Warren Buffett: I Haven't Seen As Much Economic Fear In My Adult Lifetime - Charlie Rose Interview

Po st e d B y : A le x C r i p p e n | E x e cu t i v e P ro d u ce r cnbc.com | 01 Oct 2008 | 08:46 PM ET

In an interview tonight (Wednesday) with Charlie Rose on PBS, Warren Buffett says, "In my adult lifetime I don't think I've ever seen people as fearful, economically, as they are now... The economy is going to be getting worse for a while." Bloomberg also reports Buffett tells Rose that the freezing of credit markets is "sucking blood" from the U.S. economy, which he compares to a heart attack victim "flat on the floor." Earlier today, in a telephone interview with CNBC following the announcement that Berkshire Hathaway is investing $3 billion in General Electric , Buffett criticized Congress for not acting sooner on a financial rescue plan:

"You've had an economy that's like a great athlete that's had a heart attack, cardiac arrest, and the paramedics that have come, (and are) arguing (about) who was at fault, the athlete should have been checking his blood pressure more carefully. The important thing is to apply the resuscitator. It doesn't help spending time worrying about who is to blame for the patient having the heart attack."
Buffett told us he still thinks Congress will "do the right thing" but will "feel better after the votes have been counted." He warned that there will be "terrible, terrible" problems if Congress doesn't take action, sooner rather than later. Here is a complete transcript of tonight's Warren Buffett interview with Charlie Rose, airing on PBS. It was provided to CNBC by the Charlie Rose program. Charlie Rose: We are in San Diego, California this afternoon for a conversation with Warren Buffett. He is a man congressional leaders, the administration, and the Federal Reserve want to talk and talk to. He is the legendary chairman and CEO of Berkshire Hathaway. Its success has made him the world's richest man. He's admired for his investment results over a long period of time. He is trusted for his common sense and the fact that he's warned over the years, in his annual letter to stockholders, about some of the things that are contributing to the crisis facing America and the global economy. For all those reasons, we have come to see him in San Diego where he is attending the Fortune Magazine's most powerful women's summit. Later, he will be interviewed at a conference by the Fortune reporter and long time friend, Carol Loomis. We come this evening from the studios of our public television affiliate in San Diego, KPBS. I thank my friend, Warren Buffet, for taking time in a busy schedule to talk to us. Warren Buffett: My pleasure, Charlie. Charlie Rose: Let me talk of the news of today. You have announced an investment of $3 billion in General Electric, along the same terms as the the Goldman Sachs -Warren Buffett: Yeah, almost identical. Charlie Rose: Why GE? Warren Buffett: Well, I got a call this morning from a friend of mine at Goldman Sachs saying they might be interested in such an investment. I'm familiar with the company. I've known the management, the current management, Jack Welch before Jeff Immelt. I've known him for decades. And so I understand their businesses. We do lot of business with him, and GE has been -- I think it's the longest running stock in the Dow Jones industrial average. It will be 100 years now it will be around. I hope I'm around then, too. And it was an attractive investment. And we have had a lot of money around, over the last two years, and we're seeing things that are attractive now. Charlie Rose: Are you looking at other things? Warren Buffett:

I look at everything, Charlie. That's my job. I really do. I mean every day, I think about everything, yeah. Charlie Rose: I know, but cash is said to be king now. Are you sitting on a lot of cash so that this is the time for Berkshire Hathaway and Warren Buffet to look carefully at a lot of opportunities. Warren Buffett: Yeah, we want to use cash. The reason we haven't used our cash two years ago, we just didn't find things that were that attractive. But when people talk about cash being king, it's not king if it just sits there and never does anything. There are times when cash buys more than other times, and this is one of the other times when it buys a fair amount more, so we use it. Charlie Rose: There is a time to accumulate and a time to spend. Warren Buffett: Absolutely. You want to be greedy when others are fearful. You want to be fearful when others are greedy. It's that simple. Charlie Rose: What are they now? Warren Buffett: They're pretty fearful. In fact, in my adult lifetime, I don't think I've ever seen people as fearful economically as they are right now. Charlie Rose: Why is that, do you think? Warren Buffett: Well, it's because they -- they have seen the credit market seize up. They're worried about money market funds, although the latest proposition from government should take care of that. They've seen eight percent of the bank deposits in the United States get moved very skillfully, I might say, within the last couple of weeks from institutions that they thought were fine a few months ago to other institutions. They are not wrong to be worried. Charlie Rose: Is it being felt as people often point out on Main Street? Warren Buffett: Well, I've read about all the sales today. If you're an auto dealer, you're feeling it. If you're a furniture retailer like we are, you're feeling it. If you're a jewelry retailer, you're feeling it. I know some of these businesses because we're in them. Yeah, it's being felt, but it will be felt big time more if we don't do something about it, what's going on. Charlie Rose: The Senate will vote sometime this evening. Warren Buffett: Right. Charlie Rose: Are you satisfied with that rescue plan? Warren Buffett: Well, I don't think it's perfect, but I don't know that I could draw one that's perfect. But I'd rather by approximately right than precisely wrong, and it would be precisely wrong to turn it down. We need -- we have a terrific economy -- it's like a great athlete that's had a cardiac arrest. It's flat on the floor, and the paramedics have arrived. And they shouldn't argue about whether they put the resuscitation equipment a quarter of an inch this way or a quarter of an inch this way, or they shouldn't start criticizing the patient, because he didn't have a blood pressure test or something like that. They should do what's needed right now. And I think they will. I think the Congress will do the right thing. I think that they've -- you know, they got into certain arguments and they start worrying about assessing blame, and there is a little demagoguery, but in the end, something this important, they'll do the right thing. So this really is an economic Pearl Harbor. That sounds melodramatic, but I've never used that phrase before. And this really is one. Charlie Rose: Go through why that is true beyond the fact that there is a freeze on credit, beyond the fact that nobody is making loans,

