[0:01]
WarrenFear is extraordinarily contagious, and we saw that in September of 2008 like we've never seen it before in financial markets. On Saturday, I had a long-standing commitment to go to Edmonton, and my wife and I went up with another couple, and we checked into our hotel room about 6 o'clock or so, and amazingly I got a call. I didn't think anybody knew I was there. I said, I'm going to this performance with another couple, send me a fax, describe exactly what you want and tell me how much you will pay. So I came back from the performance and no fax and so I called the manager of the hotel. There must be a fax someplace. And he said, no, there's no facts. And I couldn't figure that out. Well, they called me on a cell phone, which I didn't have, a little flip phone, which I still have, and it was beyond my technical comprehension to figure out that's what they'd done because actually they said they'd send a fax. And the following summer, I was arriving in Sun Valley with my daughter and she He said, there's a message on your phone. I said, I don't know how to bring it up. And so she brought it up for me. And of course, it was a message from that Saturday night saying, call us and do this or that. So it's a little bit late. So you don't think the message would have changed? No, I could not make a commitment like that. This is a 10K of Lehman brothers, and this goes back a little before the panic. Lehman was looking for money at that time. And they approached. Berkshire. I came down to the office at night and made these little notes on here of things that were red flags and you'll see a number of pages here. You had to get to page 150 or 200, but there was clearly a lot of trouble there. By the time I got through I decided that we were not in a position to lend money to Lehman. How are you feeding? How do you think? On Lehman weekend, on Friday, preceding the weekend, I got a call from AIG. And AIG was going to run out of money the following week. They'd done some very foolish things in their financial products operation. So I looked at this and finally decided that there was no way that I could come up with a cash offer that could be done in the following week. or really probably the following month. But, so I called them back late that night. I wanted to convey to them promptly that I just wasn't a prospect. I came back on Sunday. I got a long, previously scheduled dinner, but before we'd gone,
[3:26]
WarrenI'm still getting more calls on AIG, and I went through dinner. I think I behaved reasonably well. I was still wondering what was going on, obviously, with AIG in New York. But there was nothing to be done. AIG was just going to run out of money. big time in the next day or two. And Lehman was going to go under unless something was happening that I didn't know about. One of the lessons of the 2008 and 9 experience, well, maybe the 2008 experience, was the fact that every company in the United States was a domino, and those dominoes were placed right next to each other. So when they started toppling, everything was in line, and they were very, very close to it. And it's really like the old movies, you know, there's a run on the bank. It's getting so a guy's money ain't safe. Well, unless it's in his sock. If you have a run on a bank and there's a big line in front of the bank and you've got your money in that bank, you're going to get in line. And if the president of the bank comes out and says, our capital ratio is 13 percent, you don't care because, you know, you don't know what a capital ratio is, and you don't know whether he knows what one is, and you know he's probably lying to you. A company like Lehman or any major financial institution depends on people being willing to do business with them tomorrow and lend them money tomorrow. money tomorrow and take their word the next day and nobody has to do business with Lehman or or any any other institution once they lose confidence it's all over