Munger slaps down 'disgusting' Goldman role
Published 03/05/2011 | 05:00
Charles Munger, whose Berkshire Hathaway holds $5bn of options on Goldman Sachs stock, said the role of investment bankers in helping to mask Greece's financial troubles was "perfectly disgusting".
"Wall Street to some extent is deliberately trying to profit from sin, and I think it's a mistake," Munger told reporters yesterday after Berkshire's annual press conference in Nebraska.
"Why should an investment banker go to Greece to teach them how to pretend their finances are different from what they really are?" he said. "Why isn't that a perfectly disgusting bit of human behaviour?"
Munger has criticised bankers for greed and said he opposes handouts for distressed borrowers in the US.
The 87-year-old executive, who helped Warren Buffett build Berkshire, said that the Greek work ethic shares blame with bankers for Europe's debt crisis. Goldman Sachs helped Greece raise $1bn of off- balance-sheet funding in 2002 through a currency swap, allowing the government to hide debt.
Greece "cheated on the accounting and the investment banks helped them cheat," Munger said. "I don't see why a bunch of Dutch and Germans should save them."
Joanna Carss, a Goldman Sachs spokeswoman in London, declined to comment. (Bloomberg)
Greece, recipient of a 110 billion-euro ($163 billion) bailout from the European Union and International Monetary Fund, is seeking to avoid a debt restructuring after its 2010 budget deficit came in more than a percentage point wider than the government estimated. Ireland followed Greece with a bailout of its own, and last month, Portugal became the third euro-region country to seek an international rescue.
'A Tough Problem'
Yields on two- and 10-year bonds from Greece, Ireland and Portugal all rose to euro-era records last month. Buffett said at the conference yesterday that the European Monetary Union is under pressure.
"I just don't know if it can withstand the strains," said Buffett. "It is really a tough problem when you tie yourself to a monetary union and you can't really enforce the fiscal policies of the member nations."
Buffett, 80, and Munger were asked in the conference about European debt, China's sovereign investments and the outlook for acquisitions in countries from Brazil to Korea. They spoke for more than four hours on April 30 at Berkshire's annual meeting, and took questions yesterday from journalists.