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Must Reads: Warren Buffett and Credit Problems
By JD Bluefield | April 15, 2008
Warren Buffett’s views: Based on his track record and his constant ranking in the top 3 wealthiest persons on earth, I try to read and learn everything I can about Warren Buffett. This year he is again at the top, surpassing Bill Gates for the first time in over a decade. Fortune (a magazine I subscribe to) posted this article on Buffett, and gives a brief rundown of the current market situation and what he sees for the future. Check it out, short and quick read.
Credit in the news: I’m sure everyone has heard about the credit crunch and how it is getting worse, so here is a another must read on this topic. Here are some of the highlights of the article and other notable occurrences in the recent news:
- GE dropped almost 13% on Friday on its exposure to lending.
- Wachovia plans a stock sale and cut of dividend to help pay for its expected losses from loans.
- Wachovia lost $350 Million Q1 2008.
- Bear-Stearns was purchased by J.P. Morgan Chase with Federal intervention.
- Bank of America bought Countrywide in January.
- Washington Mutual is boosting its reserves for the foreseeable housing bullet it will have to bite.
Bank of America, Citi and JP Morgan Chase will post earnings next week. Many expect them to announce huge write-downs (in losses) as well.
What am I doing about housing and credit? I’m staying put, watching the fireworks and planning my attack. In Hawaii, where I live, the housing market is starting to feel what California and Miami have been experiencing for the last 6-12months. I’ve heard from realtors that the 20% down will be very harder to get around soon and that even those with good credit will have a difficult time getting a loan. Check out an interesting housing timeline here.
If you have credit cards balances, you bought more than you could afford. If you can, return whatever still has a tag or in a box. If you’re transferring balances between cards with 0% intro rates, I hope you have a plan because I don’t think those days will last much longer. Again, I’m all for using credit cards for convenience and cash back, but not to push back payments to when I can afford it.
Topics: Credit Cards, Investing |
One Response to “Must Reads: Warren Buffett and Credit Problems”
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April 15th, 2008 at 8:48 am
Wow! that buffet article was incredible. To put the huge credit problem so simply. The good news is that America can weather this.