Buffett Watcher on ‘Oracle of Omaha’
Jeff Matthews, “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett” author, discusses Buffett’s views on the economy and investing in Berkshire Hathaway.
Bowles: Going Over Fiscal Cliff Could Cause Recession
Discussing what will happen if the U.S. goes off the so-called fiscal cliff, with Warren Buffett, Berkshire Hathaway CEO,former Sen. Alan Simpson, (R-WY); and Erskine Bowles, former chief of staff to President Clinton.
we’ll hear from google next week so we’ll get some answers.and alan simpson, i got him to say that 50% was in someeuropean countries, once i want gets above 50 he would have aproblem with it but 50% — 50%? 50, 5-0. everybody ran with this interview yesterday because he said our ideas were zombies and disparaged all of cnbc and our macroeconomics.no one led with him saying that 50% was an acceptable level.but he also said — he favors a free market welfare state is what he favored but can you imagine someone saying that 50% is an acceptable level? run with 21 from this interview. no higher than 21. that’s unanimous. no higher than 21? we can do 21. we can do 21 and, you know, there will be certain years in the future because business is cyclical. that’s why you have to get itdown. it’s harder now because of the ageing of the population to get to it 21 but can you. you have to work at it but you can get to 21. if you’re really serious. would there be any negativeconsequences for 50%? yeah. i know, it’s laughable. and yet — it’s laughable. i know. can i throw one more out there real quick. larry summers came on this broadcast, talked about, since the cost of a loan to right now, interest rates are so low we should move forward, spend a lot of money on projects that we would otherwise have to do in the next 10, 20, 30 years.given what you’ve talked about today, have you had a chance toread that or see what he had to say. what do you think? look, i’m spending for spending money we spend today more wisely.i could give you lots of examples, having run a university, having worked in state government, having worked in the federal government. you know, it’s a little bit like this guy who was the nobel prize winning scientist who said his nobel project was running out money. he turned to his team we’re running out of money now we have to start thinking. that’s what we got to do.we’re running out of money we got to start thinking and maketough choices, tough political choice. we can do it. the way to get to 18.5 or 19 is to get to 18.5 or 19. you can design a plan, joe can design a plan. most people, everybody would be a little unhappy with something but certainly be better than floating alo like we’re doing now. we need something done. the real driver is health care. it doesn’t matter what you call it. forget the obamacare label. you call it elvis presley care. there’s nothing in it that has cost containment. not a thing. people say will it will happen. it won’t happen. and the reason is very simple. you’re going have pre-existing conditions of a 3-year-old that will live to be 60. one person in the united states weighs more than the other two. you got diabetes a and b. you got to do some tort reform. you got to do something with docks. 10,000 a day turning 65. hospitals have to keep one set of books instead of two. come on. let’s quit fooling each other. this is absolute madness and this baby is on automatic pilot and will stuck up all the discretionary budget of the united states. so i say to people what do you love? well i love education, i love this, i love that. well, pal, that stuff will be wiped out unless you put thescrews to this system. we said 400 billion we would knock it off and not let it go over 1% of gdp a year. what more can you do?gentlemen, in the commercial break you were joking around and you asked if there wasn’t anybody we haven’t insulted yet.anybody left? we’ll t to think of one. we’ll get to you. if we have not offended you, please write to us. on a serious note, youmentioned at the beginning of the interview that you werelooking for 10 million signatories to sign off. if somebody is interested in getting involved what do you. fixthedebt.org. that’s where we want our people to go. we’re bringing in names there. that is our social media campaign number that we’re going to be launching next week. fixthedebtexamine.org.fixthedebtcampaign.org. when you look out across everything happening, we started this interview erskine you said you think we’ll go off the fiscal cliff. yeah. what happens at that point? i think if they don’t — if they don’t turn around very quickly and fix it shortly thereafter then i think it could be a disaster for the country. 7 trillion worth of economic events. it will have an effect of at least 1.5% decline in gdp next year. that’s enough to put us back into recession. dick durbin kept asking where is the tip point. we don’t have to do it. this is not only the most predictable economic crisis but the most avoidable if we come together, put partisanship aside and pull together. we have 30 seconds left.warren from the market’s perspective if we do go off the fiscal cliff if we don’t how do you — i have — this country works over time. we’ll do the right thing in the end. we just wait until the very end. i until think the luckiest person that’s ever been born in the world is a baby boirn the united states today. i’ll stick with that. i love owning businesses in the united states. we’ll invest $9 billion almost in the united states at berkshire this year. i’m a bull on america. i think we have to run it right. that’s all. i don’t want anybody to get discouraged how this world will turn out because it can to be done. you got people like this working on it. gentlemen, we can’t thank the three of you enough for joiningus this morning and you two gentlemen for all your hard work.mr. buffet, mr. simpson, mr. bowles, thank you very, very much for your time and we hope to check in with you again soon. back to you in studio.
