Warren Buffett is an investor. In some views, the greatest of all time. That is all he does. He doesn't start companies or invent or make things or run big Fortune 500 companies. He either buys them or invests in them. Currently, while he is on record stating that he hates to keep his capital in just cash, he is awash in cash. He has upwards of 90 percent of his money just sitting in low return cash investments. He continues to sell what little he has invested. He gets it. He is certain about what is going on and has been for a couple of years at least. Investments, right now, are bad investments. He is someone who puts his capital to work. Right now, that isn't working, so he doesn't. There will come a time, an extreme bottom in the stock market, and some very desperate companies that need immediate capital, and he will swoop in then. He did exactly that in 2008. He is patient and very disciplined.
https://www.msn.com/en-us/money/markets/warren-buffett-just-issued-a-stark-warning-to-president-trump-about-the-impact-of-tariffs-it-couldnt-be-any-clearer/ar-AA1ACxnX?ocid=BingNewsSerp
The stock market crash of 1929 and the ensuing main street crash is referred to as The Great Depression. The stock market and housing crash of 2008 and the fallout of that is referred to as The Great Recession. I will call what is happening now The Great Regression. A regression into foolish ideas, policies, threats and destruction for no good reason other than a crazy dictator who said he would do exactly what he is doing was able to get elected in spite of promising to do what he is doing now. It's a regression caused by a small faction of voters who are so desperate to get back what they never will have again that they were willing to elect a Hitler style dictator who promised them he could achieve that Golden age when there is zero chance that ever happens.
The stock market crash of 1929 and the ensuing main street crash is referred to as The Great Depression. The stock market and housing crash of 2008 and the fallout of that is referred to as The Great Recession. I will call what is happening now The Great Regression. A regression into foolish ideas, policies, threats and destruction for no good reason other than a crazy dictator who said he would do exactly what he is doing was able to get elected in spite of promising to do what he is doing now. It's a regression caused by a small faction of voters who are so desperate to get back what they never will have again that they were willing to elect a Hitler style dictator who promised them he could achieve that Golden age when there is zero chance that ever happens.
One only needs to look at how that worked out for Germany and Hitler. Nuff said.
Buffett is patient. America has panicked.
One of the markets greatest beefs is not that there will be tariffs. They dont like tariffs, but they can deal with them. It's simple enough for them. They will just pass off the costs to the end consumer. When they do that, sales will go down, layoffs will happen, the tariffs will come off for good because those that put them there, namely Donald Trump in this case, will be long gone and out the door. Sanity will return at that point, but the scars of what he has done will last long beyond that. Real people will lose real money and real jobs. Real people, just as in 2008 will lose their houses and the ability to have their kids get a decent education. That will be the end result.
Other countries will simply do what Canada and China have done. Tariffs on, threats continue, the tariffs back at America stay on. They will double down until you pull the game of chicken car off to the side. They aren't going to do anything but keep driving directly at you. It's clear Trump will not crash the car, as he has threatened to and then cried wolf already 3 times in less than 6 weeks.
One of the markets greatest beefs is not that there will be tariffs. They dont like tariffs, but they can deal with them. It's simple enough for them. They will just pass off the costs to the end consumer. When they do that, sales will go down, layoffs will happen, the tariffs will come off for good because those that put them there, namely Donald Trump in this case, will be long gone and out the door. Sanity will return at that point, but the scars of what he has done will last long beyond that. Real people will lose real money and real jobs. Real people, just as in 2008 will lose their houses and the ability to have their kids get a decent education. That will be the end result.
Other countries will simply do what Canada and China have done. Tariffs on, threats continue, the tariffs back at America stay on. They will double down until you pull the game of chicken car off to the side. They aren't going to do anything but keep driving directly at you. It's clear Trump will not crash the car, as he has threatened to and then cried wolf already 3 times in less than 6 weeks.
Just today, he has threatened to double down again. Lets see how long it takes to walk that back again.
