Warren Buffett to FBN: "Shorting FNM/FRE Like Jumping Off a Pancake"

Dear Liz: As you well know television is a visual medium, and though your writtings and insightes are very well done,its your physical presence in the interviews, that makes this site worth checking out daily.

Congress (Dems & Repubs)is responsible for passing laws and spending money. THEY DRIVE OUR FUTURE. Presidents (Dems & Repubs) are responsible for executing our government (Executives). THEY DRIVE OUR PRESENT. Courts (bi-Partisan???) are responsible for reviewing our past (Court cases). THEY DRIVE OUR PAST. Now let's look at our current situation. Which branch of government has done the worst job with their "stewardship" of America? THE COURTS? (not so much) THE PRESIDENTS? (maybe some) THE CONGRESS? (they have been the most irresponsible) And the media has also taken a public trust and made things worse by not reporting the lack of accountability of our lawmakers. When will the Warren Buffets of America hold the Congress to account? MY SOLUTION: Change your party affiliation to Independent and stop the flow of lobby and party money. That no-cost action alone will send panic to the corruption in our political system. Vote for who you want regardless of party affiliation. Demand that your congressman commit to the following: 1. No congressional pensions. (Male 'em save it like we do!) 2. Self-inflicted term limits. 3. No congressional health care (make 'em buy it like we do!) 4. Full transparency of their finances: personal, congressional, and US Budget (with all of those published on-line for all to see including campaign contributions) IT'S TIME TO CLEAN HOUSE. IT'S TIME TO GET PUBLIC SERVANTS IN AND CAREER POLITICIANS OUT. And one more thing. Every reporter, every media talking head need to be held to account. We need to hold every word they say or print to full account. Each media person must have an email and web site. We need full disclosure of their party affiliation, organizations, education, experience, and previous archived articles so we, the media consumer, can decide if the person is providing "journalism” (HA!!!) or personal or political agendas! There, I feel much better!!!!!!!!!!!!!!!!!!!!! Peter Voisin Independent Voter Hendersonville, NC P.S. There are good ideas coming from Democrats, Independents, Republicans, and Libertarians. Anyone that says differently is not thinking for themselves but has been "brainwashed" somewhere along the line. The main thing here is that most folks want to arrive at the same destination ( we want our families to be safe and have opportunity without bias) but we seem to disagree on what road to travel to get there. Leaders and effective executives find the common ground first, then define the differences and roll up their sleeves and start designing solutions. That’s what our Founding Fathers did. That’s what we need to do today!!!!!!!!!!!!!!

My first job out of college was at an S&L in 1977. On my first day, all us new employees were taken behind the teller counter, the cash drawers were opened, and with tens of thousands in cash laying before us we were told two things: "This is other people's money, they expect to get it back" and "If you take it or intentionally mishandle it, you'll go to prison" . . .I've been a mortgage lender for 31 years and with every loan I originate I remember those words and where the money comes from. I hope Paulson takes the new FNM/FRE management team "behind the teller counter" for a refresher.

Frankly He's right. FNM and FRE are crashing like crazy and while they MAY stabilize eventually its not gonna happen any time soon nor are they ever gonna reach the kind of level they were at before. Secondly for those who have questioned his picks on the basis that they are down . . . LOOK AT YOUR ECONOMY its down. . . down like crazy thanks too 8 years of the bush administration, war and mismanagement of businesses. as to unstable oil prices. Oil in the states comes from the middle east (quite a portion of it anyway.) so the region is unstable and therefore prices are unstable. Also OIL IS RUNNING OUT. its not a renewable resource (theres a fixed amount) and demand is going nowhere but up that means higher and higher oil prices until eventually the world runs out of oil.

No, Warren Buffett is NOT becoming more negative as he ages. Nor has he hung on past his prime, not by a very long shot indeed. My basis for this admiringly positive answer is based in part on the fact that my first investment in his company is up 40-fold in twenty-one years (and not only has been modestly higher in the recent past, but predictably will be notably higher in the future -- it was up $2000 per share today alone). Imagine having the problem that Warren has to face as he arrives at the office in the morning: How to reinvest the river of cash flow that comes in each and every day. At a time when many companies are declining in price, markedly, this gives him the opportunity to use his vast experience to pick the very few wonderful ones as new investments for Berkshire Hathaway. No wonder he says that he tap dances to work every day. The Berkshire annual reports, freely available on line, still provide one of the best available educations in investing.

Buffett is wrong about one thing. This is not ANOTHER $200 billion in debt. This transaction does not change the government balance sheet $1.00. FNMA and Freddie are GSE's. This debt was already the government's. They simply took over ops. A little late in my book, but they finally did the right thing. The bigger question is how much did affirmative action and political correctness contribute to this problem. After all, the outgoing managment inherited the problem. They did not create it. Enough said.

