(OPINION) Warren Buffett did not become a billionaire by being stupid. According to Forbes, Buffett is worth more than 144 billion dollars, and that makes him one of the wealthiest men in the entire world. He made his money in the stock market, and so why is he now pulling money out of the stock market at a feverish pace? Does he anticipate that a crash is coming? Earlier this year, Buffett shocked the investing community when his company sold off half the Apple shares that it was holding.
In the first quarter of 2024, Berkshire Hathaway sold over 100 million Apple shares, and in the second quarter, they sold an additional 390 million shares.
More recently, Berkshire Hathaway has been selling off Bank of America shares.
Warren Buffett’s Berkshire Hathaway (BRKa.N), opens new tab has trimmed its stake in Bank of America (BAC.N), opens new tab once again, making the total sales since mid-July nearly $7 billion.
The conglomerate, run by one of the world’s most revered investors, disclosed late on Thursday it sold 18.7 million shares of the second-largest U.S. bank between Sept. 3 and Sept. 5 to rake in roughly $760 million.
Buffett’s moves look quite savvy based on what has been happening so far this month.
In fact, we just witnessed the worst week for the S&P 500 since March 2023.
The S&P 500 dropped Friday, notching its worst week since March 2023, as investors assessed the fallout from a weak August jobs report and ditched leading technology stocks.
Will this week bring even more pain?
Right now, investors are concerned that the economy may be slowing, and those concerns were bolstered by Friday’s employment report.
As Zero Hedge has noted, that report told us that the U.S. lost a whopping 438,000 full-time jobs last month.
Starting at the top, while the number of employed workers did rise by 168K, looking closer at the composition of this increase is disastrous: that’s because it consisted of an increase of 527K part-time jobs, offset by a 438K plunge in full-time jobs.
This means that since last June, the US has added just over 2 million part-time jobs, and lost over 1.5 million full-time jobs.
If you want a low-paying part-time job, it is still fairly easy to find one.
But good paying jobs have been rapidly disappearing. The president of a firm that finds positions for white-collar workers says that the market is in “bad shape” at this moment.
Economists largely agree that the labor market is “cooling,” but one recruiting industry veteran says that is a significant understatement.
Brian Howard is the founder and president of the Howard Group, a boutique search firm located in Overland Park, Kansas, that has been in business for more than 30 years, which companies hire to recruit candidates in an array of white-collar positions.
He said the job market is in “bad shape.”
I would say that “bad shape” is quite an understatement.
Earlier today, I came across an article about a man with an MBA that has been unable to find work even though he has applied for more than 1,500 jobs.
Marcial Quinones, 48, used to have few problems getting jobs in the 1990s without a high school diploma. Now, after what he estimates is over 1,500 applications since the early 2010s, he can’t land any stable job in his field even with an MBA.
Quinones, a father of four who lives in rural eastern Pennsylvania, said he’s struggled to land a long-term job in tech or counseling. He has held part-time positions and built his own inventory software to sell to companies, though he rarely gets interviews, even after redoing his résumé two dozen times.
For many Americans, low-paying part-time jobs just won’t suffice because the cost of living just continues to go up.
In a lot of those households, at least one adult is actually working.
But in many cases there simply is not enough money coming in to even cover the basics.
At this point, working Americans have so little discretionary income to spare that even dollar stores are really struggling.
Dollar Tree stocks plunged to a 9-year low earlier this week, after the chain delivered a disappointing earnings report.
Earlier this year, the company announced it would close 600 Family Dollar stores in 2024, after it struggled to integrate the chain into its business.
Dollar General, which is the biggest dollar store in the US and is located mostly in low-income, rural areas, also reported dismal sales last month and saw its stock plummet.
This is where we are at now.
And since our leaders simply refuse to stop wildly spending money, it is inevitable that the cost of living will just continue to go up.
Our standard of living is being absolutely eviscerated, and it is because of decisions that have been made by those in positions of power.
If our leaders had made different decisions, we could have gotten different results.
But now tens of millions of U.S. households are deeply hurting, and much more pain is on the horizon.
Warren Buffett is clearly concerned about the short-term future.
