A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from October 11, 2008
“Economic Pearl Harbor” (Wall Street crisis phrase)

Investor Warren Buffett called the financial crisis of 2008 an “economic Pearl Harbor” on CNBC’s Squawk Box on September 24, 2008, and again on PBS’s Charlie Rose Show on October 1, 2008.

Pearl Harbor is the United States naval base in Hawaii that was bombed by the Japanese on December 7, 1941, starting the Pacific front of World War II. The phrase “economic Pearl Harbor” is cited in print since at least January 7, 1942. “Economic Pearl Harbor” is an expressive way to say “worldwide financial depression.”


Wikipedia: Pearl Harbor
Pearl Harbor is a harbor on the island of Oʻahu, Hawaii, west of Honolulu. Much of the harbor and surrounding lands is a United States Navy deep-water naval base. It is also the headquarters of the U.S. Pacific Fleet. The attack on Pearl Harbor by the Empire of Japan on December 7, 1941 brought the United States into World War II. 

Wikipedia: Warren Buffett
Warren Buffett (born August 30, 1930) is an American investor, businessman and philanthropist. He is one of the world’s most successful investors, and the largest shareholder and CEO of Berkshire Hathaway. He was ranked by Forbes as the richest man in the world during the first half of 2008 with an estimated net worth of $62.0 billion. As of September 17, 2008 his net worth has dropped to $58.0 billion. On Oct. 10th 2008 Forbes magazine published him as being the richest man in the US, passing Bill Gates by $ 3.5 Billion.

Often called the “Oracle of Omaha”, Buffett is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in other comparable companies. When he spent $9.7 million of Berkshire’s funds on a business jet in 1989, he jokingly named it ”The Indefensible“ because of his past criticisms of such purchases by other CEOs. He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, today valued at around $700,000.

Buffett is also a notable philanthropist. In 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill & Melinda Gates Foundation. In 2007, he was listed among Time‘s 100 Most Influential People in The World. He also serves as a member of the board of trustees at Grinnell College.

7 January 1942, Maryville (MO) Daily Forum, “Rubber Shortage Is Economic Pearl Harbor For United States” by Drew Pearson and Robert A. Allen, pg. 4, col. 1:
Thus, unless we are able to sendtremendous labor battalions to the jungles of the Amazon—and here the scarcity of shipping is important—it will be seen that the United States has in effect suffered an economic Pearl Harbor.

23 August 1945, Charleston (WV) Gazette, “CIO Chief Asks,” pg. 12, col. 1:
“Some very important people were asleep at Pearl harbor on Dec. 7, 1941; there is even greater condemnation for having been asleep at the second economic Pearl Harbor.”

21 January 1946, Troy (NY) Times Record, pg. 1, col. 3:
Washington (INS)—Reconversion Director John W. Snyder warned Congress today that the nation must increase rapidly its peacetime production and “hold the line” on prices to prevent threatening inflation.
(...)
“What we do in the next year or two, in a large measure, determine whether or not we can avoid another 1929 collapse. We cannot afford an economic Pearl Harbor.”

5 July 1951, Delta Democrat-Times (Greenville, MS), pg. 1, col. 5:
WASHINGTON (UP)—Economic Stabilizer Eric A. Johnston warned Congress Thursday that a ban on price rollbacks in the new controls law would add a dollar a day to every household budget in the land. He said it would be an “economic Pearl Harbor.”

26 January 1955, Ironwood (MI) Daily Globe, “Economic Pearl Harbor of ‘29 Is Not Likely to Happen Again” by Relman Mornin, pg. 2, col. 4:
NEW YORK (AP)—The stock market crash of 1929 was an economic Pearl Harbor.

Google Groups: soc.culture.usa
Newsgroups: soc.culture.usa, alt.fan.dan-quayle, alt.tv.muppets
From: (Walter Alden Tackett)
Date: 18 Oct 91 01:25:20 GMT
Local: Thurs, Oct 17 1991 8:25 pm
Subject: Culture,usa -we’re talking yogurt, right?

Perhaps a new Depression, or some equivalent “economic Pearl Harbor” can shock us into recovery, but whatever it is, it’s not going to be pretty.

Google Groups: alt.politics.clinton
Newsgroups: alt.politics.clinton
From: (Broward Horne)
Date: Thu, 11 Feb 93 11:11:18 MST
Local: Thurs, Feb 11 1993 1:11 pm
Subject: Clinton’s Options ( The Economic Pearl Harbor of 1993 )

Okay, a brief summary of “tax options” leaked by Clinton & Co:
( hold on to your hats, pals )

CNBC
September 1, 2008
CNBC INTERVIEW TRANSCRIPT & VIDEO, Part 3:  Warren Buffett Explains His $5B Goldman Investment
Posted By:Alex Crippen
Warren Buffett was interviewed live by telephone on CNBC’s Squawk Box this morning about his surprise investment of at least $5 billion in Goldman Sachs.
(...)
BUFFETT:  Well, I think they will get it.  I think enough of them will get it.  You know, it’s not like Pearl Harbor where you could look at what happened with your own eyes and decide you had to do something that day.  But this is sort of an economic Pearl Harbor we’re going through.  And I think most of them will get it.  And I do believe they will do what’s right for the country.  They may vent their spleen a little bit by getting mad about the people that brought us into that, and I don’t blame them for that.  I might do that privately, too.  But in the end, you know, Republican, Democrat, I think they’ve got the interest of the country at heart and I think they will do the right thing.  But I hope they do it soon.  (Laughs.)

