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Warren Buffett to CNBC: 'I Don't See Problem' With Goldman's Abacus Deal

Monday, 3 May 2010 | 11:09 AM ET
CNBC

Warren Buffett tells CNBC this morning that he does not see a "problem" with the Goldman Sachs Abacus deal at the center of SEC fraud charges against the firm.

He says there's nothing "unique" about the 2007 Abacus deal and points out that a lot of banks and others, including American homeowners, lost money betting on the housing market at the time.

"When there's a mass delusion, you can say everyone is to blame... There's no villain."

Buffett also endorses CEO Lloyd Blankfein, saying he's done a "great job" at the company and should continue as CEO.

Buffett says he has not had any conversations with Blankfein about him possibly stepping down as Goldman chief. Buffett also says he hasn't spoken with Blankfein about settling with the SEC and doesn't think there's a legal reason to do so.

He leaves it up to Goldman's board of directors to decide if there is a 'business' justification for settling the SEC's charges, a possible he calls "conceivable." If not, the situation "will play out over time."

Buffett says he's "talking his belief," not simply defending Goldman because Berkshire invested $5 billion in the firm in September of 2008. Goldman is paying Berkshire a dividend of 10 percent a year on that $5 billion loan. Berkshire also has the option to buy another $5 billion of Goldman stock at $115 per share. Current price:

Buffett was interviewed live on Squawk Box by Becky Quick after this weekend's Berkshire Hathaway shareholders meeting drew over 40,000 people to Omaha.

At the start of a lengthy Q&A session with shareholders, Berkshire delivered a detailed explanation of the Abacus deal as he defended Goldman. But in an interview with Becky Saturday morning, Buffett acknowledged that Goldman Sachs has "lost the PR battle at this point."

Current Berkshire stock prices:

Class B:

Class A:

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