Fixing Deficit Problem ‘Doable,’ Says Bowles
Insight on resolving the U.S. deficit, with Warren Buffett, Berkshire Hathaway CEO,former Sen. Alan Simpson, (R-WY); and Erskine Bowles, former chief of staff to President Clinton. “If Congress doesn’t act, we’ll face the most predictable economic crisis in history,” says Bowles, adding that if he had to bet, “I’d say we are going over the fiscal cliff.”
we get back to becky in sun valley, idaho, with our special debt reduction summit. becky, i came this close to calling it our debt reduction task force. i love and miss jonathan walt, right? it’s really kind of a task force. something that sticks with us, it is.this is a supersized task force. this is the mother of all taskforces, you might say, joe. unknown. oh, i don’t know if you heard senator simpson, he said fathers unknown. we’re going to jump back into this conversation, and gentlemen, we have already talked an awful lot about what needs to happen with tax reform, probably one of the hot button tickets but as we were just talking off camera here, another thing that you mentionederskine, you’re very concerned we need to also be doing a lotabout cutting spending as well. why don’t you tell us how theplan really would attack that. we cut spending by about $3 trillion over the next decade, and again, that gets us to the $4 trillion which is the minimum amount you have to reduce the deficit in order to stabilize the debt and get it on a downward path as a percent of gdp, and we don’t spare anything. the problem is so big right now that you have to make significant cuts in defense.you have to make significant cuts in the entitlement programs.you have to make significant cuts in the spending into the tax code if you’re going to produce enough deficit reduction to stabilize the debt. what is significant? 5%? 10%? just for people to get their heads around, what’s really coming? all of it is doable, okay? we spend today about $760 billion a year on defense. get this one — no you tell it. well, this is madness.750 billion, $760 billion is the usa, and the other countries, major countries of the earth including russia and china combined spend $540 billion. now, the only thing beinghallowed out here is your brain. this is impossible. think of it again, 750 for us alone and every other major, all these evil, even, you know, china and russia, combined, 540. there’s also a situation which is when you get into this, you see you get savage. i’m a vet van. i was proud to serve. there is a thing called tricare, and it’s for military retirees, and give them anything, 2.2 million, there’s not a great cohort of them and some of them have had very little active duty but they’ve been in the guard, the reserve, have their own health care plan and the premium is 470 bucks a year, and no copay, takes care of alldependents and costs us $53 billion a year. leon is trying to do something with that, and what’s he getting from the professional veterans? getting his head mashed. here is how crazy defense is. just think about this. the u.s. has a treaty withtaiwan that we’ll protect taiwan if they’re invaded by the chinese.there’s only one problem with that. we got to borrow the money from china to do it! that’s crazy! that is a little tricky there. the entitlements are a big part of what we have to focus on, and what we’ve been trying to do is figure out how we can slow the rate of growth in health care to the rate of growth of the economy. but the richest country in the world has ever seen, $48,000 of gdp per capita, enormous, but no matter how rich your family is, you can overpromise and that’s what we’ve done and you have to get your promises in line with your capacity.and today not only are our promises too big out our outcomes are not so great. you take health care. we spend twice as much as any other countr in the world on health care, whether you talkabout it on a per capita basis or percent of gdp and you know,that might be okay if our outcomes were twice as good asanybody else’s but on outcome, on almost any outcome measure you look at, we rank somewhere between 25th and 50th in things like infant mortality and life expectancy, and preventable zet and anybody who doesn’t think those 50 million people who don’t have health care insurance don’t have health care, they get crazy. they get health care but get it at the emergency room at five to seven times the cost of being in the doctor’s office and you know who pays for it? we do. we pay for it in higher taxes and higher insurance costs. well, this brings us to the question of whether the health care plan, the health care law fixes any of this. we’ve got to slip in another quick break, we’ll come back with that and i know joe has a question as well, gentlemen, thank you very much. we’ll be back with more with the special conversation from sun valley, right after this. special conversation in sun valley right after this.
