Munger Must Love Dodd-Frank

(Community Matters) from WSJ blog of Berkshire Hathaway shareholder meeting today:

Charlie Munger takes a hard line on the financial industry, saying that the country is “making a huge mistake not learning enough from the big mess that came from wretched excess” in the financial system. Munger says he advocates taking an “axe to our financial sector” and “whittling it down” to a smaller size.He says the tax system should discourage trading of assets, and that securities trading shouldn’t be left to the rapid-fire pace of computerized trading – what he said “amounts to legalized front running.””He’s getting warmed up,” Buffett says.

  • Did we fix too big to fail?

    Buffett last year issued a “thank you” letter to America, praising taxpayers for the bailouts that saved Wall Street, and — he conceded — rescued his investments, too. Now, Buffett says the U.S. hasn’t really solved the “too big to fail” problem — or the risk of financial institutions growing so large and so important that the government can’t let them topple.

    Buffett said it’s inevitable that the government may need to bail out some companies even if “people won’t like it.” But the price, he said, should be very high. The “problem will always be with us. For that reason you have to do things to reduce the propensity to fail,” Buffett says.

    How? CEOs of companies that need bailouts, and their spouses, should be left “dead broke,” Buffett said. And the board should suffer too, he says.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s