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DJIA 4,900 test would be bottom, that would be -65% drop from top

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March 03, 2009 – Comments (1) | RELATED TICKERS: BRK-A , BRK-B

or on PAR with the drop of the DJIA in the great depression.

 

Warren Buffett's Berkshire detailed the operating unit cuts in a Monday filing with the U.S. Securities and Exchange Commission.

It said the units "will continue to take cost reduction actions in response to the current economic situation, including curtailing production, reducing capital expenditures, closing facilities and reducing employment to partially compensate for the declines in demand for goods and services."

Buffett, who runs Berkshire and is one of the world's wealthiest people, normally stays out of day-to-day management at Berkshire's operating units, though he monitors their performance and regularly talks with executives.

In his annual letter to Berkshire shareholders on February 28, Buffett said the economy will be "in shambles" through 2009 and perhaps beyond.

"Most of the Berkshire businesses whose results are significantly affected by the economy earned below their potential last year, and that will be true in 2009," he wrote.

Economists polled by Reuters last month on average expected the U.S. unemployment rate to rise to 9.1 percent before the recession ends, up from 7.6 percent in January. Some analysts fear the rate could reach double digits.

Overall employment within Berkshire rose 5.7 percent last year to 246,083 workers, largely from the acquisition of the 18,000-person Marmon Holdings Inc, which makes industrial products. Excluding Marmon, staffing fell 2 percent.

Six of Berkshire's 10 insurance businesses including the largest, auto insurer Geico Corp, also cut jobs in 2008.

The Omaha, Nebraska, home office of Berkshire was spared job cuts in 2008. Staffing there was unchanged at 19.

(Editing by Maureen Bavdek)

1 Comments – Post Your Own

#1) On March 03, 2009 at 1:17 PM, goldminingXpert (29.74) wrote:

Dow went down 90% in the great depression, not 65.

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