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Buffett as Trader of Last Resort?

|Includes: Berkshire Hathaway inc. (BRK.B)

Somewhere in Lisa Endlich's at one time unironically and unselfconsciously titled book Goldman Sachs:  The Culture of Success, she tells a story of how, following some crisis (I think it was the 1994 south american debt crisis that gave us Brady bonds), everybody was so freaked out on the trading floor that they were standing around scratching each other's heads. Lloyd Blankfein, at that time head of trading something and relatively fresh in the door from the acquisition of J. Aron, resolutely strode out on the trading floor, manned up to a Bloomberg terminal, and started trading. Everybody got the message: you've got to take some risk.  So they went out and did the same thing, and they all lived happily ever after.

Since the credit crisis started, the Oracle of Omaha has been playing a similar role.  First came the $5 billion in preferreds in Goldman back in the depths of autumn '08.  I was palpably relieved when I heard about it. Then came the "all in bet on the American economy" of the Burlington Northern acquisition.  Today Buffett comes out and says that he's beating "very heavily" against a double dip, adding, for good measure, that everything will come back as soon as residential construction comes back.  Super!  I'm surprised the NAR didn't chime in with its support.

Buffett has become our favorite cheerleader and trader of last resort.  We all have to love the guy, or else!  The problem is, there's a boy who cried sheep aspect to this whole game. Moreover, there's the problem of succession.  What happens when he's gone?  Not just for Berkshire Hathaway, but for all of us?  Who will comfort us then with avuncular wisdom?


Disclosure: I am long BRK.B.