Tim @ 10:17 am: It is just you!

For a business show, you guys and gals seems to always arrive late to the party. Why as a business TV Show and Web site, you are not interested, investigative and down right upfront with all these so called know-it-alls. Maybe you should read the fine print and see what it really says. Let me give you a hint, "Investors are in it for themselves and they do not care how they get the money, because either you will tell us (FBN, you know Bulls and Bears, Your World with Cavuto, Forbes on Fox) where to put it or you will tell the goverment(we the people) where to put it." Warren Buffet is rich, because he is like all those people who hit the lottery. He was there at the right time and bought. He was there at the right time and did not buy. Why if Warren is so knowledgable, there are not others like him? Well, because Warren is in it for himself and he does not care how he gets the money. Note: Do any of you, or is it just me, ask yourselves, why do all these shows tell us to stick around for the deal of a stock, then you get a bunch of blow hards killing each others picks and what do they all do... LAUGH and GIGGLE.... all the way to the bank. Get a hint FBN, start interviewing for the people who watch your show and stop smooching the back ends of all your guest. This is serious and it is getting worse. And some of you really need to cover up some of those exposed areas or ask your boss for a raise so you can buy clothing that covers up what should be private.

free markets don't fail. ultimately, it's the government that will fail.

Both these companies were federal corporations; remnants of the New Deal. Now they are fully government programs. They were both scams to begin with, and we should allow failure and liquidate them. We floated billions of dollars in bonds to pay for this. Bonds that must be insured and pay interest. This isn't just $200 billion, it can easily become $300 billion or $400 billion (the yearly cost of public education). How much is the insurance costing us on all these bonds? How much interest must be paid after 1 - 10 years? Who is buying these bonds; good citizens, allies, neutrals, or enemies? The fed must prove this is a good move. So far, it's just been rhetoric and empty words without real proof to back up their actions to rescue two massive socialist scams.

Warren is a Democrat. That's why he's so cranky all the time.

Today's anouncement on FNM was "All ...future... common and prefered stock will be eliminated" ! So; Mr. Buffet, would you by FNM or FRE : Yes or no ? Never mind describing what it would be like, because that's not the question. Nor is how you would buy ...if... you were to buy. Allthough, that makes for a good follow up question, it dodges the simple question. This just goes to show that successfull people don't help others unless there's profit in it for them !

“we’ll look back and see that this $200 billion dollar infusion into these horribly run companies will have only mortgaged the future for the next generation. Our deficit is so huge, so monstrous that we’ve now come to the point where we’re saying, “What’s another $200 billion?” $200 billion is the potential that could be infused. Total thus far is $1 billion per company with 10% payback, paid quarterly, along with 80% ownership of both companies. That's a bargain. Is the infusion in Iraq paying any dividends?

@Fargo If you look at Mr. Buffets investments I'll bet you find that most his holdings are denominated in USD. Considering that the USD is now trading on the index at around mid seventies to low eighties, down from a peak of low one-twenties just seven short years ago. What you should look at is if the P/E are still long term sustainable on his investments, weather they are still viable money making businesses, not their current 'market valuation'. America is in a recession, we are experiencing price corrections, expect devaluation in all markets. Given the state of the rest of the market I'd say Mr. Buffet has done a superb job of protecting and insulating his wealth from this dollar crisis. Just my 2 cents. Jorge

Buffet's philosophy has always been once a stock has gained 50% its gone, so its no surprise he walked away from the Budweiser deal. I'd be cranky too if I was watching a government to their best to destroy an economy, remember if everything goes to crap, its the government that will have to save the day, just like Greenspan's started doing with his printing press. Would he buy Fanny or Freddie now, what a silly question, the companies are holding as much debt as the current USA deficit (5 trillion) and you want to know if its a time to buy? LMAO

Is it just me, or is WB become more cranky, snooty, and negative as he ages? Perhaps it is time for him to retire and maybe find something to smile about instead of acting like he has been lately.

hi i agree with what warren says.i have a questiion. what does he think about the unstable oil prices?what is causing it and is it connected to rising inflation?what is the way out?

Now that FNM and FRE have collapsed 85% the day that this article was written... the question is, would he buy now?

"we’ll look back and see that this $200 billion dollar infusion into these horribly run companies will have only mortgaged the future for the next generation. Our deficit is so huge, so monstrous that we’ve now come to the point where we’re saying, “What’s another $200 billion?” That about says it all. Top to bottom..For the last eight years this country has ben run by this way of thinking. Still, we let it ride. God better bless America. There's not much left.

Alright, he is a smart investor, and has one of the most enviable records of investing in history. But, he is not exactly on a winning streak. His own holding companies, full of his picks, are down considerably. His decision to bail on the Budweiser deal, before the big run-up, also looks a little suspect. Even Babe Ruth, hung on a little past his prime. Respectively, Fargo