Here is last night’s Charlie Rose Show, with WB speaking for an hour.

Category: Credit, M&A, Markets, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

76 Responses to “Warren Buffet on Charlie Rose”

  1. karen says:

    wb in one word: disingenuous

  2. Dan says:

    Buffet’s being quoted at cnn/fn right now:

    “Warren Buffett said Thursday that it is crucial to the global economy that the controversial $700 billion Wall Street bailout passes and that the pricetag may have to rise to do the job right.”

    Is this a de facto acknowledgment that the giveaway (I mean bailout) won’t work? Why shouldn’t we just f’in give EVERYTHING to the ultra-wealthy in the name of protecting the little guy? This is a nightmare.

    Meanwhile, we have the creator of the nightmare, Greenspan, saying on Bloomberg that this will be over “sooner rather than later.” I cannot believe anybody would give his opinion any credit at this point.

  3. Jos says:

    THANK YOU Barry. GREATEST Post this year.

  4. kittyboy says:

    WTF?

    I thought WB was one of the good guys…

    My big question for Barry et al: does WB actually believe what he’s saying, or is he just manipulating the situation for his own benefit?

    We know he’s smart, but what he’s saying contradicts what nearly all the other “smart” people are saying.

    Paulson has America’s concerns at heart? WB–WTF?

  5. DL says:

    ARGUMENT IN FAVOR OF THE BAILOUT

    I am personally opposed to this particular bailout. But one must also consider political realities. Suppose that we did nothing at this point to solve the problem. The Dems are going to get a three-house sweep in November. In the event that they get 60 seats in the Senate, they could easily go too far in the direction of effectively confiscating capital in an effort to solve the problem. I shudder to think of the sort of proposal that Bernie Sanders would come up with.

  6. The Redactor says:

    Has anybody noticed that our national debt — soon to be 10 trillion, then 11 — is greater than the value of the entire S&P 500 (sinking less than 10 trillion).
    Maybe it’s time to put the keys in the mailbox and give her back to the bank.

  7. Anonymous says:

    WB has shown over and over again that he is not just a Master of the Universe looking to aggrandize his own ego or his consumption of luxury goods like private jets. I think he deserves more credit than those who say he is “talking his book” give him. He is basically giving away his entire personal fortune upon his death. He hardly even spends the money he already has. You don’t have to agree with him, but I doubt he is merely “talking his book” for personal gain.

  8. E says:

    Good call, Redactor. Anyone have the values for the S&P500 and federal debt 8 years ago for a comparison?

    Oh, and off this topic but worth noting – the front of Yahoo Finance has this explanation for the market drops today:

    “Stocks tumbled and credit markets remained tight Thursday after plunging factor orders and a seven-year high in jobless claims stoked fear that the government’s financial rescue plan might not be enough to ward off a recession.”

    That’s LOL funny. Did anyone actually think the bailout plan will hold off a recession? I thought it was to hold off Armageddon.

  9. leftback says:

    @ Karen:

    Disingenuous? You aren’t buying that “Aw shucks” act?

  10. notsofastfriend says:

    Warren Buffett is nothing more than a Poster Child for the Elite. Damn those assholes.

    Thieves steal, liar lie and crooks break the law.

  11. wally says:

    I don’t know if he is talking his book, but everybody who always follows the same patterns eventually gets tripped up by a new situation. WEB is no exception.

  12. karen says:

    @ leftback,

    he might be the greatest “artist” of all time :)

    an interesting day, isn’t it?

  13. Jeff M. says:

    @leftback: Are you sticking with GDX? Looking ugly with a capital “UGLY” today.

    D-Train in full throttle today. QID looking better and better every day.

  14. FleeTheShip says:

    Maybe Buffet is aware of the gravity of the situation and knows that the financial system (and belief in government for that matter) is based upon confidence and trust and so he is “joining” into the calls to get everyone to step back from the ledge even if he personally thinks it won’t work.

    This is so uncharacteristic of him, so maybe he is not motivated by greed on this and he is doing this for the country and patriotism.

    Don’t forget that this ‘sham” system has been running like this for decades. It’s just now that people have lost confidence.

  15. Mattie says:

    If Warren Buffett was decent human being that really cared for America and not his own self-interest… he would donate all his pennies to the Government now.

