Posts Tagged ‘Berkshire Hathaway’

Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway

Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway

Courtesy of Mish 

It’s hard to know exactly the precise words to describe the arrogance and unmitigated effrontery of Charles Munger, the billionaire vice chairman of Berkshire Hathaway, who today rattled off an insane barrage of insensitive comments regarding the bailouts.

Please consider Munger Says ‘Thank God’ Bailouts Came Before Handouts

Charles Munger, the billionaire vice chairman of Berkshire Hathaway Inc., defended the U.S. financial-company rescues of 2008 and told students that people in economic distress should “suck it in and cope.”

“You should thank God” for bank bailouts, Munger said in a discussion at the University of Michigan on Sept. 14, according to a video posted on the Internet. “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

“Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens,” Munger said. “So I think when you have troubles like that you shouldn’t be bitching about a little bailout. You should have been thinking it should have been bigger.”

Germany was unable to stabilize its financial system in the 1920s, and, Munger said, “We ended up with Adolf Hitler.”

Nauseating Insensitivity

If that kind of arrogant insensitivity does not make you nauseous, what will?

It’s hard to know where to start, but let’s start with a blatant lie. This was no "little bailout", this was a multitrillion bailout, not just from the Fed and Congress but from every central bank in the world.

One of the beneficiaries of course was billionaire Charles Munger. Middle class America was the loser.

Displays of Ignorance

The biggest display of ignorance in Munger’s rant is his comparison of the current financial mess to Weimar Germany. Forgive me for asking but pray tell in what kind of fairytale fantasyland is the current deflationary credit bust remotely related to the war reparations imposed on Germany after the end of World War I that gave rise to Hitler?

Need for a Culture Change

The ridiculous Weimar comparison was not the Munger’s most galling statement, however.

This is: “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them…
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Surprise! and Something Weird is Going On

Something Weird Is Going On With The Financials And Berkshire Hathaway

Courtesy of Joe Weisenthal at Clusterstock 

The big story of the day in the world of financial stocks is that they’re all getting hammered, and the idea is that it might have something to do with the fact that strong derivatives reform seems to be coming down the pike.

Now there was a report earlier in the day that perhaps Berkshire Hathaway might somehow get a fat exemption, but now according to WSJ that’s not the case. The Democrats have killed that provision.

So you’d think that Berkshire might be getting pelted, but it’s not.

chartIt’s actually up about 0.4%.

That’s not a huge move, except in comparison to other financials, in which case it’s significant?

So what’s going on?

The markets are probably figuring that the hit to Berkshire will be one-timey in nature — basically that it will cause the company to post collateral, but that derivatives aren’t central to how it makes money.

With the financial firms getting whacked, strong regulations may go at the heart of what they do, and actually hurt future profitability, thus the falling shares and blowout in CDS.

 

Previously today:

Surprise! Buffett Set To Get A Big Fat Gift In Financial Regulation Bill

Courtesy of Joe Weisenthal 

Warren BuffettBerkshire Hathaway (BRK) CEO Warren Buffett has generally maintained a sterling reputation (as far as financiers go), but longtime observers know that he’s as good as any at taking advantage of public policy to suit his needs.

(Ever wondered why he loves the estate tax so…
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The Big Apple

The Big Apple

Apple Introduces Video iPod Nano

Courtesy of Joshua M Brown, The Reformed Broker 

Apple ($AAPL) now has a market cap of around $215 billion.  Incredible, and it couldn’t have happened to a more deserving company – they’ve changed the world.

More astonishing than the number itself is the list of companies whose market caps have been eclipsed by the tech king…

Apple is now bigger than Berkshire Hathaway, General Electric, Proctor & Gamble, Johnson & Johnson, Google and JPMorgan Chase

The only companies larger right now are Microsoft, ExxonMobil and Wal-Mart.

One other thing to consider – it all started with a device shaped like a deck of cards that was created to compete with the Sony Walkman - The iPod.  Think of how many millions of devices sold as a direct consequence of the triumph and mass adoption of iTunes and the iPod.  The dollar value created on the back of that product pairing is absolutely mindboggling.

For the details of who stands where by market cap, click the link below.

