Courtesy of John Nyaradi
According to Reuters, the U.S. Securities and Exchange Commission questioned Warren Buffett’s Berkshire Hathaway in the second quarter on why it was not writing down large losses on shares in Kraft (KFT.N) and US Bancorp (USB.N).
In a detailed response, Berkshire Chief Financial Officer Marc Hamburg said most of the losses with more than 12 months’ duration as of December 31 were concentrated in Kraft and U.S. Bancorp, shares it had acquired in 2006 and 2007.
Hamburg said that as of December 31, Berkshire determined both companies had enough earnings potential that their share prices would eventually exceed the original cost of the stock.
If this is true, the implication is the Buffett and Co are submitting fake $ valuations to the SEC which gives a higher net worth than what the assets would reasonably sell for today, or at any point in years.
What else is Berkshire hiding in its books if the SEC was able sniff this out? http://www.reuters.com/article/idUSTRE69O2S820101025
