As many of my friends know I have been an unabashed fan of Warren Buffett and his approach to business and investing since business school days. I consider Buffett's letters to shareholders of Berkshire Hathaway as required reading for anyone trying to understand our economy and the market.
Earlier this week, Buffett gave an extended interview to CNBC on the state of the economy, including taking a number of questions from viewers. The CNBC website has both a transcript and video clips (In 7 parts). A couple of the key quotes regarding the current banking crisis that leaped out to me included:
> "No depositor of an insured deposit has ever lost a penny since 1934....Thirty-six hundred times (since 1934) the FDIC has come in....It hasn't cost the taxpayer one dime, no depositor has lost one dime."
> "...we have a system in place that can take care of the banks, and most of the banks are in pretty good shape."
> "...the Fed of New York, for example, had 9 billion of deposits from banks throughout the country a year ago. Now they have 450 billion....That is a huge change in behavior by banks."
One final Buffet thought for today from a NYTimes OpEd last October:
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. Let me be clear on one point: I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month--or a year--from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over. -- Warren Buffett Op-Ed Oct. 17, 2008
