In response to a question about the worst possible development for Berkshire Hathaway's vast insurance operations, Mr. Buffet responded: nationalization.
It's highly unlikely that such a development would happen, he added. But he did note the example of Social Security, which is a form of a nationalized annuity.
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Nationalization of insurance industry is not unlikely, on the contrary it is extremely likely. In fact the only big liberal item that is going to slip through the Senate is nationalization of health insurance (EFCA and carbon tax are already dead) before the liberals lose the Congress in 2010. After nationalization of health care insurance, nationalization of all other insurance will quickly follow.
As to the Social Security, Mr. Buffet, is not form of a nationalized annuity, either. It resembles more of giant federal Madoff-Ponzi scheme, where there are no assets whatsoever to back the dividends. Only new generations of clueless investors.
In short, it's time to sell Berkshire Hathaway.
It's highly unlikely that such a development would happen, he added. But he did note the example of Social Security, which is a form of a nationalized annuity.
****
Nationalization of insurance industry is not unlikely, on the contrary it is extremely likely. In fact the only big liberal item that is going to slip through the Senate is nationalization of health insurance (EFCA and carbon tax are already dead) before the liberals lose the Congress in 2010. After nationalization of health care insurance, nationalization of all other insurance will quickly follow.
As to the Social Security, Mr. Buffet, is not form of a nationalized annuity, either. It resembles more of giant federal Madoff-Ponzi scheme, where there are no assets whatsoever to back the dividends. Only new generations of clueless investors.
In short, it's time to sell Berkshire Hathaway.