"Mr. Obama quotes Warren Buffett as describing 'derivatives that were bought and sold with little oversight as "financial weapons of mass destruction."' But Mr. Buffett's Berkshire Hathaway and its affiliates use and trade in derivatives, as does Goldman Sachs, in which Mr. Buffett's Berkshire Hathaway made a $5 billion investment. Mr. Obama's description of Mr. Buffett's take on derivatives is not the whole story." -- FutureOfCapitalism.com, April 22, 2010
"The provision, sought by Berkshire and pushed by Nebraska Sen. Ben Nelson in the Senate Agriculture Committee, would largely exempt existing derivatives contracts from the proposed rules. Previously, the legislation could have allowed regulators to require that companies such as Nebraska-based Berkshire put aside large sums to cover potential losses. The change thus would aid Berkshire, which has a $63 billion derivatives portfolio, according to Barclays Capital." -- The Wall Street Journal, April 26, 2010
A reader notes that Mr. Buffett favors grandfather clauses on things that would affect him, but not on things that he believes in that would affect others, such as an increase in taxes on carried interest of investment managers. Also, how does Mr. Buffett's argument that Berkshire shouldn't have to pay for the misdeeds of others when it comes to derivatives apply to TARP, in which sound firms were taxed to pay for capital injections for companies in which Mr. Buffett's Berkshire has invested, like Goldman Sachs, US Bancorp, GE, and American Express? Or to hedge funds and private equity funds that didn't create the financial crisis but that are now facing the possibility of increased tax and regulatory burdens?
