First of Many

There are quite a few points to cover from the shareholder meeting and it's unlikely I'll even get to them all but will try to hit the key ones. Here is the first of many. Buffett speculated that the federal government may have told Goldman not to redeem the Berkshire preferred and said this only creates more earnings for Berkshire.  If so:

> It means the government (Treasury, SEC, whoever) understands that having Berkshire/Buffett's reputational value is worth *more* to Goldman than the high additional cost of financing that Goldman is paying. In other words, even the *government* understands that Buffett sold his reputation too cheap.

> Yes, Berkshire gets financially richer the longer it holds the preferred. Berkshire got an extraordinary deal on the Goldman preferred plus warrants. The "extraordinary" part was the 10% interest (a junk bond rate on a security of a company that has no bankruptcy risk because it is too big to fail). The warrants are essentially a kicker, although they will likely prove extremely valuable. The government itself was unable to negotiate terms anywhere close to this good. Goldman got an even more extraordinary deal, though. The longer Goldman holds the preferred, the bigger the net negative for Berkshire (too much reputation traded away).

Is there a scenario that is a win/win or a win of some sort for Berkshire? Yes. Absolutely. If Goldman Sachs did a Salomon it could be a win for Berkshire. For example. Blankfein goes to Mary Shapiro, offers to resign, shakes up the board and management, new CEO is not a trader, company displays massive contrition far out of proportion with any sins/crimes/misdeeds, offers public apology, and says it is doing all of this because of the influence of Warren Buffett. In other words, rather than cling self-righteously to the technicalities of what it did right or wrong, showed sensitivity to the real problem, which is the public's anger at its multitude of callous behaviors toward taxpayers and investors. This would be a win for Berkshire. As you can see, it ain't happening, and nothing occurred today that would encourage it to happen.