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all right time to get an update on that dot Warren Buffett dot placing a four billion dollar bet on JPMorgan Chase and adding to it that certainly helping the stock I think I preventive effect on a lot of other financial issues on a day with a most of them would likely be taking a hit on this tourism a news on the fact that there could be no exposure to that region in the world it gets a little overwrought and overdone but Charlie gets Reena on whether this is a sign that Warren Buffett is not really focused on that not really focused on Democrats who want to crack down on banks in this country taking power in the house well first off I don't think they can they yes once you have the Senate in in Republican hands anything they do will be sort of counteracted let's just say they they try to they said they had an indictable evidence on Deutsche Bank right which is a bank that Dell did business would Donald Trump and clearly he's gonna be in the crosshairs of Maxine Waters the new head of the Financial Services Committee so they could send that evidence and a criminal referral or a referral to the Justice Department and the Attorney General works with Trump could say okay I'm gonna stick it in this drawer I mean that's not really where her power her power is gonna be to intimidate and harass and that will mainly come for the president rather than the big banks this is interesting I think because I think what Buffett is saying first of all he likes Jamie Dimon a lot he thinks it's well-run bank he likes Jamie Dimon as a as a leader likes a lot of what he says as a sort of thought leader in the banking business but he's also I think making a bet that interest rates are going higher and here's why I'm saying that and that may not be good for other stocks that Warren Buffett is yeah it may not be good for other stocks but banks generally do a better particularly in a higher interest rate environment cuz they could charge people more and it's ended the the lag between what they charge people and how they have to increase sort of returns on savings and checking accounts is pretty wide enough that you have this spread that's their CD rate increases are slow but the ones on their loan absolutely have you this chasm right Nick that's easy money right and that's I think what would Buffett is banking on at least in the short term and he thinks JPMorgan quite frankly if there is a banking crisis well guess who benefits from that JPMorgan benefited the last time when there was the financial crisis I mean JPMorgan if they let every bank go on they're the only one that might have survived I only say minor because they could have Dave had said they had some stuff on their balance sheet was JPMorgan if they were no bailouts you know no AIG bailout which was a backdoor bail out for all the other firms and no direct money JPMorgan had the best chance of surviving and I think that's what he's also betting if there's one Bank this is my bank and so higher interest rates though just so you know I mean listen if you didn't want to know why the markets are trading awful although they're all over the place today there's two things trade is a big determinant and interest rates anything that pushes interest rates up generally is bad for stocks because you go for other investments and there are two things that might push interest rates up the Fed unwinding its balance sheet and raising the Fed Funds rate but also if the tax cuts don't work you're gonna get higher deficits and in response higher interest rates because prices are bonds will go down and interest rates go up you'll have to attract people to buy your debt when you issue more of it so you have to give them a higher interest rates and that will affect everything so those are the sort of things that people are sort of weighing right now when I talk to investors that's what they're telling me to GE and all the credit worries yes everybody mentions GE and I think you know listen Buffett does about exposure a lot of people exposed Buffett is one of the best guys when you ask him like when does he like make his investments when you know everybody else is out and he picks the bottom okay he didn't do that with JPMorgan but he's been known to do that and what's interesting is that he's not in GE right now I mean you would think at $8 a share everyone he and Jack Welch were tight in the big a Bob right of course the former president of NBC Universal a top vice-chair I think for sure ology he was weighing in of the GE crisis yes we want you react to this you and Jack Welch and a team that was considered like a Wharton Dream Team what happened somehow or other we lost our and I say our because I never can quite get past it they just lost our bearing and wiling and and dealing with the balance sheet and with those those Durin's liability should have been dealt with you know and anyone after Jeff mo which was the more sexy quote I mean ii guess you guys but it was interesting that he said today well just what it should have could have he didn't done a job well so now I'm wondering if that's okay but it doesn't do any good pointing fingers now but I do wonder about what happens at JP well I find it interesting that Buffett's not buying at the low just for my standpoint because he's usually the guy when everybody else is scared it's right he's in he must not like what's still on the balance sheet and what these guys have to do you know I was talking about Bob before before he went on and he made I said Bob why don't they just I mean I said this is on the BET this is on the table break it up into three separately traded companies you know sell off the extraneous stuff health care aviation and power right he said it's not that easy they got thirty billion dollars in pension fund liabilities you need some of that cash flow to pay that off I mean if you can you it's not like the old days you can just walk away from your pension like they can be they can be someone can go after all I could but they can be sued they can be prosecuted so this is harder than you think that right but that's really that's what Bob died Bob and indirect and you know here's the interesting I don't know why Buffett isn't in there at eight it's got to be that some of its parts are worth more than eight remember when it got to twenty got below twenty and everyone would is you know seventeen I remember everybody's gotta be more worth more than seventeen I mean it's got a I so I'm just saying that the fact that Buffett's not in there a real bottom Fisher like that that sees value what everybody that's where he is concentrating his financial it's well the big person look what happened you're in a financial crisis when he knew and he actually knew that AIG was gonna backdoor bail out everybody you know when AIG was bailed out you essentially had all the toxic debt on the balance sheets of the banks such it bailed out that's that's what happened because they ensured that debt that's right he went in and bought goldman sachs remember that he knew that people were so scared he was gonna buy the premier investment bank that was guaranteed to survive he is not saying that with GE oh it's not yet all right buddy thank very much Charlie gasps arena
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