  16. Blackhalo says:

    “WTF?

    I thought WB was one of the good guys…”

    As a disinterested third party, I think he is one of the good guys. When he has money on the line, his opinion should be discounted.

    “In the event that they get 60 seats in the Senate, they could easily go too far in the direction of effectively confiscating capital in an effort to solve the problem.”

    I am not worried at all. Dems are such a disorginized stew of kooks, special interests, and outright wackos that they they are mostly unable to get anything, good or bad done. There is no orginization with them. It is like herding cats

    Just look back to when Clinton first took office and the number one item that the they had a clear mandate for, died a spectacular death. They could not even agree on the most basic ideals and it ended up as much of a bloated mess as this bailout bill.

    Republicans though, have the ability to tow the line and respect their leader’s direction and vote as a block. Much more dangerous results, as we are now experiencing. Though the Republican revolution with regard to the bailout bill was quite a surprise to me.

  17. He is 77 years old, and is the richest man in America, if not the world.

    What does he give a flying fig?

    I think he is sincere . . .

  18. Bruce in Tennessee says:

    @Dan:

    Bill Gross last week also stated that 700 billion would only be a start. I can tell you that this is the same mentality that Arthur Burns and Jimmy Carter had for some time in the late 70′s. Finally Volcker was hired and fixed the mess, but Burns was afraid to let the business cycle have a downturn…

    A little different set of circumstances today, but the folks in charge seem paralyzed to have a recession…and I know we keep hearing that if we do allow a slowdown a depression “will result”..but too much Arthur Burns thinking only makes it worse. Yes, his problem was stagflation, but in many ways these two events are very similar…

  19. karen says:

    Oh, please. He’s a RUTHLESS businessman. And, at this point in his life, it’s all about power and protecting his legacy (ego).

  20. kittyboy says:

    So Barry, if WB is sincere, what do you make of his arguments?

  21. He could be 87, and worth twice as much..He’d care, he likes his Bridge games, and the Media’s tongue too much.

    He’s Brilliant, that’s for sure, but he knows way more than he’s telling..

    take a peek at ‘Nebraska Furniture Mart’, a BRK op, they led in trend in Importing ‘Case Goods’ from the PROC, helped obliterate an Industry inside 15 years. Ol’ WEB, like many others, (not)= to his Headlines..remember, read the whole story, and check the footnotes..

  22. leftback says:

    @ Bruce in TN: One thing is certain. we will have “flation”.

    @ Jeff M: “it’s just a flesh wound”.. Yes, the D-train™ is rolling and all of my positions are getting killed. Thanks!! :-) I am day trading some bank stocks to take my mind off the carnage.

    Seriously, This is why I didn’t want to get too far long ahead of the employment reports. R-train™ still undergoing some engine repairs but you can bet it will be here soon. Market sending another little reminder to the House of Representatives. Watching the close carefully to see if SPX and GDX put in a double bottom here, with the bailout ahead this could be a bullish set-up from here – for a trade.

    @ Karen: We all project different things to different people. I wonder what WB is like around the office?

  23. TG Randini says:

    Buffet knows what Karl Marx knew and it’s the Gorilla in the Closet: Capitalism is a house of cards. Pull a few cards away and the whole thing collapses.

    Is he scared? You bet. He knows the worst-case long-run scenario: Even cash will not be king. And it’s not about keeping it in banks… your mattress won’t safe either. The Euro and Yen will be as worthless as the dollar. They will all become paper to build fires with.

    Even AU won’t be a store of value. It will be superceded by iron. You can make a better machete with iron.

    (But then again, we have Sarah. I’m SURE Sarah can fix it.)

  24. mind says:

    He keeps emphasizing the importance of paying “current market price” for the MBS, etc. I thought the plan was that the Treasury would be paying MORE than current market because current market is “fire sale” price and would render many institutions insolvent if recognized (?)

  25. leftback says:

    @ TG Randini:

    You really do have your tin foil hat on today….

  26. pmorrisonfl says:

    mind is right: WB consistently has talked about buying at market prices, while Paulson/Bernanke have claimed otherwise in the hearings. Why the dissonance?