Source:

The Most Valuable Companies in America (Fortune)


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Warren Buffett & Bill Ackman Interviews

Warren Buffett & Bill Ackman Interviews

Courtesy of Market Folly

Warren Buffett of Berkshire Hathaway and Bill Ackman of hedge fund Pershing Square recently sat down with CNBC in two separate interviews. While the two men shared a talking point in the recent Kraft deal (they are both large shareholders), we thought it was interesting to hear their recent takes on the economy and markets.

In his interview, hedge fund manager Bill Ackman says that you are buying Kraft (KFT) at less than 14 times earnings and get a 4% dividend yield. He liked the fact that Kraft used a limited amount of shares (and used more cash) in the deal and in the end paid a fair price to get the deal done. As we covered earlier, Kraft is now Pershing Square’s largest holding.

Ackman argues that Kraft’s purchase of confectioner Cadbury now makes Kraft a more ‘defensive’ play. Obviously it will take a bit of time to integrate the two businesses, but the Pershing Square hedge fund manager points out that Kraft has done it numerous times before with other transactions.

Embedded below is Ackman’s video interview where he outlines his thoughts on the Kraft and Cadbury deal. RSS & Email readers will want to come to the site to view this post as there are a lot of videos included:


 

And here is part two of Ackman’s video interview where he talks about some of his other portfolio activity and his take on the economy:

Moving next to Warren Buffett, we see that he shares a different opinion on the matter of the Kraft and Cadbury deal. Below he gives his thoughts on Wells Fargo (WFC), the economy, Ben Bernanke, and much more.

 

We’ve followed these two gentlemen extensively before and have covered numerous resources such as Warren Buffett’s recommended reading list, Pershing Square’s research on General Growth Properties (GGWPQ). For more insight from these two big time investors, head to our resources on Warren Buffett as well as our resources on Bill Ackman.

Market Folly

 


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Breaking: Buffett to Acquire the Rest of Burlington Northern Railroad

Breaking: Buffett to Acquire the Rest of Burlington Northern Railroad

Buffett Railroad

image from Panoramio

It’s not for me to tell you what Warren Buffett must see ahead for transportation, energy and economic activity, you must draw your own inferences.  What I will say is that this is Berkshire Hathaway’s largest-ever purchase so you may want to come up with some kind of thesis to encompass it.

From MarketWatch:

NEW YORK (MarketWatch) — Warren Buffett’s Berkshire Hathaway on Tuesday said it is paying $100 a share to acquire railroad firm Burlington Northern Santa Fe. It will also take on $10 billion of Burlington Northern debt, valuing the total deal at $44 billion. Berkshire said the deal is its biggest acquisition ever. “Our country’s future prosperity depends on its having an efficient and well-maintained rail system,” Warren Buffett said in a press release. “Conversely, America must grow and prosper for railroads to do well. He added, “Most important of all, however, it’s an all-in wager on the economic future of the United States. I love these bets.”

Source:

Buffett Buying BNI (MarketWatch)

 


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Obama Drops The Hammer On Credit Default Swaps Traders

Obama Drops The Hammer On Credit Default Swaps Traders

Courtesy of Jay Yarow at Clusterstock

obama biden whispering tbiThe Obama administration has sent its plan to regulate those financial weapons of mass destruction, credit default swaps, to Congress:

WASHINGTON (AP) — The Obama administration on Tuesday sent Congress legislation seeking to impose broad new oversight on derivatives, the complex financial instruments blamed for hastening the global economic crisis.

The plan is designed to bring transparency to, and prevent manipulation in, a $600 trillion unregulated worldwide market. Credit default swaps, a form of insurance against loan defaults, account for about $60 trillion of that market. The collapse of the swaps brought the downfall of Wall Street banking house Lehman Brothers Holdings Inc. and nearly toppled American International Group Inc. last fall, prompting the government to support the insurance conglomerate with about $180 billion.

In a point long awaited by the financial industry, the plan defines types of derivatives broadly in a way it says will be ”capable of evolving with the markets.”

