Warren Strikes Again. What's Next, Mint the Coin Support?

Addinator's picture
Rank: Neanderthal | 3,175

At this point it wouldn't surprise me if he did come out and tout that as a solution to our issues. Regardless, there are times when I wonder how much of a shill Warren Buffet is. I can't argue his investing prowess and ability to use his power and size to make more and more money. I do however question his state of mind at this point and stuff like this just makes me wonder even more.

"The banks will not get this country in trouble, I guarantee it," Buffett, chairman and chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in a phone interview last week. "The capital ratios are huge, the excesses on the asset side have been largely cleared out."

Look, I know that he holds decent stakes in many of these banks or has in the past but come on. If you even remotely think you can value any of our major financial institutions fairly at this point I have ocean front property in Omaha to sell you. I mean is this just a really obvious statement of him trying to protect and pump his own investments and the entire system?

"Our banking system is in the best shape in recent memory," Buffett said.

Really? I must have missed all the settlements still coming down the pipeline over mortgages, mass layoffs and meager returns on equity at many of the major places. Oh, and I guess they'd be fine if the Fed just started pulling liquidity out of the system or stopped any of their current operations. I don't know. Maybe you guys can make me feel better about this. What do you guys think of these statements? Is the oracle of Omaha slowly losing his mind? Is he just saying this to keep currying favor for his own interests? Am I just wrong and the banks are actually in great shape?

Comments (8)

Jan 11, 2013

Buffett is a shrewd political player. Unfortunately for him, IMO, is that this political power used to be hidden in the background, whereas now more and more people are seeing him as benefiting from graft instead of investing acumen.

Jan 11, 2013

benefiting from graft instead of investing acumen.

Care to elaborate with specific examples? This is the first time I'm hearing this. I don't really follow him so it makes no difference to me, I'm just curious what examples you have...

Jan 11, 2013

Agreed. He might not buy nice material possessions, but he sure as hell bought the false image he's been portraying for most of his life.

Jan 11, 2013

I find it hard to believe Buffett has access to the off balance sheet derivative exposure of every major bank. Without this, how does he know every bank is sound?

Jan 11, 2013

Buffett isn't exactly wrong about the banks, he may even be technically right. Banks have more excess deposits today than, well, ever sitting around $1.85 trillion. So, that's good? I guess if you're against banks lending money it's terrific to see loans at the same level they were in November 2008.

And, of course, I think we can all agree, banks surely will have the restraint necessary not to use all those excess deposits to bet on the CDX.IG9. That would totally never happen ever. For sure. And definitely not in London. Certainly not.

"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."

Jan 11, 2013

The banks may not be in great shape as you say, but Buffett is always taking a long view. Banks are currently undervalued in the markets because of all the things you mentioned, but Buffett has made a career of ignoring short term problems to focus on sound long-term bets. Basically, Buffett is betting on the US economy continuing to grow, because banks will grow with them and their value in the markets will soon be realized. However, it is true that these financial institutions have become also impossible to properly value and evaluate, but if I was going to be on someone in the market it would be Buffett.

Jan 11, 2013

He is a scum bag that received 165 million per year in railroad tax credits in the fiscal cliff deal in exchange for bashing the rich and acting as Obama''s mouthpiece during the election...


Jan 11, 2013

PE is the new black.