and we have a special event for you today. becky is live in tokyo with warren that would be becky quick and warren buffett, and we're going to be talking for three hours, becky is, to the oracle of omaha ending in the first hour we'll be joined by buffett's heir apparent it's wednesday, april 12th, 2023, and "squawk box" begins right now. ♪ good morning and welcome to "squawk box" right here on cnbc. a very special edition of "squawk box" this morning. i'm andrew ross sorkin along with joe kernen. joe is in times square at the nasdaq becky is in tokyo with our

headline guest of the morning. we're going to get to them in just a moment, but indulge two seconds right now. i want to show you the u.s. equity futures real quick as we flip the board around. we're look at the board on the screen nasdaq looking to open 28 points higher we'll show you treasuries before we get to the oracle of omaha. i'm sure you'll comment on all of it. right now the ten-eer note at 3.45% 6, the 2-year note at 4.062% with that i hand it over to becky in tokyo with maybe some of the biggest guests there could be good morning. >> andrew, good morning. it's great to see you. joe, it's great to see you yes, we are here with two very special guests, warren buffett and greg abel of berkshire

hathaway they're in japan, the last place you'd find warren buffett. they've been here since monday they've been busy. but, gentlemen, welcome. great to see you. >> welcome we're having a good time. >> we have a lot to get to we'll talk everything business-related we really want to start with why you're here in japan, why this trip is happening. warren, you've spoken to a couple of outlets over the last couple of days about the trading houses you've purchased. those are the people you've been talking to but why did the trip happen and the investments? >> the investments began close to four years ago, and i was looking at company after company as i do every day, and i just thought these were big companies. they were companies that i generally understood what they did somewhat similar to

berkshire and they owned lots of different interests and they were selling it at what i thought was a ridiculous price, particularly the price compared to the interest rates prevailing at that time, and so i started with the five largest trading comp companies. on my 90th birthday, august 30th of 2000 whatever it was. >> 2021. >> yeah. we had bought somewhat over 5% of each company and we were buying identical amounts we announced at that time we bought this 5% interest in each of the five. i wrote them a letter, to the ceos of each of the companies saying the same thing, that we would never buy -- berkshire

would never by more than 9.9% without their consent, and it was my word, beck sure hacberksr hathaway's word and they were all in, exceeded our expectations since we purchased group. i think the armg has gone up 70% or something like that we now own 7.4% of each of the companies and i just -- greg and i together, we to, greg and i, get on a plane and come over and talk to them. we've had a meeting with each of the five sequentially over the last few days, and it's been

fascinating. i feel even better about what -- we couldn't feel better about the investment and over that time, we've sold periodically the undenominated bonds. more or lis -- we don't do it precisely, but we've insulated ourselves from the exchange rate exchanges. so it's worked out very well so far. but we'll be in these stocks ten, 20 years. we have had revelations about the -- each of the companyies. greg and i are fascinated by it. >> was it worth the trip >> absolutely. >> it's been a great trip. they've been exceptional on how they've communicated both with their performance and just their approach to business. >> what have you learned since you've been here. >> i think the thing that stands out very quickly to us is they

came to the meetings wanting to build a relationship and strengthen it. so they understand we've invested in their companies, but from the very get-go when we start the conversations with them, they come each with their own story, and it's around building trust in that relationship with them. >> meaning what? that there are other potential deals you can all do together? >> each time we met with them, we said we very much like the core investment, but to the extent they could identify an opportunity that they could identify with any of the five companies we could very much evaluate it quickly. warren highlighted, the bigger, the better, and he'll answer the phone on the first ring. >> and we'll never run out of money. they can call us any time. maybe they have interest maybe not. but they'll have an answer, you know, and if we make a deal, the

money will be on the way, and we look forward to it i'm just astounded at how they really -- they're all different and they're all the same at the same time. we learned about five different individual companies, but we -- it was not exactly what we expected it was better than we expected in every respect. >> people look at this and say, okay, warren buffett is putting his stamp of approval on investing in japan basically is that an accurate read >> yeah, it was an accurate read, but it was an accurate read a couple of years ago i was con founded we could buy into these companies and have an earnings yield of 14%. the dividends actually grew 70% during that time, and the people

were invested their money at a quarter of a percent or nothing, and the quarter percent, they put it out for in a year wasn't going to grow, and the 14% was more likely to grow than not >> are the opportunities in japan better than the opportunities in the united states right now >> well, it isn't one versus the other. we could -- we could do both, but we do have more money through equitieses we all know coca-cola does a lot of business or apple does a lot of business here we do it directly through american investments, but we have more money in terms of equity securities in japan than

in any other country in the wor >> minus the united states. >> they were surprised berkshire would be the second largest place for deploying their capitals. >> what's the most surprising thing you've learned since you were here, each of you >> it's interesting to us. well, a, you know, we like each other, and we learned something about each company that -- i read the reports every quarter i look at every number i eat that up. but meeting them in person -- in the united states, nine times out of ten, i never meet anybody

we buy stock in. it's true. i don't go around to the companies anymore. and i prefer they don't come us to actually. >> don't call us, we'll call you. >> they send investment relations people and basically everyone comes in and says we're the best buy never the world and that isn't true. it's ridiculous on its face. they told us a lot of things that helped us further our understanding of how they thought, where they were going so we came away smarter than when we came in, and that's unusual. >> yeah, i would agree, warren they each had their own story, and yet there were similarities, but they each had their approach to business. but the other thing that stood out to me the more we talked to

each of them there's a lot of similarities to berkshire. they're very much thinking long term they've got their portfolios, but they think how they can manage their risk and incrementally improve their businesses that clearly came across from each of the five businesses. >> that's not the only thing you've done since you've been here too you were meeting with a subsidiary today as well this is the last time you were in japan, warren, was 12 years ago, and it was to come to the factory from the representatives who came to visit you today. there were ten very important executives of the subsidiaries of berkshire that we own 100% of is car, and the accomplishments of that company have been extraordinary. maybe 15 years ago or

thereabouts it bought an operation here in japan, and i visited that plant right after the earthquake, and it was amazing to me, and it was a chance -- i was hoping to get to their home grounds, but because of the problem of flying helicopters and everything during the season, they all joined me a few hours ago, and it's incredible. carr is one of our pride and joys it came from getting a one and a quarter-page letter through the mail, and in that one and a quarter-page letter, the person talking to me who i never heard of before -- i hadn't heard of this company -- he told me more than the 60-page brochures that they put out he told me how much he wanted for the business, he told me

what it was like, how it would fit into berkshire, and he said a couple of orr other people had come over and if i would like what he was suggesting we came there, made a deal, and ran into one kind of tax problem. he worked all night and on saturday morning, he said, they worked it out. we got whatever it was $5 billion in eevaluation and we md a deal not two months late e, charlie and i and a couple of others went over to see whether there was really anything there we had written a check for, and it's just been an amazing company it started with nothing except a fellow with zero going in to competition located in the real world at that time and now it's spread around the world.

it had nothing it was making little tools others could make and they were buying stuff they were starting it, but later thaw they got an incredible manager they've created a business that we're historically proud of. we're proud of what they've accomplished, and they don't stop they just keep going in japan, you know, they just won a 51% interest in another company that fits in berkshire will be part of it 50, 100 years from now. >> it's interesting. one of the managers asked specifically, how did the opportunity to invest, how did that come to you, and you shared

that story, but it's great to see their interest and how they've become part of berkshire, and they highlighted in japan, for example, imc started with a small operation 20-plus years ago, and now we have three businesses that we own 100% of, and we're going to visit a significant plant in japan, and they've added two since. just recently since april 1, we have 51% of another joint venture company. they have been amazing at establishing a base and continuing to run it. >> greg, let me talk to you. i've known you for years, but we've never had you on the program, your role you're vice president of the company and you're heir apparent which we found out two years ago

in los angeles charlie munger mentioned it kind of in passing and that's how the world found out. how has your life changed since that announcement? >> yeah, u would say it hasn't changed in a lot of ways because it goes back to making sure i enjoy the priorities and that they stay in place the priorities i have with other managers really hasn't changed there are external forces and interest that would naturally come i would say it really allows me to continue to enjoy it. now there's been at the same time working with all of our great managersive day, and that hasn't changed. >> the external interest that. cause with that, what does that moon a lot more people call you, want to get on your call sheet, want

to spend some time with you? >> that naturally comes. there are a lot of calls, people in the community who didn't even know that i work for berke shiefrm i get interesting comments i'll get questions from my 11-year-old's best friends about what that means like the question you asked i remind them we're doing all the same things we did five years ago together and that will be the approach to the way forward. >> how do you work together? >> he does all the work and i take the bows. that's exactly what we want. he knows more about the individuals, the business. he's seen them all you know, they haven't seen me at the railroad for ten, twelve years, something like that

greg is there and he understands each of our businesses to have the grasp of what -- you know, whether it's garanimals or the front operation, you name it, it's all of it greg gets it the same way i get it, but the difference is he likes to work and i like to sit around i like to allocate capital, and he likes to -- hi thinks the same way on it as i doer, but he also -- he likes to meet everybody that is running the business he understands them, and he's probably tougher than i would be in terms of getting things done and everything so it's already improved dramatically we think alike on acquisitions and capital allocations.

he's a big improvement on me, but don't tell anybody. >> what's an example if he's tougher, what's one example where he would have been tougher. either of you can answer that. >> warren grew up with all the businesses he acquired them or they were already there. when i came in, i had to start from scratch i had to learn the businesses and their industries, which means there's going to be that and then associated with that because i'm learning the business, i had the opportunity to discuss their businesses and expectations around it, and i would say even communicating around how they allocate the capital, how they're using it, and i wouldn't say giving them absolute requirements but providing direction in those areas has been beneficial. they like that type of input.