But the biggest beef that the market has is the uncertainty. Tariffs on for Feb 4th?.Trump said there was nothing you can do about that to stop it. Then, they are delayed. Fix your border.
Border fixed, tariffs are still threatened to go back on for March 4th? They haven't done enough.
Big business and the market complain the next day, and then the border issues dont matter and the tariffs come off.
Then it's another bullshit tariff reason, then the threat is ignored, so they come back off.
But the biggest beef that the market has is the uncertainty. Tariffs on for Feb 4th?.Trump said there was nothing you can do about that to stop it. Then, they are delayed. Fix your border.
Border fixed, tariffs are still threatened to go back on for March 4th? They haven't done enough.
Big business and the market complain the next day, and then the border issues dont matter and the tariffs come off.
Then it's another bullshit tariff reason, then the threat is ignored, so they come back off.
Today it's Aluminum and Steel to go into effect for March 12th. World wide. Nobody flinches. We all know America needs what they import on the metals. Trump can say what he wants. Alcoa and the rest of the big American metal companies cannot produce any more, and certainly even if they could it would take years to get that stream to come online. In the meantime, everything that is made these days needs high grade aluminum and steel that America does not have on its own. It's just a simple fact.
And on and on it goes. Rinse, repeat. Rinse, retreat.
As I started writing this blog on Monday morning, the stock market opened way down. It's the third or fourth time in less than a week that has happened. It's a clear signal that the market has figured out Donald Trump. They are certain he will keep doing this for as long as he has the Presidential clout to do it. He just simply does not care that he is completely destroying his own country and hurting other countries and business people that want America and themselves to succeed. That is very certain at this point. There is a strong case to be made to deal with China in this way, and to bring jobs home. Just not the way he is doing it. It's dumb, and it's lazy. And it wont work.
On top of that, he has completely surrounded himself with very determined loyalists who dont want to tell him what the last bunch did from 2016 to 2020. That is, stop doing this insane dumb shit. It's very harmful. So, everyday he hears from the Howard Lutnick's, the JD Vance's, the Peter Navarro's and the Scott Bessent's. They tell him to pile on the tariffs and threats. Donald Trump loves to have spineless people around him. He has succeeded this time in achieving that. And only that.
When Mr. Trump quickly backtracks on the tariffs like he did last week, first with the Automakers, then with all the rest of it, the market doesnt even flinch now. In fact, after a small trading bump, they double down on the selling off. They already know. They are very certain that within hours, he will just start with more threats. Which is exactly what he did Friday morning after he ditched all the tariffs on Thursday. He has created virtual certainty for the markets and business that the only way to eventually reign him in is to threaten him back and punish him for his insanely foolish and reckless behavior.
So, that is what they will keep doing. If he wants the market to lose 50 percent, or in other words, Great depression levels of pain, he can just keep talking. What he doesnt realize is that they can also make money betting against the market. They can hedge his bullshit rhetoric and get rich while the masses suffer horrific losses. In fact, almost all of them have already done that. They are going to win either way. That is also certain.
So, keep talking Mr. Trump. The market is certain what works with you now.
Why the market took so long to figure all that out is hard to make sense of. Mr. Trump has a very long history of doing things exactly this way for as long as I have known of him, which goes back 45 years now. He is not going to change. It's his way. For better or worse. Worse in this case.
Until he is removed, this is the new certainty. Chaos reigns. That is certain.
Here is what is also certain. That flock to American debt as a safe haven will be the next domino to fall. There is no safe haven when Donald Trump and his fellow cult members control the purse and piggy bank. There are lots of places to find safe haven debt purchasing and investing. I invest. I can simply buy the debt from other countries or businesses. Stable countries and sensible businesses. That is something no country wants. To have the world of investment view them as a very risky investment. It's how Latin countries like Brazil and Argentina end up defaulting on their debt and people lose confidence in them for decades after that.
