Buffett's Phone Rings `Off the Hook,' Stock Jumps: Chart of Day
By Michael Patterson
Sept. 17 (Bloomberg) -- Warren Buffett's phone is probably ``ringing off the hook'' because distressed sellers are turning to the world's richest person as credit markets seize up, according to T2 Partners LLC's Whitney Tilson.
The CHART OF THE DAY shows the share price of Buffett's Berkshire Hathaway Inc. along with the TED spread, the difference between what the U.S. government and banks pay to borrow in dollars for three months and a sign of lender confidence.
The 4.3 percent jump in Berkshire's Class A stock yesterday, the biggest since April 2003, tracked the surge in the TED spread to the highest level this year. Banks' borrowing costs more than doubled yesterday after the collapse of Lehman Brothers Holdings Inc. and credit downgrades of American International Group Inc.
The moves in Berkshire and the TED spread were similar in August 2007, when speculation that mortgage lender Countrywide Financial Corp. would file for bankruptcy froze credit markets.
``Buffett right now is probably about the only money in the world, in the billions of dollars range, that the check will clear overnight,'' Tilson, co-founder of New York-based hedge- fund firm T2 Partners, said in a Bloomberg Television interview. ``I think his phone is ringing off the hook and that makes me very bullish on Berkshire.''
Debbie Bosanek, Buffett's assistant, said the 78-year-old investor wasn't available to comment.
To contact the reporter on this story: Michael Patterson in London at [email protected].
Last Updated: September 16, 2008 19:01 EDT
By Michael Patterson
Sept. 17 (Bloomberg) -- Warren Buffett's phone is probably ``ringing off the hook'' because distressed sellers are turning to the world's richest person as credit markets seize up, according to T2 Partners LLC's Whitney Tilson.
The CHART OF THE DAY shows the share price of Buffett's Berkshire Hathaway Inc. along with the TED spread, the difference between what the U.S. government and banks pay to borrow in dollars for three months and a sign of lender confidence.
The 4.3 percent jump in Berkshire's Class A stock yesterday, the biggest since April 2003, tracked the surge in the TED spread to the highest level this year. Banks' borrowing costs more than doubled yesterday after the collapse of Lehman Brothers Holdings Inc. and credit downgrades of American International Group Inc.
The moves in Berkshire and the TED spread were similar in August 2007, when speculation that mortgage lender Countrywide Financial Corp. would file for bankruptcy froze credit markets.
``Buffett right now is probably about the only money in the world, in the billions of dollars range, that the check will clear overnight,'' Tilson, co-founder of New York-based hedge- fund firm T2 Partners, said in a Bloomberg Television interview. ``I think his phone is ringing off the hook and that makes me very bullish on Berkshire.''
Debbie Bosanek, Buffett's assistant, said the 78-year-old investor wasn't available to comment.
To contact the reporter on this story: Michael Patterson in London at [email protected].
Last Updated: September 16, 2008 19:01 EDT