>> our managers like awe toonmy, but they also get lonesome greg gives them both, and he gets somewhat more discipline of the manager with our hands-off operation. he gets more discipline than i would get. >> is it good cop, bad cop. >> no, no, no. >> not at all. >> is it nice parent, mean parent >> no. it's like i. said snoochl what they value is more one or one. they appreciate that, but they want the autonomy they've always had. >> one of the the questioning i have what would that mean how do you keep them all

interested because for so long you could say i, we with berkshire hathaway and warren buffett. how you do work that same rapport with them? >> a few things. first it helps a lot when you have this type of transition and i've had the opportunity to work with them. i think we have a very good relationship there's no question. i've effectively apologized many times for that outcome, but they still have to opportunity to run their businesses, what they love, what they wake up to every day. that's still what we're providing both today under the current situation. 6 so even though it was kind of an accident that the world found out -- >> it's charlie. >> charlie and i are not the

most careful with our wording at times. >> would you say it's a good thing that greg has this opportunity? >> of course it isn't like i had ten people i could choose from. there may be ten people out there, but i know. there are ten gregs out there, that i can guarantee you you know, the problem for our board of directors is the day i'm not around and greg's running it, i am another giving him some envelope what to do next, but grem greg is look allege it it we've go a unique organization which now has tre men dpus resources. nobody can really copy our style. in the end, where else can they get an answer in five minutes

whether we're interested in the business now they've got to apply the law in every case. they can be more lax with me than they could with greg. greg just says there's no need for them, any of our subsidiaries keeping cash around we're the best bank in the world. we've got $100 billion plus. g greg's better than i am. >> is there -- >> and they smile when he gets through enforcing it that's the other thing he can deliver tough instructions at least compared to me, and when they go away, they feel good about themselves. >> greg, recently there was news made you put more money into birj shine you had a lot of it.

recently you increased your stakes at above $100 million with your own money. >> right. >> why did you do that, and will there be more put into it? >> honestly when i monetized the position in berkshire hathaway, that provided an opportunity to purchase shares of berkshire, and had i done that sooner, i would have owned the shares in berkshire earlier. was always the intention and, yes, i will continue to invest in berkshire. i believe in what's been created. >> how many managers in the united states put $100 million of their own money not getting a share or a discount, not getting any special deal on it or any of

this sort or having an expert come around and do as instructed, which is to arrange it it so that the ceo gets a downside i can't think of a case where someone puts in their even $100 million and gets the same. if they make money, they make money. if they lose money, they lose money. that's the way you put it. at berkshire, you don't find it any place else. >> did you find any pressure to do that or was this always the plan >> i felt zero pressure. i very much believe in what warren said, that our culture is one that's very aligned with our shareholders, and i've observed both warren and charlie and our other board members, but specifically those two, that they've had their capital deployed there but it's their belief they're

ashiend by it was a pretty simple decision when the capital freed up to acquire berkshire shares >> so you've had the relationship for years with the noninsurance operation -- >> right. >> -- of overseeing all of that. jane is responsible for overseeing those operations. how have you and the cheap been aware of it? yes, we would talk and it's created an opportunity we regularly check in with each other. if there's ever an issue, we'll both pick up the phone whoever it initiates with and check in with the other to see as we move down this path, are we each comfortable with it.

it's been a great relationship and an honor. >> he didn't want to run it. >> ajit loves running a one of a kind world, cheh h belt himself in running snooerchls he tumt give a damn about garanimals you didn't have two guys competing for the same job or income like that. he'll answer to me and say you do something greg, in fact -- any noninsurance operation, you know, before long like when we

bought allegheny, allegheny, the insurance company, would have had eight other subsidiary operations they're not necessarily smachlt there's hundreds of millions of dollars. greg gets them joe continues to run the insurance operation. >> ceo of allegheny. >> he works with ajit. it all works. >> i think joe has a question from back in the studio. joe? >> did they tell you that? i have a lot of questions, but i think we're probably going to talk -- maybe i heard it wrong joe had a question maybe we need a break. >> i havequestions about life p. we've never actually spoken to

greg before. i think we should take a braj and we'll come back. we have this show lined up a certain wait that makes a lot of sense pause we only have greg for an hour. i bet sorkin's got a question, don't you? >> i do, many a question many a get err question. >> let's take a break. this is coming at 8:30 we can't stop it the latest read on con soumer price is is going to continue. you can stream us every you can stream us every mornlting ongetting into,

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just $30 a line per month. i should get paid more for this. you get paid when you win. from xfinity. home of the 10g network. all right. good morning and welcome back to "squawk box" live from the nasdaq market and times square checking the futures there in

the green this morning, it all could change at 8:30 i. is a big number, the cpi that remember we had the -- what would you call it -- banking crisis 2.0 i don't know if it deserves the "c" word or not. we had that, and all of a sudden we're waiting to see what the next data points would be after that, and the that would be inflation. the big numbers there. let's get back to becky quick in tokyo. i didn't want to waste any time because we've got greg i was going to ask warren how far he took creighton because it was really pretty amazing. and i was going to ask greg if he's basketball fan, and will we continue to do that, you know, you win money if you get all of them right, which, warren, that's the greatest thing you've ever come up with. is there anyone in the world who could have gotten past even the second round this time no your money is safe

you will never pay off that money that you offer for someone to get everything right. >> we had a winner for $100,000. if creighton had won that last game, which they should have actually -- and i'm not blaminging creighton i'm blaming the referee. the woman that won would have gotten $200,000 instead of $100,000 and she would have come to omaha and thanked the great players. next year we're going to make it even more interesting. i'm redesigned the contest for next year because i want somebody to win the million. and, of course, one time somebody came within half a game. >> by the way, don't you offer -- have it insured or are you paying it out yourself >> it's berkshire hathaway. >> self-insured. and i am a basketball fan, joe, and it will continue forever.

>> the parity's unbelievable literally one weird bounce on the rim changes everything it could be anybody in the final four, which is so great. >> it could be anybody. >> parity is so great. i thought they beat creighton. i don't know as i said, i don't want to waste any time on this, and i justdy so take i away >> as something said a long time ago, we was robbed. >> i don't think i've ever heard you blame the referees before. >> well, all i know is that nobody had been calling foul like that throughout the game. the guy missed the shot. he made one of the two free-throws, and -- i don't have

anything against san diego state, but if that referee wants a seat and the annual meeting, to hell with them. >> okay. so let me take it back away before you get yourself in more trouble. >> yeah. so we're in japan, but there are still a lot of things that have been happening while you guys have been here one of the pieces of news was about a new ceo at pilot which is flying the business which you all rescently upped your position you used to be a minority holder you just increased your position to 80ch and as a result you made some changes there including the new ceo. dow you want to talk about that? >> sure. they have a great set of assets and a great management team in

place. the one area we did want to make a change was with the ceo, and really the focus was to bring in someone who's been tenured with berkshire and would have a long-term focus, someone who would be there ten to 20 years. >> longer. >> that was really the focus we were able to -- adam wright, who is a 20-year energy veteran with berkshire hathaway and really start his career with us back in 1996 and has gone through many tirchlt roles in our organization on the energy side including being ceo of midamerican energy, one of our larger subsidiaries, so when this opportunity presented itself, we approached adam to take on the role in knoxville and we're thrilled to have him back he moved on to a company for the

past two years and he's back in the family. >> about 20% >> absolutely. they've been extremely supportive of the transition. >> it will be interesting to see the company who last year did about $70 billion of revenue that is a big number le now, they were higher last year, so it might be normally $45 billion, but it is a big, big operation. it wasn't because he was born in omaha, nebraska, but he was born in nebraska. he went to the same public high school as my wife went to and three of my grandchildren went to around 100-plus years. had a mother that supported them

where he set the rushing record, 300 yards. he's a remarkable, remarkable man manager. when he ran american, it was earning $700 million a year that no one heard of. now he'll be moving into an eve bigger position. and, by the way, he's black, and how many black men or women are running operations making 40,

$50 billion a year we have kay farmer running the united states railroad and no woman has difficult i come to the towers of railroad town and it was unthinkable both of those people, they've got the job because they deserve -- they've earned it she's got railroading in her blood. and adam is just a terrific exec executive. he worked three jobs when he was at u of o. >> university of omaha, nebraska >> he was ceo of america. >> absolutely, absolutely. >> he developed through our

country, there are great folks that helped mentor him he's an exceptional leader when i think of the talent there, it's just amazing and they leadership skills are remarkbling. >> think of the publicity that people get making 6le billion a year. they worked through berkshire with berkshire resources and our support, but they are talent, and they get it because they're the person for the job. >> not because some dei shareholder proposal came through? >> no, nothing i feel good about berkshire. i went to north high 1920 it started. here he is

public schools, you know, and he's running it. he didn't go to harvard business school, you know he just earned the job as did katy who went to tcu. >> texas christian >> yeah, texas christian vienna happened to be interested right there. i think she started working for us when she was still in college, you know. i love the stories of these people, and they don't get a lot of publicity like people did. >> both katy and adam had internships with us. they came in as interns and now are ceos of two poshlgts businesses for berke shierk and i couldn't be more proud of them. >> while we're talking about the railroad, p you've been with the

rail hold for a long time. there have been a lot of questions raised there have been a couple of other derailments. particularly that one because of the chemicals sin involved there's been a debate. is this a norfolk southern problem or a broader railroad issue? what would you say to that >> i would say it's a railroad problem now. i know within the moments of knowing of that accident, one, they're trying to understand it, an also less seasons learned we recognize there will be certain actions that come from the federal government out of different agencies, and we'll be very respectful of that, sharing ours we look at the communities we

operate in and also for our employees. there's no question there's lessons to be learned for the industry as a whole and there's room for improvement. >> just on a business basis, we would rather not whether it's chlorine, you name it we've got to do our damn dest to do it as safely as possible. you're running huge cars 20rks maybe, and it's big heavy stuff, and they go around curves and in 100-degree weather and zero-degree weather. and the record of the industry

is becoming more safe is draw mat ing overtime every day you have to consider making it safer. katy would tell you it's unacceptable to have anybody die, for example, but people walk along railroad tracks some people commit suicide on railroad tracks. imagine how traumatic that would be for an engineer he can't stoll the train and he's blowing like crazy. soum people think it's a tough business. >> some of the blame that has been put on precision railroading and the idea that norfolk southern in particular if you listen to some of the railmen there who have issued complaints about it, i was reading one guy's testimony who said in the 20 years he's been

there --and this is norfolk southern in particular -- saying in the 20 years he's been there. is sainty times have gotten rougher is that a concern is that something that happens at the nsf as well >> i would say, listen, everybody is trying to become more efficient if you look at safety, equipment failures, definitely we see improvement year after year in that area. there may be blips the team as a whole, they start with prevention. then you move to detection if we do have a problem, how do we address it early?

