The stock market is up so far today on mixed readings of the tea leaves. The Conference Board’s index of leading indicators rose unexpectedly, which elicited some positive reports, but Reuters was not impressed, noting that the 0.1% rise showed weakness but not a formal recession. The Wall Street Journal attributed the rise to analyst upgrades of tech stocks and a softening of oil prices.
Warren Buffett, however, is not convinced the US economy is in the clear, discounting cheery talk that the credit crisis is soon to be over. From Bloomberg:
Billionaire Warren Buffett said the U.S. economy is less than halfway through a credit crisis that already sent home foreclosures to a record and sparked the collapse of Wall Street’s fifth-largest securities firm.
“I don’t necessarily think we’re halfway through or necessarily a quarter of the way through the effects throughout the general economy,” Buffett, 77, told reporters today in Frankfurt, Germany. “The initial effects are felt by the people who really did the silliest things, but you can have a whole bunch of domino-type effects that eventually can get to people who are doing fairly sound things.”….
The danger of multiple investment bank failures probably ended when the Federal Reserve orchestrated the takeover of Bear Stearns Cos. by JPMorgan Chase & Co., said Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc. Yet the damage to the economy and individuals will keep mounting, he said.
“In my judgment, there’s a good chance that most of that is not over,” said Buffett.