Warren Buffett is a Genius!!!!

Berkshire Hathaway Opening Bond Insurer

Buffett Signs Death Warrant For Ambac & MBIA

MBIA, Ambac Fall as Buffett Starts Up Bond Insurer


So, the two possible effects of this is to help his competition or kill his competition... jeez, I wonder which option he'll choose?

He'll insure new bonds and leave the junk behind for the floundering industry.

In a year or two BH is going to be the biggest bond insurance company in existence standing over the corpses of it's competitors.

Brilliant!
.

Buffet does have a keen eye for opportunity. i remember following his lead buying silver in the 6 dollar range.. glad i did.

recently i saw he was buying up shares of those banks who's share price has dropped 50% this year since the "credit crunch." a couple years from now these bargains he snatched up at the firesale will earn him billions..

He was also approached by Morgan Stanley I think (might have been Merril Lynch) for a cash infusion, like he gave Lehman back in the 80's and he turned em down. he knows how to make money, safely. It's why I've been putting money in the B class shares for my kids' futures.

Guess we'll finally see the end of the "Buffet is buying this company"stuff that's been going on for months now. I love it, truly brilliant. The implications of this are truly big with the credit crunch, SIV, and sub-prime stuff going on. One must remember that Buffet did not make his fortune in a bull market like has been running the past couple of years. The irrationally optimistic have been praying for Saint Warren to step in and do something since the turmoil in the markets has started. Well the Oracle appeared and stepped right on the throat of and industry that got too greedy. Just as the bond insurance industry is starting to fret about their AAA credit rating, a new player, backed by Berkshire's Billions, with lots of insurance experience (Geico and General RE) is about to enter the market with an AAAA credit rating. When, not if the current bond insurers lose their AAA credit rating we will see some real fireworks in the market with carryover to the financials, maybe Buffet is looking at certain financial, but by making this move he almost guarantees he'll get them cheaper in a few months.

Wait for the Adjustable Rate Mortgages to reset in 08, which millions of mortgages are. These mortgages, with new, higher rates will cause even more foreclosures. This is only the beginning.

Buffett is a genius no doubt. I've been to his last 4 AGM's at the Quest Center in Omaha. Those weekends are incredible events. Buffett and Munger mkae quite a duo preaching their wisdom on stage in front of 20 000 people and another 10 000 in overflow rooms. I still haven't got teh courage up to ask a question, my NY's resolution this time is to.
Last AGM they were discussing the $30 billion in cash BH had and had trouble finding places to invest it. He made the statement that he wanted to inverst big ( billions ) or not at all.
It'll be interesting to see how this plays out, I'm looking forward to the next AGM.

Time will prove you wrong on Buffet. His insurance companies own a pretty large boatload of these mortgage instruments. This is simply a ploy to try keep these bonds on the books at face value. Ain't gonna happen as the foreclosure will keep getting worse and worse. This is only postponing the death of the major financial institutions. Buffets best days are behind him.