Bloomberg.com
Buffett Calls Crisis an `Economic Pearl Harbor,’ Backs Paulson
By Linda Shen and Andrew Frye
Sept. 24 (Bloomberg)—Billionaire investor Warren Buffett, calling the market turmoil “an economic Pearl Harbor,” said Treasury Secretary Henry Paulson’s $700 billion proposal to prop up the U.S. financial system is “absolutely necessary.”

“The market could not have taken another week” like last week, Buffett told CNBC today, a day after saying his Berkshire Hathaway Inc. will buy a $5 billion stake in Goldman Sachs Group Inc. “I think it was the last thing Hank Paulson wanted to do, but there’s no Plan B for this.”

Paulson and Federal Reserve Chairman Ben S. Bernanke are pushing Congress to quickly approve the plan to remove illiquid assets from the banking system. Lawmakers have balked at rubber- stamping the proposal, with Democrats demanding it include support for homeowners and limits on executive pay and Republicans questioning the plan’s reach and size.

CNBC
October 1, 2008
Warren Buffett: I Haven’t Seen As Much Economic Fear In My Adult Lifetime - Charlie Rose Interview
Posted By:Alex Crippen
Here is a complete transcript of tonight’s Warren Buffett interview with Charlie Rose, airing on PBS.  It was provided to CNBC by the Charlie Rose program.
(...)
Warren Buffett:
Well, I don’t think it’s perfect, but I don’t know that I could draw one that’s perfect.  But I’d rather by approximately right than precisely wrong, and it would be precisely wrong to turn it down.  We need—we have a terrific economy—it’s like a great athlete that’s had a cardiac arrest.  It’s flat on the floor, and the paramedics have arrived.  And they shouldn’t argue about whether they put the resuscitation equipment a quarter of an inch this way or a quarter of an inch this way, or they shouldn’t start criticizing the patient, because he didn’t have a blood pressure test or something like that.  They should do what’s needed right now.  And I think they will.  I think the Congress will do the right thing.  I think that they’ve—you know, they got into certain arguments and they start worrying about assessing blame, and there is a little demagoguery, but in the end, something this important, they’ll do the right thing.  So this really is an economic Pearl Harbor.  That sounds melodramatic, but I’ve never used that phrase before.  And this really is one.

Buffalo (NY) News
Buffett describes crisis as “economic Pearl Harbor,” urges quick action
By Dale Anderson
Updated: 10/02/08 7:49 AM
“This really is an economic Pearl Harbor,” billionaire investor Warren E. Buffett said Wednesday night during an interview centering on the current economic crisis on public television’s “Charlie Rose.”

“I’ve never used that term before, but it really is one,” Buffett added. Speaking in San Diego, where he is attending Fortune magazine’s Most Powerful Women Summit, Buffett said that the bailout plan before Congress was not perfect but that he favored immediate action even with its flaws.

“If you don’t react to Pearl Harbor in two or three weeks, you’re that much behind in the war you should have been fighting,” he said.

New York (NY) Times
Like J.P. Morgan, Warren E. Buffett Braves a Crisis
By STEVE LOHR
Published: October 5, 2008
(...)
Mr. Buffett still speaks to the press only occasionally, and he declined to be interviewed for this article. But after the House of Representatives rejected the rescue plan last Monday, Mr. Buffett got a call from Charlie Rose, the television interviewer, who has known Mr. Buffett for years. He urged Mr. Buffett to appear on his PBS interview show as soon as possible.

“I told him, ‘You have to do this,’ ” Mr. Rose recalled in an interview on Saturday. “ ‘No one has your credibility, and people want to hear what you have to say.’ ”

Mr. Buffett agreed to do it, and Mr. Rose flew to San Diego, where Mr. Buffett would be on Wednesday. The hourlong interview on Wednesday night was vintage Warren Buffett: calm, plain-spoken and wry.

He called the current crisis an economic Pearl Harbor, requiring immediate action. Its biggest single cause, he explained, was the real estate bubble. “Three hundred million Americans, their lending institutions, their government, their media, all believed that house prices were going to go up consistently,” he said. “Lending was done based on it, and everybody did a lot of foolish things.”

Posted by Barry Popik
New York CityBanking/Finance/Insurance • (0) Comments • Saturday, October 11, 2008 • Permalink