Buffett on the Credit Crisis: 'An Economic Pearl Harbor'

Charlie Rose interview

Skeptics will claim he is talking his own book, with the recent GS and GE investments. But I think he knows what he is talking about. Buffet says that if he could take a 1 percent stake in the bailout (investing $7 billion), he would. He thinks the bailout will make money investing in distressed mortgage securities at current market prices.

"I love to buy distressed assets... I just don't have $700B to do it with." (At about 13-14 minutes into the hour-long interview.)

Bubble logic: "Innovators, Imitators and then the Idiots" (20 minutes)

"Confidence in markets and institutions is like oxygen... when you have it you don't think about it... but you can't go 5 minutes without it." (24 minutes)

"Beware of geeks bearing formulas!" (takes a shot at quants at 27 minutes)

Upper income people should pay more taxes (basically endorses Obama's tax plan) (42 minutes)

"It is terrible that income from investments (capital gains) should be taxed less than income from labor." (against regressive taxes) (44 minutes)

"If AIG had to unwind their derivatives book, it would have hit every institution in the world." (50 minutes)

"The Fed structured the AIG deal very well. They are very likely to get their money back or more." (51 minutes)

Comments

[raising4dau...:]

Amazing. This guy has made billions and has seen everything in his 80+ years. He actually sounds mildly bullish on this country (admittedly, he's been clear that there's still some bad medicine coming). Everyone, and I mean everyone, is telling us that the sky is falling and that we're headed for GD2.0.

When everyone is one one side and Buffet is on the other, it tells me that we're less than 1 year from the bottom.

2008 Oct 03 08:06 AM

[http://www....:]

It shows that if he had 700 billion he'd invest instead of the government. The government will profit off of this.

2008 Oct 05 01:27 PM