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Sunday, June 29, 2008

BLOOMBERG: Buffett Has $2.1 Million Lunch Date With Hedge-Fund Manager

By Josh P. Hamilton and Dan Reichl

June 28 (Bloomberg) -- A lunch date with billionaire investor Warren Buffett was sold to a Chinese hedge-fund manager yesterday for more than $2.1 million during an online auction, more than tripling last year's record of $650,100.

Zhao Danyang, who manages the Pureheart China Growth Investment Fund in Shenzhen, won the auction by bidding $2,110,100, said Denise Lamott, a spokeswoman for Glide Foundation. Glide, a San Francisco charity, will receive all proceeds from the auction.

It was Buffett's ninth annual auction to benefit Glide, and the fourth consecutive time the winning bid set a record. A total of nine bidders placed 78 offers over five days this week, according to the EBay Inc. auction site. Lamott said a crowd of Glide employees, board members, donors and others gathered to watch the results at a San Francisco hotel last night, and were jubilant.

``There were screams, shouts -- it was amazing in here,'' Lamott said in a phone interview.

Buffett, chairman of Berkshire Hathaway Inc., will entertain Zhao and seven companions at a New York steakhouse and answer virtually any question except what he is buying and selling. He praised Glide, which provides services including job training, medical care and 750,000 meals a year to the poor.

``It takes people who've hit bottom and brings them back,'' Buffett, 77, said in an interview before sitting down earlier this week with last year's winners. ``That's why we're here.''

No one answered the phone at the Pureheart offices in Shenzhen after the auction closed on Saturday morning local time.

World's Richest

Buffett built Berkshire Hathaway from a failing textile manufacturer into a $200 billion holding company. Berkshire has a $72 billion stock portfolio and owns businesses including Geico car insurance, Dairy Queen restaurants, Benjamin Moore paints and Fruit of the Loom underwear.

Buffett owns about 28 percent of Omaha, Nebraska-based Berkshire, making him the world's richest man, according to Forbes magazine. Two years ago, he pledged most of his stock to the Bill & Melinda Gates Foundation.

Susan Buffett, the billionaire's late first wife, volunteered at Glide, founded in the 1960's by the Rev. Cecil Williams in the blighted Tenderloin district of San Francisco.

``He went to a dying inner-city church,'' Buffett said in the June 25 interview. ``He was a young black minister at the time. He worked, starting with nothing, and he basically built one of the great organizations I've seen for helping people that are really down and out. I'm a huge admirer of Cecil Williams and Glide.''

`Thank God for Warren'

Williams is equally appreciative of Buffett. He said the foundation is about 15 percent behind last year's fundraising, even as costs soar and lines of people waiting for services get longer.

``Thank God for Warren Buffett,'' Williams said in an interview earlier this week. ``We're going through trying times, that's why it's so important for people like Warren Buffett and others to respond.''

Buffett exhorted government and individuals to do more to help.

``You have 20 percent of the households in the United States with almost 60 million people in them that have $21,000 a year or less of income,'' Buffett said. ``And I'd just invite anybody to try to live on $21,000 a year for their household.''

Past winners have discussed a wide range of topics with the legendary investor.

Lessons, Mistakes

``We talked about how to pick good people, how to educate the children, how to donate money,'' said former winner Yongping Duan, a California investor and founder of a consumer- electronics company in China. ``He talked about his opinion on some industries'' and shared lessons he learned from his mistakes, Duan said after his lunch meeting last year. Duan won in 2006 with a bid of $620,100.

David Einhorn, founder of hedge fund Greenlight Capital LLC, won with a bid of $250,100 in 2003, the first year the auction was conducted on San Jose-based EBay's online site.

Alan Stillman, founder of steakhouse Smith & Wollensky, pledged $10,000 and the meal for the right to host the event.

The following table lists the winners from previous years and the price paid, according to Glide.


