Daniel B

Buffett's Latest Headache: U.S. Bancorp

To Williemo:

The comment was on the article being stupid. Bespoke might be full of intelligent people who had a brain fart and wrote a bunch of silliness for all I know. The fact remains, it is an amazingly stupid article. Buffett has made it abundantly clear that he focuses on the long-term.

The banks income fell 65% for one qtr so that makes Buffetts investment stupid? Do you understand the leverage involved in banking, by its very nature? Do you think that bank profits just go up by 10% every year, smooth sailing forever? It appears possible that we are in the worst recession since the great depression. The bank posts a profit, but writes down some assets and that is bad? What do you think happens over the next 10 years?

As well as this, the article implies that all the investments in this list are Buffetts. They arent.



On Jan 21 07:57 PM williemo wrote:

> To : Daniel B
> I would think twice before I made a piercing comment like you did
> about the authors of the article. You obviously aren't familiar with
> Bespoke.

Buffett's Latest Headache: U.S. Bancorp

Amazingly stupid article. You think Buffett is investing to make money over a period of a couple months? If he hasn't made a decent return on these investments in 5+ years, then write an article.

Also, some of these holdings arent even his picks. They are Lou Simpson's.

The Banker: Not a Clue

Its supposed to be capital. It doesnt have to be "spent" per se. If they just keep the money in treasuries they are doing the right thing. It is supposed to increase the confidence of banks in each other. If I know a bank has $3 billion more than it did yesterday, am I more or less likely to lend to/trade with it? If I'm a corporate that has millions in bank acccounts, am I more or less likely to pull that money out if the bank has $3 billion more than yesterday? Its capital. Not spending money.

Why I See Long-Term Deflation

John I don't understand your comments. Don't worry about clearing them up, I don't really care too much.

On topic, do you really think it appropriate to take models from well defined low-variable environments where humans can't affect the rules themselves and apply them to complex multi-thousand if not multi-million variable environments where the very understanding of the environment by various players changes that environment?

Do you think it will give useful results?

Why I See Long-Term Deflation

It is completely stupid to just arbitrarily apply a law of physics to a complex human system that doesnt obey the laws of physics.

And even when using it you have screwed up the analogy. Deflation/inflation are rates of change. In physics, if something is changing a force is acting upon it. So your "base case" if one will, of deflation continuing until a force acts, is just flawed. Inertia, in your stupid analogy, would keep prices stable, not moving. Something has to change for prices to change, no?

People who arbitrarily apply models from hard sciences to human systems have no business writing about complex topics. Why not just start a hedge fund and call it long-term capital?