Warren Buffet Warns Of Upcoming “MEGACATASTROPHE” And Our Losses Will Be BIG,,

Billionaire Warren Buffet has issued a warning that there is an upcoming “megacatastrope” on the horizon. Buffet says that when this apocalyptic scenario plays out, our losses will be immeasurable.

In his annual letter, Buffet warned of a “megacatastrophe,” which he said will cause unprecedented havoc not just to victims but to the financial world as well. “A major catastrophe that will dwarf hurricanes Katrina and Michael will occur – perhaps tomorrow, perhaps many decades from now,” the Berkshire Hathaway CEO wrote. “‘The Big One’ may come from a traditional source, such as a hurricane or earthquake, or it may be a total surprise involving, say, a cyber attack having disastrous consequences beyond anything insurers now contemplate.”

The financial world is being propped up by central banks and the debt-based monetary system that far too many trust will eventually meet its demise. This could cause a worldwide societal collapse of epic proportions.

Public services crumble and disorder ensues as the government loses control of its monopoly on violence. (Meaning people realize they are slaves, and no longer wish to be subjugated and punished at the whims of the ruling class/government, but seek their own liberty and self-ownership.) As people begin to realize that the political class (ruling class) is exceptionally wealthy as they slave away and half their wages are stolen to prop up those who exert power over them, societies tend to collapse. Government stays fat and happy when the slaves don’t realize they are enslaved. –SHTFPlan

It could all begin with a disastrous financial crisis. One which we are close to, regardless of what is being said in mainstream media. Economic numbers all over the world continue to get worse, and even New York Times columnist Paul Krugman is now warning of “an unavoidable global recession”. Unfortunately, most Americans still have absolutely no idea that this is happening right underneath their noses. Most ordinary citizens are still under the impression that everything is going to be just fine, but the numbers suggest otherwise. 78% of Americans live paycheck to paycheck while 40% don’t have enough money to cover a $400 emergency. Americans carry record levels of consumer debt and student loan debt while borrowing further with their use of credit cards.

But the “megacatastrophe” Buffet warns of could come in the form of natural disaster; although if that’s going to happen, it better hurry to beat the financial crisis the globe has found itself in. Science writer Kathryn Shultz galvanized public attention to the threat in 2015 with the New Yorker essay “The Really Big One,” in which she describes how an earthquake could destroy a large chunk of North America’s coastal Northwest. “The hand of a geological clock is somewhere in its slow sweep,” she wrote. “All across the region, seismologists are looking at their watches, wondering how long we have, and what we will do before geological time catches up to our own.”

A Yellowstone supervolcano eruption, potential pole shift, and a massive West Coast earthquake all seem to be possibilities when considering natural disasters that could be on the scale of a “megacatastrophe.” It is troubling that Americans are unable to afford home purchases with 30-year mortgages at just 4.5%. Here’s an update on the troubled housing market…

from Zero Hedge

After NAHB’s optimism rebounded sharply earlier this week, all eyes were on the existing home sales data for any signs of optimism. Alas, with consensus expecting a tiny rebounding in January following December’s sharp drop, the deterioration in the US home market continued continued, and January existing home unexpectedly dropped 1.2% (exp. +0.2%), to 4.94 million, missing expectations of a rebound to 5.00 million.

After December’s revision higher to 5.00 million, the January SAAR of 4.94 million was the first sub-5MM print since 2015, while the parallel pending home sales series confirms even more weakness is in store.

Needless to say, it is very troubling that Americans are unable to afford home purchases with the 30-year mortgage at just 4.5%, and suggests that even if inflation picks up, the Fed may have no choice but to keep rates flat to avoid a housing market crash.

As usual, NAR chief economist Larry Yun was optimistic, saying that he does not expect the numbers to decline further going forward. “Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”

One wonders what “gains in household income” he is talking about.

Meanwhile, properties are failing to sell as the slowdown spreads: Properties remained on the market for an average of 49 days in January, up from 46 days in December and 42 days a year ago. Thirty-eight percent of homes sold in January were on the market for less than a month.

Still, despite the ongoing slowdown, or perhaps adding to it, the median existing-home price rose once again, hitting $247,500, up 2.8% from January 2018 ($240,800). January’s price increase marks the 83rd straight month of year-over-year gains.

Even so, Yun noted that this median home price growth was the slowest since February 2012, and is cautions that the figures do not yet tell the full story for the month of January. “Lower mortgage rates from December 2018 had little impact on January sales, however, the lower rates will inevitably lead to more home sales.”

Regional breakdown:

January existing-home sales in the Northeast increased 2.9 percent to an annual rate of 700,000, 1.4 percent below a year ago. The median price in the Northeast was $270,000, which is up 0.4 percent from January 2018.
the Midwest, existing-home sales fell 2.5 percent from last month to an annual rate of 1.16 million in January, down 7.9 percent overall from a year ago. The median price in the Midwest was $189,700, which is up 1.4 percent from last year.
Existing-home sales in the South dropped 1.0 percent to an annual rate of 2.08 million in January, down 8.4 percent from last year. The median price in the South was $214,800, up 2.5 percent from a year ago.
Existing-home sales in the West dipped 2.9 percent to an annual rate of 1.00 million in January, 13.8 percent below a year ago. The median price in the West was $374,600, up 2.9 percent from January 2018.

While total inventory grew for the sixth straight month, Yun says the market is still suffering from an inventory shortage. “In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed,” says Yun.

“Taking steps to lower construction costs would be a tremendous help. Local zoning ordinances should also be reformed, while the housing permitting process must be expedited; these simple acts would immediately increase homeownership opportunities and boost local economies.”

With existing-home sales accounting for about 90% of U.S. housing, it would seem Jay Powell’s dovish tilt just got more support, but at what point does bad news flip to being ‘bad news’ as growth hopes get hammered.

Economic Predictions

Monday, February 25, 2019