Winner                                            Final Bid
2000 Anonymous $25,000
2001 Anonymous $18,000
2002 Edward Jones Co. and 2 Anonymous $25,000
2003 David Einhorn, Greenlight Capital $250,100
2004 Jason Choo, Singapore $202,100
2005 Anonymous $351,100
2006 Yongping Duan, California $620,100
2007 Mohnish Pabrai, Guy Spier, Harina Kapoor $650,100
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Friday, June 27, 2008

BLOOMBERG VIDEO: Warren Buffett talks to Josh Hamilton


Buffett Says He's Concerned About U.S. `Stagflation' June 25 (Bloomberg) -- Billionaire Warren Buffett talks with Bloomberg's Josh Hamilton in New York about Buffett's philanthropic efforts, U.S. economic policy, InBev NV's bid for Anheuser-Busch Cos. and the Federal Reserve's efforts to support the U.S. financial industry. Buffett's Berkshire Hathaway Inc. is Anheuser-Busch's second-biggest shareholder. (Source: Bloomberg) Play Watch Interview

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BLOOMBERG:Buffett Says He's Concerned About U.S. `Stagflation'

By Josh P. Hamilton and Erik Holm

June 25 (Bloomberg) -- Billionaire investor Warren Buffett says he's concerned about ``stagflation,'' or slowing in the U.S. economy while inflation accelerates.

``We're right in the middle of it right now,'' said Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., in an interview on Bloomberg Television today. ``I think the `flation' part will heat up and I think the `stag' part will get worse.''

Buffett, the world's richest person, runs a company with a $72 billion stock portfolio and businesses ranging from candy to corporate jet leasing and insurance. He's said the U.S. housing slump has been a drag on Berkshire's earnings, adding today he's unsure when the economy will recover.

``It's not going to be tomorrow, it's not going to be next month, and may not even be next year,'' said Buffett, 77.

The U.S. economy will expand 1.4 percent in 2008, the weakest performance since 2001, according to a survey by Bloomberg. The Federal Reserve today left its benchmark interest rate at 2 percent, saying ``uncertainty about the inflation outlook remains high.'' Consumer prices rose 4.2 percent in the 12 months ended in May, the fastest pace since January.

Buffett, whose Berkshire is the second-largest shareholder of Anheuser-Busch Cos., declined to comment on InBev NV's $46.3 billion bid for the St. Louis-based brewer. He disavowed comments in the media attributed to him about whether he favors the offer.

Mistaken Identity

``I've been reported to be in St. Louis, I've been reported to be at dinner with August Busch IV,'' Buffett said referring to the chief executive officer of the brewer. ``There must be some guy in St. Louis that looks a lot like me, because I have not been in St. Louis since this started.''

Federal regulators may not need to step in to help Lehman Brothers Holdings Inc., the securities firm that lost about 62 percent of its market value this year, Buffett said.

``The fact that they intervened on Bear Stearns prevents them from needing to intervene on other large investment banks,'' Buffett said. ``The very act of the fire engine showing up when there was a fire means that other fires won't break out in this particular case.''

The second-largest underwriter of mortgage debt last year, Bear Stearns Cos. sold itself after an exodus of clients and lenders threatened to plunge the company into bankruptcy. New York-based JPMorgan Chase & Co. agreed in March to buy Bear Stearns with backing from the Fed.

Buffett also praised Barack Obama, the Democratic senator from Illinois running for president against Republican John McCain, an Arizona senator.

Charity Lunch

``He will have more concern for the people who don't get the lucky breaks in life like I've gotten,'' said Buffett, ranked the richest man by Forbes magazine.

Buffett spoke before a scheduled lunch with two money managers who paid $650,100 last year for the privilege. The money goes to San Francisco's Glide Foundation, which provides food, medical care and other services to the poor.

The foundation ``takes people who have hit bottom, and brings them back,'' said Buffett.

The ninth-annual auction for lunch with Buffett began June 22 on EBay Inc. and runs through June 27. The high bid so far is $77,100.

To contact the reporters on this story: Josh P. Hamilton in New York at jphamilton@bloomberg.net; Erik Holm in New York at eholm2@bloomberg.net

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DEALBREAKER: Anheuser-Busch's Rebuff of InBev

As we reported earlier today, CEO August Busch IV and his board plan to turn down InBev's $65/share bid for Anheuser-Busch. The Budweiser brewer, which has ignored the offer for the past two weeks, will formally reject the courtship of Carlos Brito while announcing its own strategic plan.

