Warren Buffett: we have to be sure all debt liabilities of Citigroup are met

| 9 March 2009 07:52

Warren Buffett spoke with CNBC about the U.S. economy and the banking system in an interview televised this morning. His basic message was that the economy cannot function without confidence in the banking system. The FDIC can work its magic with smaller institutions and that is a good thing. However, some banks are too big for the FDIC. Citigroup is one of them. This led to his statement that all debt liabilities of a large institution like Citigroup need to be met to ensure confidence.

Shareholders can be wiped out, but Buffett believes debt holders are a different story.

Watch the videos below. Buffett’s comments on Citi are in the bottom video.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Related Posts
More About: , , , , , ,

«
»

2 Comments

  1. avatar Terry says:
    9 March 2009 at 08:14

    Regrettably, I am finding the quaint comments and simplistic analogies offered by the “Oracle of Omaha” less and less insightful, useful, or even just entertaining. In part, it’s because his own company is showing some of the same weakness as virtually every other company in America. Moreover, his remarks–maybe tailored for a simplistic CNBC couch potato audience–are so simplistic that they offer little understanding of what is going on or will likely go on in the economy and markets. His most recent letter to shareholders was somewhat better, a least a little more candid, but I didn’t learn anything broader than about the performance and pitfalls of BRK last year.

    I guess, like a true oracle, Mr. Buffett’s commentary is too subtle for most, including me, to understand.

  2. avatar Edward Harrison says:
    9 March 2009 at 12:37

    Terry,

    No, I think you are seeing something that we all are seeing. Buffett seemed a bit doddering in the interview, to be honest. I actually like Buffett a lot. I think Marshall is less partial to him and this interview demonstrates why.

    He is very much an insider and profits from that position. Nothing he says in public could ever be perceived as doubting the President or America. One has to wonder what he truly believes and says when not in front of the cameras. There is a certain incongruity between what he says and does regarding derivatives, corporate governance and a host of issues.

    Let’s see where this leads in a year’s time. A lot of people pilloried him in 2000 as well.