  27. JOE 6 PACK says:

    Home prices caving. Markets crashing. What’s the big deal? So I change from Guinness to Schlitz. Drive a Pinto instead of a Lexus. It’s all the same.

    Just don’t take my football games away.

    Even the Roman emperors provided the masses with entertainments.

  28. TG Randini says:

    @ leftback:

    Remember, I’m a Marxist. I believe Groucho was almost as brilliant as Einstein.

  29. BULLS says:

    so much misplaced anger here. talk about not seeing the root cause. dummies.

  30. Phil says:

    And how much is WB making off the bailout from his GE and G-Sax investments. Please…I thought there was more to him than that. End of the day he is looking out for #1 and lying through his teeth.

  31. Blackhalo:
    Will Rogers made his classic comment about Democrats. It’s even more true today. Republicans are different because they are top down. Meaning they take orders from the top and do what they are told(Yes, I am generalizing a bit .. but the point holds). How far apart are the Republicans ideologically compared to the Democrats? Why do you think McCain had to pick Palin? To kiss up to the religious fundies. That is why. Democratic politicians tend to trash their base. See the difference?

  32. Blackhalo:
    Will Rogers made his classic comment about Democrats. It’s even more true today. Republicans are different because they are top down. Meaning they take orders from the top and do what they are told(Yes, I am generalizing a bit .. but the point holds). How far apart are the Republicans ideologically compared to the Democrats? Why do you think McCain had to pick Palin? To kiss up to the religious fundies. That is why. Democratic politicians tend to trash their base. See the difference?

  33. john Doe says:

    Bush is begging congress to pass this SCAM bailout bill. He’s trying to save his legacy….we should build his presidential library in Karachi…that way everyone can see what great things he has achieved….. I’m tired of beings screw by the SHAM Republicans…Limbaugh should be ashamed… Jefferson is probably pissing on his picture in the heavenlies….
    stock and house prices will keep falling… this BILL IS WELFARE for the Wealthy of huge magnitude. That bastard first destroyed the military, then the economy, now the Republic. We are not a Socialist nation…..do we want to end up like Cuba, Brazil, Russia??? These Republicans are a disgrace…. they are Bolshevik socialists……. Can we survive the last 4 months of this administration??? God Help us….

  34. NH Voter says:

    Hello All!

    Please VOTE ALL INCUMBENTS OUT regardless of party, AT ALL LEVELS OF GOVERNMENT.

    I don’t care if you replace them with the same party as long as they are voted OUT.

    Once they realize their re-election is not assured some behaviors may change. It’s time for term limits. If anything, we scare the elite!

    We need to REPLACE EVERY LAST ONE of these clowns.

    Let this revolution start at the ballot box.

    Remember that the Congress allocates and spends the money. Vote these creeeeeeeps out! End the oligarchy!

  35. D says:

    Buffet’s arguments are based on the treasury paying market value for assets. I see little to suggest this will happen.

  36. Jeff M. says:

    I’m not as cynical as most on this blog about Buffett (the truth is probably somewhere in the middle, although I wonder why we taxpayers can’t get the same deals he seems to be getting). But here’s a question:

    What do we (or the government) do if/when the market and economy STILL tank after the bailout bill is passed? What then?

    I see Dow down 320+ today. Is that the market telling the House they’d better pass this bill or is it the market saying that we’re screwed either way?

  37. sweeny texas says:

    Warren is scared shitless. Sincere my ass.

    What should happen is to let the big banks fail, taking down under-insured depositors and shareholders. This whole “401k main street” scare tactic is BS. Probably 90% of the losses sustained in letting them fail will come out the posckets of some of the wealthiest people in the world.

    That’s why a bailout is a certainty.

  38. elliot says:

    Hey Jeff M…

    cash or fetal?

  39. Jeff M. says:

    @elliot: BOTH.

  40. karen says:

    52 card pickup anyone?

  41. Oil Shock says:

    Warren Buffet is a rent seeking, cunning crook. Let Berkshire Hathaway go bankrupt.

  42. The Redactor says:

    To E: Yes. When W. Bush took over the U.S. Debt was roughly 6 trillion and the S&P was worth about the same as now (10 trillion). What a bummer — The social conservatives (not-fiscal) sold the farm.