Anheuser-Busch will cut at least $500 million in costs, largely in marketing, and is considering the sale of its Busch Gardens parks. The cuts to be proposed will largely mirror those planned by InBev, and Busch will have to make a tough but critical sell since Anheuser has practically no takeover defenses.

Warren Buffett, whose 4.9% stake in Anheuser is larger than the Busch family's, chatted with Becky Quick yesterday to deny reports that he had an opinion about the merger, let alone that he had met with August Busch in St. Louis. Buffett remains publicly an agnostic about the offer, calling the upcoming fight "an interesting spectator sport."

August Busch earlier made a proposal to acquire Modelo Group as a means to make Anheuser too big for InBev to swallow. Anheuser already owns a majority of the Mexican brewer behind swill-grade Corona, but the controlling stake is in the hands of Antonino Fernandez, the ninety -year-old patriarch whose family runs Modelo. Modelo has reportedly refused any talk of surrendering control and has twisted the knife by talking with InBev behind Bud's back; American news reports have shifted their description of Modelo from "Mexican partner" to "fiercely nationalistic."

Matt Blunt, governor of Missouri, and both of the state's senators have made a bipartisan plea for an antitrust review to block the sale. DealBreaker's on-site research at Anheuser's St. Louis brewery discovered that Budweiser gained its light-tasting rice-and-barley mix from World War I rationing. While this exonerates Anheuser from the charge of chintzing out on the mix, it further discredits the merits of political meddling in beer and lets us blame Woodrow Wilson for the sorry state of American lager.


-Negra Modelo aficionado Andrew

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Thursday, June 26, 2008

CNBC:LIVE BLOG ARCHIVE: Warren Buffett's Power Lunch Interview

Warren Buffett Live Interview: Live Blog

This is a live blog archive of Warren Buffett's interview with Becky Quick on CNBC's Power Lunch, Wednesday, June 25, 2008.

WBW has also posted an Executive Summary of the interview, along with a complete transcript.

All times eastern.

11:52a: The interview with Warren Buffett is scheduled to begin just after 12p. Buffett is in New York to host a "power lunch" with the high bidders in last year's Lunch with Warren charity auction. Investors Mohnish Pabrai and Guy Spier paid $650,100 for the invite. The money goes to San Francisco's Glide Foundation.

12:01p: Becky begins the interview with Buffett at New York's Smith & Wollensky Steakhouse restaurant.

12:02p

: First question is about the Glide Foundation, which is the beneficiary of the charity lunch. Buffett describes the organization in San Francisco, which helps the poor and homeless.

12:03p: Buffett says the Federal Reserve should be concerned about both rising prices and slowing growth because both are happening right now. He's glad he doesn't have Ben Bernanke's job.

12:04p: Buffett sees inflation everywhere - it's "exploding" even as the economy get weaker.

12:05p: Buffett says his businesses see weakness in everything concerning the consumer and housing, and it's getting worse.

12:06p: Buffett doesn't blame the Fed for the weak dollar. He again says its the result of U.S. trade policy, and if that policy isn't changed, the dollar will continue to get weaker.

12:06p: Buffett says high oil prices are the result of "supply and demand", not speculators. He says there isn't excess capacity anymore, and that's driving prices higher. Even if oil futures stopped trading altogether, Buffett doesn't think it would affect the price of energy very much.

12:08p: Buffett says he hasn't talked to anyone at all about InBev's bid for Anheuser-Busch

ANHEUSER BUSCH COS INC
BUD

61.96 0.83 +1.36%
NYSE








[BUD 61.96 0.83 (+1.36%) ], discounting reports that he favors one side or the other. (Berkshire Hathaway has a big stake in BUD.) He says it's an "interesting spectactor sport" but he's not taking sides, yet.

12:09p: Buffett thinks money will be a "non-issue" in the presidential campaign as both sides have plenty of funding.

12:10p: Buffett says it's "very hard" to have windfall taxes on oil, or anything, for that matter. He doesn't think it makes a lot of sense to tax anyone because they have a commodity that's gone up in price.

12:11p: Buffett repeats his callf or higher taxes on the super-rich and less reliance on the middle class. He wants a "major overhaul" in the payroll tax.

