Thursday, September 25, 2008

Billionaire Warren Buffet Optimistic about Potential of U.S. Government Market Intervention

By Andrew Clark in New York
From The Guardian

Legendary investor Warren Buffett reckons the US government can make a sizeable profit if it manages its $700bn (£380bn) banking bail-out package carefully...

"I bet they'll make a profit," said Buffett, who pointed out that hedge funds specialising in junk assets were already picking up mortgage-related securities with a view to making profits of 15% to 20%. He said a positive return was feasible if the government ignored the book value of instruments or the original cost to banks and instead paid the prevailing market rates for the bombed-out assets.

"They'll pay back the $700bn and make a considerable amount of money if they approach it like that," said Buffett. "I would love to have $700bn at treasury rates to buy fixed-income securities... (Read the rest of Andrew Clark's story)


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