One of the main reasons that the stock market crashed so violently in 1929 was that there were no buyers when everyone was selling. That is something that feeds off itself. When you get to that point, it collapses very fast. We all know about runs on banks. What the average person does not understand, but real investors do, is that when there is a run on stocks it only takes a couple of days for everyone to sell and basically get wiped out.
Personally, I have no money invested in any risky debt or stocks and haven't for a couple of years. This was obviously going to happen if someone like Trump got in. He did, and so, now it's certain if Congress and the Senate refuse to do the job they were elected to do, the market will just do it for them.
In the meantime, Joe Average and his family in Oklahoma or Utah or Kentucky is going to take massive pain the longer this goes on. So will Canada and others in the short term. We are willing to take that. We are united. Americans, as is their history, are not. When the price of gas and eggs go up they will revolt. We wont. We will ride this out for as long as it takes.
That is again another certainty.
Trump has created absolute certainty. As long as he is in, the market is out. As long as he is in, business will not invest. They will conserve their capital, and wait until he is out. As long as Trump is in, jobs will keep disappearing. All of that is 100 percent certain.
What I am not certain of is how long the American people are willing to stick with him. I was hoping by now they would revolt, but there is not enough of that. The clock is ticking and the market is tanking. There is very little margin left for them to get on this. Their futures are at stake.
Go ahead. Put the steel and Aluminum tariffs on on Wednesday. We dare you. Keep making mistake after mistake. Keep shooting your mouth off, day after day, hour after hour. Keep digging a deeper and deeper hole. Take on the world on April 2nd and tariff everyone for no good reason other than a whim or crazy idea you have. I am certain that the more Mr. Trump does this, the faster the American people will turn on him. The market already has. Big business already has. It hasn't been enough. It's been a start, but it will not finish this. When real America, the people that actually work for a living do, then we can be certain this ends for good. Not a day before.
A perfect example of all this is Tesla. At the rate that stock is falling, and sales are dropping of real product, it's not out of the realm of possibility that they will have to be bailed out by the American government or they will go bankrupt. In any case, there is going to be massive layoffs of real workers and people at Tesla. One only has to watch Elon Musk at work in the last month to see that is his way on a good day, not to mention when the blowback causes a financial collapse to his empire. That is another certainty. A harsh, stark, and terrible one for people that have been drinking his Kool Aid for more than a decade now.
When you lose the certainty of a great reputation and honor, you create the reality of a complete lack of confidence. That is where we are as I write these words today. It's very easy to take back your words on a daily basis. It's much harder to regain the trust that you wont keep doing it over and over again.
In my previous blog about a month ago, I laid out exactly how this is going to play out. Most of what I have said has already happened. It's a long blog, but you can read it here if you wish.
And on and on it goes. Rinse, repeat. Rinse, retreat.
As I started writing this blog on Monday morning, the stock market opened way down. It's the third or fourth time in less than a week that has happened. It's a clear signal that the market has figured out Donald Trump. They are certain he will keep doing this for as long as he has the Presidential clout to do it. He just simply does not care that he is completely destroying his own country and hurting other countries and business people that want America and themselves to succeed. That is very certain at this point. There is a strong case to be made to deal with China in this way, and to bring jobs home. Just not the way he is doing it. It's dumb, and it's lazy. And it wont work.
On top of that, he has completely surrounded himself with very determined loyalists who dont want to tell him what the last bunch did from 2016 to 2020. That is, stop doing this insane dumb shit. It's very harmful. So, everyday he hears from the Howard Lutnick's, the JD Vance's, the Peter Navarro's and the Scott Bessent's. They tell him to pile on the tariffs and threats. Donald Trump loves to have spineless people around him. He has succeeded this time in achieving that. And only that.
When Mr. Trump quickly backtracks on the tariffs like he did last week, first with the Automakers, then with all the rest of it, the market doesnt even flinch now. In fact, after a small trading bump, they double down on the selling off. They already know. They are very certain that within hours, he will just start with more threats. Which is exactly what he did Friday morning after he ditched all the tariffs on Thursday. He has created virtual certainty for the markets and business that the only way to eventually reign him in is to threaten him back and punish him for his insanely foolish and reckless behavior.