12:13p: No one wants to pay higher taxes, but it's Congress' job to do what's fair, and Buffett thinks it would be fairer if the super-rich paid more in taxes.

12:13p: What will he talk about at lunch with the high bidders? A: Since they paid $650,100, they can ask about anything they want (except what he's buying and selling.)

12:14p: Asked if he would consider running for office, Buffett said he "would go Sherman one better" and totally dismissed any idea of standing for any elected office.

12:15p: The interview has ended.

Current Berkshire price:

Berkshire Hathaway Inc
US%3bBRK.A

122750.0 50.00 +0.04%
NYSE








[US;BRK.A 122750.0 50.00 (+0.04%) ]

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CNBC: Warren Buffett Tells CNBC U.S. Inflation is "Exploding"

Warren Buffett Live Interview: Executive Summary

Warren Buffett says inflation in the U.S. is "exploding" and he urged the Federal Reserve not to signal in any way that controlling prices takes a back seat to encouraging economic growth.

"I think inflation is really picking up... Whether it's steel or oil ... We see it everyplace. It's exploding," Buffett told Becky Quick in a live interview on CNBC's Power Lunch. He spoke ahead of a charity lunch he is hosting in New York City.

While Buffett stressed that the Fed needs to control inflation, he also said the central bank should also be concerned about slowing economic growth, and said he's glad he doesn't have Chairman Ben Bernanke's job. Pressed by Becky about what he would do if he were Fed chairman, Buffett joked that he'd "resign."

The Federal Reserve announces its latest decision on interest rates around 2:15p ET today (Wednesday.)

WARREN BUFFETT'S POWER LUNCH INTERVIEW:
TRANSCRIPT AND LIVE BLOG ARCHIVE

Buffett told Becky that from a consumer's perspective, the economy's weakening is getting worse. He's been saying for several months that the U.S. is effectively in a recession.

Buffett dismissed suggestions that "speculators" are responsible for the high price of oil, saying energy prices are being driven solely by supply and demand.

Asked about InBev's unsolicited $46 billion takeover bid for Anhesuer-Busch

ANHEUSER BUSCH COS INC
BUD

61.97 0.84 +1.37%
NYSE




[BUD 61.97 0.84 (+1.37%) ], Buffett said he hasn't talked to anyone about it and hasn't taken sides. He implicitly dismissed reports he favors the InBev bid. At this point, he says, the InBev-Bud battle is just an "interesting spectactor" sport. Buffett's Berkshire Hathaway owns a 5% stake in St. Louis-based Anhesuer, making it the brewer's second largest shareholder.

Berkshire Portfolio
Buffett said he doesn't think either Barack Obama or John McCain will have trouble raising enough money for their presidential campaigns. While he's a long-time Obama supporter, Buffett did say the Illinois Senator should not have changed his position on accepting public financing. Buffett will be in Chicago next week for some Obama fund-raising events.

Buffett repeated his call for higher taxes on the "super-rich" so that the middle-class pay less.

Current Berkshire price:

Berkshire Hathaway Inc
US%3bBRK.A

122900.0 200.00 +0.16%
NYSE




[US;BRK.A 122900.0 200.00 (+0.16%) ]


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CNBC: Warren Buffett's Power Lunch Interview on "Exploding" Inflation

Warren Buffett Live Interview: The Transcript
This is a transcript of Warren Buffett's live interview with Becky Quick on CNBC's Power Lunch, Wednesday, June 25, 2008 at 12p ET. Buffett tells Becky U.S. inflation is "exploding" and warns that the Federal Reserve must signal controlling prices is not a secondary concern.

We have also posted an Executive Summary and a Live Blog Archive.

Becky Quick: We are standing by at Smith and Wollensky in New York City for an annual gathering, something that's been happening for years now. This is to benefit the Glide Foundation. That's an organization Warren Buffett has been very closely allied with. And Mr Buffett, we want to thank you very much for joining us today.

Warren Buffett: Thank you.

Becky: The first question, we just want to talk about why we're here today. The Glide Foundation is an organization you've been workign with for many years at this point. For people who aren't familiar with it, why Glide and why this lunch where you're going to be meeting with people today who have paid over 600-thousand dollars for this chance to break bread with you?