  43. itulip says:

    The Last Bubble

    To preserve the great institutions of American capitalism, government will need to cut tax subsidies to non-productive industries, such as real estate, become less dependent on borrowing and domestic consumption, encourage saving and investment, and reallocate financial and human capital to rebuild America¹s physical and economic infrastructure, a new economic foundation that nurtures the next generation of globally competitive American private enterprise.

  44. mhm says:

    That was a great talk and I agree even with the capital gain tax… but the “if we want more gov services…”, that is out of line. Gov should set minimum standard for services and get out of the way.

  45. babycondor says:

    @ JOE 6 PACK | Oct 2, 2008 2:14:54 PM

    So you’re saying, go long BUD, F and DIS?

  46. Travis Bickel says:

    Bush Legacy? How about a giant turd left in the lap of us little people.

    Some say he tried to take steps to avert the current Mortgage market FUBAR but it seems like he did the bare CYA minimum as opposed to taking the bully pulpit and making a lot of noise about the impending train wreck.

    I think there is something to the previous post regarding the 700 Billion being a back stop to saving the financial asses and standard of living of people who don’t know the cost of a Big Mac or gallon of gas and who have never been on a public bus…the galatically rich.

    Where’s Dick Cheney been. He’s always been MIA but lately he’s totally off the scene.

    If we got anybody in the space station, I’m sure glad it’s not me. They could be stuck there for awhile.

    BTW, I voted for GwB twice. What a “tool” I was.

  47. glarp says:

    The anti-Buffet knee-jerk backlash here is ridiculous. I think he understands the implications of cutting off the nation’s cash supply and is being sincere. Anybody who thinks that only the wealthy will suffer is crazy. We’re all in the same boat, and it’s taking on water fast.

  48. concerned citizen says:

    I watched this last night.

    I don’t get WB, he backed up Paulson that these MBSs were worth more than the current market value (22 cents/dollar or less) so the Treasury gets a deal. I can’t see how these securities are worth more than current book value. House prices are going to decline at least another 10% with no recovery in sight for 20 years.

    Also, WB said Paulson would buy these MBSs at current market prices but everyone know Pauslon will have to buy at an above market price in order to recapitalize the banks, thus giving banks money for nothing.

    He was wrong on two counts. He’s out of touch with the nations leading economists.

    I just don’t get him, maybe he had a small stroke. I’d send him for an MRI scan.

  49. MAS says:

    BR – Warren’s last name is spelled with 2 Ts.

    Warren Buffett

  50. WB has an absolutely wonderful way of saying “bubble”. Listen at 18:45. Beautiful artful enunciation.

  51. Steve Barry says:

    Warren Buffett jumped the shark when he started appearing on CNBC all the time to talk his book…and now that he owns a piece of GE, he owns a piece of CNBC, so it will only be downhill from here.

  52. Jeff M. says:

    If WB thinks this is such a good deal for the taxpayer, then why doesn’t he buy this shit sandwich and “turn a profit” on them?

  53. Spud says:

    This makes me want to BARF. Never thought I’d say this Warren, but the apple falls very far from the tree. (Warren’s dad, as senator, had a nice speech on the role of Gold)

    I didn’t hear the federal reserve or paper money mentioned. You know Warren, the Austrians did see this coming – so your claim that nobody saw the extent of this coming is flat out wrong.

    This guy is way too blaze. Not a market for old men. Your analogies are about as intelligent as something Bush would say, too. Warren is apparently as statist as Bush is, too.

    Warren says the government can borrow unlimited amounts. We’re screwed.

  54. A summary of Buffett’s major points, and a link to the transcript of his conversation with Charlie Rose, can be found here: http://mathoda.com/archives/433

  55. Erin says:

    hey people, you voted for Bush, once, twice…

  56. Momo says:

    Warren has serious money to lose if the markets plunge. He has sold $4.5 Billion in index puts, so he could easily lose multiples of that amount. Imagine if you could give an unbiased position if you knew your opinon could sway whether or not you’d end up losing billions and billions of dollars. Warren’s not a saint. He’s just as human as the rest of us.

    http://www.condoroptions.com/index.php/options-education/trading-put-options-with-warren-buffett/

  57. erin says:

    it is all scam. let the big banks go down. nationalize them (it will cost less, think jpm, citi, bac deals).

    government wages for everybody. Let’s say buy jpm for 3b, city for 3b, bac for 3b. You have everthing for 10-15bln dollars instead of 3 trillions. you are paying for losses anyway,
    he he he.

