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Buffett: "The Banks Will Not Get This Country Into Trouble"

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#1 WorkingPoor


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Posted 10 January 2013 - 08:33 AM

Jan. 10 (Bloomberg) -- Warren Buffett, the billionaire investor who oversees stakes in some of the largest U.S. banks, said the nation’s lenders have rebuilt capital to the point where they no longer pose a threat to the economy.

“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., said in a phone interview last week. “The capital ratios are huge, the excesses on the asset side have been largely cleared out.”

Lenders including Bank of America Corp. and Citigroup Inc. have sold assets, cut jobs and bolstered balance sheets after repaying taxpayer bailouts from 2008, when the companies were overwhelmed by losses on securities tied to the housing market. Those actions helped boost financial stocks last year and increased the value of Berkshire’s holdings.

Buffett’s firm has investments in at least four of the seven biggest U.S. lenders by assets, including a stake of more than $14 billion in San Francisco-based Wells Fargo & Co., $5 billion in Bank of America and warrants that allow it to buy $5 billion of Goldman Sachs Group Inc. shares. Berkshire also has a holding in U.S. Bancorp.

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

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#2 Calvin Bear

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Posted 11 January 2013 - 09:06 AM

Warren Buffett is suffering from the same thing that happens to all old people - namely, they get left behind by changes that they do not have the tools to observe actually taking place under their eyes and noses.

'They are in great shape' yes - until you factor in the possibility that there are financial enterprises around competing in the same arenas, but who don't rely on the taxpayer to bail them out when they lose everything.

'Buffett guarantees you...' Well I guarantee you that those enterprises ARE there, people have observed them appear, and they are sitting, waiting for the banks to do what all privileged spoiled brats do; that is, screw up again.

Every single one of the business models that have kept these dinosaurs fat for the last fifty years no longer works - that is WHY they require taxpayer bailouts. The TV business model is dead, the Hollywood movie industry business model has been replaced by pc and console gaming, the music business cannot compete against YouTube, and banks and equities exchanges cannot survive when the price of money is 'nil.' They might look like they have survived.

But I guarantee you the so-called stress-tests do not have the creativity to have factored in what the current world of finance and capital actually looks like - it looks like a Hong Kong kid in a Hong Kong alleyway who knows more about computers than Buffett will ever even begin to comprehend. The fact that he said what he just said, shows he has no clue. In the past, if I wanted some expensive sophisticated piece of technical equipment, I went to a merchant bank run by Buffett or someone like him, who financed its acquisition from IBM or HP or even Caterpillar or Sperry-Rand.

Now, I go ask the kid, same as Buffett has to. But since he doesn't think he has to, I get what I want and Buffett doesn't and lives without it and more often than not lives without even knowing it exists. He has no right telling me what banking world is doing right know - he doesn't know. He's not in the actual banking world, he just thinks he still is because he once was.

One Indian youth called Danny Bandhari took the Australian banks to the cleaners for $300,000,000 a couple of years ago - legitimately. And he is the most feared person in town today because of what he knows and what he can do with super fast HFT robot programs. Recently there has been a spate of fraudulent takeover letters hitting the Stock Exchange here, or 'leaks' claiming some big company has lost its credit line or similar. These have emanated (and I know this because I know this because I know this...) from within the Stock Exchange hierarchy itself to try and counteract the robot programs. Now when the 'top' resorts to this bullshit, then you know Buffett really has no clue and neither does any old clown at the top. The kids have all the cards. And they are going to squeeze the necks of the old rulers until they all choke to death. Watch what I say unfold in front of you, and observe it happen while the old idiots spit in the wind.

Calvin J. Bear

#3 Calvin Bear

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Posted 11 January 2013 - 09:13 AM

And anyway, what does he mean 'will not get?' The country already is in trouble. So I guess this must mean he is so 'Wall Street' that he thinks the country means Wall Street and no one else.

He means Wall Street will not get into trouble because of the banks. Well this we already know Warren. Go home and play your ukelele. You don't impress me anymore now that I realise you were only ever capable of parroting what Benjamin Graham told you.

This guy is completely out of touch with reality.

#4 Case of Bear

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Posted 11 January 2013 - 05:46 PM

I could be wrong but I dont see why it wouldnt be the case.

The Fed has been buying their crap for full price for years now.

#5 Pulp_Cutter


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Posted 12 January 2013 - 09:09 AM

"He means Wall Street will not get into trouble because of the banks. Well this we already know Warren. Go home and play your ukelele."



Think corporations have too much power in Washington?  VOTE



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Posted 12 January 2013 - 02:08 PM

All that banks can do is facilitate inflation to maximum potential and implode.

That is all their business model produces...

As for what Warren Buffet means...He means the next collapse will have a different scapegoat for you all to embrace as the cause.

#7 detachedbear


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Posted 12 January 2013 - 08:21 PM

Warren Buffet has come up with the "5 minute plan to balance the federal budget". He claims, that if any Congress person that votes for a budget deficit of more than 3% gives up the right to run for re-election, it will solve the debt problem in 5 minutes. Warren may not be brain dead yet. Of course, the chances that they will give up that right are zero.

#8 qqqbear


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Posted 12 January 2013 - 11:36 PM


Under federal law, money paid to settle a company’s actual or potential liability for a civil or criminal penalty is not deductible. But, this being taxes, the issue is complicated. As Robert W. Wood, a tax lawyer, said in a 2009 Tax Notes article, “The tax deduction for business expenses is broad enough to include most settlements and judgments.”
In an interview last week, Mr. Wood, who is also the author of “Taxation of Damage Awards and Settlement Payments,” said the test for deductibility boils down to whether the payment is a penalty or is meant to be remedial. “I don’t know the specifics on these mortgage settlements,” he said, “but if any of the lenders are putting a bunch of money into a pot that goes to help people, yes, I would assume that everybody will deduct that.”

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