Buffett: Well, Glide is an organization in San Francisco. It's run by a remarkable man named Cecil Williams, who, more than 40 years ago, went out there as a young black pastor to a dying inner-city church. And they turned it into a marvelous, marvelous, really social organization. he takes people that the world has given up on, and sometimes have given up on themselves, and he brings them back.. He gives them hope. They feed 750-thousand meals a year. They train people. They have child care. They have health clinics. They have 52 rooms where people who don't have shelter can come... As the years have gone by, the people in San Francisco have come to appreciate it and I learned about them some years ago and I just decided that money couldn't go to a better cause.

Becky: Well today, over 600-thousand dollars will be going for this lunch. Let's talk a little bit more about the poeple who are going to be eating lunch with today, but while we have you here, let's cover some of the news of the day, because people have been waiting to hear about some of those things. The Fed is going to be coming out with it's announcement (on interest rates) in little over two hours time. And there's been a huge debate about whether the Fed should be more concerned about higher inflation or slowing growth. In your mind, what's the most important factor?

Buffett: Well, they should be concerned about both, because both are going on. Growth is slowing, in fact, I'm not even sure it's growth anymore. And inflation is really heating up. So, it's not an easy job to have, serving two masters in effect. That's why I'm glad that Ben Bernanke has the job and I don't. (Laughs.)

Becky: Pretend you are in his shoes for the moment. What would you do?

Buffett: I'd probably offer my resignation. (Laughts.)

Becky: Would you keep rates steady, though, if it was your job to decide this right now, you're faced with both those headlines?

Buffett: I think inflation is really picking up, so I think the Fed has to be very careful to do anything that signals that they consider inflation to be a secondary goal and something that they'll worry about later. Because it's huge right now. I mean, whether it's steel or it's oil, you name it. The pressure, you've seen it in chemical prices recently. Dow has announced. We see it everyplace. It's exploding.

Becky: That's almost an argument for raising rates today, but there's still an awful lot of weakness with consumers, with the house prices they've been watching. Would that be too much of a shock, if the Fed came out with a surprise interest rate increase today?

Buffett: I think it probably would be, but the economy is weakening. All the data I see, and I see a fair amount on a real-time basis, indicates that the weakening, if anything, is getting worse.

Becky: You mean from the consumer's perspective?

Buffett: Right, from the consumer's perspective. But the things that fall out from the weaker consumer buying, and the credit card losses and that sort of thing.

Becky: Where do you see that weakness, because you have such a broad array of businesses, everything from the bricks business to the insurance business to actual retail businesses. Where do you see the biggest weakness?

Buffett: Everything connected with construction and with consumer, I see weakness. And if anything, it's accentuating a little bit.

Becky: Along with the concerns about inflation, a lot of people have been screaming the Fed has to do something to save the dollar. It's seen so much weakness recently. Do you have any currency bets right now?

Buffett: Just, I've got the tail end of the Brazilian real. But, over time, if we keep doing what we're doing, and it isn't the Fed, it starts with policy makers in Congress. If we keep doing what we're doing, we're going to keep getting the same result, which is a weakening dollar.

Becky: What do you mean, keep doing what we're doing? In terms of running a budget deficit?

Buffett: In terms of running huge current account deficits. And part of that stems from oil. I mean, there are a lot of things that go into that. But the truth is we can't send two billion dollars a day out to the rest of the world and not expect the dollar to get weaker over time. That's not a short-term forecast, but that's going to happen over time.

Becky: You mentioned oil prices, and there's been a huge debate we've been having on our show, and throughout the day, where people are trying to figure out, is this supply and demand picture or to the idea that there's speculation going on in these markets. That there's a lot more money in these markets than there used to be, say three years ago.

Buffett: It's supply and demand. I mean, if somebody buys a thousand forward oil contracts and somebody sells a thousand forward oil contracts, somebody's speculating on the downside and somebody's speculating on the upside. The only way you could have speculators having a big impact is if you had a huge amount of storage where they started actually withdrawing actual, physical oil from the system. But it's not speculation, it's supply and demand and the situation is that in my adult lifetime, up until the last year or two, there's always been a huge amount of excess supply available. There's been reserve capacity. And that goes back 30 years ago, in this country we produced way more oil than we needed here and we had something called the Texas Railroad Commission that shut down wells. And a matter of fact, we got down to where they would only let wells operate in Texas for eight days, we had so much extra capacity. We don't have excess capacity in the world anymore, and that's what you're seeing in oil prices.

