Issues on toxic assets:
=> They have not been written down by enough?
=> Or being written down too much?
The interesting thing is that the toxic assets,
if they're priced at market, are probably the best assets the banks has,
because those toxic assets presently are being priced based on
unleveraged buyers buying a fairly speculative asset.
So the returns from this market value are probably
better than almost anything else, assuming
they've got a market-to-market value, you know,
they have the best prospects for return going forward of anything the banks own.
The problems of the banks are overwhelmingly not toxic assets. . .
Issues on bank industry:
=> They are technically insolvent?
=> Or heading towards great profitibility?
The spreads have never been wider.
This is a great time to be in banking, you know,
if you just get past the past and they are getting past the past.
I mean, right now every time a loan is made to somebody to buy a house--
and we're making, you know, making millions of loans--
four and a half million houses will change hands this year
out of a total stock of less than 80 million.
So those people are making good mortgages.
You want those assets on your books and
you get a great spread in putting them on now.
So it's a great time to be in banking, but you do have to get past this past.
But the toxic assets, in my view, you know,
if they've been written down to market,
I'd rather buy those assets from the bank than any other assets they've got.
Believe it or not?
Buffett vs Lots Analysts & Economists in the world
One of the side for sure is totally totally 180 degree wrong!
Who will that be?
Who will you go for?
In the past 50 years, history has proved that Buffett is more correct than anyone else.
Will history repeat itself again or fail this time?
Let's see!!!
(FYI, Berkshire Hathaway has been downgraded from AAA to AA+ by Fitch Rating due to its un-hedge market exposures and potential earning volatility as "inconsistent with stability of an AAA rating company".)
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