While the Oracle of Omaha was busy today extolling the soundness of his bank portfolio and generally talking his book, his alter ego, Charles Munger, was voicing some rather heavy criticism of the financial services industry.
Here’s part of what he told Bloomberg:
Berkshire Hathaway Inc. Vice Chairman Charles Munger, whose company is the largest private shareholder in Goldman Sachs Group Inc. and Wells Fargo & Co., said banks will use their “enormous political power” to prevent changes to the industry that would benefit society.
“This is an enormously influential group of people, and 90 percent of that influence is being spent to gain powers and practices that the world would be better off without,” Munger, 85, said yesterday in an interview with Bloomberg Television. “It will be very hard to accomplish the kind of surgery that would be desirable for the wider civilization.”
Berkshire Hathaway Inc. Vice Chairman Charles Munger, whose company is the largest private shareholder in Goldman Sachs Group Inc. and Wells Fargo & Co., said banks will use their “enormous political power” to prevent changes to the industry that would benefit society.
“We need to remove from the investment banking and the commercial banking industries a lot of the practices and prerogatives that they have so lovingly possessed,” Munger said. “If they are too big to fail, they are too big to be allowed to be as gamey and venal as they’ve been — and as stupid as they’ve been.”
I suspect that some people at Wells and Goldman are asking themselves why they need enemies when they have friends like Munger.
He does seem to be advocating regulation that would significantly clip the wings of some of his biggest investments. I guess you have to admire his honesty but then you also have to ask why in the world they invested the kind of money they have recently in an industry they think should be downsized and restructured.
Maybe there’s some mad plan in there somewhere.
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