The plan sent to Capitol Hill was the final section of the administration’s sweeping legislative proposal for overhauling the U.S. financial rule book to help avert a repeat of the meltdown touched off last year. It capped a series of measures rolled out in recent weeks by the Treasury Department.

Under the proposal, the big investment banks that trade the derivatives would be subject to requirements for holding capital reserves against risk and other rules. A new network of clearinghouses would be established to provide transparency for trades in credit default swaps and other derivatives. All so-called ”standardized” derivatives would be required to go through clearinghouses and to be traded on regulated exchanges or electronic trading systems.

Customized derivative products, by contrast, are designed for specific users in a transaction and would remain largely unregulated — a gap that some critics fear could allow abuses.

The plan defines standardized derivatives broadly. An over-the-counter derivative that is accepted by an official clearinghouse would be presumed to be standardized. In addition, the Securities and Exchange Commission and the Commodity Futures Trading Commission would get authority to prevent attempts by market players to falsely portray derivatives as customized to skirt the oversight of clearinghouses and exchanges.

CFTC Chairman Gary Gensler recently estimated that about 80 percent of derivatives…
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Zero Hedge

Ex-Spy Chief Admits Role In 'Deep State' Intelligence War On Trump

Courtesy of ZeroHedge. View original post here.

An ex-spy chief who spoke out publicly against Trump while inspiring other career intelligence figures to follow suit has admitted his leading role in the intelligence community waging political war against the president, describing his actions as something he didn't "fully think through". In a surprisingly frank interview, the CIA's Michael Morell - who was longtime Deputy Director and former Acting Director of the nation's most powerful intelligence agency - said that it wasn't a great idea to leak against and bash a new president...



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Insider Scoop

7 Stocks To Watch For December 12, 2017

Courtesy of Benzinga.

Some of the stocks that may grab investor focus today are:

  • Casey's General Stores Inc (NASDAQ: CASY) reported weaker-than-expected earnings for its second quarter. Casey's shares dropped 3.62 percent to $116.86 in the after-hours trading session.
  • KMG Chemicals, Inc. (NYSE: KMG) reported upbeat results for its first quarter on Monday. KMG Che...


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Phil's Favorites

Life expectancy in Britain has fallen so much that a million years of life could disappear by 2058 - why?

 

Life expectancy in Britain has fallen so much that a million years of life could disappear by 2058 – why?

Courtesy of Danny DorlingUniversity of Oxford and Stuart Gietel-BastenHong Kong University of Science and Technology

via shutterstock.com

Buried deep in a note towards the end of a recent bulletin published by the British government’s statistical agency was a startling revelation. On average, people in the UK are now projected to live ...



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Digital Currencies

No, Bitcoin Won't Boil The Oceans

Courtesy of ZeroHedge. View original post here.

Authored by Elaine Ou via Bloomberg.com,

Concerns about the cryptocurrency's energy use are overblown...

While much of the world marvels at bitcoin’s meteoric rise, another part is focused on an environmental byproduct:

The sheer amount of electricity that crypto-currencies use.

By some estimates, bitcoin’s consumption ...



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Chart School

Weekly Market Recap Dec 10, 2017

Courtesy of Blain.

Before we talk about the stodgy ole stock market, anyone see that Bitcoin?  $11K last week – $16K this week…. and as I write this bitcoin futures are up over $18K. Just another week in the life…. (here is what you need to know about bitcoin futures)

Back to your regularly scheduled program… the S&P 500 rested a bit while a small correction rolled through the massive winners of 2017 in mega cap tech land, but in the end all was well again by Friday.

“The Nasdaq Composite Index was getting a little frothy, so it&...



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Biotech

DNA has gone digital - what could possibly go wrong?

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

DNA has gone digital – what could possibly go wrong?

Courtesy of Jenna E. GallegosColorado State University and Jean PeccoudColorado State University

Modern advances come with new liabilities. Sergey ...



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ValueWalk

Tax Bill May Spark Exodus From High-Tax States

Courtesy of FinancialSense.com via ValueWalk.com

The following is a summary of our recent podcast, “Exodus – The Major Wealth Migration,” which can be listened to on our site here on on iTunes here.

It’s looking increasingl...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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