Buffet Lauds Fed .... for making money for the US gov!

[vinoveri]

HA HA HA HA -


“The Fed is the greatest hedge fund in history,” Buffett told students yesterday at Georgetown University in Washington. It’s generating “$80 billion or $90 billion a year probably” in revenue for the U.S. government, he said. “And that wasn’t the case a few years back.”

Geez, Warren, maybe if the Fed expanded its balance sheet to $30T, it could generate $800-900billion for the treasury, wow why didn't I think of that?
...

“If you’ve got a .400 hitter in the lineup, you don’t take him out,” Buffett told the business news network, referring to a high batting average in baseball. “I don’t have a second choice. I don’t know Janet Yellen at all.”http://www.bloomberg.com/news/2013-0...n-history.html

Well, at least we know who pulls the strings after all ... the plutocrats; great analogy by the way - I need to keep doubling my wealth every 5 years; hmm who can I put in the game to insure my team wins ....

[c1ue]

Re: Buffet Lauds Fed .... for making money for the US gov!

Yes, that's exactly what we want our central bank to be: a hedge fund.

I thought that was exactly the problem.

[EJ]

Re: Buffet Lauds Fed .... for making money for the US gov!

HA HA HA HA -


“The Fed is the greatest hedge fund in history,” Buffett told students yesterday at Georgetown University in Washington. It’s generating “$80 billion or $90 billion a year probably” in revenue for the U.S. government, he said. “And that wasn’t the case a few years back.”

Geez, Warren, maybe if the Fed expanded its balance sheet to $30T, it could generate $800-900billion for the treasury, wow why didn't I think of that?
...

“If you’ve got a .400 hitter in the lineup, you don’t take him out,” Buffett told the business news network, referring to a high batting average in baseball. “I don’t have a second choice. I don’t know Janet Yellen at all.”http://www.bloomberg.com/news/2013-0...n-history.html

Well, at least we know who pulls the strings after all ... the plutocrats; great analogy by the way - I need to keep doubling my wealth every 5 years; hmm who can I put in the game to insure my team wins ....

I know Yellen slightly from one brief conversation after a presentation that she gave to our club at the Boston Fed last fall, so I suppose that puts me slightly ahead of Buffet in that regard.

This is not the same Warren Buffett who in 2007 warned about credit derivatives as "financial weapons of mass destruction." More likely he was playing both sides of the table then and has recently had to pick a team: FIRE.

Members may notice that Buffett is quoted less in the FIRE Economy media these days. Maybe now that he has declared, coverage will pick up.

[vt]

Re: Buffet Lauds Fed .... for making money for the US gov!

But Warren is now making millions from derivatives:

http://dealbook.nytimes.com/2011/03/...-buffett/?_r=0

[vinoveri]

Re: Buffet Lauds Fed .... for making money for the US gov!

I know Yellen slightly from one brief conversation after a presentation that she gave to our club at the Boston Fed last fall, so I suppose that puts me slightly ahead of Buffet in that regard..

What kind of hitter will Yellen be I wonder? Let's hope she's not an all star for FIRE.

[Polish_Silver]

Wfmd

But Warren is now making millions from derivatives:

http://dealbook.nytimes.com/2011/03/...-buffett/?_r=0

People need to read the analogy more closely. If you wield a WMD, it is not you who gets killed, but your counterparty, which in this case is taxpayers.

See Akerloff "Bankruptcy for profit"

[charliebrown]

Re: Buffet Lauds Fed .... for making money for the US gov!

Is this going to continue, now the fed has trillions of dollars of bonds that can no longer be sold at face value because of the 100 bpt rise in interest rates.? I also think the fed stops turning over interest to the treasury if said bonds are underwater.

Ten years ago I used to think that Warren was straight shooter, gentle grandpa type, now I think he is a shill for the monied interests. He and his crumby little toady charlie munger.

Another thing ... before the taper talk started in May or June 10y T was 2.1% Then it went to 2.9%, now that taper is off we are at 2.7%. I think EJs light switch vs. rheostat analogy is correct. If taper talk comes back, are we going to see 3.25% etc. Has the fed lost control?

[c1ue]

Re: Buffet Lauds Fed .... for making money for the US gov!

Let's keep in mind that Buffet's derivatives are a far cry from the majority of derivatives on the market.

For one thing, Buffet and Berkshire have the capital to pay up should their derivatives be 'in the money'. For another thing, he's using these derivatives exactly in the spirit they were created for: to generate a short term cash bonanza which is then employed to generate even more substantial returns. This is a far cry from the way derivatives are being used in the banks now - which is to create illusory profits up until the point an 'unanticipated' disaster wipes out a gigantic chunk of said bank's (or investment bank, or insurance company, etc) cash.

On the other hand, it would be incorrect to think Buffet is anything but a banker. He has historically held his nose and cleaned up behind banksters when his direct financial interests are at stake. See Salomon brothers for one example.

In my view, Buffet is on the 'right' side of being a banker, but that doesn't mean that he doesn't ultimately share many of the same views held by banksters.

Among other things - Buffet and Berkshire are so big now that they don't need to play bankster games. A look further back, however, with the original Berkshire acquisition, and the line gets much blurrier. Buffet successfully transformed Berkshire's large but shrinking revenue into another area of business - much as Sears has failed to do so (thus far).