Blake Hampton

I'd also add that the greatest mathematicians are the ones who discover new patterns. This was always interesting to me.

Why do people think that unprecedented events can't happen? Because they've never happened before? That's nonsense. Go back and look at human history. Unprecedented events have happened repeatedly, over and over again, throughout the entirety of our existence. And history and data from the past have never offered a complete roadmap for the future. The only thing they can possibly do is give you tools in order to spot patterns. Interestingly, mathematics is often defined as the studying of patterns. So much of the well-being of the United States, and the well-being of the world by extension, is currently sitting, and has sat, atop the credit and the faith placed in the United States currency. We have built a global economy, trade, systems of credit, the means for humans to exist at scale on this agreement that the United States would be good for what it said it would. This system we now live in came to be after WW2. Since then, much has changed, but this system we've created has grown massively and has created a period of unprecedented peace and prosperity throughout the world. Now, we are overconsuming on a grand level, at a pace that we've never done before, which is compounding on top of massive overconsumption we've already done. This overconsumption, reflected in our massive and growing fiscal deficits, is putting immense pressure and growing stress on the Treasury market, and in-effect the USD, which in a multitude of ways is the foundation for the global economy and credit itself. What happens if this system breaks? Is Warren Buffett wrong? Is Jamie Dimon wrong? Buffett has been repeatedly warning about runaway inflation, most recently this Saturday during his interview, on top of years of warnings from Munger. Jamie Dimon has said multiple times that we're approaching a bond market crisis. Remember, this is the man who is the CEO and Chairman of JP Morgan Chase, the world's largest primary dealer by total volume and inventory. The risks to Treasury markets are existential ones. In the future, they will ultimately define the realities for many.

A recession is defined by the National Bureau of Economic Research (NBER) as a "significant decline in economic activity that is spread across the economy and that lasts more than a few months." They also said it was the shortest but deepest in U.S. history: NBER: Business Cycle Dating Committee Announcement July 19, 2021 People don't understand how close we really were in March of 2020. For an in-depth view, read Trillion Dollar Triage. It was written by Nick Timiraos, the chief economics correspondent for The Wall Street Journal. It's a great book.

Imagine investing everything right before the economy has a stroke, and then having to rely on the government to save your ass. That describes the entire U.S. economy And what happened in the stock market around Liberation Day was nothing. What really should have scared people was what was happening in the bond market But you wouldn't know anything about that.

If you buy the market today, I’m certain it’ll go up quite a lot in nominal terms. In real terms, however, you’re going to get absolutely fucking crushed.

“Price is what you pay. Value is what you get.” What exactly are you getting for today's prices? Or is the fact that prices have risen consistently in the recent past all that really matters? Maybe this time is different.

Buffett indicator is at 233%. Dot-com bubble peak was 190%. Now, imagine the outcome if the future consists of vastly higher inflation and interest rates.

But maybe our government can continue saving the system forever:

I personally think we're moving beyond recessions and simple market corrections.

The last two recessions nearly resulted in financial collapse.

I could sit here all day using data to support my argument, but it never seems to make a difference anyway.

You're right. The system indeed is uncaring. It's kind of like what Peter Lynch said about the stock market: Good people can lose big while bad people make a fortune. It ultimately comes down to what you own. The point I'm trying to make is that a system that preys on it's younger generations is not sustainable. That is the sort of system that we now live in. Many here would like to say that it's the inverse. They're wrong.

Biden wasn't great. But if you think Trump 2.0 is nothing but a disaster, you're simply living in dreamland. One of the biggest reasons Buffett will no longer endorse anybody is because he's afraid of the fallout from a deranged president. The dude is attacking business leaders, media, our allies, left to right, and yet so many still find a way to stand by his lunacy. And his supporters get angry because others call them dumb and say they're in a cult. That's certainly what it looks like on the outside. But what it truly looks like to me is a bunch of scared and desperate people supporting a man who offers them simple solutions and a form of hope. The world today is a scary place, there's a lot of problems that seem insurmountable and threaten to destroy us. The current state of media and technology make sure you get to know about 24/7, every single day. Trumpism is kind of like a religion. It exists outside of logic and data. While I'm personally not religious, I don't think those that are religious are stupid. It's something more than that. Same thing with Trump. This is a dynamic that will become more and more pronounced alongside the deterioration of our economy. It'll likely get worse. History tells the tale.

Cubs, I find it amazing that you're on a Buffett board: Here's Charlie:

And so Buffett continues to warn about runaway inflation. The United States is running $2 trillion fiscal deficits, deficits that are continuing to grow exponentially. And spending primarily goes to the old, while taxes are largely paid by the working class and the young. If we do end up experiencing significant amounts of inflation, the younger generations will get crushed. Prices for everything will go up, including housing, and the job market is apt to cause a lot of pain. And there always been a lot of confusion surrounding the economics of inflation: It's a cost. It is, as Milton Friedman famously said, "Taxation without legislation." You're paying for the overconsumption of your country through the deterioration of your currency. Like many things, panic can cause it to spiral out of control. There are few ways to escape its grasp. The only thing certain is that mass ignorance will continue, it is after all how we got here.

Munger slipped up and let the world know that Abel was the incoming CEO. Buffett slipped up and got Abel deported.

Buffett today (on Greg Abel): "He's getting his American citizenship very soon." Outside Berkshire HQ Monday morning:

I appreciate it.

I partly agree. But I also think this kind of talk is exactly what makes some people so angry. It's always funny until it's not.

I don't think blaming your life's woes on systemic problems is a winning strategy. But you still have to account for these things when trying to understand the world. You can't simply blame swathes of people for failing when the system itself they're working in has largely failed them.

Work where exactly? Walmart, McDonalds? Aren't those jobs where we "shouldn't raise the minimum wage" because "only high schoolers work them?" Do they go to work in manufacturing? Isn't a core tenant of your savior's policy to reshore jobs, which I'll add he hasn't done, because other countries are "taking advantage of us?" Our troubles surrounding current account are largely not Trump's fault. But he's certainly not doing anything today to properly fix them. For him, it's simply too difficult politically. And before you try and say it, his mish-mash, brazenly stupid tariff policy has done nothing here. The only thing that has accomplished is cause business and geopolitical chaos, Trump's specialty.

Failure to understand or try and fix these hardships is exactly what's driving this sort of behavior. If we continue down this path, which it's overwhelmingly likely that we will, the drumbeat of socialism and anti-capitalist thinking will only increase. The solution of course is clear. But it's funny because politics tends to get in the way of things like that, simple solutions. It's also funny because those who decry these trends are exactly the same people who support many of the policies creating them. In politics, it seems, irony is a bitch.

On this, like many of the other points you try and make, you are wrong. This behavior is not being driven by a mass avoidance of working. It's being driven by a sense of enormous inequality and how systems that define our lives (education, real estate, healthcare, labor markets) are increasingly broken. The young right now are facing hardships that many older people fail to understand. I hear their arguments all the time, and many of them make very little logical sense.

You know what I think one of Buffett's most important qualities is? He can stare directly into the deepest, darkest abyss, spending an extended period analyzing and understanding what is actually happening, and ultimately come to a logical conclusion without going crazy. I imagine this quality also extends to alternate contingencies in his mind where he visualizes the outcomes of potential large mistakes, which is likely why he very rarely makes them. I've found that many people are unable to do this; they usually spiral in one of two directions: complete collapse or the arrogance of saying, "That could never happen."