Simpson on Raising the Retirement Age to 68
Warren Buffett, Berkshire Hathaway CEO;former Sen. Alan Simpson, (R-WY); and Erskine Bowles, former chief of staff to President Clinton, discuss jobless claims and import prices, and the stalemate in Congress. “We tried to do the things that really made a difference for people who desperately need social security,” says Bowles.
we’ve been talking about solutions and better than expected news, 350,000 but if you look at the unemployment picture and last monthly jobs number there are concerning things happening here. when we have unemployment at 8.2%, how much does it take for people to talk seriously about these measures to try and help us? austerity is a tough thing forpeople when you’re looking at numbers like this. they’re talking seriously around the country, where you need them talking seriously is in washington. just one example, everyone knowsyou’re going to have to change the debt limit. the leaders of each house should get it done in five minutes. why spend weeks posturing and huffing and puffing and accusing the other side of bad faith and all that. just raise it and get on to the next problem. i would think you could get reid and mcconnell and pelosi and boehner, just say we’re going to raise it, so why should we go through the charade of everybody blaming each other. they’ve already spent it. and to waste weeks on that and to hold the legislation hostage over it, that’s for school kids and you know, let’s just get down to what needs to be done. i mean, if berkshire were in trouble financially, charlie and i and everybody else the directors we’d sit down and say we have to figure out a plan to get out of this and we’ll do it today. is anything going to happen before this election, gentlemen? no.we thought the easiest thing would be to have some vert safefor 45 years and lord came the aarp and the senior groups andthe cat food commission, just absolutely stupefying and wesaid take the lowest 20% and give them 125% of poverty? that will cost some money and give the older olds from 80 to 85 a percent kick a year and keep the progressivity and raise the wages subject to the tax. we did all that stuff and then get nailed by groups who really, really don’t care. the aarp, i asked theirleadership, where they patriots in here or just marketers. that did not go withal that day either. it was just one of those days.we recommended raising the retirement age one year, 40 years from now, we want to give people a chance to get ready. it’s like, you know, give me a break. i’m for anything 40 years from now.as sob who could be affected by this, i would even take itsooner than that. i’d say okay let me know what i’m getting ready for, tell me what’s coming rather than having a crisis where you look like greece and have to pull back the promises you’d made to people over 40, 50 years. and at the same time we took care of a truly disadvantaged, we raised the minimum payment to125% of poverty, we gave people between 81 and 86 and 1% bump up because when every economist, republican or democrat told us their private pitching funds generally run out.we tried to do the kinds of things that made a difference for people who desperately need social security as that you knowsounding board for them. and not one person will argue with this number, that if you do nothing, in the year 2033, they moved it up three years in one year, you’re going to waddle up to the window and get a check for 27% less. in f nothing’s done. what is smart about that? when we said raise the retirement age to 68 by the year 2050, and the aarp said, how will people ever be able to prepare for that? well, we said we think they can figure it out. we just know they can, try to help them do that. andrew’s got another question. sorry, andrew? hey, guys, this question i’ll start with warren but all three can jump in. the president proposed extending the bush era tax cuts for those making less than $250,000. number of democrats, including senator schumer and others have come out and said 250 is the wrong number, it should be $1 million. warren, you have the buffettrule. how do you think about this? well, i am generally in favor of making the tax code more progressive, certainly when the most recent figures for the 400 highest incomes in 2009, incomesthat averaged $200 million per taxpayer showed that over half of them paid less than 20% in a combination of income taxes andpayroll