Nuclear reactors exploding in Japan because of historic earthquake. Bodies washing up on the shore because of the Tsunami. Japans stock market plunges wiping out $267 billion of value. Riots continue in the mideast with strategic Saudi Arabia now threatened with an overthrow by Islamists who despise America. Libya is raging . China's growth is slowing and also there is an undercurrent of unrest. Greedy U.S. politicians continue to ignore potentially ruinous economic issues.
But Warren Buffett who heads Berkshire Hathaway just signed another deal today. The stock market has doubled in the past two years but Buffett now thinks Lubrizol is worth a 28% premium over Fridays close. He pays $9 billion for the company. Buffetts cash horde is reduced to $29 billion after the purchase. Of course more money from his various companies will eventually build up his liquidity again. Or will it? His main business is insurance. That's where the bulk of the cash is generated. But what about the unexpected, like an earthquake, or riots or an attack by Islamists or disgruntled U.S. citizens? Payout will have to be made and business in general will suffer. Buffett is shaking dice with insurance premium receipts.What could possibly go wrong?
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