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Commentary

Buffett Interview: Markets, excesses, bailout, fear

Listen to a one hour interview of Warren Buffett. Interesting thoughts:

  • In my adult lifetime I don’t think I’ve ever seen people as fearful economically, as they are right now.
  • Sheila Bair moved 8% of deposits in the US from one set of institutions to another. She’ll never get a golden parachute…we have some great public servants.
  • I’d rather be approximately right than precisely wrong . ANd it would be precisely wrong to turn [the bailout plan] down.
  • [The American Economy] is like a great athlete that’s had a cardiac arrest. It’s flat on the floor, the paramedics have arrived. They shouldn’t argue whether they put the resuscitation equipment a quarter of an inch this way or that, and they shouldn’t criticise the patient for having high blood pressure…[basically, address the problem, not the symptoms]
  • This is really an economic pearl harbour.
  • As long as you have markets, you’ll have excesses.
  • I believe in mark to market. In 1974 – I told our shareholders what they [common stocks we held] were worth then – mark to market is reality. [You may not agree with it but it’s reality]
  • The treasury can make a profit out of this deal … but only if they buy at current prices, not inflated prices. Maybe for a bank looking to sell $1 billion of assets it should be like sell $100 million in the market, and we’ll match the remaining $900 million at those prices and terms.

As usual, very interesting nuggets in there. Very straightforward person, is Buffett. He expects the recession to get worse, and things to get very sticky – and that every bit the government is doing is in the right direction and they should do it fast.

Time will tell which bits of it are right.

  • Kamal says:

    >Only if Treasury buys the Buffet buys, preffered shares with 10 percent dividend and also an option to buy at current prices.
    This crisis is the great unravelling, Wait and watch the train wreck, its always fascinating…