taxes, which means that they, those, over half of thempaid less than 23 of the 24 people in our office, the only one lower was me. i think there’s some changes needed but i say let’s — if they aren’t going to do anything i’m for doing that, but why not just solve the problem? i mean, why just — why workaround the edges? i am for what these gentlemen propose.gentlemen, senator simpson and mr. bowles, what do you think about those proposals? there’s proposals out, with unis to extend the bush tax cuts for another year and the president has laid out his proposal. what’s the right solution for right now?well, between november 6th, when they will do nothing, nothing will be done, politically nothing will be done between now and november 6th. it’s just posturing and guy also get up and say we can get this terrible thing resolved without touching precious medicare, precious medicaid, precious social security and precious defense. let me tell you, that person would be described as a phony that’s going to do that in this election. we think, naively enough, that if you have the guts to do something along the lines what we suggest, the people will reward you, and it won’t come now, but in four months, as this thing closes in, man, you know, people are going to say hey, if i don’t do something they’re going to throw me out for sitting here doing this b.s. and mush that i’ve been pouring out. can you imagine sitting at berkshire, and you know you have the equivalent of a $7 trillion economic event hitting in december, you know, that if you do nothing, it will have an adverse effect on the economy ofat least 1.5% next year which is enough to throw us back intorecession, and you’re not doing anything? it’s crazy. in an election year, why pay them? pay them three years out of four.they’re only going to work three years out of four. of course we have an election every two years, too, it’s crazy. andrew, sorry, did i cut you off before? the question i had is, i completely understand that we have a much bigger tax reform and reform broadly that we need to get to and i guess i was just trying to understand from both gentlemen, given where we are and that maybe we won’t get any movement, if the million-dollar number, the 250 number, i know it’s peanuts on a relative basis to the bigger scheme, where they come out. andrew, eight not exactlypeanuts, because the difference between the 250 and the 1million is about $366 billion, and we’ve got to pay for that some way. that’s — we’re always ready to reduce revenue but we’re never willing to pay for it in any way. i really think talking about the bush tax cuts is almost a waste of time. what we should be doing is talking about how do we reform the tax code to broaden the base, simplify the code, take some small portion to reduce the deficit and take most of it to reduce rates, so we’ll beglobally competitive. that’s what makes sense. but that’s not going to happen between november and january, right? no, but what you could do is set up a framework between november and january that would call for that, you’d have to have some real specificity — what is it? specificity. you got a framework, yeah, you fellows worked on it for ten months. that could be set up as something to say here’s what we will get to, maybe it doesn’t kick in january 1. becky, one of the things we’ve done is taken that 67-page report that you’ve read and we’ve now put it in legislative language. why not have an up and down vote on it. yeah. anybody in the past could say, i read their 67-pagereport, but it was a little vague, so if i saw legislative language, i would then get enthused. well, baby, you got it right now and that’s what they have in front of them, ald then we say, do what you’re supposed to do. if you don’t like it, take it out, amend something, get in the game. so erskine has pushed that sobeautifully, but if you send the bush tax cuts just like that, it’s between 3.8 trillion and 4.2 trillion in ten years added to the pile. i mean, madness. now you’re talking some real money.and if i had been in congress at that time with what we had todo, and i’m not being a smart alec, why would you give a tax cut when you’re fighting two wars, borrowing money hand over fist and give a tax cut. i think the american people came up when reading their newspapers saying what’s going on? madness?we’ll continue the conversation in a moment but for right now andrew back over to you.
