STEVE HAYWARD: Did Buffett See This Coming?

Finally! A stock market I like! I almost salivate when the stock market crashes as hard as it is right now, because it means good companies are suddenly selling for 10 percent off.

It’s almost always the case that an inverted yield curve eventually leads to a recession, and with our Fed-induced yield curve inverted for more than 500 days now we shouldn’t be surprised to see the economy slowing. There have been signs of slowing in the data in recent weeks in manufacturing and consumer demand, and keep in mind that the job market is always a lagging indicator, so last week’s weaker-than-expected jobs number may be the signal that we’re going into recession for real.

Over the weekend I noticed one particular story that suggested the party might be over: Warren Buffett has been selling some large amounts of his leading holdings (especially Apple and Bank of America), building up a huge cash hoard ($277 billion) and, most significant of all, bringing Berkshire-Hathaway stock buybacks to a screeching halt in the last quarter.

In the long run, historically, this has always been true:

In the short term, however:

And a reminder that there are no atheists during market panics: