Warren Buffett co-hosted Bloomberg TV’s “In the Loop” with Betty Liu Friday morning, and given his previous comments, he had some contrarian things to say about the U.S. economy, JPMorgan Chase’s big loss and Wells Fargo’s mortgage operations, along with Bank of America and other Berkshire Hathaway holdings.
JPMorgan CEO Jamie Dimon “does not need any advice from me,” Buffett said, before offering some.
The Oracle of Omaha went on to talk about the U.S. debt ceiling and what he calls “the tapeworm of the American economy.”
Read on for nine of Buffett’s midyear pronouncements, taken from a Bloomberg TV transcript.
1. Buffett on JPMorgan Chase
On whether he was surprised by JPMorgan’s $4.4 billion loss:
“Not surprising … in terms of the loss from a transaction of that size. My guess they pretty much worked out of it by now. They lost a whole lot more than that in loans and mortgages and reps and warranties that are coming back. It sounds like a whole lot of money, but it is not that significant relative to JPMorgan … I have had enough mistakes of my own, so I am very forgiving.”
“Oh sure—They had losses on reps and warranties on mortgages that were substantial. They had loan losses that were substantial bearing the 2008 period. I just heard the Wells Fargo figure. That was $5 billion a few years ago. Banks are in the business of taking some risk. If they take risks, they are going to have losses as well. If you put it under a rock, you will not have any losses, but you will not earn any money.” 2. On JPMorgan Chase’s CEO Jamie Dimon
“We work on a panel together at Microsoft shortly after it broke. I heard him talk about it. It is pretty clear what happened. He does not need any advice from me.”
On what advice he’d give Dimon:
“Keep your head down and you have a fantastic institution, and you are making money every day. You are going to run into things like this…I think it is the best shareholder letter. It is very, very good. He is a candid guy. When he made that statement in April, that is what he thought. I have no question about Jamie Dimon telling the truth.”
3. On Wells Fargo:
“They’ve got a sensational mortgage operation. The total mortgage market was at the $3 trillion level not that long ago. If it goes back up to $3 trillion, I hope Wells is going a third of those.”
“Wells did the best job of the big players in the mortgage market and therefore they’ve garnered a share as the other fellows have fallen by the wayside.”
“I like Wells Fargo better than anything by far. It complicates life when I and buying things as opposed to the Berkshire Hathaway. I get what is left over…I like Wells Fargo better [than JPMorgan]. We have been buying Wells Fargo month after month for a lot of years. Among the big banks, I think it is the best.”
3. On the housing market:
“It is starting to recover. The general economy has probably slowed down a little in the last few months … We have moved noticeably in the last few months. It was just a question of getting households in balance with housing units. That happens at different paces in different parts of the country. You have seen a much better balance developing here in recent months. That is why you are seeing a pickup in prices.”
4. On Berkshire Hathaway’s $5 Billion Investment in Bank of America:
“It is an attractive price. I wish I had done it for $10 billion.”