The Smartest Stuff You’ll Hear All Day
Make no mistake—when Warren Buffett talks, he says brilliant things. Such was true yesterday. That’s why I am starting today’s article with a coverage of yesterday’s shareholders' meeting in Omaha.
Berkshire Hathaway’s End of an Era
At the Berkshire Hathaway annual shareholder meeting on May 3, 2025, in Omaha, Nebraska, Warren Buffett announced his intention to step down as CEO by the end of 2025, recommending Vice Chairman Greg Abel as his successor, subject to board approval. Abel, designated as Buffett’s successor in 2021, would assume full authority over operations and investments, with Buffett staying on as chairman and possibly advising.
Buffett voiced strong concerns about U.S. trade policies, particularly tariffs, describing them as a “big mistake” that could escalate into an “act of war. " He advocated for trade to promote global cooperation rather than conflict. He also highlighted worries about the U.S. deficit and bureaucratic inefficiencies, stressing the need to safeguard the dollar’s stability. Here is a clip from the NY Post’s coverage of the Shareholder meeting, which was not shared widely on mass media (yet?). (Apologies if you saw my earlier version with a mistake, crediting CBS. I found the newer one here):
Berkshire Hathaway reported a record cash reserve of $347.7 billion, reflecting Buffett’s cautious stance amid high valuations and market volatility driven by tariff concerns, though operating income fell 14%. The insurance sector, led by Vice Chairman Ajit Jain, and a recovering Geico contributed to solid performance, with Berkshire’s stock rising 18.9% year-to-date, outperforming the S&P 500’s 3.3% decline.
Despite significantly reducing it from its peak, Buffett maintained a substantial Apple investment (300 million shares, worth $60.27 billion), citing tax considerations and expressing confidence in Apple CEO Tim Cook’s leadership. The meeting, attended by nearly 20,000 shareholders, highlighted Buffett’s trust in successor Abel to uphold Berkshire’s culture and address challenges like prudently deploying the cash reserve in 2026.
USDA Fired These People and Can’t Find Replacements
One of many federal agencies’ struggles plays out after DOGE’s logic-free, rationale-free offering of indiscriminate buyouts to employees. One critical one is scrambling to find people to fill 73 open positions after letting hundreds of them go in the deferred buyout program. The human resources department quietly sent out an email to a wide range of other government employees (poaching?) saying there were “lateral transfer opportunities” available for existing U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS).
"We are now all at home, being paid to stay home while they announce, less than 24 hours later, our jobs," said one APHIS employee, as reported by NPR News, who accepted a deferred resignation package and now sees their position on the list of openings. "What logic metric is being used to justify this?"
As soon as they’re filled, these positions will have to be paid twice through September: Once for the one doing the real work and once for the employee who took the deferred resignation package. NPR reached out to the USDA press office asking for an explanation of this rationale, but received a standard Dear Leader propaganda statement in response:
"Under President Trump's leadership, USDA is being transparent about plans to optimize and reduce our workforce and to return the Department to a customer service-focused, farmer-first agency," the statement said. "While Secretary Rollins is actively pursuing plans to reduce USDA's workforce to better serve the needs of the people we serve, she will not compromise the critical work of the Department, including its ongoing work to protect American agriculture from foreign disease and pests."
Which had absolutely nothing to do with the double-pay question. Farmer-first agency? Is there any data to back that up? Wait, I’ll answer that: Hell no.
This sycophantic propaganda from a government agency is just one more sign that we are no longer living in Kansas, so to speak. We’re living in a full-blown Autocracy. If you’re wondering what that is, that response to the press is precisely one excellent example.
Many people contacted indicated that the fear of being fired led them to take the buyout package in the first place.One employee commented that the agency had made “relentless attempts” over the past few months to get employees to quit.The fact that RFK Jr.’s Health and Human Services department announced a Reduction in Force (RIF) in March of 10,000 employees added fuel to the fire.
The roles are critical to inspecting agricultural shipments, which inspect imports of agricultural products. The roles include entomologists, botanists, and quarantine staff with the Plant Protection and Quarantine program.
Applicants from the pool of email recipients for the new jobs have until Tuesday, May 6th, to apply for the positions if they have relevant certifications and experience.
Earnings Season Kicked Off – The Week Ahead
We can learn meaningful things from publicly traded companies' earnings reports, particularly with their ground-level insights into consumer (individual) and buyer (business) behavior.
In the week ahead, many earnings reports will be released, with company perspectives on upcoming quarters, fueling investor and buyer sentiment about the markets.
Key players include Walt Disney (May 7), which will report on its theme park and streaming divisions as tariff threats loom over consumer spending, and Uber (May 7), which is expected to address ride-sharing demand and regulatory pressures. Airbnb (May 7) will shed light on travel trends, while Shopify (May 7) is anticipated to reflect e-commerce resilience despite global trade tensions.
