Buffett Backtracks A Little

Just one day after I wrote about the media highlighting Buffett’s remarks about the economy, he backtracked a bit on those comments. In an interview on CNBC (transcript, video below), he clearly states that

“on any common sense definitions…we’re still in recession.”

Perhaps he felt misquoted, that his remarks were taken out of context or that he simply didn’t clearly communicate what he had meant to. Whatever his reason, he was specific in describing that while the economy is certainly on the mend, it isn’t out of the woods yet. While there was no reference to a possible double-dip, he did say

“we are still in recession and we’re not gonna be out of it for a while.”

Too bad this didn’t come out before I spilled so much electronic ink parsing last week’s statements. Sigh. Video below:

http://plus.cnbc.com/rssvideosearch/action/player/id/1598016844/code/cnbcplayershare

You Can’t Always Bank on Buffett

It’s true that you can never dismiss what Warren Buffett has to say. Any serious investor must pay attention to The Oracle’s comments, particularly when markets or economies are at extremes. Given his record and reputation, people sometimes take his words too seriously though.

Last week provided a good example of this. Buffett answered several questions at the Montana Economic Development Summit by satellite. Though transcripts have not been released, the media widely reported several quotes. The first went like this:

Another Ponzi Scheme Busted

You’re shocked to hear about yet another Ponzi scheme aren’t you? Yawn. Why is he blogging about yet another Ponzi scheme gone bad? I bring you this tale because it highlights just how creative some fraudsters can be.

Sandra Venetis of upscale Branchburg, NJ used her company, Systematic Financial Associates, to steal some $11 million from clients, many of whom were “retired or unsophisticated”, according to the SEC news release. How did she do it? The SEC complaint alleges that she sold promissory notes yielding 6-11%. Naturally, that yield was supposedly tax-free due to a loophole in the tax code. All the more enticing if you are retired on a fixed income, right?