Buffett, Simpson & Bowles on Debt Reduction
“Reform is the cop-out word,” comments Warren Buffett, Berkshire Hathaway CEO, discussing solutions needed to reduce the nation’s growing debt, with former Sen. Alan Simpson, (R-WY), and Erskine Bowles, former chief of staff to President Clinton. “We have to have about a $trillion of revenue,” adds Bowles.
let’s get straight back to our conversation with our threenewsmakers of the hour, warren buffett, alan simpson, erskinebowles. gentlemen, we had just been talking about the problems but let’s start talking about some real solutions. what needs to happen? i know there are a lot of different ways to get to the numbers, but the basic number is warren, something you’ve talked to us a lot about on this program, what do you need to get for revenue and what do you need to get for spending? you know, 2.5% is, if that’s average of gdp, that actually is sustainable. debt-to-gdp will not go up over time and these gentlemen were charged with bringing it down to 3% and came in i think at 2.2% or something of the sort, so you have to get expenditures, in my view, down to about 21% of gdp and revenues up to 18.5 or 19, and you can get hundreds of people that could draw up plans, thousands that i would accept, he would accept, and they wouldn’t all be identical but it’s an obvious problem, the need of a solution is obvious and most of the aspects of the solution are pretty obvious to everybody and you can argue around the edges, and the democrats don’t want to talk about reducing expenditure, they want to talk about reform and the republicans don’t want to talk about revenues, they want to talk about reform. reform is the copout word. i know your plan, gentlemen, had six points or six basic parts that lays out, a huge part of it is tax reform and people that we’ve talked to i think spin it in different directions. they use tax reform as theircode for doing whatever they want to do. your plan was not revenue neutral. it was to raise revenue, and to do that how?what we wanted to do was first of all, in order to stabilize the debt and get it on a downward path as a percent of gdp, you’ve got to have at least $4 trillion of deficit reduction, so that’s kind of like your bogey. if you talk about anything less than that, you’re just kidding yourself. what we said is look, let’s take a trillion of that from revenue and $3 trillion from spending cuts.and how did we get to revenue? we said what makes the mostsense is to broaden the base, simplify the code, start off with getting rid of all of the, of this back door spending in the tax code. we only raised last year $1.3 trillion in total tax revenuecoming into the country, and you know why? because we had $1.1 trillion worth of spending in the tax code. it’s literally crazy.wow. and if you were to eliminate that, okay, you could take rates to 8%, up to $70,000, 14% up to $210,000, have a maximum rate of 23%, could you take the corporate rate to 26%, and could you pay for a territorial system so all of that $1.5 trillion is captured overseas could be brought back here and if you just used 8% of that money from eliminating those taxexpenditures so you’re using 92% of it to reduce rates, 8% isabout $100 billion a year, that over ten years is $1 trillion. that’s where our $1 trillion of revenue comes from. it’s not revenue neutral by any stretch of the imagination. we have to have about $1 trillion of revenue and the reason you have to have that is if you take it all out of cuts, you’ll truly hurt the disadvantaged or you’ll disrupt a very fragile economic recovery, or you won’t haveenough to invest in education, infrastructure and high value-added research. what we need to invest in to grow the economy. gentlemen, i know andrew ross sorkin has a question as well. hey guys, we had paul krugman on the program yesterday, and there’s been, you know, depending on which side of the aisle you come from, you can like this plan and say or rather you can dislike this plan and say that the tax cuts are too harsh or too much or this or that. he said that this proposal was regressive, and i’m curious how both of you think about that critique. well paul krugman is a little hyper, and when this started for me, he said that i would, never saw a spending cut i didn’t love, or some snide little crack but i think he needs to rest. he needs some solace. he needs to sit in sun valley and someone hold his hand and say, poor, poor dear. he just gave in to ranting. he had a really, really, really tough weekend. i guess he spoke to a spanish, i guess the guy from the austrianschool of economics and it’s all over — check it out on the web,but apparently it didn’t go so well for the eminent mr. krugmanwith this guy. i don’t know, check it out. you might enjoy it, from the sound of your tone. joe, you also might tell him to check the analysis that we had done and we tried to make sure that as we reform the tax code we kept it just as progressive as it is today.and how did you do that? how did you ensure by going back?there are things like you get rid of second home mortgageinterest deduction, you cap it at $500,000, those are all things designed to help people at the bottom. actually if you look at it,becky, only 27% of the people itemize. 