  58. Blackhalo says:

    “Anybody who thinks that only the wealthy will suffer is crazy.”

    Some have more to lose than others. Particularly onerous is taking money from the many to bailout the few. Especially those few who have benefited the most from bad behavior and were the greatest contributors to the mess we are in.

  59. Ron B. says:

    I got really pissed when Buffett said that we’re so much better off today than 30 years ago. That’s an outright lie. 30 years ago we were the #1 creditor nation, now we’re the #1 debtor nation. Also real incomes have declined due to inflation over the last 30 years. So who’s better off? Fat cats like Buffett. He isn’t credible to listen to.

  60. Jeff M. says:

    hey people, you voted for Bush, once, twice…

    Posted by: Erin | Oct 2, 2008 4:42:37 PM

    Um, Correction: I did not vote for that monkey at any time.

  61. JohnB says:

    I like Buffett. I’ve learned a tremendous amount from him (even simple things like not using leverage). Some things he points out are so obvious.

    But he’s always sort of “on”, always cracking jokes, smiling…regardless of whats going on in the economy. And always making the same economic statements (we’re better off than we were 30 years ago). He ignores whether we’re a creditor or debtor nation. He ignores the fact that the dollar became the worlds reserve currency in the 20th century (allowing us unlimited money). He ignores just a *few* key factors.

    And everything is happy, happy, hot, hot.

  62. BobC says:

    To Rob B:

    We are much better off than 30 years ago. The value of the dollar may be lower but look what lower class americans get for their dollar. How many struggling families have the following?:

    -Cell phones
    -internet
    -computers at speeds that would blow peoples minds in 1978 (except gordan Moore).
    -Boner pills for cheap
    -Some of the most struggling families own a playstation 2. If you gave someone a PS2 in 1978 they would not believe a person could be bored with such an amazing, multimedia machine
    -A poor family today probably owns a television of quality well beyond anything in 1978.

    In the end, the value of the dollar doesn’t determine if a person is better off. Progress has brought innovation for cheap to millions of Americans. The modern lower class in the US enjoys amenities beyond any other age. And capitalism has been the fundemantal driver of that wealth creation.

  63. Jeff M. says:

    @BobC: You fail to account for the fact that many people have “stuff” for sure, but many don’t actually “own” this “stuff”. They put it on a credit card (sound familiar?) and are indentured servants to their bills.

    Sorry, but don’t call the accumulation of cheap, often badly made, stuff “progress” when it was purchased mostly via cheap, easy credit. Now the bills are coming due, so we’ll find out just how much “progress” we’ve made. I’m guessing this unwinding (hear that giant sucking sound?) ain’t gonna be pretty.

  64. Pam says:

    @BobC,

    You must be very young and not have really lived through the 70s to think we’re better off. Yeah, we have more “stuff” now but the quality of life today is immeasurably worse. Really, no comparison.

  65. CJ says:

    I respect Buffett’s intelligence, business acumen/negotiating skills, and his ability communicate clearly. I have learned from him about the problems of leverage and of valuing collateralized securities. However, he is affected by self-interest like all human beings. When he has skin in the game, then yes, he’s going to “talk his book” at least somewhat and he’s going to avoid inconvenient subjects.

    One example of this that isn’t directly related to current events is his call for higher income taxes, when he doesn’t pay income taxes. Listen to him, yes for sure, but be skeptical.

  66. oldplebian says:

    L-T Capital gains should be taxed at the same rate as labor income? What happened to the time value of money? Sometimes a portion of the capital gain is nothing more than a partial inflation adjustment!

  67. Kyle B says:

    No one seems to be able to answer why there is such disconnect between WB insisting that the MBS should be purchased at market value and the fact that the current low market value of MBS is key to the problem. (besides of course the ubiquitous internet ad hominem attacks)

    So, why does WB think that the feds purchasing MBS at current market value will work and provide sufficient capitalization? Anyone?

