Without looking up figures: Berky may have some 100 Bn hard book on 300 bn assets. Could be an AA + or -. Whatever.

But GE is an AAA with 10 bn of hard book and 700 bn of (probably worse) assets ?

Please put this agencies out of their misery…..

Fitch needs to protect its franchise and calls like this are just aggrandisment.

And as another comemntator stated, why no downgrade on the insurance arm?

The rataing agencies are just limpets on Wall Street. And are still to be taken to task for their rating calls on sub-prime and the collateralised structured deals.

buffett doing derivatives, shorts, cnbc(buffett of all people i thought would avoid cnbc). he may have a lot of capital, but it’s still going against what he’s preached in the past.

and sometimes i think he’s for large bailouts because a lot of that money will flow in his direction. maybe, maybe not.

And Warren if you’re reading this, your mega-insurance division (Achit’s group) sounds like a black-swan blowup just waiting to happen. Is berk too big to fail?

Looking at some of his recent actions (the preferreds + warrants infusions to GE and Goldman Sachs), maybe he’s playing the spread game with highly positive NPV, but that’s not anything worthy of the great Buffett investment label, it’s just a weird kind of banking on a grand scale.

So, uh, why not downgrade the insurance unit too?

This feels like Fitch trying to do the right thing, which is laudable, but not yet being successful in that endeavor. The cited alternative is weak:

… rather Fitch’s belief that Berkshire’s record of outstanding long-term investment results and the company’s ability to identify and purchase attractive operating companies is intimately tied to Mr. Buffett,”

This is a bizarre reason to downgrade a conglomerate like Berkshire, as I’m rather skeptical of the impact of any single individual in such a massive enterprise. We are long past the era of the lone genius, though perhaps not the lucky genius.

Buffett will “likely make money on at least the index put contracts,” said Jeff Matthews, author of “Pilgrimage to Warren Buffett’s Omaha” and founder of hedge fund Ram Partners LP.

Likely, maybe, but by no means a certainty in a world with negative equilibrium real interest rates.

“Even if he didn’t, his balance sheet would in no way be as weak as GE’s.”

And in other news, the New England Patriots are likely to play better than the Detroit Lions.

The situation grows more bizarre by the day.

skippy