"I was sort of hoping you wouldn't do it, because then everything would have crashed and I would have been first in line to buy."Buffett continued,
"It would have been terrible for the country, but I would've made a lot more money"Amen on number one. A's fire sale is B's buying opportunity. In the end, a lot of finance depends on flexible long-only money to come in and take risks when others are selling.
Absolutely wrong on number 2, Mr. Buffett. There is no more patriotic act an American sitting on a few billion dollars can perform, than to show up at a fire sale with a fat checkbook and a pen.
It would certainly have given courage to other wealthy investors, endowments, hedge funds, and sovereign wealth funds.
A bottom-feeders' frenzy might also have shown to the likes of Mr. Geithner the limits of constantly repeated stories of "no buyers," limitless "fire sales," "liquidity spirals;" the belief that that only highly-leveraged and panicky intermediaries set asset prices, so government must always bail out all creditors.
A good Bear Stearns failure might well have saved us from a bad Lehman failure.