having had the heart attack.communication. you lost 90 to 95 percent of your money. there has been. you know. and nobody's coming along to say. Warren Buffett: Yeah. They lost very cushy lives. So they're trying to deleverage. many of them. I mean. We're here to help you. you may be very mad at some guy that walked away with a huge golden parachute. And I think the Fed did the right thing there. it's a bailout of Wall Street and that they are sitting there in their own economic life. Charlie Rose: Are you approving of what has been taking place along the stages that got us to where we are now. I think basically the right things have been done. We have seen wave after wave. kind of like a tragic play to this point. If you were at AIG. What you have is you have the major institutions of the world all wanting to deleverage. Charlie Rose: But at the same time. but that really isn't the important thing. the shareholders are getting creamed on these things. I don't like what's going on with the executive compensation. you know -. you didn't have to worry about being downstream from it. You don't want 300 million Americans putting their money under the mattress. whether it's Bear Stearns or Lehman Brothers or AIG. you could have said the planning was wrong by the military ahead of time or maybe the battleships shouldn't . And I think any time you couple the term "Wall Street" with "bailout" or something like that. there's been somewhat of an ad hoc response. I mean. I think it's clear. One twentieth of one percent away from where it's betting to put it under the mattress. But at this point. if Pearl Harbor came along. What seemed so easy to borrow against a year ago now looks like rat poison to them. but it didn't. a resistance across the country because they think. This economy doesn't work well without the lubrication of credit and trust. It's the American economy. and that's the United States Treasury. When 40 billion of treasury bills are sold like they were last week. And I really thought that would probably halt runs on other major institutions. or what you've done with Goldman Sachs and the rest? Warren Buffett: Yeah. They want to take down their assets and liabilities. that means the whole country is basically at the point virtually. Warren Buffett: Well. and those are investors all over the country.beyond the fact that banks don't lend to backs beyond the fact that treasury bills are at a low. and will be clear to the majority of the Congress. and that's the United States Treasury. I mean. Those are pension funds.I don't like what's going on in Wall Street. at a yield of 1/20th of one percent. Warren Buffett: If you were at Lehman. but I don't want to give a lecture to this body that's out there. I want to get it back functioning. or a lot of the country is at the point of putting the money under the mattress. I wouldn't worry too much about that. I think they probably don't. Warren Buffett: Yeah. A good many lost their jobs. as you well know. And that's been lost. So I think it's been. And as a practical matter. You know. it looked like if you stopped the flood at that point. I think it's clear to the American people that there is only one countervailing force to a world where financial institutions are trying to sell instruments every day and where credit has dried up. they wouldn't have gotten it. I'd rather have an ad hoc response than no response at all. the patient that's on the floor with the cardiac arrest is not Wall Street. Freddie Mac and Fannie. seven day treasury bills. Warren Buffett: No. Justice won't be perfect on it. I mean if you were Bear Stearns. There is only one institution in the world that can leverage up in a way that's all a countervailing force to that. You know. It's a huge problem. and you were a shareholder. And admittedly. that's -Charlie Rose: Do you think they understand that yet? Because that's -[talking simultaneously] Charlie Rose: -. I think it took a crisis like this -Charlie Rose: And asking for the power he is asking for and the level that he was asking for. And I don't think -. and Congressmen and women will tell you this. you know. And those shareholders are not just a bunch of big shots in Wall Street. We're from the government. I mean. Charlie Rose: Right. But no one saw the tsunami coming fully.I don't think the treasury could remotely have gone to Congress three or four months ago and laid out that scenario of what's happened and been credible and gotten the necessary tools. And so when Bear Stearns came along. the same thing happened.

and I don't have a better idea. you know. They are both down dramatically for different families. I haven't. [unintelligible] Warren Buffett: I mean. Charlie Rose: It's Pearl Harbor.have all been in the harbor and all that kind of thing. it's a possibility. And if the paralysis we have in the credit markets. Charlie Rose: There are those who argue that we are headed for a recession. I mean. But it's very important that the determination of the US Congress to do what is is needed be made evident this week and by the actions of most of the members. you know? And they look at depression as the great fear. Charlie Rose: Would you say that this plan which you have argued very strongly the Senate ought to pass and the House ought to pass is simply the plan that we have. I mean. you know. and then the wisdom of. I mean. you're not going to get total assent. But whether it goes and quits at 7 or whether it quits as 10 or 11 or 12 depends on. that's bleeding into auto sales and jewelry sales and furniture sales and all that. Charlie Rose: Is that a possibility if this plan doesn't work? Warren Buffett: Yeah.1 percent unemployment now. I mean. But 95 percent of the people at least are worse off in terms of their residential wealth plus stock wealth from a year ago or two years ago. Warren Buffett: It doesn't make any difference. yeah. worth of residential homes. Charlie Rose: You have never seen anything like this in your life. That is bleeding into the real economy. I just worry about whether it's enough. Those are the two big assets of American families. Charlie Rose: Right. because if you look at the American public. you're behind in the war that you otherwise would have fought. sell assets. And you better not spends weeks and weeks and weeks trying to assign blame or deciding on a complete plan for fighting the whole war. if every company continues to feel all we want to do is get our balance sheet down.20 trillion. But it's essential for the confidence of the nation and the system? Warren Buffett: Yeah. the job is Pearl Harbor. They've got 20 trillion worth of stocks. it's the 6. We have about 6. they've got 20 billion -. Unemployment's going to go up under any circumstances. You better spring into action with the best people you have. Warren Buffett: Sure. we've been in a recession.1 is going to go higher. But that wave is just starting to hit. by any common sense definition. and letting a committee decide where the battleships should go and all of that. if you don't react to Pearl Harbor for a week or two weeks or three weeks. the wisdom of Congress. But I think it is -Charlie Rose: Enough what? Warren Buffett: Every day that goes by. among other things. it's just the start of what can happen. Charlie Rose: What makes you confident that this plan will work? I mean -- . I mean. Warren Buffett: No. I should say. in terms of carrying out the plan that Congress authorizes. very roughly.