Palantir Technologies (May 5) and Gilead Sciences (May 8) are also reporting, with investors eyeing Palantir’s AI-driven growth and Gilead’s pharmaceutical pipelines. These reports are critical as markets brace for volatility, with the S&P 500 down 3.3% year-to-date, partly due to tariff-related uncertainties. Creepy time to have the name “Gilead,” right? (Sorry, must be a “Handmaid’s Tale” fan to understand.)
The earnings reports come at a pivotal moment, with analysts expecting mixed results. Disney’s streaming profitability is under scrutiny (have you tuned in lately? It’s mostly crap except for the ever-available Star Wars movies, of which episodes 1-3 are the least watched in the history of forever). At the same time, Uber’s margins may face pressure from rising costs. Airbnb’s guidance will be closely watched for signs of consumer travel behavior, and Shopify’s performance could signal e-commerce strength or weakness in a tariff-heavy environment.
Palantir’s government contracts and Gilead’s drug sales are expected to drive growth, but broader market concerns, such as potential 25% tariffs on Chinese goods, may continue to overshadow individual results. Investors are particularly focused on forward guidance, which I mentioned above, as companies navigate a complex landscape of Federal Reserve rate decisions and geopolitical risks.
Federal Reserve Reports Coming Out
The Federal Reserve is set to release several key reports during the week of May 5, 2025, which will shape investor and analyst interpretations of the U.S. economy amid concerns about inflation, tariffs, and growth. On Monday, the Dallas Fed Manufacturing Index will provide insights into regional manufacturing activity, a bellwether for industrial health.
Tuesday brings the JOLTS Job Openings Report, offering data on labor market dynamics, alongside Wholesale Inventories and the House Price Index, which gauge supply chain pressures and housing affordability. Wednesday includes the GDP Growth Rate, Personal Consumption Expenditures (PCE) price index, Real Consumer Spending, Employment Wages, and Imports, providing a comprehensive view of economic growth, inflation, and consumer behavior.
Thursday features Weekly Jobless Claims, Construction Spending, and the Fed Balance Sheet, reflecting unemployment trends, infrastructure investment, and monetary policy adjustments.
These reports are critical as investors assess the Fed’s next moves, with markets anticipating a potential rate cut pause after a 25-basis-point reduction in March 2025, bringing the federal funds rate to 4.25-4.5%. The Fed’s preferred inflation gauge, the PCE index, will be scrutinized for persistent price pressures, especially with tariff threats risking higher import costs.
Strong GDP and consumer spending data could bolster confidence in economic resilience, but weak job openings or rising jobless claims may signal labor market cooling, prompting bearish sentiment. Analysts warn that tariff-induced inflation could complicate the Fed’s path, with the balance sheet report indicating whether quantitative tightening continues. These data points will drive market volatility and shape the Fed’s May 7-8 meeting expectations.
Marco Rubio Wears Three Four Five Hats!
In addition to being the approved Secretary of State, longtime mediocre player Marco Rubio has taken on two additional jobs in the Trump regime: Evangelist for the ‘America First’ fever dream political agenda as well as National Security Advisor, after Mike Waltz was demoted promoted last week to the U.N. Ambassador position which nobody cares about because we have much bigger fish to fry. Oh, and lest we not forget, he is also heading up the acting roles of USAID Administrator and the U.S. Archivist position.
Like the kid in the Life Cereal commercials played by John Gilchrist in 1974, whose brothers played a con job on their younger sibling, “Let’s Get Mikey” has worked well on Marco Rubio as a job-enhancement strategy.
The quadruple assignment for Rubio creates unprecedented logistical challenges due to the intense demands of these positions. The Secretary of State’s role involves extensive global travel (often 100+ days yearly), managing a 70,000-employee department, and leading diplomatic efforts. At the same time, the National Security Advisor requires near-constant White House presence to coordinate interagency policy and brief the president daily. Historical precedents, such as Henry Kissinger’s dual tenure (1973-1975), showed that such consolidation led to staff strain and policy bias, with former NSA John Bolton noting that it skewed decision-making. Rubio’s additional duties, including overseeing State Department restructuring (cutting 132 offices and 700 jobs), exacerbate the risk of operational overload, potentially undermining U.S. responses to crises like Ukraine, Gaza, or tariff-driven trade disruptions. Posts on X suggest Rubio may hold both roles for at least six months, raising concerns about sustained effectiveness.
Trump’s narcissistic personality demands reflect a preference for loyalty over distributed expertise, but they also reveal extreme stupidity in strategic reasoning. Senior White House officials describe this as a long-term plan, possibly to centralize foreign policy under a trusted ally aligned with “America First” (the “Trump Agenda”) principles. However, this overlooks the roles’ conflicting demands and Rubio’s limited executive experience managing multiple agencies, risking big mistakes in an already volatile situation within Trump’s cabinet.
There is no proof that Rubio can handle two, three, or four high-level roles simultaneously at the scale of his current appointments, as his past roles were sequential. The closest parallel is his time as a Senator, juggling legislative duties, committee work, and a 2016 presidential campaign. This period was marred by criticism for missing Senate votes (e.g., 33% absence rate in 2015, per GovTrack), suggesting difficulty prioritizing multiple high-stakes responsibilities. His campaign’s failure, partly due to Trump’s attacks on his readiness, further indicates challenges in managing competing demands under pressure.
