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Below are Philip Durell's rough notes on the 1st question asked at Berkshire 2010 (unedited and the q&a is not word-for-word):

QUESTION: Goldman Sachs & SEC. Compared to Salomon clip - Goldman lost reputation - what do you think about transaction & what advice would you give the board of Goldman, reflections on Berkshire's investment

ANSWER (Buffett): I think the transaction has been somewhat misrepresented by media. 4 losers - Goldman lost about $100m on the Abacus deal. ABN AMRO lost the most guaranteed credit on another company. We do it at Berkshire & get paid for it & make money on it. We have lost money when the guaranteed company went bad. ABN AMRO lost $900m because they made a bad deal. ACA the insured company something like Ambac & MBIA. Started insuring municipal bonds but got into insuring structured credit - all of them got into trouble. We insure bonds but stay away from structured credit. We are often brought business and asked to insure bonds BUT we don't care who is on the other side of the trade - it could be Ben Bernanke or John Paulson for all we care. It's up to us to decide if we want to insure the bonds & what premium we'll accept.

No-one should have any problem if we had shorted or gone long the housing market in 2007. Buffett has not seen anything wrong in the deal.

It's probably helped BRK's investment because they probably will delay them calling our preferred shares! We get $15 a second on those preferreds - we get 10% and they could put them back to us by paying as $5.5b which we would put in short term - so we love the investment.

The allegation & press alone hurt the reputation. I don't believe an allegation falls into my judgement - if its proved that's a different matter & we'll look at it. I do not see that Abacus deal is wrong. 


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