Becky: Except we had a series of people who came to Capitol Hill, to Congress on Monday, who said, the analysts, if you tamp down on speculation, you could cut 50 percent, as much as 50 percent, out of oil prices immediately. Do you think that's just hogwash?

Buffett: (Laughs.) I think if they closed the oil futures trading, I don't think it would make much difference. Incidentally, the five-year oil price, you can buy oil for delivery in 2012 now, or 2013, that price is very close to this price. Now if anyone thinks that short-term speculation is entering into oil prices, where are they paying 130 dollars a barrel for delivery in 2013.

Becky: Mr. Buffett, you are the (second) largest shareholder in Anheuser-Busch

ANHEUSER BUSCH COS INC
BUD

61.95 0.82 +1.34%
NYSE




[BUD 61.95 0.82 (+1.34%) ]. InBev has made a bid for Budweiser, for Anheuser-Busch, for Bud, and there are a lot of people trying to figure out if you think that's a good offer. What do you think about it?

Buffett: (Laughs.) When we get through with this interview, there will still be a lot of people wondering what I think about it. I haven't talked about it to anybody. I've been reported, all these things have been reported, I have not talked to anybody about it. I've been reported to have been seen in St. Louis. There's obviously some double of me that's running around out there. (Laughs). I can't imagine any guy wanting to look like me, but if he's out there, he's apparently in St. Louis and he's apparently over talking to InBev and all these people.

Becky: So you haven't talked to Anheuser-Bush management? You haven't talked to InBev?

Buffett: I have not talked to anybody.

Becky: What do you think about the deal?

Buffett: (Laughs.) I think it's an interesting spectator sport at the moment.

Becky: So you're not going to weigh in on either side of this?

Buffett: (Laughs.) I certainly haven't so far.

Becky: And you don't want to right now?

Buffett: (Laughs.) If we didn't have all these people around I could tell you about it.

Becky: If we didn't have all these people around. Let's talk a little bit about politics, too.

Buffett: Sure.

Becky: Barack Obama has been the person that you're supporting. This is the first time you've really had a chance to talk since Hillary Clinton dropped out of the campaign, but you're holding a fund-raiser for him next week.

Buffett: July second.

Becky: July second. We watched some of the numbers coming in in May and Barack Obama's fund-raising ability slowed down significantly in May. McCain has picked up. Do you think that's a temporary, one-time blip, or are these two candiadtes going to be running neck-and-neck when it comes to fund-raising.

Buffett: Well, I think Barack is going to have plenty of money. I mean, he gave up on federal financing. So I don't think money is going to be a problem for either candidate. The American public, when they go to the voting booth in November is going to have a very good fix on both candidates and the shortage of money will not impair them having that fix. So I think money is going to be a non-issue in the campaign.

Becky: Barack Obama did give up on public financing after saying he would accept it. What did you think of that move?

Buffett: I wouldn't have, I don't agree with that.

Becky: You don't agree with him changing his position?

Buffett: I don't think he should have, yeah.

Becky: What about the idea of supporting windfall taxes against the oil companies? He's the candidate you support, but if you start talking about taking windfall taxes out on the oil companies, is that something you would agree with?

Buffett: I think it's very hard to have windfall taxes. Steel has doubled in price. Is that a windfall for the steel producers? Sure. Corn is, you know, $7 a bushel. Soybeans are at $15 a bushel. I don't think any candidate in his right mind who is standing for election in farm states would say you ought to tax farmers especially because they're getting a windfall. But they are getting a windfall from commodity prices. Maybe they deserve it because commodities have been underpriced. But to pick out one commodity, with copper at $3.60 a pound you could say that the copper producers are getting a windfall. You know, the networks are getting a windfall because the Olympics are being held. So I don't think that taking anybody that's had a commodity that increased in price a lot and saying there ought to be a special tax because of that really makes a lot of sense. I do think the tax code should be changed in major ways, but I don't think that's the way to do it.