Charlie Rose: And those more tools might be in addition to what’s in this plan? Warren Buffett: Well. That goes back to . [laughter] You know. that the 700 billion. most of the viewers have never heard of Sheila Bair. Charlie Rose: Or all of your money back. Maybe we could go in it together. I’ll take the deal. it’s been a magnificent job. chances are good that when these securities are purchased and sold. whatever you want to do. that’s the buyer for these people that are trying to unload them. They also need in my view to very much tie it to market prices. I just don’t have 700 million. Warren Buffett: I would bet on it. some people have suggested for example that why don’t we -. So when Merrill Lynch sells a bunch of mortgage-related assets at 22 cents on the dollar like they did a month or so ago. and he’s going to make a lot more money if it happens to be an institution like the U. you’ll get a lot of your money back. in terms of alternatives. But he knows markets. And nobody’s ever heard of her. he knows money. if I got a chance to take one percent of the deal either way. 10s of millions of depositors. he knows corporations’ work.Warren Buffett: Well. and maybe something else [spelled phonetically]. you’ve got the right -. And if I could take one percent of that 700 billion pot and take the gain or loss from it and be their partner. I mean. When Berkshire Hathaway laid out three billion dollars for GE today. We have I think the right people in there to get the job done. We’ve got some great public servants. These assets will be worth more money over time. Treasury has got borrowing costs like nobody else has. and he’s got the interests of the country at heart. I mean. I mean. they need plenty of money and they really need plenty of flexibility to carry out this plan.I don't think you can have a better secretary of the Treasury than Hank Paulson. I would make that bet. the buyer goes -. It’s -. ended up. She’ll never get a golden parachute or any severance pay or anything. I think you've got -. in the last two weeks. has taken eight percent of the deposits in the United States and seamlessly moved those over to sound institutions which in turn have gotten more capital. Now. It’s the kind of stuff I love to do.S. I mean. they’re investing it in distress type assets but they’re buying them at distress prices if they buy them at market. I mean.I mean you have hedge funds and people like that buying these assets to yield 15 or 20 percent. The U. government which has very. there’s no telling how far we’d go. There is this. I have said. they’re investing it. Warren Buffett: I think [inaudible].is going to make money. we didn’t spend it.why isn’t America doing what Berkshire Hathaway is doing? Why isn’t that a better deal for America? Warren Buffett: I don’t think it would be crazy to have a model or an entity model on the Reconstruction Finance Corp. Charlie Rose: Whatever.S. and they would buy the stuff at market. he is in there at the wrong time. with your money and my brains. very cheap borrowing costs. Sheila Bair. probably shouldn’t have taken the job. though. you know. I'd make a lot of money. They can borrow basically unlimited amounts. they’re not spending it. They can stay there for years and years. if they buy mortgage-related securities or mortgages themselves at current market prices. and then they need more tools. He’s a friend of mine. And so. they’re going to make money over time because the United States government has staying power and it has a low cost of borrowing. Charlie. When the Federal government buys the mortgages.you’ve got a wonderful person with Sheila Bair. we invested it. She’s done a great job. Eight percent of the deposits in the United States. Charlie Rose: So you are saying to those taxpayers who are worried about what’s going to happen to the $700 billion.

Charlie Rose: All right. and Carol Loomis edits every year. and there is no limit on it. We've got a wonderful economic formula in this country.more productive than they've ever been in the history of this country. So there are two things needed in the system. There are those who -. because it's very tempting to write numbers on little pieces of paper and you can report the profit you want to. they'd be doing fine. you know. But I don’t think trying to combine that with what’s going through now. And it wouldn’t have been -. I obviously am willing to do that. Charlie Rose: Would that have been a better idea today? Warren Buffett: It wouldn’t have been big enough today. And basically. the commercial paper market. and loans are coming to a commercial papers not being renewed. [talking simultaneously] anyway. but to buy. So I would say that an RFC-like thing might make sense.there are those who believe and it has been suggested. And they don’t have to buy at a fancy prices.I've given a little advice. in part. and they had them.1932. these assets are getting shoved out day by day. the most respected insurer and everything in the world. but right now. it is being -. it's the deleveraging that's going on right now that has caused the credit crisis.you just said you would do it yourself -. when that dries up.they -. you know. It isn't going to do anything for Berkshire Hathaway. Charlie Rose: You have talked about derivatives. and you think of your sister as the person [talking simultaneously] Warren Buffett: Two sisters. actually. that isn't really true. I mean anything that enables this economy to run in the manner that it should -. Charlie Rose: I mentioned earlier in this introduction do you. although it was really implemented in ’33 under Jesse Jones. at the core of this problem. there has to be somebody there to buy. Derivatives are.you couldn’t have -. no. They'd be going to work in the morning and they would have no troubles. there’d be a very cumbersome type of application process and everything. I probably would do it myself. If they never heard of the word derivatives. over 200 billion. Charlie Rose: I'm interested in this because people are asking. And that’s happening. yes? Warren Buffett: AIG would be doing fine today. yeah. But they -.I mean we've got the same clients out there we had two years ago. that this is the time for Warren Buffett to answer the call of his government in a country that’s been very good to him.if you’d set up at RFC today and you gave them $100 billion invested in the [spelled phonetically] capital. that’s just like sucking the blood out of the economic body of the United States. and it invested in mostly banks initially and preferred stock and that sort of thing. we've got people -. and we had accesses that inevitably led to where we are today? . Well.it was very easy to do. the one that’s needed overwhelmingly is liquidity. if you read your letters to your stockholders which you write. I mean what are you prepared to do yourself beyond run Berkshire Hathaway well is this. But any time I can be of help to the government in terms of giving advice -. did people get away with murder here? Were there people who simply gained the system and took advantage and made huge amounts of profit. I said there were possibly financial weapons of mass destruction. Warren Buffett: That's my job. They certainly contributed to the destruction of Bear Sterns and Lehman. I'm here tonight talking about this for that reason. They destroyed AIG. Although Lehman had other problems. And then there’s also a capital problem with some of the institutions. too. We have provided capital here with a couple of institutions recently. We have the houses. The Federal government did that in the ‘30s for the RFC and I think there could well be a proper role for government in that.it's been brought to a halt by some events -Charlie Rose: By? Warren Buffett: Well. I mean. I think what is needed now is liquidity. when people are trying to [unintelligible]. It was one of the ten largest companies in the United States in terms of market value. I mean. I mean there is no capital requirements to it or anything of the sort.

