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Tuesday, November 30, 2010

CNBC: Warren Buffett Talks Charity and Taxes on ABC's This Week

Published: Monday, 29 Nov 2010 | 1:02 PM ET

By: Alex Crippen
Executive Producer

Christiane Amanpour speaks with Warren Buffett in this screengrab from ABC's This Week program.
ABC News
Christiane Amanpour speaks with Warren Buffett in this screengrab from ABC's This Week program.

For those of you who slept in or otherwise missed Warren Buffett on ABC's This Week with Christiane Amanpour Sunday morning, here are some links to the interview. (Amanpour also spoke with Bill and Melinda Gates, Ted Turner, and hedge fund manager Tom Steyer.)

The conversation focuses on Buffett's "Giving Pledge" but also touched on his long-standing argument that the super-rich should be paying more in taxes. It's been getting some extra attention lately as Congress debates whether and how to extend the Bush tax cuts.

ABC has posted a video of the complete 47-minute program.

Shorter clips are included in a text story headlined "Billionaires Giving Back" on the ABC News site.

There is also a "web extra" video clip in which Buffett walks and talks with Amanpour, explaining why he thinks it is important, and profitable, to be able to communicate clearly and effectively.

Current Berkshire stock prices:

Berkshire Portfolio

Class B: [BRK.B 79.51 -0.25 (-0.31%) ]

Class A: [BRK.A 119750.0 300.00 (+0.25%) ]


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Tuesday, November 23, 2010

BLOOMBERG: Berkshire Mortgage Venture to Make $200 Million in Loans in CMBS Strategy

Berkadia Commercial Mortgage LLC, the servicer backed by Berkshire Hathaway Inc., said it plans to use its own capital to fund a least $200 million in loans to be securitized and sold to investors.

The fixed-rate loans, aimed at inclusion in commercial mortgage-backed securities, will be available at the beginning of 2011, the Horsham, Pennsylvania-based company said today in a statement. The program, which will focus on mortgages of $5 million to $25 million, will help Berkadia win business from brokers that don’t issue loans with their own capital, Senior Vice President Joseph Franzetti said in an interview.

“It’s going to make us much more competitive with other mortgage bankers,” said Franzetti, who will manage the program. “If you have the ability to provide capital to borrowers I think it makes you a better place to go.”

Berkshire, led by Chief Executive Officer Warren Buffett, 80, and Leucadia National Corp. created Berkadia from the mortgage-lending business they bought last year from bankrupt Capmark Financial Group Inc. Berkadia earns income by servicing $215 billion in mortgages. Its team of about 100 mortgage bankers also matches borrowers with sources of capital outside the company, said Joyce Patterson, a spokeswoman for Berkadia.

Demand for financing may increase as existing debt matures. CMBS sales may jump to $25 billion to $41 billion in 2011 from about $8.2 billion this year, according to a Citigroup Inc. report. Issuance tumbled 95 percent to $11.2 billion in 2008 from a record $234 billion in 2007 as the credit crisis sapped demand.

Berkadia was granted a 50 percent increase in its secured credit facility as it seeks to expand its servicing and loan- origination businesses, the company said in a Nov. 5 filing. Omaha, Nebraska-based Berkshire and New York-based Leucadia increased the line to $1.5 billion.

The company will seek to make loans on offices, retail buildings, warehouses and apartments, Franzetti said.

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Friday, November 19, 2010

CNBC: Warren Buffett to Receive Nation's Highest Civilian Honor

Published: Wednesday, 17 Nov 2010 | 5:43 PM ET
By: Alex Crippen
Executive Producer

Presidential Medal of Freedom

Warren Buffett will receive the nation's highest civilian honor at a White House ceremony early next year. President Obama named Buffett today as one of 15 recipients of the 2010 Presidential Medal of Freedom.

According to a White House news release this afternoon, the Medal of Freedom is "presented to individuals who have made especially meritorious contributions to the security or national interests of the United States, to world peace, or to cultural or other significant public or private endeavors."

The release calls Buffett an "American investor, industrialist, and philanthropist" who is often referred to as "legendary."

It notes that Buffett has pledged to give 99 percent of his net worth to philanthropic endeavors and cites his co-founding (with Bill Gates) of The Giving Pledge, "an organization that encourages wealthy Americans to devote at least 50 percent of their net worth to philanthropy."

Among the other recipients: President George H.W. Bush, German Chancellor Angela Merkel, Congressman John Lewis, and Baseball Hall of Famer Stan "The Man" Musial.

Current Berkshire stock prices:

Berkshire Portfolio

Class B: [BRK.B 79.53 --- UNCH (0) ]

Class A: [BRK.A 119310.0 --- UNCH (0) ]


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The Intelligent Investor: The Definitive Book on Value Investing. A                     Book of Practical Counsel (Revised Edition)The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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CNBC: Warren Buffett's Letter to Uncle Sam


Published: Wednesday, 17 Nov 2010 | 6:03 AM ET

By: Warren Buffett
The New York Times

Dear Uncle Sam,

My mother told me to send thank-you notes promptly. I’ve been remiss.