you create a culture that you're going to focus on the three of those, and that will create a safer work environmental both for employees and the community they offer in. things do go wrong and that's why detection and protection does move forward. >> the report i get ever since we bought it, particularly under kate, it begins with safety. it's an outdoor exercise you deal with hundreds and hundreds you have problems if you have trucks you have problems if you have airplanes. have problems if you have

barngs you have problems if you have railroads. it's got rch gotten safer we have all of those risks covered. there was much more passenger traffic in the pachlt but we're carrying much more ton loads in the freight. we've got one tenth as many people needed to do it they're doing it more safely than existed at the time every day they're worried about it to say there will never be any more derailments is just plain crazy.

i would rather not be carrying hazmat materials, but they're going to be transported in this country, and the shippers decide what is the best method of getting their product to market, and that's -- they're on the nsf. i mean we carry them i can tell you that katy farmer and her predecessor, they care about safety but will we be perfect the answer is no, it just isn't going to happen. >> you bowon't be perfect is your response going to be the same >> i think they handled it terribly, you know we connect with them in all kinds of ways, and the amount we

had to offer is what comes it's developed into the railroading. but i don't want to hold the person pernsly responsible, the ceo. they were tone-deaf. their resp not been the same way. i mean, we had a derailment not long thereafter, you know, it was either going to be katie or it was going to be -- but got immediately on a plane and flew there. >> right. >> and looking back now, i'm second guessing somebody, you know i made so many mistakes in my life, but looking with hindsight, the ceo of norfolk southern, i mean, he got there and drank the first water and said we're going to do whatever

it takes to restore your life as before this happened, that's the way to behave. i got a lot of things that i would do over too, so i don't want to say my responses have been perfect in every instance either, but i sure hope we don't do that at bnsf. >> let's talk about where you spend most of your time. bnsf and berkshire energy are two huge areas how much of your time do you spend with berkshire hathaway energy >> it would be similar to what i spend with bns except i still know -- have a lot of strong relationships in that industry. so a few years ago we acquired some assets from dominion energy, a great set of gas transmission assets in the northeast part of the united states that's a strong relationship that i had with the prior ceo, tom farrell, and so i maintained

those relationships. so inevitably i'll spend more time on energy, say, than bnsf on the general matters, it is equal. but there are other opportunities that i know within the energy space and that's where i came from. inevitably i spend more time there, but and then i try to cross our businesses i mean, our top 12 businesses account for 85%, 86% of our underlying cash flow within the group. it is pretty easy to know where you should be spending your time as warren touched on earlier, i do know all the businesses and as best i can and the ceos and a large part their management team so it is not that the rest are ignored, but the time is prioritized across those top 12 businesses >> greg lived in omaha in the past but he lives in des moines now

and he was in england. he's gone wherever needed in terms of the predecessor company. but he's found apparently some little area in des moines where there is 48 hours in the day and that's the only explanation for everything he does >> yeah. >> maybe only a couple of blocks >> we have a lot of great members of our team as we all know that allow a lot to happen, but, yeah. and that's a good point. you sort of -- in the end i go where someone's either requesting some input or discussion that, of course, i know, like i said, the large ones, but if someone else calls and says we need to discuss something, i'm going to talk to them that day or very quickly. >> a big part of warren's job is also capital allocation, and right now warren and charlie and todd combs and ted westler are all responsible for allocating capital. obviously you've done a lot of deals in your day too. >> right. >> what kind of -- what kind of

relationship do you have with todd and ted do you talk to them about capital allocation at all? is there any back and forth? >> i pay attention to what they're doing, but in the end, it is much like warren does, they run their own portfolio i watch it with interest, and i don't really know who's doing what amongst it, but we all have a pretty good idea of what warren is doing versus the two of them. so i'll do it to mainly observe and pay attention and learn from what they're doing and i may ask them, that was really interesting what triggered your interest but that's the extent of it. and outside of having relationships with both of them, which are important, that's their portfolio and that's the way it will always be and they'll manage it accordingly. >> do you like capital allocation >> he's terrific at it but my job, the job of any ceo at berkshire is the job of capital allocation is their job. and the -- the chief risk

officer is their job and you can't get rid of it. moving to assume that responsibility, forget it, you shouldn't have the job now, greg's got all kinds of ideas and everything, but it is my responsibility in the end, i just -- it will be his responsibility when he runs it it just -- the idea that you have this committee and a risk committee and all that kind of thing, i think that's kind of crazy myself, but there are rules, for example, in banking that you have a risk committee and the ceo is the one that is going to get you in trouble. >> or keep you out of it. >> keep you out of it. it is up to them to identify the risk and own it and we have got that culture i talked about that responsibility to the shareholder, but that -- with that comes being the chief risk officer, allocating the capital

properly, and prudently, and then incrementally we have our business operations, but our managers know what to do but keeping them within our level of comfort and with that, what we really want to create is a company that is an asset to america. and never a liability. >> do you two have discussions about risk management, just because, warren, you've been somebody who has been great at this, over years and years and decades of kind of seeing risks far off in the horizon before anybody else do you talk about stuff like that >> it is my job to think about risks that nobody else thinks about. i was very easy to read a little thing in the front of the 10k about the risks. it is the ones that aren't in there that one way or another are going to bite you. i got 99 and a fraction of a percent of my net worth in berkshire. i got all my relatives, everybody in it. if i thought that i wasn't going to be able to do a decent job of

managing the risk better than a decent job, i would be crazy to take on that responsibility. why in the world -- i got all the money i need, so why should i do something that could destroy me internally and my sisters and my cousins and all these people unless i felt that i could do the job of managing risk really as well as anybody can do. and it is a complex organization and i worry about things nobody else worries about but i can't solve them all i can't solve it if the pandemic starts, but anything that can be solved, i should be -- i should be thinking about. and charlie thinks about it too. we talked about it forever >> we're going to talk a lot more about this in the next couple of hours, what you see out there is the risks greg, we want to thank you very much for this time and for sitting down with us

we really appreciate it. >> it's been great, so thank you very much. >> greg abel, vice chairman of berkshire hathaway andrew, we'll send it over to you. we got a lot more to come. >> a lot more to come, becky thank you for bringing us that thank you for bringing us greg abel and a lot more from warren buffett in tokyo this morning. we're going to come back in just a moment we also got key inflation data ahead. we're going to get the march read on cpi happening at 8:30 a.m. eastern you can get the best of "squawk box" in our daily podcast including today's very special conversation with warren buffett. if you missed any of it, it will be available a little bit later. follow squawk pod on your favorite podcast app we're coming right back. two big hours of warren buffett inok aad tyohe

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good morning and welcome back to "squawk box" here on cnbc live from thenasdaq market sit in times square, i'm joe kernen with becky quick and andrew ross sorkin we're counting down to the release of the march consumer price index at 8:30 a.m. eastern time let's check out the markets ahead of that report, we have got some green across the board, but we'll be waiting for that 8:30 number. let's look at treasuries as one of the pieces in the journal today. i know you -- andrew saw it, you're far away, beck, but austi au austin ghoulsby saying you're seeing a fault line in the fed, which is in the markets now, fed

funds at 70%, but it could all change, depending on what we see today, which is, you know, we'll see inflation, but it is supposed to ease if it doesn't, obviously that would be a big story take a quick look at oil, which as we pointed out, has trouble holding 80 it is back to 81.54. some people think it would be much higher if it were not for some of these other producers that are ramping up production we'll see what finally happens and then crypto, bitcoin has been right around 30,000 it has been above, it has been below. this morning right now you can see just barely above 30,000 let's get back to becky, with warren buffett in tokyo. hey, beck. >> hey, joe, thank you very much we are going to get to those cpi numbers at 8:30. we'll do our very best to hit it right on time. rick santelli will bring us the update on all of those and we'll get warren buffett's reaction to it too in the meantime this is the

first time that we have gotten the chance to speak with you in a very long time >> yeah. as they say in england, i've gone quiet >> yes you've gone quiet, but there has been a lot that has happened and a lot that has happened recently in particular. problems in the banking sector your name kept coming up as someone who was in talks with the administration, potentially to step in and do something with some of the regional banks, with some of the bigger banks, there was a lot of confusion around it can you tell us what happened? were you talking to the biden administration about problems with the banks >> i never talk to the president. i never called the president in my life, but i have talked with people, with -- that -- from time to time that work around the president. that's been true for administration after administration and i don't talk about what i talk with them about. >> would it be fair to assume that you have spoken with them recently, when these --

>> the president >> not the president the people around the president, let's say, people in the administration. >> not that recently, but i've spoken with people, and i've spoken with people around the administration, but generally they call me, but not 100% of the time i mean, i would feel free to call a member of the administration i would never feel free to call the president of the united states >> okay. let's talk about what's happening in the banking sector right now. is this a banking crisis is this financials in turmoil? is this banking crisis 2.0 what would you call what we have been seeing happen >> i would say that the -- some of the dumb things that banks do periodically, well, has become uncovered during this period, and as one banker told me one

time, i don't know why we keep looking for new ways to lose money when the old ones are working so well. and they made the same mistake, some banks in this period, by -- they haven't made as many mistakes, they expect to make some mistakes, but they haven't -- credit card loans, that's part of the game, but they haven't made the same sort of mistakes that they made back in 2008 or '09, but they have mismanaged assets and liabilities and bankers have been attempting to do that forever and every now and then it bites them in a big wait. it is just amazing to me that banks could make presentations to financial analysts and everything and if one bank bonded at 100 and another bought at 96 and they both held a maturity, one bank at 100 and

some and one bank at 96, it is accounting procedures that have driven some bankers to do some things that may have helped their current earnings a little bit, and caused the recurring temptation to get a little bit bigger spread on -- report a little more in earnings and the result you can predict, and once they start looking at one that does it, then they start looking at others, and pretty soon, you know, that -- everybody is in a position of looking at a number that nobody looked at when it was presented to them a year ago if you're above the 10k or anything of the sort the banks didn't pay attention to what was going on and i would read investor contact when they had meetings with financial

analysts or the people who follow banking and nobody brought up the point. and, believe me, if we got a $50 billion loss at berkshire, we would expect people to know about it and it has happened before it has happened this time. it will happen again some day. >> did you see this? you were reading through the reports? you followed all the banking earnings that were coming in, so you noticed it you saw it >> sure, i noticed it. >> is that what you saw -- and sold so manufacty of the banking stocks >> we held some of them for 25 years, but i don't like it when people get too focused on the earnings number and forget the banking principle, i won't get into any names or anything like

that, but it happened at varying degrees. and they say the big banks did this, that isn't true. i mean, i know who has been holding long-term instruments and if they take more commercial mortgages or something of the sort, they carry them at cost, basically. and can't sell them at the right cost and it is important -- it is important that banks retain the confidence of the public and they can lose it, you know, in seconds. and we saw the country that was not worried about banks, you know, until about wednesday or thursday of the week when silicon valley --all of a sudden, everybody was worried about it all over the country.

