A Quote by Warren Buffett
The banking business is no favorite of ours. When assets are twenty times equity - a common ratio in this industry - mistakes that involve only a small portion of assets can destroy a major portion of equity. And mistakes have been the rule rather than the exception at many major banks.
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In a world of businessmen and financial intermediaries who aggressively seek profit, innovators will always outpace regulators; the authorities cannot prevent changes in the structure of portfolios from occurring. What they can do is keep the asset-equity ratio of banks within bounds by setting equity-absorption ratios for various types of assets. If the authorities constrain banks and are aware of the activities of fringe banks and other financial institutions, they are in a better position to attenuate the disruptive expansionary tendencies of our economy.
Banks don't want certain asset classes, and that's created opportunities for private equity, hedge funds, Silicon Valley. In this case I think he was referring to some of the European banks shedding assets, and the big buyers are probably not going to be big American banks. Someone like Blackstone may have a very good chance to buy those assets, leverage them, borrow up a little bit, and do something good there.
What are we focused on? Return on equity. We don't need these great big tier one assets. I'm very happy with getting tier two, tier three assets; that's what Glencore has been good at.
We [US government] have used our taxpayer dollars not only to subsidize these banks but also to subsidize the creditors of those banks and the equity holders in those banks. We could have talked about forcing those investors to take some serious hits on their risky dealings. The idea that taxpayer dollars go in first rather than last - after the equity has been used up - is shocking.
Private equity firms working closely with venture capitalists and technologists may be able to unlock assets that others have not leveraged and build technology cultures to iterate on solutions that make these assets more productive.
Sweat equity is the most valuable equity there is. Know your business and industry better than anyone else in the world. Love what you do or don't do it.
Equity is the cushion that protects financial institutions from unexpected changes in the value of their assets. The greater the leverage, the smaller the losses required to wipe out a company's equity, leaving it without enough money to repay the people who hold its debt.
When you look at the world, everyone in the world who cares about his or her family wants to have a major portion of their assets in the United States because we are the growth country and the freedom loving country.
[A] major source of wealth for many families is financial assets, including stocks, bonds, mutual funds, and private pensions. ...the wealthiest 5 percent of households held nearly two-thirds of all such assets in 2013
I passionately disagreed with Treasury Secretary Hank Paulson's plan to bail out the banks by using a public fund called the Troubled Asset Relief Program (TARP) to help banks take toxic assets off their balance sheets. I argued that it would be much better to put the money where the hole was and replenish the equity of the banks themselves.
I think Dodd-Frank has contributed to a concentration of banking assets in the hands of a small number of banks.
On the foreign policy front, Barack Obama is not a confrontational man. He stayed away from all confrontations, and you can look and see what happened overseas. It's a mess everywhere. So he made major mistakes, major policy mistakes. Those mistakes are not going to be forgiven by history.
The financial crisis was linked to the fact that banks had excessive leverage and too many risky assets. The solution is not to try to dictate to banks what they can do or not do, but to require them to strengthen their capital to absorb potential losses and hold less risky assets.
I make small mistakes every day. But major mistakes? It doesn't seem so. I've examined my service to the Tibetan people and to humanity, and I've done as much as I can in my life.
We already have an annual wealth tax on homes, the major asset of the middle class. It's called the property tax. Why not a small annual tax on the value of stocks and bonds, the major assets of the wealthy?
No business in the economy has the easy money that banks get to play with.... The existence of banks with single digit amounts of equity is a completely unhealthy existence -- that is not only a risk for the banks, but for all of us.
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