Many have oversimplified that Buffet didn’t understand dot.com’s, therefore he didn’t invest in them; and this is why he was able to have the last laugh once the floor caved in on the bubble. As he says: “Risk comes from not knowing what you’re doing.” My feeling is that Buffet knew exactly what dot.com’s were, he simply chose not to bite. In the irrational exuberance of market surges, Buffet, as stated above, knew these companies were not making a profit, therefore there was no true underlying value for most of them. Any great investor, or gambler, knows that the biggest wins usually come when you’re the 5% minority making the wager, and public opinion is going the other wa

There’s a lot of talk out there about green shoots, economic recovery and stabilization. Most people aren’t predicting giant leaps in GDP anytime soon, but some are predicting modest global GDP growth between 2-4 percent for 2010. As Greece goes bankrupt and looks to its EU compatriots for help, remember they’re not the only nation on the belly up path. And from a United States perspective, here are the numbers you should be hearing on a daily basis, but aren’t. It isn’t just a matter of restoring economic growth and reducing unemployment. Surprise, surprise: debt, unfulfillable promises and easy money have consequences. Unfortunately, we have plenty of all three:

We haven’t seen inflation on the whole during the financial rescue efforts, despite the Federal Reserve’s easy money policies. If you wanted to cherry pick certain assets, the argument could be made that $140/barrel oil, during a recession, coinciding with a dump of liquidity on the economy, could be related. Global oil transactions are denominated in US dollars. It is hard to imagine any other factor being solely responsible for such a historic, and counterintuitive, rise in petroleum during a recession.

If you didn’t think there was a wink and a nod relationship between large banks and the feds, the “Volcker Rule” should serve as an acknowledgment. Because lending and credit is so crucial to the economy, financial institutions know the government will backstop them during crisis mode in the industry.

Treasury Secretary Timothy Geithner discusses the burdens of his position, why he felt it was necessary to bailout the financial system and the paternal role taken by the federal government:

Economic forecasts are a funny thing. If they attempt to project anything beyond the short-run (one year), be very skeptical. But short-run forecasts are not iron-clad either. I have a great time on this site making fun of economists and their predictions. Guessing what the intricate convergence of millions, if not billions, of different economic agents and their decisions will be, is kind of an exercise in futility. So if I were to predict what crude oil will do in 2010, I’d give you some markers to help you make your own decision long before I took a specific barrel price and defended the position.

The question is, can the Fed take enough money out of the economy without sending us back into a severe recession, or will the excess money lead to high inflation. Personally, I’m predicting some pretty vicious stagflation is coming our way.

I’m about to tell you why non-ideological economists get so frustrated with global warming zealots (brace yourself): frankly, there are more pressing issues facing the world. I know, in the wake of NBC’s “Green Week” and Prius’ taking over the streets, it’s hard to believe. This isn’t to say that environmental preservation is not on the short list of world concerns. It is. And this isn’t to say that environmentalism is not a worthy cause. Again, it is. Unfortunately, some of the brightest minds in the world, who look at things from a perspective of costs and benefits, do not see the need for public tax dollars to be funneled vigorously into combating climate change. Just ask the Copenhagen Consensus.

Will the massive increase in money cause hyperinflation? I certainly think that high inflation will come when velocity picks up, however, YouTube user ramzpaul makes a good case that given the way our economy is set up, one thing we won’t have to worry about is hyperinflation. For the Austrians out there, it’s worth taking a listen to:

The spirit of the season is upon us. With Black Friday and Cyber Monday at our backs, rounding out those holiday wish lists for loved ones will consume the collective American conscious. With all of these efforts brought about by the desire to bring a smile to someone’s face, the wonder and awe of the Christmas season is truly something to be thankful for. But as chestnuts are roasting on my open fire, peppermint snow mocha’s cease to leave my hand and mistletoe is strategically placed around my home, I would be remiss if I failed to do the right thing: confront the deadweight loss of Christmas.