Warren Buffett: Read My Lips, Raise My Taxes

Yesterday famed billionaire Warren Buffet spoke with ABC News' Christiane Amanpou and said that he supports letting the Bush tax cuts expire for wealthy taxpayers.

"If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further," Buffett said. "But I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we've ever had it." While about 40 other super-rich taxpayers have jumped on this “tax me, please!” bandwagon, I’m sure there are dozens more rich folk who would just as soon pay less in taxes.

Check out a video of Buffet's interview below, or click here for the full article on ABC News.com.

Jay-Z, Buffett and Forbes on Success and Giving Back

From Forbes.com:

Neither Jay-Z nor Buffett would admit to being nervous. It was their behavior that gave them away. Jay-Z the wordsmith said little at first but stared at Buffett intently, taking in every word. He ordered what Buffett ordered: a strawberry malt, thin. He barely touched it. Buffett never stopped talking, telling childhood stories about stealing syrup from nickel Coke machines and peeling off zingers. "When you see me reach for the check," he told the photographer, "you'll know I'm posing." They warmed up quickly and were soon laughing every minute or so. As they left Jay-Z headed over toward his Escalade. Warren called him back, "I'll give you a lift. Sit up in the front with me. My rates are very competitive."

Steve Forbes: You two are unique. In very different spheres you've each reached a level of success that's almost legendary. What did you do that made you different?

Warren Buffett: Well, I was lucky that I got started early. My dad happened to be in the investment business, so I would go down to his office on Saturdays. At age 7 or so I started reading these books that were around the place. I knew what I wanted to do early. That's a huge advantage.

You don't need a lot of brains in this business. I've always said if you've got an IQ of 160, give away 30 points to somebody else, because you don't need it in investments. What you need is emotional stability. You have to be able to think independently, and when you come to a conclusion you have to really not care what other people say. Just follow the facts and your reasoning. That's tough for a lot of people. But that part, I was just lucky with. I was born that way.

Read more here

Warren Buffett: "We're Still In a Recession"

Despite a study earlier in the week asserting the recession has ended, famed investor Warren Buffet claims that we are still in a recession. He admits that the economy will recover eventually but that it is going to take a few more years.

MSN reports

On Monday, the National Bureau of Economic Research said the world's largest economy ended an 18-month recession in June 2009, but cautioned that its assessment did not mean normal activity had resumed.

Buffett said he defines a recession differently from the NBER, saying it ends when real per capita gross domestic product returns to its pre-downturn level.

President Barack Obama said on Monday that economic weakness is "still very real" for the millions of Americans who are out of work, have seen the value of their homes fall, or are mired in debt.

Buffett, 80, runs Berkshire Hathaway Inc, which has roughly 80 operating businesses. "A great majority" of these businesses are "coming back slowly," he said.

Berkshire's operations cover a broad swath of the economy, including the Burlington Northern Santa Fe railroad, Dairy Queen ice cream, Geico auto insurance, and luxury jewelers such as Borsheim's.

Shipments at Burlington Northern are "61 percent of the way back," Buffett said. "Our carpet business, our brick business, our insulation business, they're not back 61 percent, but they are moving back."

Read more here

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Buffett’s Wager on Economy May Give Boost for Obama Policies

For years famed investor Warren Buffet has been in the financial spotlight for his high-risk, and often rewarding financial decisions. Therefore, his recent move take over of Burlington Northern Santa Fe Corp., a railroad near his home, has gotten people talking. Buffet even called the decision “an all-in wager on the economic future of the United States.”

Bloomberg.com wrote an article on how Buffet’s very noticed move could give a boost to Obama’s economic policy. You can find a section of their story below, or read the full text here.

Warren Buffett’s takeover of Burlington Northern Santa Fe Corp. today is a $26 billion bet on President Barack Obama’s economic policies at a time when the administration may need the help.

Buffett called the purchase of the railroad by his Berkshire Hathaway Inc. “an all-in wager on the economic future of the United States.” He’s making it at a time when discontent has grown in the U.S. about jobs and growth.

Public approval of Obama’s handling of the economy has slipped to 46 percent in an Oct. 30-Nov. 1 CNN poll from 59 percent in March.

Buffett’s comment “does seem like an endorsement of the president’s policies,” Zelizer said. Still, “most voters who would be paying attention to this statement probably already have made their minds up so it is hard to see this having a major impact today.”

Warren Buffett Says Second Stimulus Might Be Needed

It seems like almost every day there is a new story supporting a second economic stimulus program. Earlier in the week I posted an entry about an Obama advisor who was advocating one, and now financial mogul Warren Buffet has also come out announcing that a second stimulus might be necessary. The billionaire is well known for making money based on his skill to judge the state of the economy, and is often asked for his advice on anything finance related. I’ve included a snippet of a Reuters.com article on the topic but you can find the original post here.

