nothing, or claim bankruptcy for it, etc.

They never have to SAVE any of their profits!! They can have 50 years of windfalls, then in year 51 if things go really bad, they can just bankrupt, get saved by the government, and not even touch their stacks of cash they saved for the 50 years previous..

Wtf?

No shit. But the government has not bailed anyone out yet, the fed has. Banks have gone bankrupt since they were invented. Why should that change now?

How many billions in BONUSES did BSC take before they got bailed out? :disgust

YAHOO.com

few bilions...

Rogers on Bearn Stearns:
https://youtube.com/watch?v=wXUU_lyb0Lc

The question is, what will happen when FED will incure big losses?
There is a serious possibility of FED being stuck with all that TAF shit from its members, some of them possible future BK candidates.

although I dont like much Kunster, this is really very good:

" The Fed has, in effect, made itself the world's largest financial shit-magnet. It has already taken in a few hundred billion in securities based on non-performing real estate loans, and has now opened the window to securities based on non-performing credit card debt, car loans, and other miscellaneous IOUs still drifting un-hedged in the banking ether."

and isnt FED recipient of taxpayers money already?

that Buffett guy should learn from the reps on GFY - "sales are greater than ever!!!!"

http://jurmo.us/2007/07/23/the-day-the-dollar-falls/
(but I hope it doesn't)

As a BRK shareholder ...

The annual report in Feb. explained this pretty well. Buffett himself is managing 62 derivatives contracts. he explained that there is no counterparty risk but because of accounting conventions they must be marked-to-market every quarter. As a result he said, their results will swing by as much as a billion dollars per quarter even though the intrinsic value of these contracts will have changed very little. "Charlies and I will not be bothered by these swings" ... "and we hope you won't be either".