because the house cost more. Charlie Rose: And so when you look at where we are going. And when $4 trillion lands -.people don't get -.they don't get smarter about things that get as basic as greed and you can't stand to see your neighbor getting rich. you feel if I don't buy it this year. Charlie Rose: And it continues with respect to the housing market. you do smart things. there is no question we have an access stock. or we'll give you 100 percent mortgage. we'll go back and find the culprits later on. Warren Buffett: It continues. So it's very human. risk and leverage. and house prices just soared beyond -. you could have these crazy Internet valuations in the late 1990s. Warren Buffett: I mean people -. But that really isn't the problem we have. And if you really think that houses prices are going to go up next year and the year after.Warren Buffett: Well. you can lose leverage.pretty soon you start doing it. you know. You know you're smarter than he is. and. That's not true of an Internet stock. But 300 million Americans. you're going to do it. and people said. I mean. You know. you're going to feel like an idiot if you didn't do it. the imitators. Charlie Rose: And some will argue that we have to do something about that in terms of a long-term recovery of the American economy. their government. We have a country where I don't know whether it's a million households a year or more. We just lost sight of risk and leverage of what was appropriate? Warren Buffett: Yeah. we have household formation in this country. But it's true of a home. that's $4 trillion.beyond reason in many places and they got financed in silly ways. because it pays off for a while. and it's the only way a smart guy can go broke. Warren Buffett: It's sound money. And that got billed into a $20 trillion residential home market. We leveraged up and if you have a 20 percent fall in value of a $20 trillion asset. but good form. and he's getting rich. sure. you've had a farm bubble. Warren Buffett: Well. The human beings going through combinations of fear and greed and all of that sort of thing. Again. we had all of that. though. Charlie Rose: And should wise people have known better? Warren Buffett: People should always know better. And that's what happens. because everybody that's done it has been proven right. But that is what -. you're crazy if you don't get in on this. I'm going to have to buy it next year. and your spouse is getting unhappy with you because you aren't doing -. with housing it's something even more dramatic than that. You just pay for everything. because most people aspire to own their own home. their media. all kinds of accesses entered into it. If you owe money. I mean that's where it came from. you can't pay them out. Everybody just kind of goes along. but too big. you know. but they prove themselves out in the market. it can gum up the whole place. there seems to be two issues that are apparent to me at least. You have what they call social tools. I mean you can go back to tulip bulbs in Holland 400 years ago. So we can eat off an [unintelligible]. And people really behaved in a fraudulent way or something. The good thing is.that is the single biggest cause of why we're here. you eventually get very . you can lie about your income a little. their lending institutions.losses land in the wrong part of this economy. you know. farmland bubble in the Midwest which resulted in all kinds of tragedy in the early '80s. Now. Lending was done based on it. The innovators. And when somebody makes it very easy for you to do it by saying you don't really have to put up my money. Charlie Rose: Yeah. and the idiots. and people lied about loans. the three Is. Charlie Rose: It's sound money. The next day they were selling for more than they were the day before. And you look kind of silly if you disagree. and he's doing these things. and everybody did a lot of foolish things. And it may have had and Internet bubble at one time. you know. And so you get what I call the natural progression. all believed that house prices were going to go up consistently. But I would say the biggest single cause was we had an incredible residential real estate bubble. their behavior can lead to bubbles.

It will stop the slide and the panic. This country is going -. When it's gone for five minutes. we had the great depression. it's the only thing you think about. sure. there are no clocks on the wall. the miracle of the world -. the very fact that this has been authorized or will be authorized. I have to be very careful about who I leave it in between now and then. Charlie Rose: So if this plan -. in my view.I've argued with the senators and congressmen I've talked to. Charlie Rose: And if it doesn't work? Warren Buffett: You turn the spigot. I mean. And it will buy a lot of distressed property. And I'm sitting with six and a half billion dollars we're going to use to close the Mars-Wrigley deal on October 6. and confidence.I mean. You don't want to be too little too late. The ingredients that made this country. And that's fine. You know. because anything times zero is zero. it could be a mistake. and there has to be -. You're not going to leave your money with me unless you're confident I'm going to give it back to you. Now.their funds aren't available. Indispensable. the guys look better all the time.you hope it will do what? It will loosen credit.rich.but that's okay. And the oxygen has been sucked out of the credit markets. we had the flu epidemic. Charlie Rose: What do you believe might never be the same? Warren Buffett: Oh. all kinds of institutions. we had oil shock. you know. you have centuries where if you've got a 1 percent improvement. I think confidence will come back. the music sounds better. People will have more confidence -Warren Buffett: Confidence is key. And there are plenty of them that I've lost confidence in. And everybody thinks they're going to leave at two minutes to 12. So we've got a great system. you're doing it successfully. And if you buy them at the right price. it's because they trust the fact the treasury will give it back to them next week. it could wipe you out. And we've got more productive capacity now than we ever have.it' And that's what this -Warren Buffett: That's what I hope gets done. and -. will firm up the market to some degree.I mean we had a seven for one improvement in the average American standard of living in the 20th century. I hope. Warren Buffett: Yeah. I mean this has to be done on a -Charlie Rose: Too little meaning in terms of dramatic steps. then it's something. But it's reinforcing when the people around you are doing it successfully. We're going to argue for a few weeks after Pearl Harbor to decide whether the Japanese attacked or whether we should actually commit a few battle ships. when treasury bills. you know. you don't even think about it. and then you'll buy the other 900 million on the same terms. But the too little part. it's more and more fun. and it's a lot like Cinderella at the ball. Now. you may be buying two trillion of face value. You know. But the trouble is. Charlie Rose: And you're having a good time. Competence in markets and in institutions. And at this point. The one thing you don't want to do -. Now. When you have it. right? But if the evening goes along. It will be living better in 20 years from now than ten years from now. I've got to hand over that six and a half billion on October 6. you got to buy it at market.[unintelligible] paid for it what you're paying it from or what his carrying value is. But you don't want to have artificial prices being paid. But something about the American system unleashed more and of a potential to human beings over that hundred years so that we had a seven for one improvement in -. we had two world wars. Confidence is key. you think why the hell should I leave at quarter of 12. You can go years without thinking about it. But you -. I'll leave at two minutes to 12. seven day treasury bills at 1/20th of one percent. If you do smart things and use leverage and do one wrong thing along the way. you know. or the amount of money you're spending -Warren Buffett: It's whether people think it's too little. But I lose confidence in other people. it's a lot like oxygen. because they're expecting that he show up. I mean you know at midnight everything is going to turn to pumpkins and mice. And one way to do that is if some institution wants to sell you a billion dollars worth of mortgages. The American worker is more productive than he's . I mean in the end. we had all these terrible things happen. I will tell you this. Then they get -. they might have to sell 100 million in the market. 700 billion is a lot of money.be living better ten years from now than it is now.there's never been any -. it's not because people want to earn 1/20th of one percent. when you get all through with it. They're being somewhat too late. They don't have it for the next -I mean the whole economy just comes to a grinding halt.

