The Oracle of Omaha has spoken and Lloyd Blankfein must be breathing a sigh of relief.
As I noted in my post below, a lot was riding on what Warren Buffett had to say about Goldman Sachs at the annual meeting of Berkshire Hathaway shareholders this weekend. As it turns out, Mr Buffett has come out strongly in Goldman’s defence.
As the New York Times reports from Omaha, Nebraska:
Mr Buffett essentially took Goldman’s defense that everyone involved in the now-infamous Abacus deal was a sophisticated investor fully capable of evaluating the risks in the subprime mortgage investment. Instead of needing to be told that a hedge fund manager who suggested which bonds should form the underpinnings of the Abacus collateralized debt obligation was also short the bonds, the investors should have relied on their own due diligence, Mr Buffett said.
“If I have to care who is on the other side of the trade, I shouldn’t be insuring bonds,” he said.
Mr Blankfein, Goldman’s chairman and chief executive, could not ask for much more than that.
