Warren Buffett has been on TV today stating his support for Goldman Sachs and Lloyd Blankfein following the SEC's civil fraud charges against Goldman Sachs.
To CNBC and Good Morning America, Mr Buffett said that there is nothing unique about Goldman's Abacus transaction. "When there's a mass delusion, you can say everyone is to blame," Buffett said. "There's no villain." That is Warren Buffett's assessment we are not sure that it is everyone else's.
Given that Warren Buffett has a stake in Goldman Sachs, some people might think that he is merely talking his book, but Buffett says he is "talking his belief" and the fact that he has $5 bn invested in Goldman Sachs proves that he has faith in the management and in the company itself. He said he'd rather have Lloyd Blankfein running the firm than anyone else but he does have $5 bn worth of options on Goldman Sachs shares at $115 each. Goldman’s stock is at $148 at the moment, so he is around 25% up but down from the $184 before the SEC announced its charges.
I've got to say Mr Buffett blaming everyone for making mistakes is a bit disingenuous, "the whole country was involved in a fantasy" he says but not everyone is as financially savvy as the millionaires on Wall Street and not everyone was encouraging people to take out short-term, no down-payment mortgages and then hiking the interest rates so that they couldn't meet the payments. For an alternative view on Warren Buffet and his investment in Goldmans Sachs check out - Buffett Talks His Book on Goldman
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