GO
Loading...

CNBC EXCERPTS: BILLIONAIRE INVESTOR WARREN BUFFETT AND ALAN SIMPSON & ERSKINE BOWLES, CO-CHAIRS OF THE PRESIDENT'S DEFICIT COMMISSION, ON CNBC’S “SQUAWK BOX” TODAY

Jennifer Dauble
Thursday, 12 Jul 2012 | 11:57 AM ET

WHEN: THURSDAY, JULY 12TH

WHERE: CNBC’S “SQUAWK BOX

Following are excerpts from the unofficial transcript of billionaire investor Warren Buffett and Alan Simpson & Erksine Bowles, Co-Chairs of the President's Deficit Commission, on CNBC’s “Squawk Box” today. All references must be sourced to CNBC.

The full transcript will be available on buffettwatch.cnbc.com. Video clips are available on CNBC.com.

BUFFETT ON THE GENERAL ECONOMY:

THE GENERAL ECONOMY OF THE UNITED STATES HAS BEEN MORE OR LESS FLAT SO THAT GROWTH HAS TEMPERED DOWN BUT THE RESIDENTIAL HOUSING WE ARE SEEING PICK UP IT IS NOTICEABLE, IT IS FROM A VERY LOW BASE AND IT DOESN'T AMOUNT TO A WHOLE LOT YET BUT ITS GETTING BETTER.

BUFFETT ON LIBOR 1:

IT'S A BIG DEAL I MEAN YOU HAVE GOT THE BASE RATE FOR THE WHOLE WORLD INCLUDING SOME LOANS WE HAVE IN THE PAST. THE IDEA THAT A BUNCH OF TRADERS CAN START EMAILING EACH OTHER OR PHONING EACH OTHER AND PLAY AROUND WITH THAT RATE IS AN IMPORTANT THING AND IT IS NOT GOOD FOR THE SYSTEM.

BUFFETT ON DIAMOND:

I AM NOT A BARCLAYS SHAREHOLDER BUT I DON’T HE HAD ANY CHOICE BUT TO GO. SOMETHING AS BIG AS LIBOR AND HE WASN’T IN CHARGE OF ALL OF BARCLAYS AT THAT TIME BUT THERE ARE A LOT OF THINGS THAT WENT ON IN THAT TRADING ROOM THAT WHO KNOWS WHO WAS AWARE OF WHAT AND I DON'T KNOW ANYTHING SPECIFIC ABOUT IT BUT IT WAS NOT A ROGUE TRADER LET'S PUT IT THAT WAY.

BUFFETT ON DIMON:

I THINK JAMIE DIMON IS ONE OF THE BEST BANKERS IN THE WORLD…IF I OWNED A BANK IN OMAHA AND I COULD GET JAMIE TO RUN IT FOR ME I WOULD FEEL VERY HAPPY. JAMIE UNDERSTANDS BANKING HE UNDERSTANDS RISK AND IT IS A SIGNIFICANT LOSS JPMORGAN LOST BILLIONS AND BILLIONS AND BILLIONS OF DOLLARS ON LOANS I MEAN IF YOU’VE GOT A COUPLE TRILLION DOLLAR BALANCE SHEET YOU ARE GOING TO HAVE SOME LOSSES SOMEPLACE.

BUFFETT ON LIBOR 2:

YOU GET LIBOR AND YOU ARE TALKING ABOUT THE WHOLE WORLD…EVERYTHING IS TIED AND OF COURSE YOU ARE IN THIS TERRIBLE POSITION, IF YOU HAVE MILLIOINS OF THESE CONTRACTS BASED ON LIBOR AND ONE SIDE PROFITS FROM A GIVEN PRICE BEING OUT OF LINE AND THE OTHER SIDE LOSES, YOU ARE NOT GOING TO COLLECT FROM THE FELLA THAT GOT THE BENEFIT IF YOU ARE IN THE MIDDLE OF THE TRADE YOU ARE GOING TO HAVE THE PEOPLE ON THE LOSING SIDE OF EACH TRADE COME AFTER YOU SO IT IS VERY ASYMMETRICAL FOR THE PERSON THAT’’S GOT A BUNCH OF TRADES ON IT."

BUFFETT ON EXPENDITURES:

YOU HAVE TO GET EXPENDITURES, IN MY VIEW, DOWN TO ABOUT 21% OF GDP AND REVENUES UP TO 18.5 OR 19, AND YOU CAN GET HUNDREDS OF PEOPLE THAT COULD DRAW UP PLANS, THOUSANDS THAT I WOULD ACCEPT, HE WOULD ACCEPT, AND THEY WOULDN'T ALL BE IDENTICAL BUT IT'S AN OBVIOUS PROBLEM, THE NEEDED SOLUTION IS OBVIOUS AND MOST OF THE ASPECTS OF THE SOLUTION ARE PRETTY OBVIOUS TO EVERYBODY

BOWLES ON DEFICITS:

IF WE DON'T GET THESE POLITICIANS TO COME TOGETHER, WE FACE THE MOST PREDICTABLE ECONOMIC CRISIS IN HISTORY, I THINK IT'S ABSOLUTELY CLEAR THAT THE FISCAL PATH WE'RE ON IS NOT SUSTAINABLE AND FOR ME THE BEST ANALOGY IS THESE DEFICITS ARE LIKE A CANCER, AND OVER TIME THEY WILL DESTROY THE COUNTRY FROM WITHIN.

