Buffett sees more losses for banks

Discussion in 'Wall St. News' started by Cdntrader, May 4, 2008.

  1. Buffett sees more losses for banks

    By Alistair Barr, MarketWatch
    Last update: 4:05 p.m. EDT May 4, 2008

    OMAHA, Neb. (MarketWatch) --Banks will suffer more losses over the next few years from the real-estate crisis, despite the Federal Reserve's successful efforts to prevent contagion in the financial system, Berkshire Hathaway Chairman Warren Buffett said on Sunday.

    "The action of the Fed in terms of Bear Stearns ( prevented contagion where there may have been more bank runs on the investment banks," he said during a press conference. "That doesn't mean the losses are over by a long shot. There's going to be more pain."

    "We've looked at several of the investment banks where it's clear more losses are to be taken," he added.

    The size of future losses depends on the outlook for the economy and the housing market, he explained.

    Listings of homes for sale in some areas of the country, such as Broward County, Fla., are up a lot from last year, Buffett noted.
    "That will work its way out," he said, but stressed that it's difficult to know how long that will take.

    Berkshire owns a big stake in Wells Fargo , one of the largest mortgage lenders in the U.S., and holds shares in other banks such as US Bancorp .

    Wells Fargo is going to have above average losses as will other banks on things that relate to real estate over the next few years," Buffett said.
    Berkshire is not selling its Wells Fargo shares though, he noted.
    Alistair Barr is a reporter for MarketWatch in San Francisco.
  2. boo hoo hoo the money guys and funds that run wallstreet could care less

    market will continue to rally
  3. good point. He griped about the dollar, wallstreet could care less.
  4. Buffett's really sticking his neck out there! When have banks ever not made losses? It's inherent in taking risks. The size of their losses almost always depends on the economy and housing. This reads to me as 'business as normal' unless something else terrible happens.
  5. c-Trader;
    Neat read. Caught my eye, he exspects above average losses in Wells Fargo Bank, but doesnt plan to sell.:cool: