Read this Excerpt

From the first page of the Warren Buffett's annual report released today. He eloquently explains (as usual) what's happened in the financial world and ends with an optimistic note for America's future.


"As the year progressed, a series of life-threatening problems within many of the world’s great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: “In God we trust; all others pay cash.”

"By the fourth quarter, the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country. A freefall in business activity ensued, accelerating at a pace that I have never before witnessed. The U.S. – and much of the world – became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear.

"This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation. Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.

"Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown. Had that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.

"Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 211⁄2% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges.

"Without fail, however, we’ve overcome them. In the face of those obstacles – and many others – the real standard of living for Americans improved nearly seven-fold during the 1900s, while the Dow Jones Industrials rose from 66 to 11,497. Compare the record of this period with the dozens of centuries during which humans secured only tiny gains, if any, in how they lived. Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America’s best days lie ahead."

The Empire Strikes Back

Did you know that dandelion is a corruption of the French "dent de lion", meaning lion's tooth, which refers to the coarsely-toothed leaves? I read that on Wikipedia - and shamelessly plagiarized it just now - so it must be true. 'Tis the season to be pulling dandelions out of the lawn. It's gotten to where I know the full lifecycle of the dandelion, its favorite hiding places, its anatomy's weaknesses that provide the best way to pop them out. Pulling weeds can be strangely, mildly addictive or at least meditative after a long day at work. I can't help but admire the simple and ruthless efficiency with which the dandelion slowly and surely takes over a lawn. Maybe having some dandelion wine would help me welcome our new overlords.

A New Hope

We recently invested in this Toro self-propelled lawn mower. Now we can't believe that we used to sling around the human-propelled kind. It's terrific on our hilly backyard - it feels like a horse that's chomping at the bit to go at it. All we do now is guide it around and it does the rest. My back doesn't ache when I'm done. I almost look forward to mowing the lawn (OK, OK everyone already knows I enjoy it).

Sea Stacks on the Oregon Coast

Life could be anywhere...

I watched an interesting show on PBS recently called "Exploring Space: The Quest for Life". The main gist of it was that the necessary environment for life to exist could be on Mars, or Europa (ice moon of Jupiter), or even deep in the Earth's crust, where sunlight never travels. And potentially meteorites from space have in them the kernels of life, ready to seed any place with basic elements. All life really needs to develop and survive is a will, lots of time, and energy. Even water is no longer a prerequisite. That's a big change from what I was taught in school -- back then it was thought that the environmental needs for life were, well, the Earth's surface! Maybe there is a man on the moon?

Guest Post: One of Maddy's Favorite Things

Mr. Gump's Wump from One Fish, Two Fish, Red Fish, Blue Fish by Dr. Seuss.

"Bump, bump, bump!", says Maddy when she sees this book.

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