Warren Buffett was on CNBC this morning for a three hour interview. He discussed topics including, Berkshire’s purchase of IBM, tax policy, US-China relations, infrastructure spending, David Sokol, the European crisis (utter-mess), the depression in housing, the folly of investing while using macro forecasts, insider trading and David Sokol and more.

Below are the links to all the videos followed by some select quotes and full transcript:

Penalties Too Light For CEOs

‘Not Clear’ Europe Has Will or Ability to Resolve Crisis

Warren Buffett Weighs in on GOP, likes Romney the best

Ignore the macro picture

on banks “Too Big to Fail”

On infrastructure

Discloses huge stake in IBM

On deficit reduction

On insider trading and David Sokol

 

 

Some highlights:

On Europe:

“They’ve discovered they have a fundamental flaw, which is that they can’t print money.”

“It’s not clear who can say ‘we’ll do whatever it takes’ there.”

“There’s tens of billions of debt coming due every month in Italy… stopping a run is tough. You don’t get half of your confidence back.”

“It’s very, very stuff to stop a run.”

“We believed Bernanke an Paulson and the President when they said that in September 2008… there’s nobody with comparable authority.”

“Time works against you.”

However Buffett thinks Europe will be stronger in 5-10 years.

 

On European banks

 

“I haven’t bought any.”

 

On Berkshire Hathaway/economy:

Buffett wouldn’t recommend QE3, but he’s not too worried if he does do it.

“Of our 70 plus businesses, all but about 5 are doing better than they were ago.”

Housing is getting killed and Buffett called it a depression.

On GOP:

“I did not change my opinion of Governor Perry one iota because of a flub… I (still) don’t want him to be President.”

“(Romney) is likely the nominee.”

 

Purchases/Sales:

Bought a huge stake $10.7b in IBM, making it Berkshire’s largest holding after Coke. He also added to Wells Fargo, which is the third largest holding. Buffett did very little selling, and joked that “I like to buy”.

In this section, Buffett speaks extensively about Europe and also talks about a ‘depression’ for Berkshire companies related to the still-struggling U.S. housing market.

JOE KERNEN:  Good morning. The “full Monti.” Mario Monti takes over the Italian government after Silvio Berlusconi leaves to a chorus of hallelujah.  Boeing lands one of the biggest deals in aviation history.  And legendary investor Warren Buffett joins us live for the next three hours to tackle Europe, the markets, and the supercommittee.  It’s Monday, November 14th, 2011. SQUAWK BOX begins right now.

JOE: Is he there with you right now?

BECKY QUICK in Omaha, Nebraska:  He is. He’s sitting right here and he’s listening.

JOE: Excellent.

 

WARREN BUFFETT: What’s a synonym—what’s a synonym for “gravitas“?

JOE: Yeah.

BECKY: What’s a synonym? That’s a good question.

BUFFETT: I was thinking some other words.

JOE: Yes. Wow, he looks—God, you look—you look—you look healthy and rosy cheeks.

ANDREW ROSS ANDREW:  He looks great, doesn’t he?

BECKY: Thank you.

JOE: It’s like 5:00 or 4:00 out there, isn’t it?

BECKY: It’s 5:00 out here, and we are, and we’re ready to go.  And we were just talking about it and, Warren, you had your thinking cap on early this morning, right?

BUFFETT: Been up for hours, was thinking in the bathtub.

BECKY: And we know what happens when he thinks in the bathtub. The last time he did this he came up with the Bank of America investment, so, guys, we’ve got a lot of different things we’re going to be covering over the next three hours. And, Warren, you’re ready to go, right?

BUFFETT: Sure.

BECKY: OK.

BUFFETT: Fire away.

JOE: Has he—has he seen pictures of (Becky’s baby boy) Kyle?

BUFFETT: I have…

BECKY: I didn’t show him any new pictures this morning, no.

JOE: It’s…

BECKY: I haven’t but I will.

JOE: Has he taken care of college yet?

BECKY: No, unfortunately not.

JOE: That was a nervous laugh.

BECKY: But I will show him some of those pictures…

JOE: That was a nervous laugh I just heard from you. Just an idea. I mean, it’s not—you know, you’re doing this for us. Actually, we owe you anyway. You’re right.

BECKY: Yeah, I paid Joe to slip that in for me.

BUFFETT: I see. OK.

JOE: That was pretty…

BUFFETT: Yeah.

JOE: You know what you’ll get, Becky?

BECKY: What?

JOE: One of those boxes of See’s candies.

ANDREW: Right.

JOE: That’s what—that’s usually—or a brick. That’s what he sent me, a brick.

BUFFETT: Yeah.

JOE: I’m not sure what that was supposed to mean.  Anyway, let’s check…

BUFFETT: Joe, you’re in my will. It says, “To my friend Joe Kernen, who wanted to be mentioned in my will: hi, Joe.”

JOE: “Hi, Joe.”

ANDREW: “Hi, Joe.”

JOE: Yeah, I’m going to use your—I already stole your epitaph, though, on the tombstone, Warren, and that is, “He lived to be really, really, really old.” That’s the one I’m going to use.

BUFFETT: I like that one.

JOE: Yeah, that’s a good one. All right, we’ll get back to you. Let’s check on the markets this morning.

***

BECKY: Come on, we’re going to play right in. We’re going to jump right into these questions. Warren Buffett is with us for the next three hours.  And, Warren, we just heard Ross talking about the situation in Europe. That’s been driving the markets for quite a while at this point, and a lot of people feel better now that they see Mario Monti in (Italy) and Lucas Papademos in Greece. Do you feel better about the situation at this point?

BUFFETT: Well, I feel better about those two developments, but they have a situation that—where they found a—kind of a fundamental flaw, which is that they can’t print money. And when you have a loss of confidence, that begins a run, which has occurred to some degree on both sovereign debt and banks over there. And it’s—in 2008 we had our own run in the United States, and it took—it took the full power of the United States and some very strong action. The ability—or the belief that the authorities would do whatever it took, and we did believe that, and it led us out. But it’s not clear who can say, ‘We’ll do whatever it takes,’ over there and that they’ve got the ability to do whatever it takes. It’s going to have to become much more clear as to—as to who can do what and that they will do it, that—they need both the will and the ability.

BECKY: (German Chancellor) Angela Merkel is already pushing for reforms to the EU to deal with exactly that problem. She’s hoping to get changes in place and voted on by all the countries that are involved by next year some time. Short of that, do you worry what happens to the euro?

BUFFETT: Yeah, well, runs don’t necessarily—markets are stronger than everything. I mean, when you—we’ve seen that time after time. And used to be when you had a run on banks, you know, that the tellers started paying out slowly and they piled up gold in the teller window. But now you

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