73% of the people don’t even itemize so they don’t take advantage of the mortgageinterest deduction, so what we said is, well you can — 12.5% non-refundable tax credit, that helps the little guy. i mean paul krugman talks about the little guy all day long. the little guy will be wiped out, and stimulus? i mean, i get a kick out of this, they say well we can get ourselves out of this with consumer spending. what consumer is ready to spend in this atmosphere? right. i mean this is madness, and a stimulus, you’re not going to get a nickel’s worth of stimulus from either party or they’d go home and get cremated. we have a $1.3 trillion stimulus right now. we’re spending $1.3 trillion more than we take in. we have a huge deficit and these guys are not talking radicalism. for 50 years after world war ii, more or less revenue was in the 18.5% or so range and spending was in the 20.5% range, and it really worked quite well. this is not something the country s you know, we’re not talking about something we never attained or anything of the sort, it’s just we’ve drifted into this situation where we’re not getting enough revenue and we’ve overpromised on expenditures. we’ve got a rich country but a rich country can overpromise. we’ve never had less money coming into the country since the korean war.
Bowles: ‘We Are Going Over the Fiscal Cliff’
“Everyone know we need something done, and they did their job and Congress has not done its job,” says Warren Buffett, Berkshire Hathaway CEO, commenting on the Simpson-Bowles plan to reduce the federal deficit, with former Sen. Alan Simpson, (R-WY), and Erskine Bowles, former chief of staff to President Clinton. “Deficit solutions are painful, but there’s no other way out,” explains Sen. Simpson.
Buffett Sees Pick-Up in Residential Housing
Warren Buffett, Berkshire Hathaway CEO, discusses the outlook on the U.S. economy; the decline in Europe over the past several months; and a pick-up in the homebuilders space, adding a strong comeback in housing is necessary for an overall recovery.
ross sorkin. becky quick is in sun valley, idaho, with a special guest who will join us for the rest of this show. we didn’t decide you were at dollar mountain so we don’t know where you are, but you have noticed, nothing costs $1 anywhere around that mountain, on that mountain or any of the vicinities near that, but it is dollar mountain. yes, that’s right, joe. the inappropriately-named dollar mountain, we’re over sun valley and joined by a special guest, warren buffett. mr. buffett thank you for joining us this morning. good to be here. we couldn’t think of a better time to have you on because there are so many questions about what’s been happening with the economy, what’s beenhappening with the jobs picture. why don’t you tell us whatyou’re seeing now in your businesses. for a couple of years i’vebeen telling you everything except residential housing wasimproving at a moderate rate, not crawling but not galloping but the last two months it’s been sort of the opposite. the general economy in the united states has been more or less flat, and so the growth is tempered down, but the residential housing we’re seeing a pickup, and it’s noticeable, it’s from a very low base and it doesn’t amount to a whole lot yet but it’s getting better, and so we’ve got a flip-flop on that. what happened? we talked in the past you had said when housing turned that would be when the u.s. economy would turn. what happened? it hasn’t turned that much yet but it is picking up but at the same time, the rest of the economy i would say is slowing down. it’s not heading downward but it’s not growing at the rate that it was earlier, and then it’s kind of interesting in europe, for a year or so, in most places, i mean forget about greece for the moment but generally in europe, you didn’t have a big slowdown. you had a lot of worry in all of that but in the last couple months in europe, particularly in the last month, it’s pretty much across europe things are really starting to slip pretty fast. we’ve heard this from a lot of ceos who joined us in the last several weeks but what business lines in particular do you look at and do you see these things kind of popping up? i look at all of thebusinesses we have and then i talk to people in otherbusinesses, and it’s pretty clear that that’s what’s going on right now, that there’s certain figures i can’t tell you where i get them, but they — europe is really, it’s headed downward in the last, i don’t know, six weeks or so, and it wasn’t going that way before, it wasn’t doing that well, but it hadn’t really hit the skids. is that because of consumers or because of businesses, confidence and spending slowing down. spending slowing down andwhen