BOWLES ON DEBT:

EVERY SINGLE DOLLAR WE SPENT LAST YEAR ON THESE 2 WARS, NATIONAL DEFENSE, HOMELAND SECURITY, EDUCATION, INFRASTRUCTURE, HIGH VALUE ADDED RESEARCH, EVERY SINGLE DOLLAR WAS BORROWED AND HALF OF IT WAS BORROWED FROM FOREIGN COUNTRIES. THAT'S CRAZY, CRAZY, IT'S A FORMULA FOR FAILURE IN ANY ORGANIZATION.

BOWLES ON THE TAX CODE:

WHAT MAKES THE MOST SENSE IS TO BROADEN THE BASE, SIMPLIFY THE CODE, START OFF WITH GETTING RID OF ALL OF THE, OF THIS BACK DOOR SPENDING IN THE TAX CODE. WE ONLY RAISED LAST YEAR $1.3 TRILLION IN TOTAL TAX REVENUE COMING INTO THE COUNTRY, AND YOU KNOW WHY? BECAUSE WE HAD $1.1 TRILLION WORTH OF SPENDING IN THE TAX CODE. IT'S LITERALLY CRAZY.

SIMPSON ON KRUGMAN:

WELL PAUL KRUGMAN IS A LITTLE HYPER, AND WHEN THIS STARTED FOR ME, HE SAID THAT I WOULD, NEVER SAW A SPENDING CUT I DIDN'T LOVE, OR SOME SNIDE LITTLE CRACK BUT I THINK HE NEEDS TO REST. HE NEEDS SOME SOLACE. HE NEEDS TO SIT IN SUN VALLEY AND SOMEONE HOLD HIS HAND AND SAY, "POOR, POOR DEAR." HE JUST GAVE IN TO RANTING.

BOWLES ON DEFENSE SPENDING:

HERE IS HOW CRAZY DEFENSE IS. JUST THINK ABOUT THIS. THE U.S. HAS A TREATY WITH TAIWAN THAT WE'LL PROTECT TAIWAN IF THEY'RE INVADED BY THE CHINESE. THERE'S ONLY ONE PROBLEM WITH THAT. WE GOT TO BORROW THE MONEY FROM CHINA TO DO IT! THAT'S CRAZY!

BOWLES ON HEALTH CARE OUTCOMES:

WE SPEND TWICE AS MUCH AS ANY OTHER COUNTRY IN THE WORLD ON HEALTH CARE, WHETHER YOU TALK ABOUT IT ON A PER CAPITA BASIS OR PERCENT OF GDP AND YOU KNOW, THAT MIGHT BE OKAY IF OUR OUTCOMES WERE TWICE AS GOOD AS ANYBODY ELSE'S BUT ON OUTCOME, ON ALMOST ANY OUTCOME MEASURE YOU LOOK AT, WE RANK SOMEWHERE BETWEEN 25TH AND 50TH IN THINGS LIKE INFANT MORTALITY AND LIFE EXPECTANCY, AND PREVENTABLE DEATH.

SIMPSON ON HEALTH CARE:

THERE'S NOTHING IN IT THAT HAS COST CONTAINMENT. NOT A THING. PEOPLE SAY WILL IT WILL HAPPEN. LET ME TELL YOU IT WON'T HAPPEN. AND THE REASON IS VERY SIMPLE. YOU'RE GOING HAVE PRE-EXISTING CONDITIONS OF A 3-YEAR-OLD THAT WILL LIVE TO BE 60. ONE PERSON IN THE UNITED STATES WEIGHS MORE THAN THE OTHER TWO. YOU GOT DIABETES A AND B. YOU GOT TO DO SOME TORT REFORM. YOU GOT TO DO SOMETHING WITH DOCKS. 10,000 A DAY TURNING 65.

SIMPSON ON BUSH TAX CUTS:

POLITICALLY NOTHING WILL BE DONE BETWEEN NOW AND NOVEMBER 6TH. ITS JUST POSTERING AND GUYS WILL GET UP AND SAY WE CAN GET THIS TERRIBLE THING RESOLVED WITHOUT TOUCHING PRECIOUS MEDICARE, PRECIOUS MEDICAID, PRECIOUS SOCIAL SECURITY AND PRECIOUS DEFENSE LET ME TELL YOU THAT PERSON WOULD BE DESCRIBED AS A PHONY THAT’S GOING TO DO THAT IN THIS ELECTION. WE THINK NAIVELY ENOUGH IF YOU HAVE THE GUTS TO DO SOMETHING ALONG THE LINES OF WHAT WE SUGGESTED THE PEOPLE WILL REWARD YOU AND IT WON’T COME NOW BUT IN 4 MONTHS AS THIS THING CLOSES IN MAN YOU KNOW PEOPLE ARE GOING TO SAY HEY IF I DON’T DO SOMETHING THEY ARE GOING TO THROW ME OUT FOR SITTING HERE DOING THIS B.S. AND MUSH THAT I HAVE BEEN POURING OUT.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD+, CNBC is the recognized world leader in business news providing real-time data, analysis and information to more than 390 million homes worldwide. The network's 16 live hours a day of business programming in North America (weekdays from 4:00 a.m.- 8:00 p.m.) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC.com and CNBC Mobile Web (mobile.cnbc.com) offer real-time stock quotes, charts, analysis and on-demand video.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/