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Buffett: ‘No Reason To Worry’ About Bank Deposits
Warren Buffett wouldn't confirm reports he discussed adverse developments in the US banking sector with White House staff last month, but he wasn't mum on much else during remarks to CNBC that aired on Wednesday.
In an interview, Buffett weighed in on March's drama (and other matters) extensively, with a characteristically folksy mix of assurances and implicit exhortations for Americans to keep the faith.
He did caution on the psychological nature of bank runs. Banks, he warned, can lose publi
I hope he’s right about the debt ceiling, because I think things are going to get hairy this time. I’d say the single largest tail risk in the next 4 months isn’t bank failures, over-tightening, inflation, or recession… it’s a debt-ceiling debacle.
Honestly, the only clear path I can see to the debt ceiling being raised is if the “responsible adult” faction of the Republican party decides to team up with the Democrats, and that’s a perishingly small faction. Moreover, the Democrats are unlikely to be on board if any kind of “Sequester” style spending cut is part of the package. Republicans are likely to shoot for a roll-back of much of the spending passed during the first 2 years of the Biden administration, and I don’t see Democrats agreeing to vote for that.
In the past (so, In 2011), Republicans could put the pressure on because they were able to actually get a bill out of the House of Representatives. I’m skeptical they can even accomplish that much in 2023.
One of the reasons I was reasonably pleased with the outcome of the November elections was that Republicans only captured a narrow majority in the house. I’m sure they’ll put on a good show, but Republican leadership will find a few Republicans to fall on their swords knowing that a government default does not help them politically. No one cares about the deficit or debt ceiling anymore, so they’ll pretend to put up fight, get a few small concessions, and move on with the plausible deniability that it was a few Republicans who crossed the aisle to get a deal done.
Meanwhile, we can get our popcorn out when the Crazy Caucus then pushes for the removal of McCarthy as speaker for caving to democrats.