Legendary investor Warren Buffett said in an interview aired on Thursday unemployment could hit 11 percent and a second stimulus package might be needed as the economy struggles to recover from recession.

Buffett, the billionaire founder of Berkshire Hathaway, said Americans suffered "a shock to the system" from the economic difficulties in the final quarter of last year but had started to rebound.

"We're not in a freefall, but we're not in a recovery either," he told ABC's "Good Morning America."

"We were in a freefall really in the last quarter of last year, starting in the financial markets and spreading to the economy, and we had this huge change in behavior."

Buffett, a supporter of President Barack Obama during last year's election campaign, said a second economic stimulus package might be needed. The Obama administration says it does not see a need for a second stimulus yet.

"I think a second one may well be called for. It is not a panacea. A stimulus is the right thing. You hope it doesn't get watered down," he said.

He likened the first $787 billion stimulus package passed by Congress to "half a tablet of Viagra and then having also a bunch of candy mixed in --- it doesn't have really quite the wallop."

Buffett said unemployment had "a ways to go" and he would not be surprised to see it hit 11 percent before it recovers.

"I'm not predicting it but no that would not surprise me," he said of the 11 percent figure.

"We're going to come out of this better than ever, the best days of America lie ahead but not next week or next month," he said.

Buffett: Better To Buy Equities Over Time

From the Wall Street Journal.com:

Warren Buffett, one of the world's richest men, reiterated his support for the controversial estate tax, which levies a tax of up to 55% on the estates of the wealthy.

He called the tax a "good way to collect money" in a time when the government needs to collect more in taxes.

Buffett of Berkshire Hathaway Inc. made the comments Monday in an interview with Liz Claman that was aired on Fox Business Network.

Buffett estimated the estate tax raises about $25 billion a year, which amounts to about 1% of the revenue of the country.

"If you don't get it from estate tax," it would need to be replaced he said, and he said he has seen no proposal for making up the money.

Buffett is donating most of his own holdings to a charitable foundation run by Bill Gates, chairman of Microsoft Corp., who also spoke during the interview in support of the tax. Buffett also advised investors to invest in equities regularly over time rather than try to time the market.

"This is a poor time to buy government bonds," he said.

Buffett also said that commercial real estate will continue to fall in value. Values "will hit the skids big time," he said.

He responded to criticism of credit rating agencies by saying investors should not rely on ratings to make investing decisions. Berkshire owns about 20% of the company that owns Moody's Investors Service. The agencies have been criticized in the past year for giving good ratings to securities that ended up posting big losses.

During Berkshire Hathaway's annual meeting over the weekend, Buffett said the company had earned $1.7 billion in operating earnings for the first quarter, down 10% from $1.9 billion a year earlier. The company will report full earnings on Friday.

Buffett also said some of the derivatives contracts the company has written in recent years will probably lose money.

Buffett has criticized derivatives contracts over the years but revealed that he more than doubled the number of derivatives contracts he held in 2008 to 251 because the contracts were "mispriced."

At the end of 2008, Berkshire Hathaway had received payments of $8.1 billion on the contracts.

Death Tax Conflict of Interests

The death tax, also known as the Federal Estate Tax, has been getting a lot of media attention lately. For those unfamiliar with the death tax, it is essentially a tax levied on the transfer of a taxable estate usually following a person’s death. As part of President’s 2001 tax cuts, the death tax was set to slowly die off and eventually be completely removed by December 31, 2010. However, unless the next President renews Bush’s tax cuts the prior law will reassert itself the next day, January 1st, 2011. Therefore theoretically some one who dies in December 2010 would pay no estate taxes whatsoever, while some one who passes away 24 hours later could have as much as a 55% tax levied on their estate.

Warren Buffet has been one of the strongest supporters of continuing the estate tax, even appearing before the Senate. Which seems odd considering Buffet is worth an estimated $52 billion, meaning when he dies his estate will be hit with some sort of estate tax. So why would he support the estate tax? The truth lies in Buffet’s business dealings. He has major investments in companies that sell life insurance and directly profits from the continued estate taxes.

When people want to avoid loosing large portions of their estate to the death tax, they often put their wealth into life insurance policies. Therefore once they pass the designated heirs are paid the life insurance funds without having to pay any taxes. Therefore Mr. Buffet has a huge conflict of interest and his insurance companies stand to directly profit from a continued death tax. I hope that the Senate will consider this information the next time Mr. Buffet testifies.