  68. matt says:

    He is the biggest liar I’ve heard all year (and I’ve been listening to politics all year).

    He claims that the deals on these MBS are incredible and he’d love to get in on the government’s deal of buying these at market value. He has tens of billions in cash. If he really believed what he’s saying, then he’d start buying. None of these banks are telling buyers to go away because they’re only selling to the government.

  69. Mitchn says:

    Early on in the interview, WB says “No one saw the tsunami coming.” Bullcrap. I pulled all my retirement money out of equities and put it into a money market fund almost exactly three years ago. Dow was at 10,400 and anyone walking around New York City could see the housing bubble inflating before their eyes. And the Masters of the Universe? Blinded by greed. Shame on them.

  70. notsofastfriend says:

    If Buffett was a man of the People why do Berkshire shares sell for thousands a piece and out of reach of the average American. If Buffett was a man of the People Why not condemn the IB’s greedy Executives instead of investing in them through GS. If Buffett was a man of the People why not condemn Special Interest politics in Washington. If Buffett was a man of the People why not condemn CNBC for it’s unbelievable Propaganda in favor of American Corporate interest. If Warren Buffett was who he’s portrayed to be…

  71. bob duerr says:

    OZYMANDIAS by Percy Shelly
    I met a traveller from an antique land
    Who said: Two vast and trunkless legs of stone
    Stand in the desert. Near them on the sand,
    Half sunk, a shatter’d visage lies, whose frown
    And wrinkled lip and sneer of cold command
    Tell that its sculptor well those passions read
    Which yet survive, stamp’d on these lifeless things,
    The hand that mock’d them and the heart that fed.
    And on the pedestal these words appear:
    “My name is Ozymandias, king of kings:
    Look on my works, ye Mighty, and despair!”
    Nothing beside remains: round the decay
    Of that colossal wreck, boundless and bare,
    The lone and level sands stretch far away.[1]

    Warren king of kings. What you sow so you shall reap.

  72. tom a taxpayer says:

    Buffet now is bankrolling Goldman Sachs, the ringleader of the Wall Street gang that raped and pillaged the mortgage industry, ruined the housing market, destroyed the credit system, endangered municipal financing, pension funds, and the banking system, sent the economy into a downward spiral, endangered the world financial system, and blackmailed the U.S. and the world to pay them billions in ransom or face the destruction of the world financial system and economy.
    Buffet has been mentioned as a possible member of an oversight board for the Paulson/Pelosi bailout bill. However, Buffet’s bankrolling of Goldman Sachs creates a conflict of interest that should throw chances of oversight board membership down the toilet, along with Buffet’s “good guy” reputation.

  73. BobC says:

    to Jeff M and Pam:

    OK, then you guys can state what you see as quality of life.

    i understand that you do not value cheap garbage as high quality of life. That is why I made the reference to, “boner pills.” These are silly, materialistic, and not helping us evolve into the StarChild from the book “2001.” Buying it on credit is probably not the best way to acheiving nirvana.

    But in the end it is what people want.

  74. Johannes Climacus says:

    End bold.

  75. Tezzer says:

    He’s definitely one of the good guys- here’s his quote around 43:00- I wonder how many of you detractors have watched this.

    “The truth is, I’ve never had it so good in terms of taxes. I am paying the lowest tax rate that I’ve ever paid in my life, and that’s crazy… If you look at the Forbes 400 they’re paying the lowest rate. I think people in my situation should be paying more taxes, the rest of the country should be paying less- the 95% that Obama talks about, or maybe even a little more than that. A stimulus plan should really be geared to the people.”

    “Much of my income comes from capital gains; I pay 15% on that. The girl who comes in to take the wastebasket away is paying 15.3% on her payroll tax. I’ve never had it so good. I think it’s terrible for people in the fed to say that income from investments should be taxed at a lower rate than income from labor.”

    “If you want a government… you have to get [money] from somebody. We’re going to raise about 2.6 trillion. Over the years, particularly over the last 6 or 8 years they’ve taken less and less from a guy like me… The payroll tax is over a third of the receipts to the federal government and they don’t take that from me on capital gains, they don’t take that from me on dividends, they take that from the woman who comes and takes the wastebaskets out.”