Buffett: Fed Is History's Best Hedge Fund

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Sept. 20 (Bloomberg) -- On today's "The Roundup," Graham Fisher's Josh Rosner and Bloomberg's Matt Miller and Olivia Sterns wrap up the day's top market stories on Bloomberg Television's "Street Smart." (Source: Bloomberg)

I want to focus on this.

Warren buffett calling the federal reserve the greatest hedge fund in history, saying the bond purchases, inflating its balance sheet, have generated a huge profit.

In comments at georgetown, buffett commented on the fed taper.

This is under no pressure.

None whatsoever.

It can pick it's time to deleverage.

If you have somebody wiser, and i think bernanke is wise and i expect his successor to be, it can be handled.

But it is something that has never quite been done.

Buffett also weighed in on the battle in washington over the debt limit, saying it would be "dumb" not to raise the debt ceiling.

It kind of would be, right?

At that point, you are not paying your bills.

It really is the largest hedge fund, and i want to know what they are short.

Because hedge funds are long and short.


Lacks good point.

It is in the interest of the fed to keep interest rates low for itself.

Even as we were talking about earlier, if you were going to bring private capital back into the mortgage market, you are not going to do that with mortgage rates where they are.

At some point, you have to accept a balance.

They have gone up.

But they are still really low.


How are you going to bring capital in when there is no money for private capital to make?

Rates are way too low.

You are not going to bring private capital until rates go up.

We want them to go up because of a stronger economy.

I am not sure that is what it is going to come from.

If you own the printing press, you should be able to make money with it, right?

The fed should be able to generate returns.

But what has it bought you?

At some point, even though buffett says bernanke is under no pressure to de-lever, they have to do it.

The empire state building is going public, or the company behind it is.

They filed to raise more than a billion dollars as they receive one of the largest ipo's of a u.s. real estate investment trust in history.

The company plans to offer 71.5 million shares, $13-$15 each.

It is expected to list at the new york stock exchange under the symbol esrt.

If you like the empire state building, you can own a little piece of it.

Isn't it sort of an awkward time to be going public?

We are talking about rates backing up.

It is a great time if you are them to go public.

Not bad for tony milton.

You are getting prices -- tom barrick on thursday talking about that.

Colony capital.

Legendary real estate investor.

$50 billion.

He said he would not buy in new york right now if you paid him, prices are so high.

This was not the only way out.

Thor equities offered them $1.4 billion.

This is an ipo of less than that.

It certainly says it.

For all the millions of dollars the oracle ceo larry ellison spent on the america's cup race, he is still being assailed by the kiwis.

Oracle team usa is losing its grip on the 162-year-old trophy.

It needs to win every remaining race in the series with emirates team new zealand to win the cup and retain the right to organize the next event.

That is important for larry ellison.

He did so much with this.

He had plans to do so much more.

He wants to start a huge sailing racing league.

He wants f1 on the water.

He has spent a decade and tens of millions of dollars of his own money to win this cup.

And he lost 2 points due to penalties.

I would argue this is the problem.

Larry ellison spent too much money.

He scared off other people.

There are only 4 teams competing, because it became so expensive.

It would be great to have f1 on the water, but it is too expensive.

F1 on the street is pretty darn expensive as well.

Can you get the kind of revenue on the water that you get on the track?

Probably, sadly, no.

Tough questions for federal contractor you sis -- usis.

They've performed a background check that let the washington navy shooter obtained his security clearance, not to mention edward snowden.

Questions about how snowden and alexis were able to slip through the cracks.

No company does more u.s. background checks for clearance than usis, which was awarded 253 million dollars by the office of personnel management last year.

It is hard to fathom that you can have 2 almost back to back issues like this for the same company.

It is a question of process.

What are they doing?

If it is a monopoly, it is pretty easy to fathom.

The u.s. government spends a billion dollars a year on security clearances.

They are the biggest player there.

You talked about process.

Back in 2008, when alexis was still in the navy, he got the clearance.

Since then, there have been 2 shooting incidences.

There were no checkups on what happened.

And snowden -- the clearance was going to last for a decade even though he had incidents.

Nothing happens.

I would never get clearance.

You could get clearance.

This text has been automatically generated. It may not be 100% accurate.


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