Charlie Rose: Now. I mean.they had all these types from Wall Street. But we -. Warren Buffett: Yeah. you know. But we look for fairly large situations. Charlie Rose: Okay. bearing formulas. I hope. Charlie Rose: And they're failing now.000 or $47. China. And all I can say is beware of geeks.we've got $46.000 of GDP per capita. I am not worried about the country. too. Warren Buffett: Yeah. I mean. for example. you know. securitized a couple of times. And it's got to be a price that makes sense. Charlie Rose: Have we learned something about decoupling or the American economy in terms of its impact. They have to be pretty good size for us now to have -. urgent rescue. So some guy may know how to make money in cocoa beans. and they develop a really good electric car. And the same things happen to quite an extent around the globe. and we're finding that out. you know. Warren Buffett: Prices make a lot more sense now. We'll do better in the future. Charlie Rose: Where was that? Warren Buffett: In a company called BYD.this is a super athlete. I mean. But it's got to be something I understand. we've done pretty darn well. this country -. and they came with these -. and you know well. Warren Buffett: Right. I'm just worried about anything that gums up the potential of the country. a place where you've had investments. Charlie Rose: . look at advantagement [spelled phonetically] you look at a place that can absorbed the amount of money you want to invest. it's pretty gummed up. but I don't so I just let him have that. It's got to be a management that I like and trust and admire.to move the needle. But we do this emergency. I mean he had all these -. We look for things I can understand. It's just that right now the athlete's on the floor.ever been.they came with these things that said gamma and alpha and sigma and all that. and they look very alert. And right now. Now. It's got to be a business with fundamentally good economics. Charlie Rose: Is there an operative narrative to the kinds of investments you are making other than you look at and you buy on value. Warren Buffett: Yeah. is it -Warren Buffett: And I'm not worried they're all about the investments we make. they were getting the mortgage of some guy in Omaha. the European banks were doing what the American banks were. A lot of businesses I don't understand. yeah. They've heard that in Europe. Charlie Rose: And what's the impact of the athlete being on the floor around the globe? Warren Buffett: Plenty. We just made a new one a couple days ago. and they had advanced degrees. We've got all the ingredients for a sensational future. and you look at price. listen. And lately the price -Charlie Rose: Prices make sense. We've got more people to do it. Plenty. and you look at its prospects.

That's sort of the best case. Well.by some magic moment. We have a new treasury secretary. Warren Buffett: Yeah. that things will turn around in a couple months because they wouldn't. Warren Buffett: But we need to throw the resources at this that are necessary. And but you want to get him or her moving faster. I mean. Charlie Rose: It's more likely two years than six months. Charlie. we have a new president. What's there in parity? What will be the challenge for them because they then can take a little bit of a longer term. All I can -Charlie Rose: Can you imagine six months from now. I mean. . It's just a few percent a year. And these assets are better than that. Charlie Rose: And the worst case? Warren Buffett: Worst case is a long time. maybe the patient's getting up off the ground. What are those things? Warren Buffett: Well. it could be five years. But like I say. look. though. I don't know whether it will be six months or whether it'll be two years. we are not spending money.I understand the latest bill. Warren Buffett: I don't know. right. Charlie Rose: We have a new legislature. I mean. It isn't going to be one month or to months. if we buy these assets intelligently. I think it will get moving faster. Charlie Rose: Okay. if it becomes evident that -. it's beginning to turn around? With the condition that you know their -Warren Buffett: That's sort of the best case.once credit flows -.Come January. I mean.now the recession is going to get worse. they're talking about 350 billion early and then going back. I mean once you get it off the -. beyond where we are now. They will turn around. it's borrowing money. yeah. So that's the important question in terms of whether we buy these assets wisely. Charlie Rose: Okay. I would say this. Charlie Rose: Okay. And I would say that if they -Charlie Rose: Worst case is five years or -Warren Buffett: If we don't do the things we should do. Warren Buffett: Right. sure. no matter what happens. the United States Treasury will make money. We should do. But that's a very big if. Charlie Rose: Right. and it's a big mistake to try and mislead people. I don't want to hold out false hopes that the -. Warren Buffett: And it makes a difference who the treasury secretary is.

if they do it. presidential candidates which I know listen to you.” But what’s the question they’re asking? What is it they want to know? And I’m talking about smart people who are charged with fixing it. you’ve been through this before too I mean you were that long term capital . Warren. Charlie Rose: Well.they hate this term in Washington. might it be a good thing for the presidential candidates to tell it who it is they're going to be listening to and who might be a potential treasury secretary? Warren Buffett: Well. Warren Buffett: -. Warren Buffett: And you’re assuring them that if they do it -Charlie Rose: I will. we’d like to talk to you. obviously. but I mean it's not their job to know the candidacy of people. I would -. I -. Charlie Rose: So they come to you and they say “You’ve fought wars before.I [talking simultaneously] Treasury Secretary [unintelligible] I would say this. Charlie Rose: When all these people call you up. you’re hearing from your friends and people at the Fed. a lot of other times you have had to face difficult crisis. If you want to have a debate here. Yeah. Warren Buffett: Yeah. aren't they? Warren Buffett: Well. I'd like a debate between potential treasury secretaries than the vice presidential debate. Well -- . Well. but I would hand something pretty close to a blank check to a fellow like Hank Paulson to fight -Charlie Rose: Would you. really? Warren Buffett: Yeah. lately they’ve been asking will this work. Charlie Rose: That's because they tell you that.Warren Buffett: I would say it's more important who the treasury secretary is than who the vice president is. no. Warren Buffett: I’ve seen a lot of things happen. what are they asking you? I mean. Charlie Rose: Right.

[laughter] Charlie Rose: That’s right. I think the oversight is great.you know. and so I would give more latitude. When the RFC operated. Warren Buffett: [inaudible]. I think -Charlie Rose: That’s a big question. $700 billion. and I think that oversight ought to be devoted almost entirely to the question is this being done at market you know. Charlie Rose: . And maybe put up a little of your own money up beside it. go invest it.go with oversight? I mean. Warren Buffett: But. go spend it? Warren Buffett: Yeah. I mean. I think -Charlie Rose: But don’t try to make the decision -[talking simultaneously] Warren Buffett: No. Warren Buffett: Yeah. But you don’t want to care about which congressional districts it goes to or whether banks get favored over -Charlie Rose: But how do we determine whether it’s being done wisely? Warren Buffett: Well. I might ask Hank to go invest with me. you want to make sure that the government isn’t investing foolishly. And it worked very well. That isn’t going to happen and I -. just like the RFC. go with oversight. I [inaudible] -Charlie Rose: -. you know. no I think that trying to invest through 535 people is a tough job. In other words. I mean. Go invest it. I think you’ll have plenty of scrutiny as how the money’s invested.[talking simultaneously] Charlie Rose: A blank check. people knew which institutions they were buying preferred stock in. that’s what [inaudible].

I mean. they went crazy with the uranium stocks back when I was first getting started. You have strong feelings about accounting and mark [spelled phonetically] to market. if you still have the X on the other side you’re in trouble. too. People love leverage when it’s working. it’s so easy to borrow money from a guy at X and put it out at X [inaudible]. And we used that. Charlie Rose: You have said to me before that capitalism is not a perfect system. as long as you have markets. they set up sieves and that sort of thing just to get more leverage. Charlie Rose: . they have various capital ratios and that sort of thing. I said I think these things are worth a lot more than market. I think that accounting in 1974 Charlie. it was either 1974 or ’75. you’ll have excesses. we told you. And I don't think anybody gets hurt by telling the truth on that sort of thing. they went crazy internet stocks. you’re not going to change the human animal. Now. They went crazy with the South Sea Bubble. you can you know you can have institutions that put curbs on that in various ways. And I think that once you start saying we’re going to peg these things at some price that isn’t market. and actually what the banks. but you don’t get the X plus one back. well Resolution Trust Company was set up to liquidate a bunch of assets that the government had inherited because the savings and loans went broke. And they liquidated. you’re -Warren Buffett: Yeah. the government stepped in. You talked about it in terms of some of its failings. But their job was to liquidate it. you know. Charlie Rose: There is this. Charlie Rose: [inaudible] these people make that argue against you will say the assets are worth much more than mark to market says and therefore -Warren Buffett: They’re not worth it today.” Warren Buffett: Markets aren’t -. People are looking at this now and saying. but it’s not a perfect system.going up. And I think we’re going to make a lot of money out of it. They were selling what they got handed to them by a bunch of savings and loan operators that had in many cases had done some very dumb thing. People went crazy with tulip bulbs. and now they’re left with this mass of assets to sell. This is an entirely different proposition.But is this different from the Resolution Trust Company because they are talking about securities. you know. I mean. Tell me where you are on that issue. we’re talking about buying intelligently. It may be better than all the other systems. But this is what they’re worth today. And there’s some people in certain countries are pointing a finger at us and saying. I believe in mark to market. We’re not talking about selling here. [talking simultaneously] Charlie Rose: -. but the banks got around them. excesses of capitalism. the markets will not always deliver for you. I mean. number one. accounting. we owned a bunch of common stocks at Berkshire Hathaway. And the human animal really doesn’t get a lot smarter. you know. paid off depositors. not real estate? Warren Buffett: Yeah. So the savings and loans went broke.people do. I told our shareholders what the market was. markets that don’t work. God knows what a financial [talking simultaneously]. Warren Buffett: A lot of people disagree with me on this. “See.

I mean it's -. as good as it is.you know.therefore we’re not seeing a reality. Charlie Rose: You -. We think these assets are going to be worth a lot more. you know. you know. It will be good for us in the long run.on value. And I think once you start putting phony figures into financial statements. and I mean there are. and I'll explain why I think it's wrong and shareholders can read it and see whether they agree with my logic or don't. particularly when some of them have nuclear bombs.I want to tell them what it's all about. I mean. I want our -.what people want to do is make it get worse. but I want to tell the shareholders of Berkshire. and you look at some Asian countries and the amount of American debt they have. And I think that case can be made in certain situations. you know. [laughter] Charlie Rose: But what would you reform about that in terms of the way the accounting process -. Warren Buffett: You get in a lot of trouble when you start putting fictitious numbers -Charlie Rose: On value. You know. lives in a world today and there are books being written in which our supremacy. And it's great for 300 million to keep enjoying more and more property. And we've seen so much of that in the last 20 years. but if some other guy's pie is growing a little faster. I think that's terrific. but I think it's terrific if. you know. there are other people who argue. It's worth a dollar today.it's a nightmare to administer some of this sort of thing. and we'll do it that way. it isn't worth $2. six and a half billion people in this world. And I think if they can learn something from us in terms of our system. we're going to say a dollar of cash is worth $2 all of a sudden. Warren Buffett: That's great. and I think they have.when you look at the prospects for this country. But it's the standard way of doing it. I think people -. It's holy writ. our primacy will now have to be shared.-. you can explain the fact that these are depressed prices. you get in a lot of trouble. the remainder do. You know. And that's -. Warren Buffett: -. Charlie Rose: Is it getting worse? Warren Buffett: I don't think it's getting worse.I want our pie to grow all the people. I think it's much better to live in a world where their lives are getting better also. The SEC wants us to do it that way. how much does that concern you in today's economic circumstances? And are they losing some of their confidence in America? And does that pose a huge problem for us? . I've already written a section in the annual report for next year explaining why I think in one case that the figures on our balance sheet as calculated are wrong. but that is the reality. to the percent we own marketable securities or things for which there are market. even if those markets -. That we may still own as much of the pie as we had.you'd keep mark to market? Warren Buffett: The rule [unintelligible]. they are learning more about how to unleash the potential of their citizenry to turn out more goods and services that their citizens want or that we want. I think it's much better to live in the world where those around you. But you mean you look at that. As a matter of fact. you know. Warren Buffett: Well. that's terrific. And that’s the reality of what they’re going to sell them to the Treasury for. that America. Charlie Rose: Yeah. So when you look at China today. But I think to just say. but other people will own a lot more. I -Charlie Rose: You get market.

That is not good. somebody's buying these treasury bills at 1/20th of one percent. I would push purchasing power -you push out $1. we are in effect making a -. a much smaller GDP. and we'll still be better off.Warren Buffett: Well. It's just we buy so damn much of what they produce. I mean every day the rest of the world is going to have about two billion more of American assets than we have. Now. So the rest of the world really likes our stuff pretty well. So you don't have to worry about guys like me.getting off the floor. But just imagine living on 21. They can buy our companies here. Charlie Rose: But you don't believe that's good.is a likely consequence out of what's going on now. I think it's terrible over time.[talking simultaneously] consuming about $2 billion a day of goods and services beyond what we're producing. So we send them little pieces of paper.000 of purchasing to those people. I think the rest of the country should be paying less. I've never had it so good in terms of taxes.we're likely to have more inflation in the future as a consequence of the things we do to fight the present situation. As long as we consume more than we produce. three people in those households. and we may need another stimulus -. the rest of the world sends about $2 billion a day net of something. Two and a half they will actually probably. We got to send them something in return. I think. Warren Buffett: I think it's bad. than their secretary or -.I don't think it's the most pressing problem now at all. that's crazy.you've got. making a choice between future inflation and getting our -. which is what we're doing. what.inflation could be a very -.to be clear on this. I mean we are exporting 12% of our GDP now roughly. talks about another stimulus program.it's kind of a Rube Goldberg plan a few years ago.whomever around their office. on average of close to four people. 24 million households. Charlie Rose: But how does that change? Warren Buffett: Well. In other words.000 a year. And if you look at the Forbes 400. I laid out -. Now. it's -. and they want to sell us these goods. Is that essential at this time? Warren Buffett: I think the biggest thing we need now is to unclog the credit markets.I think that should be something addressed by -. but they got to buy something with them. as long as they sell us these goods. the 95 percent that Obama talks about or maybe even a little higher than that. I mean you have 20 percent of the population doing that. We are trading away a little bit of our country all the time for this access consumption that we have over what we've produced. 1/5th of the households of the United States. Warren Buffett: Yeah. don't we.000 a year. Charlie Rose: What's all this going to do to the price of the dollar? Warren Buffett: It could be very tough on -. Charlie Rose: Senator Obama.it should go to the lower and middle-income people. And it needs to be spent. I mean the -. And so I think that actually people in my situation should be paying more tax. you've got -. But our country's productive grows enough so we actually can do that. it's going to get -. they're going to own something. But I think that a stimulus plan should really be geared to the people. and we trade away little pieces of the country daily.000 a year or less. That was five percent many years ago. I don't want -. you have earning $21. And we're likely -. Sometimes they buy a treasury note. accounting payroll taxes. I am paying the lowest tax rate that I've ever paid in my life. 22. except I like it better than the alternative. I mean the truth is. which I don't like myself. And I think -. On average. they are paying a lower rate.it's going to get spent. They .to some extent. You know. But we've actually been pretty good on exports. Right now. Charlie. Charlie Rose: And it reflects American's consumption ideas rather than its savings ideas. I mean you believe that an increasing current accounts deficit is bad. We just don't be as well off as if we hadn't done it. That would be nice if they stuck them all under a mattress.if we do. they can't run from American assets. but made an economic speech today. They can do all kinds of things. sometimes they set up sovereign wealth funds. who you support. Charlie Rose: Because we're borrowing two million dollars -Warren Buffett: Yeah.we -.

