Warren Buffett Selling $28.7 Billion in Stock Rings Alarm Bell Over Economy

Submitted by Dave Hodges on Tuesday, December 12, 2023 - 14:24.

GIULANA CARBAONARO

Warren Buffett's firm Berkshire Hathaway sold $28.7 billion of stock in the first three quarters of 2023 in a move that some economists have interpreted as ringing alarm bells for the American economy.

According to the company's earnings, the Nebraska-based firm of the legendary investor and billionaire, known as the Oracle of Omaha, sold a net $10.4 billion of stock in the first quarter of the year. In the second quarter, it sold close to $13 billion of shares and bought less than $5 billion. In the third quarter, it sold about $5.3 billion worth of stocks.

As Buffett is considered one of the greatest investors of all time, as well as one of America's richest men, his moves are closely observed and analyzed.

For Steve H. Hanke, a professor of applied economics at Johns Hopkins University who served on President Ronald Reagan's Council of Economic Advisers, Buffett's and Berkshire Hathaway's "recent lightening up on stocks and accumulation of a pile of cash—$157 billion—is consistent with the fact that stocks are relatively pricey right now."

But it's also, crucially, a sign "that a recession is right around the corner," Hanke told Newsweek.

"The money supply of the United States, broadly measured [M2], started contracting in July 2022, and has been falling like a stone," Hanke said. "Since last year, the U.S. money supply has contracted by 3.3 percent."

According to Hanke, there have been only four periods in U.S. history—in 1920-21, 1929-33, 1937-38 and 1948-49—in which the money supply has had significant contractions.

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