H/tip Barry Rithlotz: Warren Buffett Explains ‘Colorful Charlie’ | The Big Picture.
Excellent clip. Becky Quick asks Warren Buffett to comment on Charlie Munger’s best lines in a question-and-answer session with shareholders in which Buffett asks Munger, "who haven't we insulted yet?"
With Becky:
Short-selling: Munger says "we don't like trading agony for money." Buffett agrees, a shorted stock can theoretically go to infinity. Can't sleep well if short a lot of stocks.
Greece: Monger says letting Greece into the EU was like serving up rat poison for whipping cream. Buffett would have said it differently, but basically true. Can't synchronise currency without synchronizing other aspects of the economy – fiscal policy, culture, cost of production. It was doomed to failure.
Bankers: Munger says bankers are like heroin addicts. Leverage has enticed people to do crazy things. We need limitations on bankers so they can't over-leverage. Too much temptation to over-leverage. Need limitations on bankers. Leverage is like heroin. Both suspicious of derivatives which create more leverage than people realize.
High Frequency Trading – legalized front-running. Agreed. That's the whole game. No social purpose.
Interest Rates and the Fed – Bernanke had to hurt somebody. Decided to hurt the savers.
Twitter: Munger stays away; Buffett – not a priority.
10 Smartest Words in Economic History were spoken by George Bush: "If money doesn't loosen up, this sucker could go down."
