Warren Buffet Tells Columbia Business Students: "The Financial Panic Is Over" (VIDEO)

Warren Buffett and Bill Gates spoke to a group of Columbia students on Thursday for a CNBC town hall and question-and-answer session. The business giants discussed topics ranging from capitalism and the state of the economy to Goldman Sachs, Apple, and Google, and they were decidedly positive in their outlooks.

When asked whether at any point over the last year they'd doubted capitalism and the American "way of life," both expressed confidence in the system. "This country works," Buffett told the audience. "We have two hundred years of proof, and it's going to continue to work."

Gates said the United States is still a great place for innovation and science, and he said that while he expected that "we're going to tune our system of capitalism," overall the structure of the American free market system is strong:

"There are definitely some lessons, but the fundamentals of the system, a marketplace driven system where we invest in education, in a great infrastructure for the long term, that's continued."

Buffett conceded that the "economy was sputtering, still is sputtering some," but he indicated that there is great opportunity for growth within the country, and counseled investors to look inward before going overseas. He also addressed the challenge of regulatory reform:

"Going forward, it's a very tricky thing to figure out how to present excessive leverage, how to prevent off balance sheet arrangements from getting in trouble, or for just having people at the top of major institutions that run risks that they shouldn't be running. We're wrestling with that right now."

The students applauded and clapped in unanimity after each of Buffett's punch lines- all variations on: "Right now, I would pay $100,000 for 10 percent of the future earnings of any of you. So, if anyone wants to see me after this is over ..."

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Comments

[johnnygoodwud]

buffets class B stock is getting ready to split 50-1. they have NEVER done a stock split before. it would make the new stock worth approx $65-75 per share, and more affordable for the average investor. i have saved my pennies and bought 6 shares of the current class B, but when it splits will have 300 of the new class B. i predict the new class B will skyrocket, as people sitting on the sideline, can all of a sudden buy into bershire. folks is you can't beat them, why not join them.

[Acadine]

Mega wealthy celebrities like Gates and Buffet speaking to an elite group of students about our economy is uninspiring if not downright offensive. These two barons claim equality of opportunity exists. I would have like for them to expound on that. Sounds good, but it's simply not the case anymore.
Actually, I'm not sure it ever was.

[blogisti]

Panic is over for him. I think the rest of us know there is a lot more misery to come, for us that is. Big business has arranged to have Government cushion any future monetary shortfalls so Buffet and his friends can rest easy. Yes, we've got your back, and our grandchildren too. Trouble is, no one has ours.

[talkingdog]

Everyone go out and buy up lots of christmas presents this year!!!

I mean it! Even if it's hard to swallow,....do it!!

[UNCLEJOE]

Before the bailout, both BILL Gates and Warren Buffett lost billions in their investments and Buffert made some caustic remarks about the failure of unregulated Capitalism.

After the bailout tax money refinanced the failing banks that they both were heavily invested in, Buffett and Gates changed their tun when their lost billions was graciously returned through the magic f the bank bailouts.

Yeah, I see their point; We invest in risky ventures, but can't lose because this type of Capitalism works for us because we have our own Social Security Safety Net when our investments fail, the US tax payer's bailout money.

I hope those Columbia students see through the duplicity of these gentlemen.

[Overbluff]

I'm beginning to hate that old man.

[sonnybrakes]

I'm finished liking him.

[oceanlover]

Give me five minutes alone in a room with Buffet. Just five. That's all it would take for me to slap him silly. Has he lost his "f"ing mind? Several weeks ago he spoke of how we were out of the worst of it. What is this guy drinking? Really. What potion is he drinking to be thinking/spewing such utter nonsense? I know he's a billionaire, but is he that out of touch with the rest of the country? Obviously, the answer is yes, he is disturbingly out of touch with working class Americans and what they are going through. I am so sick of this old man, words fail me.

What gall this billionaire has. What audacity. This guy is clueless to the plight of the vast majority of Americans. Just clueless. Besides, where was he the past five years warning folks of such a meltdown. Roubini has twice the intellect and insight Buffet has.

[sonnybrakes]

Did he mention that the mortgage is being underwritten by taxpayers?

[Hysterian68]

I still believe Professor Neal Ferguson of Harvard: we have been eclipsed by the new economies of the east. Get accustomed to it and learn to live with it.

Think it can't happen? Argentina was the richest country in South America in the 30s to the 50s. Today it is a pitiful laughing stock.

[sonnybrakes]

It scares me to think that debt finances our economies' existence and that without debt it would cease to exists. Luckily for Warren, the Obama administration is okay with throwing taxpayers under the bus and that taxpayers are such good sports about it.

[NoMoreBail2]

We, the American people, dug ourselves into this hold for which there is no escape.a

hat tip to: http://financeopinionss.blogspot.com

[mrspiffy]

WB bought a railroad for the love of Mike!!! That's so analog and cool!!! Those guys have gotten ridiculously wealthy doing it the way its been done for centuries:
Buffet: Buys stuff with REAL tangible value and yield that's priced below that value. Digs on the income then maybe sells it for more than he paid after QUITE a while.
Bill the Gates: INNOVATION­...INVENTI­ON..DISRUP­TIVE TECHNOLOGY
This borrow money cheap buy high and HOPEFULLY sell higher kool aid was bull**** and always has been.
http://yieldpig.blogspot.com/

[piggybackmom]

My guess is if one can defer paying hundreds of millions in taxes for a generation, which is what Buffett is good at, than you to would be ridiculously wealthy.