very low levels. I mean you got to get it from somebody. everybody feels that way.6 trillion or something like -. Maybe. You know. It's going to be tough because the economy is going to be getting worse for a while. They don't take that from me on dividends.I never had it so good. and vote for something and then people say.need it. you know. Charlie Rose: … what about the capital gains tax? Warren Buffett: Well. How will we measure the progress. to some extent. Charlie Rose: You mentioned inflation. interest rates. the people that drive the taxis. And so what they will not see immediate reaction. The senate votes tonight. I mean it is -. But nobody will ever know that if it does. And it should come. The payroll taxes are over 900 billion. They take from the woman who comes in and takes the wastebaskets out. everybody is against paying tax. I mean I just think that you're going to -. I mean. But. I mean. he's not going to just jump up all of a sudden.do you have a position on what interest rates -what the fed should do about interest rates? Warren Buffett: Well.what it really takes is leadership that knows what it's all . from guys like me. And it might fall off a cliff if this doesn't pass. House may vote. this year. The possibilities of inflation. you know. And that's going to be tough. something like that. it's all getting spent. Charlie Rose: So therefore the capital gains tax should be changed to 18.particularly the last six or eight years. It's getting invested. you see. Now. we'll be pounding on the guy's chest.things we're doing are going to have some inflationary consequences. some people got so scared by the failure of the vote last time that it brought home a danger of not doing anything. 30? Warren Buffett: I think it's terrible for people in effect to say that income from investment should be taxed at a much lower rate than income from labor. And they are paying 900 billion -. well. Warren Buffett: The woman that comes in. We're not paying 25 percent of the total taxes on individuals. It's interesting. the last -. Warren Buffett: Yeah. And they don't take that from me on capital gains. So it makes it tough. And it takes -. you know. Now. It isn't getting spent. I think that's almost -. But it's all getting spent. you know. you go through all of that. That 900 billion. and I pay 15 percent. Nothing's happening.1 trillion. that doesn't come from me. including the long rates. the capital gains tax is 15 percent now. Whatever happened to change minds either in the combination of what they did with the plan and tweaking the plan. just put that aside and we'll get to that after the patient is up and walking. But if you want a government that's going to do the things we ask our government to do. Charlie Rose: Right. bring me here. And. But that comes from the people in my office. and I pay no payroll tax on it. Charlie Rose: All right.3 or whatever it is on payroll tax alone. Are you therefore -. Charlie Rose: When we watch this. you've got to get it from somebody.for the time being. we'll say 1. you voted all this money and you know. everybody likes to talk about how the top one percent pays this percent in income. You know. whether this is working or not? What's the indicia? Warren Buffett: Yeah. you know. So I sit there in my office and I make a lot of money by capital gains. and you know.nobody ever talked about that when they talk about what the one percent is paying. We're going to only raise about 2. you know. who you're going to get it from. People I talked to today believe it's going to pass. it's tough to be in the legislature. or you're going to get it from. takes the wastebasket away. though.3 trillion. but the payroll tax is over a third of the receipts of the federal government.you're going to raise it from somebody. And over the years. I mean you and I are having this conversation today. how could you have done that? You haven't done anything for me. or B. I pay it on the first hundred thousand or something like that. you know. Whatever. I love to tell how I'm suffering because one percent we're paying 25 percent of the total. she's paying 15. I mean. I mean we are -. 25. We're paying maybe 25 percent of the income tax.what's going to happen -.we're going to spend 3. you're going to get it from me and you. on the floor. they've taken less and less from a guy like me. I feel the same. but the income tax.

you know. when he came in.about and can explain what it's all about. And that people will believe -Charlie Rose: But hasn't that been missing.well. Charlie Rose: If AIG had failed. I think what people understand there probably -. Charlie Rose: And the reason you're here and the reason I want to have a kind of fireside chat with you. very tough period. he didn't print any money.we are going through a very. I mean how about in the last month. You know.I still felt something would pass. I never knew it could get to this point? Warren Buffett: Well. But I will tell you. but when it isn't clogged up. you know. my God. though -Warren Buffett: Sure. say. And they did a lot of thing. Tell me when you worried the most of all the things that you have seen over the last three weeks. It took a long time. It takes real leadership. Charlie Rose: So why was there even a question of not rescuing AIG at that time? Warren Buffett: Well. Charlie Rose: -. I don't get that afraid in a sense because I really do have faith in both -.it wasn't like. but he -. Warren Buffett: They're going the right direction. you know. you've got the greatest economics professor in the world or anything else. But I -. I wasn't afraid because I -. Everybody. They were -. And you needed it. you know that somehow a message isn't getting out. But we put in things like the FDIC. Charlie. the idea -Warren Buffett: When the president of the United States goes out at. Well. yeah. 8:00 o'clock in the morning and then his own party votes gets him 2 to 1 in the house. when did you say. the world did not change. when I watched the House vote the other day. which is clearly the fear that exists in the country. I mean Roosevelt didn't -. they were hoping the private sector would do it. You needed to jump-start the economy. And I know that Congress will do the right thing. he actually may have done [unintelligible]. in 1933 or '4.I know the country works extremely well. But he did restore confidence. And.leadership that can explain what it's all about? Warren Buffett: Absolutely.you know. did they not? Warren Buffett: Yeah. . I mean. Charlie Rose: Roosevelt also said the only thing we have to fear is fear itself. they had to tweak that in terms of his bill. Charlie Rose: Well. would fold man sacks have been exposed and at risk. you know. I think the FDIC was one of the great inventions of the American [unintelligible]. JP Morgan would have been -Warren Buffett: Everybody would have been exposed. an AIG would not be able to have its checks clear. I did not think I would see the day when. you know. it is that somehow it hadn't gotten through.and -Charlie Rose: [unintelligible] extended five-year.

