• Warren Buffett, the Oracle of Omaha, dropped some hints in an April interview that got people raising their eyebrows. Known for his indirect style, Buffett rarely sounds the alarm on financial matters, but this time, he seemed to be hinting at something more ominous.

The Buffett Buzz:

• While the economy appeared strong, Buffett’s words now seem prophetic, pointing towards a darker economic horizon. Remember last year when analysts and banks, like Deutsche Bank, were predicting a 2023 recession? Buffett’s comments seem to align with that.

Real Estate Rumbles:

• Back then, we saw national home prices dropping for the first time since 2008, interest rates were climbing, and the yield curve (a big deal in finance) had inverted – all classic signs of trouble ahead. Despite a temporary pause in the real estate downturn and a summer stock market surge, Buffett’s words suggest we missed some crucial warning signs.

Buffett’s Take:

• In the interview, Becky Quick asked Buffett whether he’s in the bullish or bearish camp. True to form, Buffett didn’t give a straight answer but shared insights about his businesses. For instance, he noted a significant slowdown in retail and other sectors like railroads and utilities, hinting at a broader economic slowdown.

Railroad Red Flags:

• Fast forward six months, and Buffett’s concerns about railroads are glaringly evident. Union Pacific’s earnings report shows declining revenues, profits, and volumes. In the broader freight industry, trucking is also struggling with bankruptcies, low rates, and rising fuel costs. The World Container Index reported a whopping 75% drop in traffic year-over-year, signaling major economic distress.

Recession Risks:

• When asked directly about recession risks, Buffett, in his usual style, pointed out surprises in business performance compared to expectations six months prior, especially in essential services like railroads.

Wrapping Up:

• Summing up, the video suggests that we’re witnessing the beginning of an economic slowdown across various sectors, from tech to trucking, and now real estate. It’s like watching a slow-moving train wreck, where the crash doesn’t happen overnight but gradually builds up. And now, with rising interest rates and a tightening money supply, the economy might be heading for a nap from which it might not wake up pleasantly.

So, there you have it! Buffett’s subtle hints from April, now looking like a forecast of the economic storm we’re starting to see unfold. 🌧️💼🚂