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alstry (36.12)

Dominos Starting to Fall?

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March 03, 2008 – Comments (2)

In his interview with Becky Quick this morning, Warren Buffett said that dominos could start falling if unemployment continued to rise.  He first made the statement at the end of last year using 5% as the threshold.  Today, he said we are much closer to that point.

What could Mr. Buffett mean?

2 Comments – Post Your Own

#1) On March 03, 2008 at 8:32 AM, alstry (36.12) wrote:

5% Unemployment?  How about 15%

We are already at about 5% unemployment.  How about 15% unemployment.   Tax revenues accross America are declining 7, 10%, or even more.  Governments are slashing jobs as this is written.  Merrill Lynch is rumbling about HUGE cutbacks.  30% of the residential construction business has been eliminated.  More than that in the mortgage business.

Retailers are shutting down and reducing workers.  Commercial vacancies are rising.  Hotel bookings are slowing and restaurant sales are following the trend.

Recently we have seen Macy's slash thousands of jobs, Ford eliminating even more, Goldman cut 1500, CountryWide cut over 10,000, NJ propose 3000, CA slashing 10% of its budget, and many many more jobs lost in the RE related industries alone.

And we are just at the beginning of the slowdown and job cuts. Clearly this will be an issue to follow closely to see how hard the dominos fall. 

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#2) On March 03, 2008 at 11:07 AM, abitare (93.63) wrote:

The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster

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