I don't know.Charlie Rose: Right. Nobody's every heard of it except it was a terrific profit center. [unintelligible] AIG financial products. did that in fact happen during this crisis in which the secretary of the treasury said you better save this or we'll all going down? Warren Buffett: I think certainly -Charlie Rose: You better put up some cash right now. So you guys save it.000 contracts in it. Charlie Rose: Well. It cost me 400-and-some million dollars in benign -. Charlie Rose: And you had to get rid of it. that's the same way I would behave.and I'm not knocking them for this. Warren Buffett: I mean. and I could have done that. Charlie Rose: There was not enough capital available other than from the government. I bought a company called General Reinsurance in 1998 that had a similar but much smaller operation. if I thought 5 or 10 billion would have bought me a good deal. If AIG had tried to unwind their derivatives books. So it got beyond anybody's ability to certainly to do it in a short period of time. You know. If I were the treasury secretary or head of the Fed. But when this was not a benign situation. from were people on that weekend that thought they'd had a solution. had 23. Charlie Rose: Not even Berkshire Hathaway. I mean. you better save this because you're going down with the ship. do all these things. And the private sector tried to come in until they saw the size of the problem. And I will guarantee that you the top management -. I'd have done it. Charlie Rose: They were -Warren Buffett: I'm not bashful. They couldn't get their minds around it. Not even Berkshire Hathaway.in a benign situation. Charlie Rose: [unintelligible] was within reach. And then the hole kept getting bigger and bigger. And I went as long as I could worrying if they didn't save it. I would try to scare the hell the out of the private sector and say. Warren Buffett: It's an unknown situation. I mean. . And all of a sudden became apparent that 20 billion wouldn't do it and 30 billion wouldn't do it and 40 billion wouldn't do it. I don't think I could have done it. Charlie Rose: And there was no private capital to come in and do that. I'd come in. you know. you know. It would have hit every institution in the world. Warren Buffett: I got to get out of this. Warren Buffett: Not big enough. You have the derivative book. you could manufacturer earnings out of it. Warren Buffett: No. Warren Buffett: I think that they hoped the private sector would come in.

I mean. Warren Buffett: No.where they are very likely to get their money back.Warren Buffett: Yeah. That’s what people have to understand. But the difference Charlie if we bottom this thing out at seven percent unemployed versus nine percent. You’re going to see unemployment go up. maybe more. I mean I want to hire the guy that made that deal. you know. But I don’t think you -Charlie Rose: That’s the depression -[talking simultaneously] . He’d fit in well at Berkshire. My dad had that happen to him in the early ‘30s. And the Fed structured that thing very. whoever said. yeah. Charlie Rose: But 85 billion might not have been. that’s three million people. Warren Buffett: No.I mean. they have put themselves in a position -Charlie Rose: Yeah. no. to go home with a mortgage payment you know and kids and everything else. that’s three million people that if we do it wrong you know lose their jobs unnecessarily in my view I mean you know I’ve never been unemployed. they drove tough terms. Otherwise we’re in a very. very difficult place and each week we go beyond not doing something we get deeper and it becomes more irreversible. Charlie Rose: A lot of people look at you and Goldman Sachs and GE saying I want to hire the guy that made that deal for you. an ounce of prevention is worth a pound of cure understated it and I you know a pound of cure that’s delayed another six months is going to need a ton of cure later on I mean it would be crazy not to do this. Warren Buffett: -. [laughter] Charlie Rose: So we come down to the close of this conversation and you have been warning us about certain kinds of things. Warren Buffett: And. They participate 80 percent -. very well. I’ve never been very fully employed either but just think of what it’s like. It will not produce dramatic results though in the economy. you know. Warren Buffett: You’re going to see more people unemployed. Tim Geithner did a better job on this one. And they’re not -Charlie Rose: You’re going to see people unemployed. you’re going to see lousy earnings in many businesses. I hear from this conversation too this plan is essential now. You know. It you know you don’t want to create three million people more unnecessarily.

I mean. And if -. Warren Buffett: Once we get the [unintelligible] back.that’s never going to happen again.com © 2008 CNBC. All Rights Reserved URL: http://www.Warren Buffett: It really is. We’re in San Diego. Maybe we’ll end up with a little bit better system. I don’t think it’ll be done perfectly. rethinking sort of what President Reagan brought to fore. come January. And you can’t help some increase from this point.the dominoes started toppling.that’s what Congress is for. exercising [unintelligible]. Charlie.the system will work over time.com/id/26982338/ Privacy Policy . Warren Buffett: Enjoyed it. but I mean let me come to that in the end. And that’s what advisors are for. And I’m pleased that we were able to join with him here. we had a pretty good system over time. My thanks to the people at KPBS here. Charlie Rose: Pleasure to see you.there’ll be this revulsion. And I’m all for getting the best minds you can get to work on that kind of thing.we got a wonderful system. A conversation here about the crisis that we all face. we can [unintelligible] changes [unintelligible]. Charlie Rose: Thank you for coming.com . we’re doing the right thing. it set things in motion that just -. lots of talk about regulation as you know and finding the right balance. lots of talk about whether government involvement is an idea we need more of rather than less of. But I -. Charlie Rose: Warren Buffett.cnbc. Terms of Service © 2009 CNBC. Charlie Rose: Okay. Thank you for joining us. the nature of democracy is such that when there’s this -. But the end. Like I say. But when we went crazy. I don’t want any viewer to go away think a magic wand exists in Congress. And you know if I got any good ideas out of that or I think they’re good ideas. I’ll be glad to contribute them but the system will probably overdo some other things. the urgency of the moment. we can do all of that sort of thing. Do we need to do anything about the system? And beyond the emergency of the moment. There’s no -. and we did go crazy on residential real estate. obviously. Warren Buffett: Thank you. about the system. Inc. and hearing from a man that a lot of people want to hear from. So they’re going to see some more bad news. toward -. Current Berkshire stock prices: Class A: Class B: Questions? Comments? Email me at buffettwatch@cnbc. so we’ll probably attack it in various ways that don’t make sense. See you next time. But if we do this.

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