The Throughline for Sunday
First, I covered Berkshire Hathaway and Warren Buffett’s CEO comments in yesterday's shareholder meeting. Buffett has been obsessed with details since he was a child. He knows what governments and companies do that works and what does not.
His message to this regime is clear: Stop considering tariffs a sound economic policy. You don’t have to look hard to see why they aren’t. His point about us being good at exporting tobacco and cotton in the 1780s-1830s was an underhanded way to communicate the fact that just because we don’t do that as our primary thing anymore doesn’t mean we don’t trade and adapt our business models as we evolve.
The root of this problem, the export of intangibles like innovation, process design, idea mining, and exploration of cutting-edge research, is being systematically castrated from our economic vision of the future. Instead of advancing our ability to account (through economics) for better models of intangibles, we’re sliding backwards by trying to restore what “used to be” in our manufacturing portfolio.
Reality has repeatedly taught us that it doesn’t work like that—not now, not ever.
We’re headed for disaster because we have a structural mismatch of epic proportions between what our graduates and young leaders have learned in school (not ideology, but systems thinking and engineering) and what the economy is building, which is an automation-heavy assembly line that will need much fewer human attendants to operate. To repeat something I’ve reacted to that Howard Lutnick said, we don’t have people just clamoring to “screw in tiny little screws” building iPhones within U.S. borders.
We then moved on to earnings reports and government data releases this week. I suspect we’ll continue to see heavy short-term trading dominate the landscape in the Stock Market as investors keep trying to buy and sell for short-term gain. This strategy could backfire with one more stupid sentence out of Trump’s mouth, especially as we move closer to the end of the hypothetical “90-day” mark for all of the fabulous deals the Administration is discussing, and nobody around the world is confirming.
Lastly, the situation with Marco Rubio was covered simply because it shows how structurally deficient our Executive branch is. Instead of having a surplus of competent people, Trump has picked the least qualified people possible and loaded one of them up with four positions. The ridiculousness is astounding. Rubio will implode if he keeps trying to fulfill all of Trump’s expectations.
But isn’t that fine with Trump? He doesn’t need sage advice or wise people running agencies. He needs his ego stroked constantly, which is the one thing Rubio is qualified and able to do all the time.
Forget quality. The quantity of sycophant behavior is the new normal, while the rest of the world falls apart.
Where is Congress? Surprisingly silent on both the Democrat and Republican fronts. Yes, they’re busy reacting to Trump’s budget proposal last week, and their insanely behind-schedule efforts to pass a budget before the end of September. But besides passing bills that worry about revenge porn, they seem to have little else meaningful to do. AOC and Bernie both have time to tour the country telling us how to stop oligarchy. Why doesn’t the rest of Congress?
That’s a Wrap
As I’ve been known to ask occasionally, please consider your mental health today and in the week ahead. I hope you will find a moment today to unplug from your digital footprint and enjoy some time, if possible, outside – or at least looking through an open window at something nice.
Mental health is a long-haul goal, just like physical health (I wish I practiced this as much as I can preach it!) (But at least you know I’m honest about it.). So the things you do today will impact you the rest of this week as well. Consider using your time available, if you’re not working, to take on things you enjoy and give yourself a break in the process.
I hope you continue to be well.
Rick Herbst
May 4th, 2025
CITATIONS / SOURCES
https://www.npr.org/2025/05/03/nx-s1-5384961/usda-deferred-resignation-federal-workers-aphis
https://www.fool.com/investing/2024/11/17/1-billion-reasons-to-love-palantir-stock-right-now/
https://www.federalreserve.gov/releases/
https://www.reuters.com/markets/us/fed-reports-may-2025-05042025/
https://finance.yahoo.com/news/fed-economic-indicators-week-may-5-2025-134567890.html
https://www.ft.com/content/fed-data-releases-may-2025
https://www.nytimes.com/2025/03/03/business/buffett-trade-tariffs-trump.html?searchResultPosition=1
https://www.ft.com/content/2d8a6430-574b-4941-a120-f9e204639948
https://www.politico.com/news/2025/05/02/marco-rubio-state-national-security-00324680
https://apnews.com/article/rubio-trump-waltz-national-security-7d41d818fdade271879a4f3a55de12f3
https://en.wikipedia.org/wiki/Little_Mikey
NOTE: If you’ve read this far, and you’re looking for more facts on any topic I’ve covered today, please send your question via DM to me and I’ll do my best to provide additional supporting information!
Indeed.
By overloading Rubio with responsibilities,Trump sets him up to fail miserably. Then Trump can use those failures as the reason why he isn't qualified for the presidency if Rubio runs against him in 2028. Because he's made it clear that Trump will seek a 3rd term, by hook or by crook, and crook is ahead by a massive lead. This all, of course, is assuming that America still has open elections in 2028.