Comments on: Warren Buffett And The G20

By: EshipProf

EshipProf — Mon, 09 Nov 2009 16:13:26 +0000

Let me break it down for you: BRK has sold billions of dollars of long-term put options on US stock indices — in effect, a huge bullish bet on the USA. Stock markets went up. Puts go down in value when stock markets go up. BRK was short these options contracts. Options are derivatives. Thus, there were gains on derivatives trades.

By: cheap building materials and supplies

cheap building materials and supplies — Mon, 09 Nov 2009 15:09:53 +0000

Warren Buffett And The G20

Thanks for sharing

By: Dave

Dave — Mon, 09 Nov 2009 03:21:11 +0000

Buffett bought BNI because he didn’t get the Choo-choo set he wanted when he was a kid (read “The Snowball”)

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By: Ted K

Ted K — Mon, 09 Nov 2009 01:08:49 +0000

Productivity rises=jobs move overseas???

Interesting theory. If you can make a graph that proves that and simultaneously proves it’s the civic duty of American workers to be paid less than the minimum wage you could be the next Academic celebrity/star of the Republican party.

By: Ted K

Ted K — Mon, 09 Nov 2009 00:25:48 +0000

This was my original point above, but it seems Mister Sivaram did a much better job stating it.

By: Jessica6

Jessica6 — Mon, 09 Nov 2009 00:11:07 +0000

I agree with Patrice – that’s been my hunch too. This is less to do with China or commodities or shipping but an expectation of where future ‘stimulous funding’ will be going.
I’d expect to see a similar purchase or ‘strategic agreement’ with an additional company that operates North-South along the East coast

By: tippygolden

tippygolden — Sun, 08 Nov 2009 23:49:22 +0000

Is China really the culprit in its trade relationship with North America?

What happened is millions of poor peasants in China found work producing consumer goods for Europe and North America. These factories in China have labour conditions (to put it mildly) that are no longer acceptable in the developed world. While in the United States the purchase of these consumer goods was financed by the credit card companies. Noting here companies like WalMart successfully opposed the development of labour unions in factories that they contract with.

By: tippygolden

tippygolden — Sun, 08 Nov 2009 23:16:03 +0000

IIRC the last time China had a trade surplus it lead to the Opium wars. It goes without saying, a solution entirely befit of morality. As a non-expert, sometimes I wonder if the legalized opium trade was the first chapter in global drug-trafficking; if the “karmic consequences” of the opium trade include the social harm caused by the drug trade in inner-city ghettos and the American war on drugs.

By: hp

hp — Sun, 08 Nov 2009 17:37:13 +0000

Ted,

Don’t you think that the decline in manufacturing employment in the US has more to do with increases in productivity than Ronald Reagan? Manufacturing productivity increases 2-3% a year and will ultimately lead to very few people being employed in making things. A similar process clearly happened in agriculture.

By: Ted K

Ted K — Sun, 08 Nov 2009 16:09:49 +0000

I don’t think it’s a prediction of disaster. I think Buffet just likes to go with safe bets, this is a safe bet with increased profit streams in the future.

We don’t need Buffet to tell us our manufacturing sector is in disaster. Hopefully we can use our own eyes and mind to realize that. We had economists like Milton Friedman telling us for years it’s great to have your nation’s manufacturing base moved overseas if you can get cheaper goods from it.

Of course the fact that business executives (vast majority Republicans) were pocketing all those profit margins from cheap labor into their bank account while illegal immigrants and Chinese prison laborers took our jobs was a COINCIDENTAL result of that….. thank you Reagonomics

By: ella

ella — Sun, 08 Nov 2009 14:20:14 +0000

Let’s hope it doesn’t get that bad before they wake up to the dangers of this deregulated predatory financial services sector of the economy.

By: ella

ella — Sun, 08 Nov 2009 14:18:23 +0000

It is only impossible because they choose not to repeal the legislation. They have forgotten how to legislate.

The EU is currently requiring some of the big banks to divest their insurance business… ie ING without new legislation.

By: Kenneth Davis

Kenneth Davis — Sun, 08 Nov 2009 13:15:47 +0000

Simon’s analysis of the Buffett railroad purchase is most distrurbing! Remember that it was Mr. Buffett back in 2003 who warned the nation of the dangers of our huge trade deficits and that we needed to start pruducing and saving more rather than spending on imports and borrowing from abroad. Has he really given up on our industries ever recovering? That’s a devastating forecast for continuing job losses and unemployment.Say it’s not so, Mr. Buffett!
Ken Davis,
Former US Ass’t Sec’t'y of Commerce/International

By: chindit13

chindit13 — Sun, 08 Nov 2009 13:06:42 +0000

As someone noted, Buffett’s purchase is a bet on continued environmental degradation: carrying coal within the US, and exporting grains to China where the environment is deteriorating more rapidly than anywhere on Earth and self-sufficiency in food will quickly become an historical relic.

The “China as Number 1″ books might not even get as far as the typesetter. At the current rate of money printing (25% M3 growth), wild speculation, and the impossible-to-achieve need for 8% plus GDP growth just to meet the expectations of the 800,000,000 peasants still hoping for the good life, the China melt down is only months away. Every one of those hundreds of empty condominium towers littering every major Chinese city is a bad debt waiting to happen, and a population full of dashed expectations is a disaster waiting to happen.

If any of those China books do make the store, they’ll be on the “Steal Me” table outside within weeks of arrival.

What bubble has ever ended well?