It seems that all eyes are on billionaire Warren Buffett's moves in the market. And why not? He is the Oracle of Omaha after all. So Buffett took to the airwaves Wednesday morning and spoke in length on
CNBC's "Squawk Box" -- with his favorite cable news host, Becky Quick -- about his $5 billion investment in Goldman Sachs Group Inc. and the current economy.
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Buffett said he has confidence in Goldman Sachs and the Congress'
bailout plan. He said he believes that the government will wind up making money on its $700 billion bailout plan in the long run, and action is needed. "It's a vote of confidence in the Congress to do the
right thing. I am betting on the Congress ... if they went home on Friday
and there was doubt that they were going to do something on Monday I
think you would see things you don't want to see in the economy," he
said. "This is an economic Pearl Harbor we are going through. ... They
have the interest of the country at heart, and I think they will do the
right thing."
Buffett said he has renewed interest in
investing in investment banks and was actually called to invest in
Lehman Brothers Holdings Inc.'s first round in April or March. Why did Buffett invest in
Goldman Sachs and not Lehman Brothers? Buffett said he thought that
Lehman was unrealistic in marking positions in Wall Street, but
Goldman's marks are realistic.
When Quick made light of Berkshire Hathaway Inc.'s
investments of $24 billion in the last nine months, Buffett said,
"It's nice to have a lot of money, but you don't want to keep it around forever. I prefer buying things. Otherwise it's a little like saving up sex for your old age. (Laughter.) At some point, you've got to use it. (Laughter.)"
Buffett
also spoke about what lessons people and businesses should take from
the crisis on Wall Street. "In the short run, the stock market is a
voting machine and long run is a weighing
machine. Five years from now and 10 years from now we will see that we
could have made some extraordinary buys. I do know that the American
economy will do well, and that people that own a piece of it will do
well. But they shouldn't do it on leverage, and that's what people have
learned in this period," he said.
Buffett also confirmed
Berkshire Hathaway's interest in American International Group Inc. and
said he has looked at the books. "I think no one knew as much as they
needed to know including their management. You can do a lot of damage
in Wall Street with a pen and a piece of paper. ... Most of those units
will be for sale over the next year or two, and we would be interested
in a couple of them," said Buffett. - Maria Woehr
