These were words used by none other but Warren Buffett to describe current state of economy. I don’t try to decimate his comments and hang on every remark he makes, like those people who buy fractional shares of Berkshire Hathaway in order to get copy of annual report, with his commentary. This one caught my attention, though, because of very direct tone. I’ve seen few interviews with him and he has never, to my knowledge, been so blunt. Buffett stated fear is dominating Americans’ behavior and the economy has basically followed the worst-case scenario he envisioned. “It’s fallen off a cliff,” Buffett said during a live appearance on CNBC. “Not only has the economy slowed down a lot, but people have really changed their habits like I haven’t seen.” His company’s income fell 96%, something he has not seen before. He predicted that unemployment will likely climb a lot higher before the recession is done and the current efforts to help revive the economy are likely to produce inflation that could be worse than what the country suffered through in the late 1970′s. This is very pessimistic outlook from normally rather upbeat Mr. Buffett. As recently as late fall he wrote a commentary encouraging people to buy U.S. stocks. Today he jokingly said that he has not changed his mind, but should have waited longer to publish the piece.
I knew the two of us had something in common- I also should have waited longer before publishing my yesterday’s piece. It had to do with buying Yen crosses, well, at least placing orders in them. Normally upbeat Mike K. has pessimistic report about those orders. Just like the economy, GBP fell of the cliff, yet again. I discussed 2 potential buys in GBP-JPY. Only one could have been taken- at the market on open and this would have resulted in a loss. My trading in the beast was limited to short term buy breakouts, which left much to be desired.
This is it, two trades with not much to comment. Another pair that was presented yesterday was AUD-JPY. Buy order placed there, at 63.55 is still valid. And I’m tracking more Yen crosses with buy orders above recent minor highs. Meanwhile Swiss Franc became very strong, taking GBP-CHF to under 1.6000. Time to test just how strong is Franc.
I’m placing buy order in EUR-CHF at 1.4723, looking for 80-90 pips. Some of CHF charts indicate more down move( stronger Franc), so things are a little confusing. Next few days will probably decide what happens. If I’m still confused on this issue by the end of the week, I’ll just move over to something else. Plenty of other stuff to trade.
Buffett has lost some his luster, but frankly, nobody is always right. I’m sure he’d like to wait even longer now before saying it was good time to buy stocks.
As far as he is concerned mabe the economy fell of the cliff. His company never had this kind of losses before and some of his recent investments were questionable. Now he is trying to blame it on economy.
Yes, economy is a perfect scape goat now. If something doesn’t go right, you can always say “I was right, but the economy is messing things up”.
It is very refreshing to read you admitt to a little confusion about GBP/chf. Most people who have some success act as if they know it all. Honesty goes a long way.
Mike, do you invest in stocks at all? I know you don’t trade them actively, but what about retirement funds and so on? You admitted to accasionally trading futures. Individual stocks also?
No, Michelle. I don’t invest in individual stocks. If anything I play with ETF’s. But, as you well know, this blog is devoted to Forex trading.
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