Warren Buffett, the billionaire chairman of Berkshire Hathaway, said municipal bankruptcies are set to rise as there’s less stigma attached after three California cities opted to seek protection just weeks apart, reports Bloomberg.
“The stigma has probably been reduced when you get very sizeable cities like Stockton or San Bernardino to do it,” Buffett, 81, said in an interview today on “In the Loop with Betty Liu” on Bloomberg Television. “The very fact they do it makes it more likely.”
LOL. What's really going to cause cities to go bankrupt is that they have run out of money and they can't find any more suckers to buy their muni bonds. The cities have started things rolling, but it's not too long before some states start filing for bankruptcy.
You have to be a real idiot to own long-term munis now.
For some unexplained reason, the world seems to think that every utterance from Mr. Buffett is somehow a pearl of great wisdom.
ReplyDeleteI get the giggles every year when some rube steps forward and donates millions of dollars to "charity" (last year 3.46 big ones) to have lunch with old Warren. Like over lunch you are going to somehow find out the hidden secret to becoming a billionaire. As you sip your glass of Dom he leans close, and with a twinkle in his eye, whispers "it's easy, just buy enough politicians to get whatever it is you need."
Clearly Warren has mastered the skills of one Phineas T. Barnum - "I am a showman by profession...and all the gilding shall make nothing else of me," and whose personal aims were, "to put money in his own coffers."
Absolutely nothing wrong with that, of course, but if you think “The very fact they do it makes it more likely” is profound financial wisdom, you shouldn't be having this conversation... Turn of Bloomberg and get to work!