Berkshire Portfolio

Becky: How do you think the tax code should be changed?

Buffett: I think the super-rich should pay more and people in the middle class and lower should pay less.

Becky: If you start looking at the proposal that's been put forth with social security taxes which includes stopping, still, at 102,000 for social security, but then picking up that payroll tax at $250,000. Is that your idea of a good change?

Buffett: The payroll tax is a third of all taxes raised. Over 900 billion dollars out of 2.6 trillion. So the payroll tax is terribly important. It quits at $100,000 for a guy like me. So I pay practically no payroll tax in relation to my income. Most of the people that are going to be -- people are going to be serving us the steak in this restaurant today are paying a very, very high, they're paying 15.3% or so in payroll taxes. I am paying a tiny fraction of 1% of payroll taxes. I think there should be a major overhaul of the payroll tax. I think guys like me should pay more.

Becky: Although there are people who have said, under this new proposal that's been put out, it would end up meaning that someone like an entrepreneur goes back to a tax rate of 50%. And that is even before you include some of the state and local taxes. Do you worry that if entrepreneurs and other people are taxed at 50% to 60%, depending on where they live and how much they make, that it will stop innovation? That it will harm some of the innovation?

Buffett: I worry about my cleaning lady paying 15.3% on payroll tax when I pay on my total income tax, capital gains and dividends, 15. So, she is paying a higher tax rate than I am, but she doesn't have the lobbyists talking for her. The United States government raises about -- spends about 20% of the GDP. Nobody wants to pay their share. That's human nature. But the Congress has the job of saying we're going to get 20% of GDP from the American government because the American people demand these services and so on. And the question is, they get it from anybody that pays it, they're not going to like it. You have to figure out on a basis of your own idea of social justice and making sure that the golden goose keeps laying golden eggs. What is the best system? I think the answer is to tax the super-rich more.

Becky: You are going to be having lunch today with two people that paid more than $600,000 for the opportunity to sit down with you. These two gentlemen, have you spoken to them at this point?

Buffett: No, I've had some correspondence with them. I'm looking forward to speaking with them.

Becky: What do you think you'll be talking about? I know they brought their children and wives along. What's your plan for this lunch?

Buffett: We'll be talking about anything they're interested in. We'll talk as long as they want to talk, and we'll talk about the subjects they want to talk about. If you want to pay $660,000, we'll talk about anything you want to talk about, Becky. Maybe even the Anheuser deal. (Laughs).

Becky: Great. One more question for you. There have been people who have been saying just taking a look at politics and some of the things out there that maybe you would be interested in getting on a ticket at some point. Is there any truth to that?

Buffett: No. I will go Sherman one better, whatever he said.

Becky: Okay. Mr. Buffet, thank you very much for your time. We appreciate it.

Buffett: Thank you.

Current Berkshire price:

Berkshire Hathaway Inc
US%3bBRK.A

122700.0 UNCH 0
NYSE




[US;BRK.A 122700.0 --- UNCH (0) ]


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Wednesday, June 25, 2008

CNBC: Warren Buffett to Appear Live on CNBC's Power Lunch Wednesday

Warren Buffett is scheduled to appear live with Becky Quick on CNBC's Power Lunch, tomorrow, Wednesday, June 25 at 12p ET.

Among the topics expected to be covered in the interview:

Buffett will be in New York to host his own "Power Lunch" with the high bidders in last year's 'Lunch with Warren' charity auction.

Investors Mohnish Pabrai and Guy Spier paid $650,100 for the invite. The money goes to San Francisco's Glide Foundation. Buffett will also talk to Becky about Glide and his support of their mission to help the poor and homeless.

This year's bidding for the next meal with Buffett is now underway. The current high bid is just over $77,000, but if the past is any guide, the winner will be paying much more than that. The auction comes to a close Sunday night.

Current Berkshire price:

Berkshire Hathaway Inc
US%3bBRK.A

122700.0 UNCH 0
NYSE




[US;BRK.A 122700.0 --- UNCH (0) ]

See Warren Buffett Watch on CNBC's The Call, most weekday mornings at 11:50a ET

Questions? Comments? Email me at buffettwatch@cnbc.com

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