Buffett: S&P Downgrade ‘Doesn’t Make Sense’

Berkshire Hathaway Inc. (BRK-A, BRK-B) Chairman and CEO Warren Buffett told the FOX Business Network that S&P’s downgrade of the United States’ triple-A credit rating “doesn’t make sense.”

“I don’t get it,” Buffett told FBN late Friday night. In fact, Buffett reaffirmed his belief in the quality of the United States’ credit telling FBN, “In Omaha, the U.S. is still triple A. In fact, if there were a quadruple-A rating, I’d give the U.S. that.”

Buffett told me tonight that Berkshire Hathaway’s T-bill exposure is significant.

“We just filed our 10Q and we have $47 billion in cash and cash equivalents. Well over $40 billion of it is in short end T-bills. (Tonight’s S&P downgrade) doesn’t tempt me to sell. We’ll stay right there.”

Buffett sounded no alarm bells about the downgrade, going so far as to say it wouldn’t have much effect on the markets Monday. “If nothing else takes place, meaning, if all other variables hold and there isn’t say, a new problem in Europe, it won’t make any difference.”

“Think about it. The U.S., to my knowledge owes no money in currency other than the U.S. dollar, which it can print at will. Now if you’re talking about inflation, that’s a different question.”

When asked if he felt the U.S. deserved the downgrade, Buffett said, “No.” He took a swipe at S&P, quipping, “Remember, this is the same group that downgraded Berkshire.”

The downgrade has prompted some economists and market watchers to warn that interest rates may rise, the dollar may weaken and stocks could see a sell-off. When asked whether he was worried about market gyrations Monday, Buffett said, “No.”

About Liz Claman 1 Article

Affiliation: FOX Business Network

Liz Claman joined FOX Business Network (FBN) as an anchor in October 2007. Her debut included an exclusive interview with Berkshire Hathaway CEO and legendary investor Warren Buffett.

Before joining FBN, Claman served as an anchor at CNBC, most recently anchoring Morning Call and Cover to Cover. During her time at CNBC, Claman has interviewed major financial newsmakers, including Warren Buffett, Commerce Secretary Carlos Gutierrez, and former Treasury Secretary John Snow. She has also anchored Wake Up Call, Market Watch, and Today's Business. In addition, Claman is the author of "The Best Investment Advice I Ever Received: Priceless Wisdom from Warren Buffett, Jim Cramer, Suze Orman, Steve Forbes, and Dozens of Other Top Financial Experts" (Warner Books 2006).

Before CNBC, Claman served as an anchor and reporter for Boston's WHDH-TV (NBC). She was also a contributing correspondent for NBC's syndicated daytime program RealLife. Prior to that, she anchored a two-hour daily talk show, The Morning Exchange for WEWS-TV (ABC) in Cleveland. She received an Emmy for her work on The Morning Exchange.

A graduate of the University of California, Berkeley, Claman began her on-air career at WSYX-TV (ABC) in Columbus, OH as a reporter and later a weekend anchor. Earlier, she was a news associate for KCBS-TV (CBS) in Los Angeles where she was the youngest person in the station's history to win a local Emmy Award for Best Spot Producer.

Visit: FBN

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