So, that is what they will keep doing. If he wants the market to lose 50 percent, or in other words, Great depression levels of pain, he can just keep talking. What he doesnt realize is that they can also make money betting against the market. They can hedge his bullshit rhetoric and get rich while the masses suffer horrific losses. In fact, almost all of them have already done that. They are going to win either way. That is also certain.
So, keep talking Mr. Trump. The market is certain what works with you now.
Why the market took so long to figure all that out is hard to make sense of. Mr. Trump has a very long history of doing things exactly this way for as long as I have known of him, which goes back 45 years now. He is not going to change. It's his way. For better or worse. Worse in this case.
Until he is removed, this is the new certainty. Chaos reigns. That is certain.
Here is what is also certain. That flock to American debt as a safe haven will be the next domino to fall. There is no safe haven when Donald Trump and his fellow cult members control the purse and piggy bank. There are lots of places to find safe haven debt purchasing and investing. I invest. I can simply buy the debt from other countries or businesses. Stable countries and sensible businesses. That is something no country wants. To have the world of investment view them as a very risky investment. It's how Latin countries like Brazil and Argentina end up defaulting on their debt and people lose confidence in them for decades after that.
One of the main reasons that the stock market crashed so violently in 1929 was that there were no buyers when everyone was selling. That is something that feeds off itself. When you get to that point, it collapses very fast. We all know about runs on banks. What the average person does not understand, but real investors do, is that when there is a run on stocks it only takes a couple of days for everyone to sell and basically get wiped out.
Personally, I have no money invested in any risky debt or stocks and haven't for a couple of years. This was obviously going to happen if someone like Trump got in. He did, and so, now it's certain if Congress and the Senate refuse to do the job they were elected to do, the market will just do it for them.
In the meantime, Joe Average and his family in Oklahoma or Utah or Kentucky is going to take massive pain the longer this goes on. So will Canada and others in the short term. We are willing to take that. We are united. Americans, as is their history, are not. When the price of gas and eggs go up they will revolt. We wont. We will ride this out for as long as it takes.
That is again another certainty.
Trump has created absolute certainty. As long as he is in, the market is out. As long as he is in, business will not invest. They will conserve their capital, and wait until he is out. As long as Trump is in, jobs will keep disappearing. All of that is 100 percent certain.
What I am not certain of is how long the American people are willing to stick with him. I was hoping by now they would revolt, but there is not enough of that. The clock is ticking and the market is tanking. There is very little margin left for them to get on this. Their futures are at stake.
Go ahead. Put the steel and Aluminum tariffs on on Wednesday. We dare you. Keep making mistake after mistake. Keep shooting your mouth off, day after day, hour after hour. Keep digging a deeper and deeper hole. Take on the world on April 2nd and tariff everyone for no good reason other than a whim or crazy idea you have. I am certain that the more Mr. Trump does this, the faster the American people will turn on him. The market already has. Big business already has. It hasn't been enough. It's been a start, but it will not finish this. When real America, the people that actually work for a living do, then we can be certain this ends for good. Not a day before.
A perfect example of all this is Tesla. At the rate that stock is falling, and sales are dropping of real product, it's not out of the realm of possibility that they will have to be bailed out by the American government or they will go bankrupt. In any case, there is going to be massive layoffs of real workers and people at Tesla. One only has to watch Elon Musk at work in the last month to see that is his way on a good day, not to mention when the blowback causes a financial collapse to his empire. That is another certainty. A harsh, stark, and terrible one for people that have been drinking his Kool Aid for more than a decade now.
When you lose the certainty of a great reputation and honor, you create the reality of a complete lack of confidence. That is where we are as I write these words today. It's very easy to take back your words on a daily basis. It's much harder to regain the trust that you wont keep doing it over and over again.
In my previous blog about a month ago, I laid out exactly how this is going to play out. Most of what I have said has already happened. It's a long blog, but you can read it here if you wish.
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