Warren Buffet and Rupert Murdoch have a lot more money than I ever will. They are both billionaires, wealthy industrialists, captains of industry. They obviously know more than I do about money. And recently, both have said “the worst is behind us…the economy is getting better.”
So why don’t I feel comforted?
I’ll tell you why. Because I don’t believe a word of it. These are smart men. Knowledgeable men. Talented men. So are both of these guys wrong? Let’s pause for a nanosecond and examine the possibilities:
1. They are right, as far as can be reasonably seen.
I’m not convinced. My rationale is because I don’t believe macro and micro function any differently. I don’t think that there is any way you can spend your way out of a recession. I see massive inflation – hyper-inflation – on the horizon. And I see this country amassing a Himalayan mountain of debt my great-grandkids will still be paying off, long after I start my permanent dirt nap. No, I don’t think “they’re right” is within the realm of reason.
2. They’re clueless.
Again, not bloody likely. These guys didn’t get where they are today by misreading the markets. Try again.
3. They are trying to manipulate the markets to take advantage of irrational exuberance over this mini-uptick in the markets.
If I were a cynical man, I’d say we’re on to something here. (Lucky for me, I’m Mr. Cynic.) If you were in a position to manipulate the market for your own benefit, would you? I can’t speak for me, but each of these guys have several billion reasons to do this, and no good reason not to.
4. They’re lying to help Obama.
Maybe. Despite the fact that FoxNews is the only news organization that eschews the liberal talking points, Murdoch himself is no darling of the Conservative set. Buffet supported Obama in the election, despite his ruinous tax policy ideas – ideas that have already proven themselves fiscally unsound as we toboggan into the Obameconomy. Still they both must know that if they lie and get caught, it will damage their credibility – and their personal reputations.
5. Some degree of most of the above.
Perhaps. But for my money, I’d vote for No. 3 or alternately, a combination of 3 and 4.
So what does this mean for you? My advice is to not believe a word of it when people say “the worst is over.” The problem here is that it’s not. It’s gonna get worse. A lot worse. And if you’re not prepared, you’re gonna get screwed. Big time. Besides, there’s no real advantage to you to act as if the recession is over, and much to assuming it’s not. So choose sides, and take your pick. Just remember, the patron saint of the “What…Me Worry?” crowd is not Buffet or Murdoch. It’s Alfred E. Neuman.