Let me remind you why I’m writing. Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G., the world’s most famous insurer, was at death’s door.

Warren Buffett
Getty Images
Warren Buffett

Many of our largest industrial companies, dependent on commercial paper financing that had disappeared, were weeks away from exhausting their cash resources. Indeed, all of corporate America’s dominoes were lined up, ready to topple at lightning speed. My own company, Berkshire Hathaway

Berkshire Hathaway Inc Class A Stock
BRK'A

119310.00 -729.00 -0.61%
NYSE
[BRK'A 119310.00 -729.00 (-0.61%) ], might have been the last to fall, but that distinction provided little solace.

Nor was it just business that was in peril: 300 million Americans were in the domino line as well. Just days before, the jobs, income, 401(k)’s and money-market funds of these citizens had seemed secure. Then, virtually overnight, everything began to turn into pumpkins and mice. There was no hiding place. A destructive economic force unlike any seen for generations had been unleashed.

Only one counterforce was available, and that was you, Uncle Sam. Yes, you are often clumsy, even inept. But when businesses and people worldwide race to get liquid, you are the only party with the resources to take the other side of the transaction. And when our citizens are losing trust by the hour in institutions they once revered, only you can restore calm.

When the crisis struck, I felt you would understand the role you had to play. But you’ve never been known for speed, and in a meltdown minutes matter. I worried whether the barrage of shattering surprises would disorient you. You would have to improvise solutions on the run, stretch legal boundaries and avoid slowdowns, like Congressional hearings and studies. You would also need to get turf-conscious departments to work together in mounting your counterattack. The challenge was huge, and many people thought you were not up to it.

Well, Uncle Sam, you delivered. People will second-guess your specific decisions; you can always count on that. But just as there is a fog of war, there is a fog of panic — and, overall, your actions were remarkably effective.

I don’t know precisely how you orchestrated these. But I did have a pretty good seat as events unfolded, and I would like to commend a few of your troops. In the darkest of days, Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch. And though I never voted for George W. Bush, I give him great credit for leading, even as Congress postured and squabbled.

You have been criticized, Uncle Sam, for some of the earlier decisions that got us in this mess — most prominently, for not battling the rot building up in the housing market. But then few of your critics saw matters clearly either. In truth, almost all of the country became possessed by the idea that home prices could never fall significantly.

That was a mass delusion, reinforced by rapidly rising prices that discredited the few skeptics who warned of trouble. Delusions, whether about tulips or Internet stocks, produce bubbles. And when bubbles pop, they can generate waves of trouble that hit shores far from their origin. This bubble was a doozy and its pop was felt around the world.

So, again, Uncle Sam, thanks to you and your aides. Often you are wasteful, and sometimes you are bullying. On occasion, you are downright maddening. But in this extraordinary emergency, you came through — and the world would look far different now if you had not.

Your grateful nephew,

Warren

- Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

This story originally appeared in the The New York Times

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Warren Buffett's Warning on CNBC: Fed Easing Creates 'Dangers' for Confidence in Dollar

Published: Wednesday, 17 Nov 2010 | 12:11 PM ET
By: Alex Crippen
Executive Producer

Warren Buffett has written a 'Thank You' note to 'Uncle Sam' for preventing a catastrophic economic meltdown in September of 2008, but he's not as enthusiastic about what the Federal Reserve is doing right now to boost the economy.

In a live telephone interview on CNBC's Squawk Box this morning following up on his New York Times op-ed, Buffett essentially warned that the Fed's $600 billion quantitative easing program probably won't help the economy very much, but could undermine confidence in the U.S. dollar.

In any case, he says, the government is already doing a lot to stimulate the economy simply by spending more than it takes in as revenue.

Here's the exchange from this morning:

JOE KERNEN: What about — you love Bernanke. (Buffett laughs.) No, you've commended him in the past. You thought he was doing a great job. I'm wondering whether you — that some of the bloom is off the rose? I'm not trying to put words in your mouth. What about QE2? Where do you come down on whether that's necessary at this point?

WARREN BUFFETT: I do think Ben Bernanke — I think he was a huge hero of September, 2008. I don't get very enthused when central bankers start targeting higher inflation. And I don't think the impact will be huge from it, and I think it opens up certain dangers in terms of people worrying about the United States government printing money.

We, incidentally, we have a huge fiscal stimulus going on now, Joe. Fiscal stimulus comes about when the government spends considerably more than it's taking in. We are spending 8 or 9 percent of GDP more than we're taking in, and that's a stimulus that hasn't occurred since World War II.