and the interesting thing, of course, is that that -- it will not cost the government a penny. people think that, you know, that some of the government is going to get hung up with us the fdic is in effect a very peculiar mutual insurance operation that is run by the government, but is financed by the banks. and fdic had 120 billion or so at the start of the year and that's all the money that banks have paid in, lest what the fdic had to pay out on losses and the fdic has to pay out $250 billion this time or $300 billion, they just assess the banks more and they don't do it in a very business-like manner because the public has the impression that the fdic is the united states government and so on and, of course, they do appoint the people, but the

costs of the fdic, including the costs of their employees and everything else is born by the banks. so banks have never cost the federal government a dime. but that -- the public doesn't really understand the whole fdic and the comments of public officials confuse it and the issue enormously fdic was set up to operate on, i think, january 1st, 1934, you think someone would have gotten through writing what is the essence of this fdic, which is -- a fantastically good -- of the new deal 2,000 banks failed, and i don't know whether 1920 or '21, i don't know, something less than 5,000 banks in the united states and, i mean, it was a paralyzing thing to have a bank failure in this country and my dad lost his job in 1931,

he lost his savings, and the bank failed that he worked in, downtown in omaha, and people shouldn't be worried about losing their money and the deposits they have in an american bank, and today they have no reason to worry. but, the message has gotten very confused and people don't really understand how it all works, and, you know, politicians can make hay out of it and all kinds of things, bad things happen when people don't understand some major institution or who actually bears the costs and what the responsibilities are. and nobody is going to lose money on a deposit in the u.s. bank, don't know about the rest of the world, i'm not that familiar with it, but it is not going to happen. and that message has gotten mixed up.

>> well, look, the message has gotten mixed up and andrew has a question, we'll get to him in one second, the message has gotten mixed up because the government no longer has the authority to do -- to back up all deposits without getting the explicit okay from congress. >> that's the -- but they got the okay, you know, you can say that we're going to hit the deficit ceiling and the debt ceiling and, you know, and everybody makes hay out of it. we're going to change the debt ceiling. and the unnecessary apprehension, commentary, everything that is caused by the fact that people say, well, you can't get above x, well, they're going to change it and what happened with the -- with the failure of silicon valley and then things thereafter, they --

understandably the federal reserve says we have this much power on a sunday. understandably the fdic says we have as much power on a sunday which is an accurate statement and the president of the united states, the next day, says that your deposits are safe and he's absolutely correct, but you have to change the law and the president of the united states can also say, the united states is not going to -- is not going to let a debt ceiling mess up the whole world and that's true too. but it wasn't technically true in the sense that they would have to go to congress and then janet yellen, quite understandably, said, well, we won't change the rules without coming to the house and the senate and so on, and the public gets confused when they hear that they're both essentially right you know, secretary yellen is

right. the president is right but it could have been added that the american public is not going to lose -- no american depositor is going to lose money in the bank, whether they have $250,000 or more, but a change is needed. we emphasize the other banks are willing to pay the cost of it. and the message gets a little ga g gash garbled. >> there is the issue of individuals who have money at banks and then there is companies who have payroll at banks and whether you would advocate for effectively not just the implicit guarantee, but an explicit guarantee that covers everything and what the implications of that are, just from the -- for the risk that banks may take as a result of knowing that it is guaranteed and also what the cost of

effectively -- you are in the insurance business if we were to insure every deposit across the entire banking system, what that would do to how much to, how much capital would be in the system and available for loan >> you basically have a mutual insurance company, and they have a very peculiar sort and the -- the ability to pay the assessment, i think the assessments are like $10 billion or maybe that was the total revenue of the fdic, but they need $30 billion or $50 billion, it won't be the federal government that puts in the money, it will be banks. and i don't think that's understood even though -- originally when it started in 1934, they had different rules, you didn't have to belong to the fdic it evolved in a way, it evolve

like social security, where people got a notion in their mind, politicians use it to demagogue things, and in the end, it is like saying the social security trust is going to run out of money and therefore won't pay people well, here's the offer i will make, actually i like to make bets. charlie doesn't like to make bets i won't frame it exactly as a bet. but i will be glad to put a million dollars of my own money at -- in the bank that -- or any place else actually, anybody takes a differenting differing them put in a million dollars, and if any american depositor has lost money from a bank failure, the other fellow gets the to name where the $2 million

goes that's a firm offer and we'll see who steps up. >> right if that's the case, are the regional banks right now the first republics and the like a steal from a value proposition >> no. they're not going to say the stockholder. i didn't say saving the stockholder, i didn't say saving the debt of the holding company. people really don't understand when they look generally at the bank it is usually the fact that the shareholders own the bank on margin they borrow money from the holding company. and that's a different game. but they shouldn't lose money. i don't have any problem with people losing money if they do dumb things. i've got a suggestion how to handle more hazard on that subject, which we can get to in a second, but the depositors are going to get their money and they got their money on -- you know, in the case of silicon

valley on monday morning, but they were splitting bullets all weekend unnecessarily. if they just understood how the system worked, and, you know, it -- it is a failure of all of ours that that message is really not communicated i don't think one person can describe how the fdic actually operates and where they get their money and who appoints the people who are working there, who pays the salary of the people it is a misunderstood institution. >> are we through the banking crisis at this point >> we're not through with bank failures, but we are through depositors -- depositors haven't had a crisis the owners of banks may have lost a lot of money. the holder of the debt, they

could lose a lot of money, but the depositors aren't. so you don't need to turn a dumb decision by managers into a panicking the whole citizenry of the united states about something they don't need to be panicked about i mean, it is really, you know, it is like we're thinking t that -- i just don't know why you do it, we set up the fdic to relieve people initially it wouldn't the same institution -- >> you're saying on one hand, okay, no depositor is going to lose money on the other hand, you're saying we're not through the bank failures. >> banks are no bust but depositors aren't -- banks no bust. the franklin national bank, the bank of the commonwealth, and sometimes they go broke because

they make too many dumb loans and sometimes they mismatch maturities. >> joe has a question. i want warren to get to -- he foreshadowed he's going to talk about how to deal with the moral hazard if there is moral hazard if the banks can fail, maybe if the shareholders lose and debt holders lose, that's -- maybe there is no moral hazard but it has been posited that you give bank managers or ceos the notion that all their depositors are going to be protected, then they're going to keeppromising higher rates that they can't deliver and they're going to do all kinds of things because they're not worried about their depositors anymore but you've got an answer for how to deal with that moral hazard >> absolutely. i mean, they -- they got to have something to lose themselves in 2008, all kinds of trouble was called -- caused by the banks. but no bank executive that the ceos that made those decisions,

they all continue to live fine, they may have lost their job, but they got their pensions. so they bore no -- the bank later would pay billions of dollars, had nothing to make -- to do with making those decisions. so i would absolutely suggest -- and i had some friends in banking, i may not have any by the time the program is over i would suggest that is a ceo of a bank that screws up and causes shareholders a lot of money, in effect, you know, they got no pension from the bank, they go back to living, you know, like a person that works on the production line of ford or something like that. they don't deserve anything special. and i would suggest to the directors of the bank that sat there for five years and listened to people come in and give reports and all that sort of thing that they get back all their director fees and there

has got to be consequences to the people who make the decisions. and penalize the shareholders later on by billions of dollars worth of fines paid to the government that doesn't -- that doesn't deter the bad action the way -- if you're the president, the bank and you skcrew up enormously, you know, you still will live on like you did before you have taken away any sense of real responsibility with the directors, and the answer with the directors isn't to have any more risk committee meetings or anything like that, i've been on the board of banks and the answer is to have board of directors feel, my god, if this guy screws things up, i got to get back all this money i've gotten, 300,000 a year or whatever it may be in prestock and this kind of -- i got give it all back for five years believe me, that changes

behavior of the people that caused the problem and this system doesn't get rid of moral hazard because it penalizes different people and makes the decision i want to penalize people who make the decision and i have been very clear to them. and that will not be met by great enthusiasm from a lot of friends of mine. but that's exactly what i believe should be done and banking systems are enormously important the world doesn't work well without a banking system and i don't know anybody that went back to flipping burgers at mcdonald's or something, after they screwed up the system in a big way in 2008 and '09. they made dumb -- they did things in 2008 and or '07 and '08 that really are qualitatively different and

really much more reprehensible than things -- people did in this period currently. they did a lot of dumb things. and some of them sold their stock. and, i mean, it -- there is no penalty attached to bad behavior and it does really, really affect the system when people lose confidence in banks. >> let me ask you, you again sold a lot of your bank shares that berkshire hathaway holds. should we read that as an indication that you think banking is less investable than it used to be? >> well, no, i love going to the bank we owned a bank in 1969 at berkshire. i think it was probably the best run bank in the country and ran it like i'm talking about. i mean, he -- he was a real

banker they used to run the two big banking analyst firms on wall street, and they were really smart guys and maury shapiro once said there are more banks than bankers, and you want people to understand that they're handling other people's money, just like you did with -- when you want people running, you know, hedge funds or anything else. they handle their own money. and it is very clever in this country, it set up things, it is nice if your investors make money, but in the banking industry, you have not connected responsibility for problems to the real punishment for that act. and that's when you get responsible -- >> okay, but the -- >> you get a better banking

system. >> some of the banks you sold include usb, wells fargo, goldman sachs, jpmorgan, should we think there are banks that aren't well run because you haven't sold them? >> no, but i did think that banking can get in a lo t of trouble because of the kinds of things they did. >> why did you keep bank of america? >> if berkshire could own 100% of a bank, we would love -- we can't go to the bank holding company. >> would you like to be a bank holding company? >> well, that means we can't do all the other things we do so, we have to take it out of that in 1970, we just bought a bank in 1969 and we had to get ritt rid of it in ten years that particular option has been taken away from berkshire and i think it is probably a good idea

to taking it away from corporate management generally. >> why did you keep bank of america? >> pardon me >> why did you keep bank of america? >> well, a, they invited -- i invited myself in, many years earlier, and made a very decent deal for us and i like buy ing enormously i just don't want to sell it but i did sell banks that we owned for 25 or 30 years and if they asked me why i did it, i told them, but i liked the people i just think the system isn't quite right in terms of connecting punishment to culprits on something that is an important -- incredibl important that your banking system run well in the country it just isn't going to work unless you have a banking system that works and you don't want

them to create periodic crises unnecessarily. >> okay. we're not taking a lot of breaks today. but we will take one right now but we do have more coming from warren buffett, but, joe, we'll send it back over to you. >> yes much more to come with warren and, of course, we do have the 8:30 a.m. release of the consumer price index plus, if you missed any of today's interview with warren buffett, check out our daily podcast, follow walsquawk pod ad listen anytime stay tuned thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade

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welcome back to "squawk box. futures, little changed, since what we saw when the show began up 76 on the dow right now the nasdaq up a little, four points, three or four points in the s&p. there is the ten-year at 3.43. two-year back above 4% just barely. beck >> joe, thank you very much. we are in japan, in tokyo, with warren buffett, the chairman and ceo of berkshire hathaway. he's been talking about the financial crisis

i don't know if we call it a financial crisis, but the situation in banking now, where things stand you had said that you wouldn't necessarily -- no depositors are going to lose money. >> exactly. >> but shareholders might. and you could also see bond holders losing money. >> there will be cases, i think. >> let's talk about the assets that are out there, though you have assets from silicon valley bank, signature bank, that are now the responsibility of the government, who is trying to auction off some of these things you got people asking questions about what comes next, if this sort of pig in a python continues to work its way down commercial real estate has been brought up as an issue of a looming problem, particularly since 80% of commercial real estate loans are made from the regional banks where most of the problems have been what do you think about that >> i think there will be problems and, you know, people have -- anybody that has got a fixed rate locked in for a

while, when the fixed rate goes away, and they got to reprice it, has got a problem. the holder of a 30-year, freddie mac or -- they got the best deal in the world and they should. i love the program but -- >> you mean somebody who has their 30-year mortgage >> yeah. has the mortgage but the reason for the very fact that it is very advantageous to the person who has the mortgage means it is a very dumb holding for banks. i also believe in the system that produces -- the country is better off, but i don't want to hold any mortgages myself. and the idea that if you got a 30-year mortgage, you personally, you can call off the deal ten minutes later. and if the bank has got a bad deal, they're stuck with it for 30 years berkshire cannot make the deal with our credit that you can

make if you qualify for fannie or freddie i don't it is a good thing for society, not good for banks. banks have a good business, if run right, they can do things like that, and they -- but -- i wouldn't do them myself. and we will see people, gets back to that old story, when the tide goes out, you learn to swim naked and ran into a nudist colony here, i mean, in terms of banks all over do that sort of thing. and they can handle losses but to say that because you can hold a maturity that therefore it is safe, well, the prime rate, with 21.5% in the 19080s, who knows what can happen or

what you're paying on your deposits and people know what they can get the idea you got this kind of lazy money and people are sitting around with money and zero -- you're telling them every day on cnbc, go shop around and get best rates you can for your money so, nothing like the physical world. i mean, the physical world, you know how fast sound will travel. it will travel the same speed as, you know, 20 years ago or 50 years ago and you know if an apple falls from the tree how long it will take basically. but, in economics, the equation changes every time because of the experience of the previous time so, things that seemed to make the mistakes of 2008 and '09, they affect how people behave

subsequently and in 2023 it is a different world. it isn't like light travels at the same speed or anything like that and people have been adjusted so that lazy money in 2008 doesn't exist in the same way at all and we'll see how it plays out but, you know, it is our job at berkshire, for example, and all our businesses, to not think about -- you take cognizance of what happened in the past, but you have to worry about things that people haven't seen yet and, you know, the people that have run banks the wrong way, the shareholders will lose money. but the depositors aren't going to lose money. i made that offer, in the previous segment, and anybody who called in with their million dollars, i'm still good for it. >> let's go back to that, for anybody just tuning in you're saying you will put up a million dollars against anybody

who wants to take the other side of the bet that no depositor in the u.s. bank will lose money. >> in the next year, year from now. whichever one of us has won gets to decide what charity the $2 million goes to. the charity is going to win just like on the hedge fund bet i made a few years back. but i'm betting on what's certain to happen. it isn't the law now but it will get changed. i will bet on the fact that the united states will not suffer -- by messing around and not finally changing the debt ceiling and why the congress we elected to do all kinds of things and overworked in all kinds of ways, why do they make hay out of it on one side or the other, depending on who is in charge it is just silly

and i would rather have the government, you know, actually focus on things like they did back in the new deal, which my dad hated, but which social security came out and the fdic came out on things to really improve the situation of the world, and they proved -- they improved america and i got the advantage of hindsight and i believed in it and really, you know, since i was 11 years old, i just said bet on america and figure out a way to be in the better businesses, but even in the average business, it is just a way we still work -- and but we can work better. >> all right back to commercial real estate we have had lots of investors in commercial real estate who have come in and said this going to be a crisis point that the government is going to have to

step in. something should be done because there are so many commercial real estate loans that are coming due between now and 2025. and that they won't be able to get credit from the banks in the same way to renew or to -- once those maturities come due to refinance. >> let's say they lose $100 billion in the banking system, most of the banks can take that loss, their share of that loss, and a few of them, because they did other things, you know, their shareholders will end up losing the money, but the depositors won't lose money. if you lend money to somebody, and it comes due and they can't pay it, the old story about the banker, never made a bad loan, of course some of them turn bad after i made them. and that's exactly what happens and whether it is in commercial real estate or people -- if money rates are 2% or we were lending money out at 4 basis points, berkshire to the federal government, not much more than

the year ago, year and a half ago or something like that, and if those rates change, the person who bet they wouldn't change loses money you make mistakes in business. plenty of people make mistakes you pay for them if you got a big profitable business on top of it, you know, which a good many banks do, you take your losses and you keep going on banks can take a lot of losses, but can't take something that wipes out the capital and expect the world to ignore that fact. >> meaning that you don't think anything needs to be done on the commercial real estate front >> i think the people that -- the people that -- they are getting properties handed back to them now. within the last month or six weeks. >> the banks are >> yeah. they got some office buildings in los angeles and, you know, walked away from something and if you get a nonrecourse, you know, everybody knows in the

real estate business, told the first rule, the second rule, the third rule is never sign your name to anything you have nonrecourse mortgages and they're going to walk away and the bank is going to get stuck with losses and maybe they'll hold the property a long time and it will come back and there is all kinds of ways that if you got capital strength, you may decide, well, i'll just hold it and -- but, that money is sterile for quite a while and that's part of banking you expect to lose some money in banking. it is not a sure thing on every loan and you build that into your calculations and then have capital that protects your depositors from it eating into their money, and if it does eat into their money, then the fdic, which is really a mutual insurance company of a very peculiar sort, essentially spreads the losses among the continuing banks by higher fdic assessments in the future. >> we have had some people in commercial real estate who say,

who make the point that it is not just commercial real estate, but other places where the economy is turning over, where inflation is coming down, that the fed is doing too much, what do you think of the job the fed is doing right now >> i do not think i could run the fed as well as jay powell has done he's been a terrific -- and part of the job, well, look at paul volcker in the 1980s, people were sending in -- i mean, he knew secret service protection and everything else, but in the end, all this responsibility was to do the right thing at the fed and didn't give a damn about what anybody wrote about him or anything else and i think that he's one of my heroes and i think he's one of jay powell's heroes and i think jay powell did the same thing actually in march of 2021, during the pandemic at the annual meeting that year, i said he was there, and you have to -- you have to

act and you have to act on insufficient information and you got to -- you got an ultimate responsibility to the american public and doesn't mean you can stop recessions it doesn't mean you can turn bad loans into good loans or anything else, but it does mean that you got to keep the system working. and the system came close to stopping if you read a book called "million dollar triage," you can get it on a day by day account and people don't know how close it was, and jay powell did not call for studies or position papers and, you know, lengthy debate and everything. you act. and that's what paul volcker did. and thank heavens jay paul was there. you could have gotten a very different result in march of 2020 after the pandemic broke out. >> did the fed keep rates low for too long after that? >> who knows who knows?

we won't know -- i don't -- i don't know what they precisely should do. nobody does. and they follow conventional wisdom and all of that, and sometimes it work out, sometimes it doesn't but since 1942, you know, we made all kinds of mistakes in this country and will continue to make them we saw how the system works pretty damn well, i would rather own stocks than bonds, i would rather own part of america and squirrel my money away maybe in switzerland, credit suisse or something like that. but people are -- they don't really get any wiser about this sort of thing. people -- it is built into -- fear is so easy to arouse in people talk about fear of their money, they don't really understand the

system necessarily or anything of the sort. and they it actually by their own actions create what they were afraid of it is a very interesting phenomenon and it actually -- i grew up first ten years of my life i couldn't get dessert -- dinner unless i said something nasty about roosevelt or something over the years, when roosevelt sud said the only thing we have to fear is fear itself, he was right. he closed the banks and said i'll open the good ones in a week from then, he didn't know which bank was good or bad or anything like that, but people just needed that, an appropriate confidence and now they really have an appropriate confidence because we didn't have an fdic a lot of banks fought the idea now we have got a system that

works. but people are still scared. when they get scared, being scared is contagious, you can't imagine what it was like that weekend after silicon valley i can't see that well, and all he was talking is banking, and, you know, what should he do and -- and it's unnecessary fear, it is a terrible thing to give people. and roosevelt and the new deal really wanted to get rid of that and it -- here we are x years later and we got a mechanism that is so much better than we had going in, but people really don't quite understand it. and maybe, you know, maybe thanks to the president of the united states to go on and deliver roosevelt's message and make it more clear to people

what we really do have and what they need to be worried about and what they don't need to be worried about. but, of course, if you're trying to win an election next time, you tell people that if you're out of office, if you're out of control, you tell them how terrible the other guy is for getting you into this problem and that's always going to live with us. >> so you look around and you're not worried at this pound? >> at 92, i got other things to worry about. i'm not -- i don't worry about our ability. there is things i worry about, sure i worry about the nuclear threat i worry about a pandemic in the future all kinds of things. i don't worry about them, because i can't do anything about them but that's what i originally thought my money could be best used for, but i don't have any answers. now after 40 or 50 years of thinking that way, but i'm not -- i don't worry about --

no, i never go to bed worried about berkshire and how we handle things. if i'm worried about berkshire, i should figure out something different to do about what berkshire is doing but berkshire is my responsibility and i think i was very, very, >> i was born in 1930. the gdp is up six or seven fold. there's never been anything like that in the history of mankind so we love to complain about wherever we are but most people don't work on saturdays and don't work on sundays. when i was a kid, everybody worked on saturdays.

