"The banks will not get this country in trouble, I guarantee it," says major bank investor...

"The banks will not get this country in trouble, I guarantee it," says major bank investor Warren Buffett. "The capital ratios are huge, the excesses on the asset side have been largely cleared out," he adds, seemingly making more of a case for the debt and the preferred, rather than the common equity. He's in no hurry to convert his Bank of America (BAC) preferred and says if the bank wants to call it, it's free to do so.

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Comments (12)
  • davidingeorgia
    , contributor
    Comments (2661) | Send Message
    "The banks will not get this country in trouble, I guarantee it," says major bank investor Warren Buffett. "Well, what I really mean to say is that they'll never get someone like me in trouble because, well, you know, bank crashes and economic disasters are for the little people, not for people like me."


    There. Fixed it for you.
    10 Jan 2013, 08:35 AM Reply Like
  • Ted Bear
    , contributor
    Comments (700) | Send Message
    Very prescient.


    Now that the entire herd is gone, the corral has rotted to the ground, and the barn has been leveled, Uncle Warren comes along to tell us that the herd will never escape again.


    And those hundreds of trillions in derivatives that were conveniently slipped off the bank's balance sheets wont matter when the Fed removes the punch bowl and interest rates start to rise?


    Nah......never happen.


    Uncle Warren told you so.....while he secretly pleaded for BAC to call his paper.
    10 Jan 2013, 08:43 AM Reply Like
  • Uncle Pie
    , contributor
    Comments (4322) | Send Message
    Didn't JP Morgan say the same thing after the Panic of 1907?


    Mr. Buffett may be right...there may not be another US bank panic...in his lifetime.
    10 Jan 2013, 09:24 AM Reply Like
  • topbeancounter
    , contributor
    Comments (127) | Send Message
    Gee, Mr. Buffet, you have a different seat at the table than the other investors do. While Brian was out publicly claiming that he needed no capital, we know that behind the scenes the feds were really putting the heat on you to do one of a couple of things: (1) dispose of the millions of toxic loans on the books since your group didn't have a clue on how to fix it (all the honest folks had left following your installing the incompetent and untrained dopes that hung around B of A), or (2) raise some capital.


    Now somehow, Mr. Buffet learned of your plight. His deal is not only a 10% preferred dividend, but the rights to buy a gazillion shares of common at about $7 per share. Pretty nice seat at the head of the table too if he would want it.


    Well, Brian still has millions of bad loans on the books (by the way, they are not all Countrywide, like he would want you to believe) and those won't go away. At some point, he is going to have to come clean and dump those bad assets by "selling" them to a group that knows what they're doing. He has already agreed to reduce that end of the business in the future- no big surprise there.


    All we are missing is the announcement...
    10 Jan 2013, 10:33 AM Reply Like
  • MexCom
    , contributor
    Comments (3069) | Send Message
    No need to sell also means no need to pay taxes on the capital gain. He is very comfortable to hold and let the bank stick to the ultimate call date and conversion at that time if advantageous.


    Good to see the usual group of bashers here. Please forgive any comment from me that I wish there was an ignore button here on SA - your commentary is an important contra indicator for me.


    10 Jan 2013, 10:45 AM Reply Like
  • MexCom
    , contributor
    Comments (3069) | Send Message
    I should add when I see the negative commentary disappear - then I would be worried.
    10 Jan 2013, 01:25 PM Reply Like
  • jackooo
    , contributor
    Comments (1738) | Send Message
    Brian is doing a great job.
    I thought Warren was everyone's idol??
    If the little people got Warren's deal we would not be complaining.
    I am long BAC common and preferred in huge quantities, for me, and intend to keep buying when drops occur.. Not because of Warren but because BAC is backed by you... The U.S. bailout government and is to big to fail. No brainer!!
    10 Jan 2013, 11:04 AM Reply Like
  • vick4717
    , contributor
    Comments (133) | Send Message
    I would trust what Warren said more then the two previous comments.
    10 Jan 2013, 04:32 PM Reply Like
  • ECWD
    , contributor
    Comments (7) | Send Message
    I am stating the obvious, but financials are just about a no brainer. As the economy strengthens, the banks will earn more profits, and the
    ETF's will shoot off the map. Warren's comment is encouraging, as I see it; for the economy moving forward. 2013 will be a very good
    year for the banks, and other financials. Buy the banks! HAPPY NEW YEAR!
    10 Jan 2013, 04:32 PM Reply Like
  • ECWD
    , contributor
    Comments (7) | Send Message
    Thanks, not interested. Besides it is too long a bio, and not in the financial area.
    10 Jan 2013, 04:33 PM Reply Like
  • 21thomas99
    , contributor
    Comments (411) | Send Message
    Only out of curiosity, 'Thanks, not interested. Besides it is too long a bio, and not in the financial area.', is referencing what?
    10 Jan 2013, 04:37 PM Reply Like
  • thompv2101
    , contributor
    Comments (2) | Send Message
    Hey guys,


    I am new but wanted to throw my two cents in lol.


    I think we have to define what "a good year" actually means. For some banks, 2013 will be a year where profits are reaped. And for other banks, such as Bank of America in my opinion, the ability to create and/or better the foundation to garner gargantuan profits in the future will be sure. I honestly see Bank of America hitting the 50s in about 3 years. I do not share the same feelings about Citi or JP Morgan: for them it is an entirely different ball game.
    11 Jan 2013, 02:46 AM Reply Like
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