It doesn't have to be labeled a stimulus bill. When the government sends out a check and he doesn't raise the full amount of that check, that is stimulus, whether it's in a stimulus bill or whether it's in a hundred other bills. So we've got a lot of stimulus going on.

People like to think that government can solve everything overnight. It can't do it with fiscal and monetary policy.

BECKY QUICK: Were the critics right overseas? Ahead of the G20 we heard from China, from Germany, from Brazil, all of them criticizing what the Fed was doing. And then this week we heard from a number of Republican lawmakers and from economics professors who are very concerned about it too.

BUFFETT: Yeah. We'll see how it plays out. I would not want to bet my chips on the fact that the government monetizing 600 billion of debt is going to make a big change.

BECKY: But is it dangerous?

BUFFETT: I think — I think at some point it starts — I think it has a psychological effect on how people think about the future of money if they think the government will monetize debt. And, I — once unleashed that can be a little bit difficult to put back in the bottle.

Current Berkshire stock prices:

Berkshire Portfolio

Class B: [BRK.B 79.53 --- UNCH (0) ]

Class A: [BRK.A 119310.0 --- UNCH (0) ]


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Download the 1977 - 2009 Warren Buffett Letter's to Berkshire Hathaway Shareholders

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The Intelligent Investor: The Definitive Book on Value Investing. A                     Book of Practical Counsel (Revised Edition)The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $10.10
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Thursday, November 18, 2010

CNBC: Big Changes for Berkshire Hathaway Portfolio in Third Quarter

By: Alex Crippen
Executive Producer

Warren Buffett's Berkshire Hathaway was busy in the third quarter.

The company's quarterly stock portfolio filing with the SEC shows that during the three months ending September 30, Berkshire added a new stake in Bank of New York Mellon.

Berkshire reports holding almost two million shares of the company, worth about $55 million at today's closing price of just under $28/share. Current price:[BK 27.32 -0.37 (-1.34%) ]

ELIMINATED HOLDINGS

Berkshire's filing shows no holdings for five companies that had been listed in the Q2 filing. They are:

Many, or all, of the eliminated holdings may have been purchased by Lou Simpson, the GEICO investment manager who is retiring at the end of the year.

Proceeds may be used to provide incoming Todd Combs with the $2 to $3 billion he'll be managing, at least to start.

REDUCED HOLDINGS

The filing also shows reductions in holdings for:

  • Comcast: stake cut by 98% to 186,897 shares from 12,000,000 shares.
    11,813,103 shares, now worth $228.3 million, sold. (General Electric and Comcast have an agreement to create a joint venture that will include CNBC. It awaits government approval.)
    [CMCSK 19.24 0.13 (+0.68%) ]

  • Ingersoll Rand: stake cut by 89% to 636,600 shares from 5,636,600 shares.
    5,000,000 shares, now worth $211 million, sold.
    [IR 40.89 -0.53 (-1.28%) ]

  • Nike: stake cut by 52% to 3,642,929 shares from 7,641,000 shares.
    3,998,071 shares, now worth $327 million, sold.
    [NKE 81.39 0.88 (+1.09%) ]

  • Nalco Holding: stake cut by 33% to 6,142,300 shares from 9,150,000 shares.
    3,007,700 shares, now worth $89.7 million, sold.
    [NLC 29.04 -0.41 (-1.39%) ]

  • Fiserv: stake cut by 11% to 3,910,800 shares from 4,400,000 shares.
    489,200 shares, now worth $27.1 million, sold.
    [FISV 54.33 -0.06 (-0.11%) ]

  • Moody's: stake cut by 6% to 28,873,756 shares from 30,783,876 shares.
    1,910,120 shares, now worth $53.3 million, sold.
    [MCO 26.80 -0.35 (-1.29%) ]

  • Procter & Gamble: stake cut by 2% to 76,766,036 shares from 78,071,036 shares.
    1,305,000 shares, now worth $83.9 million, sold.
    [PG 63.27 -0.18 (-0.28%) ]

INCREASED HOLDINGS

There was small increases for:

  • Wells Fargo: stake increased by 5% to 336,408,845 shares from 320,088,385 shares.
    16,320,460 shares, now worth $451.4 million, bought.
    [WFC 26.86 -0.33 (-1.21%) ]

  • Johnson and Johnson: stake increased by 3% to 42,624,563 shares from 41,319,563 shares.
    1,305,000 shares, now worth $83.8 million, bought.
    [JNJ 63.06 -0.08 (-0.13%) ]

Our Berkshire Hathaway Portfolio Tracker has been updated to include the latest numbers.

Current Berkshire stock prices:

Class B: [BRK.B 79.53 --- UNCH (0) ]

Class A: [BRK.A 119310.0 --- UNCH (0) ]


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From Amazon

The Intelligent Investor: The Definitive Book on Value Investing. A                     Book of Practical Counsel (Revised Edition)The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $10.10
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