the world has changed so much for the better in terms of how well off people are compared to any other time in history. if i had been born 150 years ago and i went to the dentist, they'd pour whiskey on me and there's just all kinds of improvements but it's man's nature to be dissatisfied and politics does screw that up. you got to see if you're out of power that the other guy is screwing up and you can do better and that's just built into the system. but that was the case when i was a kid and it's the case today. >> joe's got a question. joe? >> i love sort of his oblique references to his dad. sounds like a really solid ne br nebraskan. i would have liked to have had a couple of domestic beers with your dad what i was trying to figure out, warren, in your long life where you've seen a lot of different

business cycles and seen hyper inflation and secular disinflation last forever, what do you think happened this time to get to 40-year highs? it's obviously pandemic related and supply chain related but do you ascribe anything to the fed enabling too much fiscal spending, profit spending by the government in general? do you think that added to it, the increase in the money supply where did it come from why did we -- what engendered it this time around and how bad is it, how long lasting >> it's fun sending money out to people if you want to stay in office and you want their vote that's always been a problem of our polling system and around the world and some countries

have just printed it where they have billions and billions and inflation is a constant threat to a country but so far the united states has done pretty well with that now, it's still the case that the price level is probably 15 times what it was when i was a kid. but the interesting thing is, you know, the price of the coca-colas may be twice or something like that, the main cost is the container. and the price of "the new york times" has gone up 40 for 1, 50 for 1. it's a very uneven thing and base commodities tend to move less but oil was $3 a barrel back when i was managing money at first and it had been

10 cents a barrel in the east texas situation in 1931 and now it's $80 a barrel. i said in the annual report that berkshire can offer some protection against inflation, but the effect of inflation can be wild. some people if you owe a lot of money, all of a sudden you don't know anything and you can earn it back in five minutes and on the other hand, there's just all kind of things but it's not a good thing for society i think the united states has generally done a pretty good job of keeping inflation from getting out of control and i think when paul walker came in, that was a seminal moment in u.s. history because it was close -- i mean, cash is trash and primaries at 21 1/2% and

paying interest on 200 acres on farmland in nebraska when the crops you could produce only cost $80 per acre and caused banks to go broke and i bought some farms from probably the fdic, somebody or other, taking it over and it was just crazy. the country went crazy because they were afraid of cash and they just piled into things and who knows what would have happened if volcker had come along. and it's popular to send money out if you're in politics. if you tell every one of your constituents that they just won the lottery and here's $5,000 or $15,000, something's going to happen you're not going to have more goods and services produced immediately that can sop up that money. you know, it's -- it's fiscal

policy in that case and we are spending a lot more than -- our government is spending a lot more than it's taking in and that's a lot of fun if you want to stay in office but it isn't necessarily the best thing to do for your kids. >> we're going to talk a lot more about inflation because, joe, we've got that cpi number coming up in just about 35 minutes' time. but i think we have some other business to get to before that >> yeah, we do i want to talk about occidental and their big piece yesterday. i want to talk about all that stuff with warren, too, and transition we got a whole hour left and in the middle of that we'll get that cpi number. but we'll have much more from warren buffett live from tokyo plus the countdown to the march consumer price index we do have that coming right at 8:30, 33 minutes away.

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begins right now good morning and welcome to "squawk box" here on cnbc, a global edition becky quick is speaking with barren buffet in tokyo at 9:00 at night do i have that right in. >> yeah. >> 13 hours, that would be eight plus one more. you're right >> i had to look at my iphone for the global no, i was able to do that in my head >> u.s. equity futures at this hour -- >> we need you

>> u.s. equities are in the green, nasdaq up 26, s&p up 10 treasury yields if we look in advance of the cpi number, rick's going to bring that to us at 8:30. 344 on the ten year. that's still interesting given where the fed is supposedly headed and where the 10-year is. it's the safest instrument in the world. it's a flight to quality but it's still a long way from where the fed is the 2-year just above 4% right now. >> all right, joe, thanks. let's talk a little bit more about where we left things with that inflation number. again, we are with warren buffett in tokyo, japan right now. warren, you can talk about inflation and what's coming and what's going, but we've got the cpi number coming up i think you probably have better information than janet yellen or

jay powell just in terms of what's happening on a day-by-day basis. you have so many big businesses that berkshire owns outright have we seen the worst of inflation? is it rolling over, coming down steadily >> inflation is always a possibility. and i mean extreme inflation it's a possibility i mean, just look at the countries and what they've done. i don't know how many times. and they can lead to terrible things, led to terrible things in germany and you want people to trust their money. i mean, if they really have a flight for money, the economy doesn't work but in 1942 when i bought my first stock, i mean, we were

going to pour money into people's pockets and they couldn't buy anything. they couldn't buy cars, they couldn't buy -- i mean, they couldn't buy washing machines or anything else but they had money flowing in to them and of course we had price controls and we did various things and the war ended august of 1945. and for a little while the fact that it there was all this money sloshing around and people wanted to buy things they hadn't been buy for three, four years and women going to work and all of that thing, i think the inflation went from something like 1% in january of '46 to by the end of the year it was running at 15% or something. i mean, if you give people more money to put in their pocket than you've got in corresponding goods and services, that money is going to become less -- not

worthless, worth less. that's happened periodically we've had incredible inflation in certain countries if you look at -- we had a post world war ii in various countries and there comes a point when it's out of control and it screws everything up there are certain people who profit from it obviously anybody that's borrowed a lot of money. but it is not good for society and government has the responsibility for making sure that they issue the currency and it's the only thing that's legal tender and, you know, you need to have -- i think charlie mentioned it even. currency is one of the great inventions of mankind. you don't want to go around all

the time trying to trade your services in terms of giving somebody eggs and trying to get back a watch and then trying to trade your watches you want something that is -- you need something in a society that's legal tender. but it's important how you treat it and the united states has been pretty good at, really quite good, but, you know, if you look over since i've been investing, there's been a 90% loss in purchasing power >> but it sounds to me like you are more worried about inflation than recession is that fair >> oh, i think either one can cause a lot of trouble and recessions can turn into depressions. i mean, it is -- we've got a great, great country and it gets messed up by depressions

i was born in 1930 and the dow didn't get back to the level -- it was higher for about five days until i got out of college. it wasn't that the american people that turned bad but we got something that fed on itself and banks failed you can disrupt an economy a lot better than you can put it back together again we've had some close calls on that and i think in 2007 and 2008 i think hankfallsen said we'll use the economic stabilization act, which was an act back in all of a sudden we'll get fund whether he was the guy to do it or not, i don't know so we don't want to mess up our economic machine and it can be done by inflation. >> how do we mess it up? should the fed keep raising rates? is inflation at bay? what do you think?

>> basically fiscal policy scares me more than monetary policy >> meaning that we -- >> i think it is easier to obtain votes if you give people money. and i think that just like i want to keep my job at berkshire, i want to get elected next year. and fortunately i have enough stock, i can do it and if i was in a super, super, super safe district, maybe i would vote my conscience in congress who knows how i would behave unless i was there my dad was in congress and i don't think his behavior has improved since 1942 when i first went there and had lunch with sam rayburn one time >> so you think that congress is going to screw it up by continuing it spend more money and jay powell is going to be in the position of having it

continue it raise rates? >> i don't know what they're going to do, but if you ask my, i things that i think about in terms of taking care of millions of people's savings who entrusted me, that's one of the calculations i have in my mind and i have said in the annual report that we will ride along with america and we can't necessarily predict how we would come out in a wild inflationary period but it certainly would be better than you would do in a unit of currency that's the best i can do i think about it a lot obviously and we own a lot of good businesses and the railroads will continue to run no matter what the currency does, the insurance company will continue to insure people

we are a cross section of america's economy and we're going to behave in a way that we'll be the last person standing >> all right, i'm going to ask you one more time because i don't think you want to answer it i know you don't want jay powell's job but if he asked you if he should keep raising rates, what would you say i would say he should do whatever he thinks is in the best interest of the united states >> what would you say is in the best interest of the united states >> that's why i didn't ef want to be chairman of the fed. it's a very, very tough job. you have to dal -- the biggest problem is in the end a congressman can torpedo your job. and i'd hate to have a job where something that somebody

essentially nullify any actions i take and i looked at him one time in the 1980s. he was even bigger looking in person and i said, you know, what can you do under that contingency clause or whatever it was. and he basically said i do what i need to do what are they going do, come down and arrest me is the supreme court going to put me in jail or something? he felt that it was his job to do what was right and i think jay powell feels exactly the same i feel most nominee that job, overwhelmingly they wanted to to it >> hey, joe, you want to take a crack in. >> i was going to shift gears a little bit, beck, though obviously energy prices have a

hume effect on inflation but i was struck on the article on oxy that was in the journal and how much money is -- i guess i'm just trying to figure out how you feel we should transition, how long it should take how much high droe carbon con over the next 15, 20 years on the transition, which would obviously impact growth around the world. there's got to be a way to do this where we can continue to grow and i'm wondering if you think we're doing it effectively is occidental a model for how we should be doing it, in your view, warren >> i certainly

