6 ms·

Warren Buffett says economy fell off a cliff

32 points by donna 18y ago

gcheong 18y ago
That's exactly what the latter part of my portfolio graph looks like.
- deleted 18y ago
  [deleted]
DannoHung 18y ago
Does anyone actually know what's really wrong with the economy? Because I've been reading about this shit for nearly two years and I don't have a real good handle on it, particularly how CDS are involved.
- mynameishere 18y ago
  Bad paper was co-signed by good people.
- jibiki 18y ago
  Considering that there still seems to be disagreement about the causes of the great depression, my guess would be that there are people who know, but nobody knows who they are.
- donna 18y ago
  Thomas Freidman said it all in the Sunday NYT: We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese... All the links begin to break...
  - karl11 18y ago
    Our dealings with China is really not what has created the mess we're in right now. I hope Thomas Friedman didn't actually blame the crisis on our trade imbalance with China. This video [ http://vimeo.com/3261363?pg=embed&sec= http://vimeo.com/3261363?pg=embed&sec= ] does a pretty decent job explaining the basics of the current crisis (~10 min).
- karl11 18y ago
  CDSs work like this: Imagine you buy a house, and then you take out fire insurance with AIG in case it burns down. You pay AIG a premium for the fire insurance. They pay you a large lump sum if the house burns down. Now imagine that AIG felt the risk of the house burning down was so low that they sold insurance policies on the same house to 100 people. They're making tons of money on premiums. And now imagine they did this for 100 different houses. They're raking in the profits, investors are loving it and AIG is doing well. And now imagine all the houses burned down at the same time...

32 points by donna 18y ago

gcheong 18y ago

That's exactly what the latter part of my portfolio graph looks like.

deleted 18y ago
[deleted]

DannoHung 18y ago

Does anyone actually know what's really wrong with the economy? Because I've been reading about this shit for nearly two years and I don't have a real good handle on it, particularly how CDS are involved.

mynameishere 18y ago
Bad paper was co-signed by good people.
jibiki 18y ago
Considering that there still seems to be disagreement about the causes of the great depression, my guess would be that there are people who know, but nobody knows who they are.
donna 18y ago
Thomas Freidman said it all in the Sunday NYT: We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese... All the links begin to break...
- karl11 18y ago
  Our dealings with China is really not what has created the mess we're in right now. I hope Thomas Friedman didn't actually blame the crisis on our trade imbalance with China. This video [ http://vimeo.com/3261363?pg=embed&sec= http://vimeo.com/3261363?pg=embed&sec= ] does a pretty decent job explaining the basics of the current crisis (~10 min).
karl11 18y ago
CDSs work like this: Imagine you buy a house, and then you take out fire insurance with AIG in case it burns down. You pay AIG a premium for the fire insurance. They pay you a large lump sum if the house burns down. Now imagine that AIG felt the risk of the house burning down was so low that they sold insurance policies on the same house to 100 people. They're making tons of money on premiums. And now imagine they did this for 100 different houses. They're raking in the profits, investors are loving it and AIG is doing well. And now imagine all the houses burned down at the same time...