LIVE BLOG ARCHIVE: Three Hours with Warren Buffett Live from Omaha
THIS IS A LIVE BLOG ARCHIVE OF WARREN BUFFETT'S APPEARANCES ON CNBC'S SQUAWK BOX THIS MORNING. BUFFETT SPOKE WITH BECKY QUICK LIVE AT THE HOLLAND PERFORMING ARTS CENTER IN OMAHA, NEBRASKA.
ALL TIMES ARE EASTERN.
6:01 AM: Becky Quick introduces Warren Buffett and plays a clip from the documentary I.O.U.S.A, which premiered last night in hundreds of movie theaters around the country. Buffett says he doesn't think the problem of the national debt is as bad as portrayed in the film, but he admires the people who made the film and thinks its good that people are thinking about the situation.
6:03 AM: Buffett says "things have rippled out" in the U.S. economy, as one might expect.
6:06 AM: Asked about Fannie Mae and Freddie Mac , Buffett says due to implicit government backing, the two GSEs could borrow without the usual checks and balances. Then needed to keep earnings growing to keep stock market happy and turned to accounting to do it. Agrees they are "too big to fail." Buffett says they would have been gone a long time ago if the government hadn't been behind them. He thinks Freddie and Fannie will survive but shareholders could "lose a lot of money."
6:05 AM: Still thinks the economic problems will be deeper than longer than expected. He expects things will be better five years from now, but not five months from now. "Troubles feed on themselves."
6:10 AM: Buffett says problems of GSEs illustrate how difficult it is for government to regulate companies where management is trying to deceive or simply doesn't know what's going on.
6:12 AM: Buffett says that while Fannie and Freddie have looked for cash from the private sector, it won't be enough to save them. Government will have to step in. His comments raise the possibility that he and Berkshire had been approached to provide capital to Freddie and Fannie, although he does not address that directly.
6:13 AM: Buffett says derivatives aren't evil, but can be misused. "They are dangerous things." Says he knows every derivatives contract Berkshire Hathaway has bought.
6:17 AM: After returning from a commercial break, Becky brings in Carl Quintanilla, who is co-anchoring from the Summer Olympics in Beijing. Becky asks about Coca-Cola's sponsorship of the Olympics. (Berkshire has a big stake in Coca-Cola: .) Buffett says Olympic sponsorship is good for a company like Coca-Cola that wants to be associated in people's minds with happiness, competition, and nations coming together. Buffett says he's been enjoying watching the Olympics on television, but he hasn't gone to China himself to see any of them.
6:22 AM: Buffett reveals that Berkshire made a half-billion dollar bid on a Chinese stock that wasn't accepted. He wouldn't say what stock or what industry. He did say that under the right circumstances he could have a lot of money in China, but noted that there are government restrictions on foreign ownership that must be overcome.
6:34 AM: Becky introduces Dave Walker, CEO of the Pete Peterson Foundation, whose campaign to raise awareness about the nation's national debt forms the basis of the film I.O.U.S.A. While Buffett doesn't agree with Walker on just how bad the problem is, he says he does admire Walker's work and thinks it's always better to try to get politicians to think longer-term.
6:44 AM: Becky and Warren have moved from the stage of the auditorium to a couple of the seats in the audience. Becky plays taped questions from some of the people who attended the movie premiere last night. The first question is about the American character and debt. Buffett says there's nothing wrong with having some debt, it just becomes a problem when it gets too bid. "Berkshire can expect to have debt forever" and shareholders wouldn't want it to operate debt-free. You worry when debt begins to spiral higher, because it then becomes more difficult to keep borrowing money from around the world.
6:46 AM: Buffett says "investing in yourself" is always the best thing.
6:48 AM: Is Fannie Mae going under? Buffett says in a sense they already have because they wouldn't survive without government backing. "They priced risk wrong."