Thursday, September 25, 2008

Prediction: Buffett Will be Asked to Manage Bailout

Assuming this bailout (Troubled Asset Relief Program) becomes law, I predict Warren Buffett will be asked to run it, pro bono.* With $700 billion of American taxpayer money at stake, politicians will have an exceptionally strong incentive to recruit the absolute best person for the job. Warren Buffett is the obvious guy to pick. Also, this is the year that both presidential candidates are advocating national service—putting country before self. Asking the world's greatest investor to put country before self isn't too much of a stretch.

I estimate the probability that Buffett will be asked to do it is less than 50%, but far higher for him than for any other individual alive.

Here's Vince Farrell's take on CNBC:
Buffett is smarter than I am. He's probably smarter than a lot of other people as well. ...

I did love his comment that he wished he had $700 billion to buy the derivatives with. Maybe we should ask him to do it! And I'm not kidding!
And here's billionaire T. Boone Pickens, interviewed by CNN:
Roberts: In fact, you have said, Boone, that you would like to see Warren Buffett handle a lot of these illiquid assets that the government buys up in terms of their disbursement.

Pickens: Can you imagine anybody better? Sure, that'd be great if he'd do it. I don't know whether he would or not. But you need to get somebody like Warren to do it.

Roberts: You don't think they have the expertise at the Treasury Department to do it?

Pickens: Oh, they do have. They may need some help. And that kind of help — you can't pay for that kind of help.
If Buffett doesn't do it, billionaire "bond king" Bill Gross has volunteered to do it for free.

* For the world's second richest man, a typical government salary is essentially pro bono.


  1. I too would put the probability of Buffett involvement at less than 50%. I'd put it at less than 1%.

    Berk is his masterpiece work of art and he isn't done painting. He won't take time away from it for other purposes like this. And besides, Buffett would be terrible at something like this - he's spent his entire life buying good assets at good prices, not "bad assets" at bad prices. He'd probably gag at the thought alone.

  2. Except for potential conflicts of interest, Buffett is the best.

  3. Agree with Anon - the problem is he just put 5 Billion into into JPM one of the parties likely to be heavily involved in this plan. Had he stayed out maybe, but otherwise, this will look too much like the fox guarding the henhouse.