she is an extremely competent, good citizen to america and she understands oil as she understand probably the reality that she understand that what is what pg and she's -- she is extremely concerned about ways it have carbon capture i mean, p but i think you figure if 20 trillion is way low. we're pro tuesdaying -- the world needs 100 million barrels a day or something like that at present. and that was an eform put a good pit. and then they say to the rest of the world you can't do that and

besides that, you ought to chip in and -- i mean, it's a very tough problem for, it seems to me, somebody that has been responsible, a country that's been responsible for putting the carbon start saying to everybody else you can't have any. so it's an enormous problem. it's an ever-present problem and you really so you really need somebody who understand the dimensions of it and what can be done with carbon capture. you will be and if you spent trillions of dollars now, you'd still need it. you can't change the world that fast >> i heard charles ear talk about it i guess he thinks maybe some of miss tearia is overdone on the

entire subject we could spend an i've asked you this before in terms of your insurance companies. at this point how much worse are your payouts for adverse event to if from what you've seen? >> well, it's essentially nothing. and we're are roo the prices are somewhat better and, actually, i don't know a damn thing about had your capes but in terms of whatever it may be, it's slightly -- it's somewhat m pierluisi than last year but there's all kinds of chance events and that's what we insure

people against but -- >> warren, can you say without hesitation that you need to charge much higher premiums because these things are happening much more frequently because we're considering -- >> no, no, no. we're charging higher -- >> go ahead. >> we're charging higher prices, joe, because prices got too low. the price level for working insurance is not -- i mean, if you take -- you say we'll ensure against any event that causes more than $50 billion of be damage in florida. there's all kind of resome years ago we didn't think we were getting paid enough. but now pruce have moved and

florida and texas and an earthquake, we could lose $10 billion and nobody else can play in that game so it's not as as tractive as it's been at different times but the auto insurance, the average price of many our policy when i went in in 1950 or 1960 was 50 bucks and now it over 2,000 a year and the whole auto insure. we are not issue willing any 20-into the approximately f as the risk changes and you can argue -- i sure as hell don't wish it on anybody but you can

argue on and that's actually happened f there isn't anybody driving terribly compared to how they drove a hundred years ago, the actual miles driven has gone down a lot but the cost of auto insurance has gone up 30 or 40 and going up at a fast enough rate, the inouye are not committing ourselves as to what insure ap spkd to temperature tnl and we're backing it up with money every day.

>> let me just ask you about the economy. we have heard recently from jamie dimon in his annual letter at jpmorgan, he says a recession is be much more likely now janet yellen was speaking i think in the last 24 hours, though it it hard to track when things are happening he said the u.s. is in better shape now than it was six months ago. which of those camps would you put yourself in? >> i know what a lot of different businesses are doing i just got a report from one of them it happens to be in the retail end of this. it was minus 22% in federal budget on the other hand, some of our businesses are still doing fine but they all are you this -- it almost of lfing months earlier and that sort of

thing. but eight tougher world in a great many businesses, not in the insurance. we can't predict how fmt and the railroad business is down and car loans carried. this so that doesn't read very much but overall i think people that run our businesses that do have any sensitivity to the economy aren't surprised at where they are now compared to where they thought they were going to be six months ago that doesn't mean that the world is coming to an end or anything. 58 years i've been running berkshire, we're run imeet is we

and we're going to try to take care of it if we lef. >> but you think a recession is more likely now than maybe would you have said six months ago i think most of our managers would say they are surprised at where them there are a lot of businesses rns pu and i think the people at the railroad are somewhat surprised that car holdings aren't a little higher rather than a little lower, but it reflects what's happening in

a year or two ago that no economic figures are pure. but i'm just telling him my impression i look at the number had our easter sales day by day. i live in call versus warks versus oregon. so get it. i just like him when i see him >> in terms for the potential for a credit crunch coming through what the banks are going through right now, there's been a lot of speculation of what that could mean to the economy is is it mean a 1% hit too gdp what do you got? >> i was running berkshire for 28 years and i never applied economic forecasts of any use to the company.

you it many so the people who keep making intelligence decisions harr that and if i am depend ent in my life on economic forecasts, i don't think we could make any money. i don't know how to do it. and, you know, you people want fwem them but it has no ult as well money many somebody is going it tell them what's going to nap the committee they've thrown the money away as far as i'm concerned other than that, i'm very tolerant >> berkshire had 128 billion almost in cash and a bid in money market government bond only money market funds. but we've never -- we don't own a commercial paper and we didn't in 2008.

you know, it's -- we want to be ready for anything that happens. >> do you have more or less now -- where are we, three and a half months later. >> if 11 billion has gone out the door but we'll know the figures exact. but i think we're probably up and catch and if many and the money comes in hfr so we were in the neighborhood of something over $100 million, a working day. that money comes in and we spend the even this we had on

depreciating we don't talk about ebitda or anything crazy thing like that coming in. we'll continue to have a lot of money coming in and we'd love to display some wood and we also want to have as the many and something that cost be problems of the nominee >> and would you say you're doing anything differently at this point just in terms ff, all right, you're not going to worry about economics. >> we don't change what we're doing in terms of prying tro pum. >> -- they just wanted to make sure that they have happy customers and they're cost effective and they asked me before they spend

a lot of money in terms at capital ogs. >> if you don't mind, we're going to pause here because we have that big cpi number coming up andrew, we'll toss is back over to you >> in just we're going to get instant market reaction and we're going it loo fmg. >> and tomorrow, an interview with am zwlon ceo andy jassy we'll go live from seattle tomorrow morning and then we'll be back to tokyo with warren buffett. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments

shape tomorrow today.

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most of the morning. less so a little bit now, 61 points on the dow, 3 on the nasdaq, 5 on the s&p, if you're in a car on the radio. the 10-year note, 3.447 and the 2-year 4.071 we've done this before, seen this movie before. rick santelli is standing by at the cme in chicago you have emphasized that the actual number we see, if it's like a tent you think you might be doing that again today? because people want it to continue to cool they don't want it to just be lower than it was a year ago but still stub orly high do you think we get any relief

today? >> yeah. as a matter of fact, if you look at the year-over-year numbers, the peak was in september of year-over-year core, they have been moving every single month since this the cbo tells us every man, woman and child owes $3 grand one trillion physical wall year through march well with. and so spend, spend, spend makes the fed probably have to say higher, higher for longer. consumer is up .01 of in 2015 and as soon as if you look at ex food and energy expected up four

tenths being and since then the low has been up .2 in august of '31. 5% year trjs every month p month since june, july, august, september, october, november, december and now march have been lower. if we look at 5.6, maybe the most important number here, here's where it gets interesting, joe 5.6 expected, 5.5 in the rear view mirror, gone down every month since september when it packed at 6.of 6 and it breaks that street. many have said it do but if you

take a bigger picture, we had and i'm so interested in how omaha issue looks at this. it becomes an extight, tighten and what rate is going to be high enough until we know what's going on with the budgets. >> incredible moves in gold in the dollar it all sort of looks like it might give the fed some breathing room >> oh, rates have dropped like a rock >> the 10 year -- the stock futures went up immediately, gold went up immediately >> a 2-year note is at 3.92. it's down, what, 14 basis points yes. and we've gone from what were 3.37 now in a 10 that was well over 3.44. so, joe, yeah, the markets are

speaking loudly. at least i'm going to toss it back to becky. we're all thank should futures equities and big drops for interest rates becky? >> all right, rick, thank you very we're listening intently to all of that. warren buffett is standing by two. what do you think? >> well, becky, on good friday, i was working. mark melard who handles all the bonds and stocks was there i knew i was leaving town on sunday night and mark says what do we do next week i said here's what we do and on monday we always buy tresh but those questions are,

so monday i was here and i don't change anything. new f and we happened to be a net seller off 300 million some but we could have been in that fire he's going to be operating on wednesday. and i'm not changing inp any instructions he's going to keep doing what he's been doing. we don't make our decisions as to wlon we don't have any idea what knobs and next month. between 1960 and 1965, controlled all kind of things were

happening in the economic markets all the time, but we haven't changed our course in 58 years. we just want to guy and trust at a decent price and we'll keep doing that and keepinbury and i keep all my upons who now we get almost 5%, which is $5 billion. so we've got nurchl dhash is there to be the strongest company you can imagine. and also to take opportunities when they come along but, mark, if you're listening, just keep doing the aim pim and i can go away for a couple cups

rpgs -- ands that what we do and some periods pfs this was pood we bought 20% of the economy that already the index pond f pem yeah, it was accidental and we were doing other things, too. but now it's a different kind of market and we can't acquire at the same as if we were buying an objection dental or selling something ls and i can't tell you what the fed was doing when i was buying birk sir we were bying berkshire.

guesses and we don't know how to profit by looking at broad statistics and getting what the bond market will do. >> you have said the interest rates are like gravity on equity prices >> there's no question >> so what's the level of gravity? are we on the moon, on earth >> the option was to get four basis points on bonds and that changed the value of real estate, changed the value of equities it changes everything. but that's all happened in my life time various ways, all the way up to and you can read the economic textbooks bile it's a 900-page school book that every kid wants to go to school with

and you look at the index and there's not a word on it so anything can happen over time we want to buy good businesses and we always want to have money >> andrew's got a question, too. andrew >> hey, warren this is actually a question that sort of moves where the economy may go and it's a question around technology, which i know it's a a space you a always don't want to go to. i know one of your best friend is go how that can inform our economy in the future and lots of weathehave you given any thot it >> i think it's understand i don't understand but bill did come band he said i'm going toe you she i actually

said take the saw my way and it in opinion and have it encompassed by views by what's fun epy and it it, and but he told me, eit just doesn't. but it can tell you it's read every book, every legal opinion. i mean, the amount of time it could save you if you were doing all kind of things is unbelievable but what i said -- you can how are you going to ruin the human race and then let me know if someone -- if i have to unplug

it, whatever you have to do rn i think it's an incredible, technological advance in terms offing and i was listening knows an awful lot about technology. it scares him pell, if scares him, the possibilities of it many 1945, i don't know what all the animals are or anything, but einstein told me it was going to change the world and it did change the world i don't want to change the world too many times without having an idea of the consequentials to it >> was it steve waz yack >> no, it was eric schmid.