spending slows down, business reacts. i mean, they’re not seeing the same kind of spending so they’re pulling their horns some. of the things that you can talk b the numbers that you do see concern you the most? well it’s pretty general,becky. like i say, it has not turned down in the united states. our freight carloadings are up week by week. i normally get them today but i’m not home. last week, they’re up, although the eastern railroads were down moderately. lot of that’s coal butnevertheless just across the board, looking at retail sales and jewelry or furniture or you name it, yards of carpet are down.carpet business is better. on the other hand, if you look at, we’re the largest home builder in the country, clayton homes. that’s up, brick is picking up but these are from low levels but you are seeing, and our real estate brokerage firm, second largest in the country, pending sales are up by a reasonable amount but from a very low base. with everything else, with not a reversal but a slowdown in the growth, what happened six weeks ago to spook people, to spook businesses? i don’t know the answer to that. i know the result. you can argue in europe why it was delayed so long. i mean, becauseeurop e has really been, you can see this coming, it was two years ago we sold all our spanish and italian and even french bonds, we were overly cautious probably but that was two years ago. so europe, with all that’s going on, it probably kept it from having any kind of gains but it didn’t really seem to sink in, but i would say the last, well i know the last couple months, and with some acceleration, it’s been hitting over there. we’ve watched the jobs picture, and the last unemployment, the last unemployment numbers at 8.2% from that last big government report last friday. is that a chicken and egg cycle? are people watching the jobs number and getting spooked by it or is the jobs number kind of — well, you’re right. there is some circularity to it, but i don’t know the answer as to exactly why it’s happening and i don’t know what it will be three months from now or six months from now because three months ago i didn’t know what it would be today, and the u.s. economy is doing better than virtually any big economy around the world. this economy has come back a long way with the exception of housing, from where it was a few years ago and you can see it in corporate profits, but i thought it would take housing, i still think it would take housing coming back significantly to move us generally significantly upward and i still think that’s true, but so far, the little pickup in housing has not been near enough to offset whatever is going on in the worldgenerally. the fed came out with their minutes yesterday, and obviously they’re concerned about the economy. they say that they could step in to do something else but i guess the question becomes what would it take to get them to step in and what could they do at that point? i have my own doubts, i’m sure chairman bernanke would disagree with me and he knows a lot more about it than i do. i get — when you have interest rates down to zero, not only here but in the major countries in europe, and you have the, you have a 15-year treasury inflation protected so-called tips security, in a negative yield, 15 years people arewilling to put their money out at a minus rate in real terms, that — that’s about as far as you can go. you can talk about more easing or that sort of thing, but you know the banks are sitting with enormous amounts of money at the fed. they don’t want to be sitting with the money at the fed. it’s bringing in a quarter of apercent. they’re not happy having that money at the fed. they just aren’t seeing that much demand for loans. although they’re picking up a little, i mean, but it’s nothing like people would like to see. i don’t see what the fed does that’s dramatic. does that mean we’re in a wait and see pattern? to some extent. it also means that they shouldn’t be bicycling like crazy at the fed while — maybe they should be bicycling like crazy but while congress sits there on the sidelines and you know, basically squabbles.what should congress be doing at this point? we’ll talk more with simpson and bowles a little later this morning but you think there’s something congress should be doing right now? i think people have a feeling that congress is inept, and sort of paralyzed by the desire of each side to make the other side look bad. i think that has got to be a factor in general confidence. you know, if you see your government not functioning, it’s not really the most — it’s not the biggest spur to activity that you can imagine. maybe not a confidence booster so to speak. so i think it’s hard for the fed to offset the congress in terms of changing public opinion. okay, we’re going to have more with warren buffett in just a moment, but andrew, i know we have to cut in for a commercial break so i’ll send it back to you. we will do that. thank you for that becky, thank