[Hysterian68]

Buffett thinks "guys like me" should be taxed. I agree with him. I respect is honesty.

MAKE THE RICH PAY AND PAY BIG TIME!!!

[ebanks84]

GREAT! That should help some of you feel better to hear it from the financiers who should know. Our economy is out of danger and working on getting itself back to being sound. That means that Obama is doing his job of protecting the PEOPLE first and foremost, no matter how it leaves a bitter taste in our mouths for enriching the "too big to fail" creeps who put us in this predicament in the first place. This is a lesson learned the HARD WAY, that's all and thank goodness, as long as he is in offfice, it will NEVER happen again when we get all the necessary laws and regulations in place to prevent it.

No thanks to the last three administrations who allowed deregulation to occur in the first place, we are now on our way to a permanent recovery and will soon be back to being good "capitalist" and business owners.

[desertman]

Recent reporting indicates continuing credit contraction and a widening trade deficit. Both factors have negative implications for broad economic activity, as discussed below. The economy remains in its most severe economic downturn since the onset of the Great Depression, and the systemic liquidity crisis is ongoing. As mentioned in the prior Commentary, the general outlook is unchanged. Equity markets remain highly vulnerable to minor shocks, potentially with extreme instability. Such is due partially to market expectations being removed so severely from underlying economic and financial-system reality.

Irrespective of near-term market gyrations, the long-term outlook remains extremely bearish for U.S. equities and the U.S. dollar, and extremely bullish for gold and silver. The economy still faces an eventual hyperinflationary great depression, with high risk of that circumstance beginning to unfold in the year ahead. - http://www.shadowstats.com

[doneflyin]

These two should be embarrassed for being so out of touch. The rarified air at the top of that elite pyramind they have occupied for so long has infected them against the realities of the 95% that live at the bottom.
Neither one of them was ever at the bottom anyway. Both came from educated, middle class backgrounds. Don't know about Gates but Buffet had a good stash to start his investing. His aunt, for one, gave him 35 thousand. Back in the 50's that was a chunk-o-change.
It's the Marie Antionette syndrome. You just don't have a clue unless you see it, experience it, live it.
You have to have been hungery, broke, homeless, one job away from on the streets, sick with no money and no health insurance, unemployed, impaired kids, old sick parents to care for, just to name a few of the things that are knocking people flat all over the country. Neither has EVER experienced this.
At that level of existence in this country, you never come in contact with the masses except as service people and then you never have to connect with them on a personal level. They have people who have people who deal with the everyday chores of living.
After all it was Buffet who said back when Bush got the wealthy the tax breaks,
"Our class won."

[ebanks84]

I understand every single word you have said and totally agree. I am one of these peons myself. Never had a silver spoon in my mouth or my house!

It's my own investigations that make me believe what they are basically saying is true. I only listened to the basic. All that other commercialized selling was for the benefit of the students entering their world, not the average joe like us and I didn't pay it any attention at all.

[doneflyin]

You're right about Gates and Buffet preaching to the student choir at Columbia.
Columbia is one of the top ten colleges in America. Big bucks, super smart, high SATS, mostly silver spoon background. Those that can get into and graduate from one of this Ivy League schools are already in that upper elite class of society.
They've got a much better start at life then Joe Lunchpail's kid who has an Associates from the local community college. That is if he can even afford that.

[ScreenName05]

Everything works until it doesn't work.

The economy works now - but 5 billion people still live in poverty - 15 million are homeless in the U.S. I guess they may not see it the same way. You think?

[jws2346]

I may be wrong but I think these millionaires are going to have a hard time convincing the jobless at over 10% and the unfortunate people that have had their homes foreclosed on that that they're OK and the financial panic is over.

[Hysterian68]

Yes, just as Fed Head Bernanke and 70% of all business and academic economists in 2006 saw smooth sailing ahead for the US economy.

Why do any of these people still have their jobs?

[Strid]

Billionaires have a fundamentally biased view of the economy, and their forecasts and economic outlooks (whether they are delivered personally or by the banks, analysts, and financial reporters that serve their interests) reflects that bias. Billionaires don't live in the real economic world. They don't adhere to the economic rules that we live by. The ups and downs of the economy have no impact on them. (Consider this...If I lost 50% of my income, I'd be on the street. If Gates or Buffet lost 99% of their income they'd still be better off than the VAST majority of us.)

The view of the billionaire therefore, isn't based on real economic life. Instead, their views are based on their ability to extract wealth from the economic environment. And yes, its a very good environment for investors, what with the abundance of cheap assets and the rock bottom interest rates.

But this conclusion really unveils the much larger problem. Somewhere along the line the "Powers that Be" decided that the good of the Wealthy Investor Class and the good of the economy are the same thing. This is an utterly false construction. Not only are the two NOT linked, to the extent that a company’s bottom line can be improved by laying-off workers or cutting benefits, the two interests are actually opposed.

So, THAT is the basis of Mr. Gates’ and Mr. Buffets comments. It would be nice if the mainstream financial media didn’t report this rubbish like gospel.

[doneflyin]

This is a great post. Fanned.

[ebanks84]

They will!

[efmo]

Very well said. Fanned.