he was saying with it. 100 of 1% from physics or anything else says that eric knows but i've come to the same conclusion >> look at you, warren, watching "quack box" lkone other question for you, warren because we always ask you -- i don't know if that's where you were watching it but he was talking about itus pg i was thinking about this with you, warren. and i know of has come up to close to $30,000 again

tua mania went from 1634 to 1637 it only lasted three years and here we have, if you're right about bitcoin, something that's now last i've been trying to understand if in fact you're right and this is just not rat poison square and is not a thing, when would it be unveiled as not a thing >> that's predicting when speculation will end or when the gambling instinct will go away and more people want to get out than getting in. if i thought i was good at that, i'd found but the one thing i know letters why should i send along a wayne letter and i can start mine on my own i've seen people do stupid things all my life and i

empathize with that. people like to play the lottery and they're going to get 60 cents back on the dollar or whatever it mayin and it very hard to tell nominee if. frm. a sure loser but society -- for the gamblers on the lottery as a whole but they're appealing to the gambling instinct and, you know, it spreads -- i mean, people love the idea they're going to make more money tomorrow, and it really drives them crazy if their next door neighbor in chiefs and are are can -- the gambling instinct is so strong. you had millions of people that

were getting set checks in the money and ruled out all the appeals of commonwealth and you can do it in your home and they have money and we've had an explosion of -- ofgambling ething i'd like to bet on a football game if sim itsing and watch temperature it i don't think i want to make a living betting against the house. if i was going to get into gambling, i would want to own the roulette terrible and do the gambling actually, on my honeymoon in my first marriage, you know, we're talking when i was 21. we went through las vegas population and about 20,000, a buchb of holes from omaha and other places and i bought the fla mingo after bugs' settle nd

and they wep komd him and i looked at all these people had known nows they thought the dice was m hot had, i can be smarter than that. i mean, and now you've created the perfect condition for it where states are legalizing gambling and what it does to football games personal p you're just point shaving, which, you know, a guy gets offered a million bucks and it like, you know, the white sox were in 1923 you know, they did it for a few

hundred dollars and you are if you're making sure the spread is met. i don't know being m changed the gambling injury but when the state has tried to sponsors it there. do you think that the idea oflool, do you think that's changing the games there are swaugss where rng manm -- situations where there are 3 million people doing it, you have 330 people doing. i mean, the urge to participate

in something where it looks like easy money is -- it's a human instinct which has been unleashed. it was always there. and i mean, when my dad was in congress and in the house office building, i could go to the elevator and yell "sammy" and a guy would come up to take numbers bets, which were illegal on the fourth floor of the house office building. and it's -- people love the idea of getting rich quick. i don't blame them but i've always wanted to get rich slow and have a lot of fun along the way. but i don't -- i'm not immune to it i've been on football games. i've made one wager at the sports book in nevada. i went in with a couple of friends and bet on nebraska against it and about ten times got behind me and said i'll have

what he's interesting and i'm at 550 and made a profit at 500 and i had somebody else cash the tickets. i just -- it's so human. and once unleashed, you can't put it back in the bottle. and something like bitcoin, you know, it's a gambling token. it doesn't have any intrinsic value. and it doesn't have any value. but that doesn't stop people from wanting to play a roulette wheel and think that there's 37, one zero and double zero, it doesn't make any difference. yeah, it makes a difference. it's just how fast it eats up your money

they feature the winners and people get excited about it. i don't know how to turn back the clock on that. >> let's talk about some investments that you have placed wagers on and maybe switched your wagers. taiwan semiconductor is a stock that showed up in berkshire's holdings in a big way a couple quarters ago and then a quarter later most of it was gone. >> that was me there are two other people that make decisions, they each run about $15 billion. sometimes they get confused with me, whether i was buying this or not. but that was my decision and i think taiwan's -- it's one of the best in the field it's a fabulous enterprise apple buys a lot of their products from them they're good and coming to the united states and we're actually maybe even building through one of our subsidiaries.

and p but i do think that there is a danger there to some who don't have any idea -- there's actually a danger of size making and where they're located. but people but i would rather have it -- it was a u.s. domicile company than be a subject of who knows what, depending on conditions outside their control. i'd rather, you know -- i re-evaluated that part of it i depeidn't re-evaluate the business, the management, or anything of the sort it is a fabulous company, and you know -- >> you re-evaluated the geopolitical risk from china stepping in to taiwan? >> yeah. i think there isn't any question that conditions change i just don't know what the results of conditions changing

i mean, china and the united states are going to be superpowers, you know, as long as your children live, and they will always compete with each other, and they should and xi can't let it get out of control, and you can't have accidents and all sorts of things it's a dangerous world >> if you're concerned about china and what that might mean for taiwan semiconductor, are you worried about what it would mean for your largest holding, apple? because apple does so much business there in terms of manufacturing and sales. >> i weigh that in, but apple is -- it's somebody -- if you're an apple user, and somebody offers you $10,000, but the only pr p proviso is they'll take away you

iphone and you can't buy another, you're not going to take it. if they tell you, they'll give you $10,000 not to pbuy a ford motor car, iyou'll do that you'll buy a chevy instead of. it's an incredibly valuable utility. that doesn't mean that it can't be misused by kids, and tim cook cares about that fire can be misused. but i think that tim cook is the -- one of the classiest ceos he understands the business, and he has a product which steve jobs basically invented, but tim cook has managed that company in an extraordinary way, and you know, i love -- you know, we've got whatever we've got, 900

million shares, and people say, isn't that a lot of money? we've got a utility business worth a similar amount it's a wonderful business. we can't develop a business like that, so we own a lot of it, and our ownership goes up a little bit every year, because they buy on their stock, and tim does not issue it he buys it in. we love it >> meaning, you're not selling any apple shares >> no, it was one period, actually, from a tax standpoint, it was a good idea to sell some. we sold some around 115, and it was a dumb sale. i mean, in the end now, we could -- the situation some of the way, but we actually bought a few shares last year. we got a few more shares when we bought allegheny corp., they

only kept two stocks they owned, berkshire hathaway and apple they have 27 stocks or something, all gone, except for those two. so, we'll never own a business that makes so many people happier and useful for them and you know, you probably got 20,000 photos up there, and apple -- what steve jobs did with that, and other people can do other technical things, and i don't know whether i'm -- when i look at my iphone, i don't know whether it's a little guy inside that's doing something i don't know the technical aspects at all, but i know the nebraska furniture mart, if we don't have the apple product, people leave the store and go someplace else and you know, i've just stood there and watched people and talked to the people that sell products at the furniture mart, and you know, whether they're

old, whether they're young, they want to have it, and lots of people have multiple products. they have -- they've been -- come up with just one little addition after another, and who knows what they come up with additionally, but tim cook has managed that business, one of the greatest managers, obviously, in history. >> let's talk about another company you own that has a major china presence in fact, it's its only presence, byd, the electric car company that you've owned for a very long time. you've been selling some of that why? >> well, we've been selling it because the companies aren't interested in being valued at -- well, the interest we had is being valued at, you know, $6.5 billion, whatever it may be, and i think it's an extraordinary company, and i think the fellow that runs it, who's run it right along ever

since we purchased it, i don't know, 14 years ago or something, is an extraordinary person i've been over there to visit. but i think that the -- we'll find things to do with the money that i'll feel better about. we haven't sold all our byd. we're not in a hurry on selling it my job is to allocate the capital within berkshire hathaway the way i would do it for my sister, because she is a big shareholder, and that's the way i feel about all the millions of shareholders we have >> very quickly, can i just ask you about paramount? that's another berkshire investment that's been a relatively new one is it because of streaming what happened? >> streaming, you know, is not really a very good business, and you know, the people in entertainment have made lots of money, the shareholders really

haven't done that great over time, and supply to many -- it's a glamorous business, and i had some friends in hollywood, and they look for pigeons, and they find them. it attracts people >> you mean suckers? >> it's a great way to meet girls. it isn't fundamentally that good a business, whether it was distributing -- producing movies or -- and you have got some people that have got deep pockets that aren't going to quit, and the product they're offering people, a chance to watch all those movies for peanuts and all that, but can they raise prices? we'll find out, but so far, they haven't been able to they've been able to subtract subscribers but at a terrible price. >> you give a lot of reasons not to buy paramount why did you buy it >> well, we'll see what happens. >> warren, you are known for

somebody who has the appetite and tastes of a 5-year-old you like hot dogs and coke and see's candy. someone wrote in on twitter skand wants to know what you've been eating in japan. >> that's an interesting question i have a coke here, and i mean, i had had some hershey kisses before i came over here and a few things like that i've gotten to 92 with the habits of a 6-year-old, and so far, it's working. charlie's 99, and he doesn't eat any better than i do pretty much, but i just get more attention with my diet i think, you know, you roll the dice i've been lucky in life. i haven't really gotten that sick the only terrible things happen when people die or get sick that you care about, and if you can make a decent living in this country, just been lucky, and i make all kinds of money because i'm good at some game where the crumbs of capitalism just fall

off the table, and you know, what people contribute to society is not proportional. somebody that gives their life to fight in a war -- i always admired hank greenberg he could be a tough competitor in the business, but he lied about his age upward to get in the army and he landed at normandy that's really something. i've been lucky. you know, i always tell people, i found everything i like to eat by the time i was 6. why should i fool around with all these other foods? i know people eat all these green things and everything. if somebody told me i would live an extra year if i ate nothing but broccoli and a few other things instead of eating what i like, i would say, take the year off the end of my life let me eat what i like to eat. i don't really think -- i think happiness makes an enormous

amount of difference in terms of -- you can't measure it very well in terms of longevity, and i'm happier when i'm eating hot fudge sundaes or drinking coke or eating hot dogs >> warren, we are lucky to have spent the last three hours with you. thank you for your time today. >> thanks for inviting me. >> you invited us, but thank you. joe, we'll send it back to you >> we've got some movement after that cpi number. they'll tell you about it on "squawk on the street. make sure you join us tomorrow "squawk on the street" is next ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, jim cramer here at post nine of the new york stock exchange. big day as mark's headline cpi comes in light, and year on year falls a full point to 5% yields are dropping, ten-year, 3.36%, of course, buffett on "squawk" also lighting up the