But maybe under Arnold's leadership he would buy CA bonds, which effectively means he would be loaning CA money, which may help out CA quite a bit.Got it FO!
When it's referencing the political leadership of California, is this actually a benefit? Warren Buffett didn't become a Billionaire by compassion for the public. (I don't mean that as a discredit to him)however his financial endeavors are a mystery like Arnold's political endeavors are. Giving California a cashflow from a billionair to resolve the political status in California which has created the deficit in the first place isn't going to do anything but mask the underlying issues with the Great State.
California is going to give him some incentive, such as giving a discount on the bonds, kind of like borrowing $98, but giving an IOU for $100 and interest on $100.
As you said, Buffett is not in it for charity. But then if you loan money to someone who goes bankrupt, the paper you are holding regardless, even if you loan someone $98 and they write and IOU for $1,000. Buffett didn't have faith that CA could recover under the Davis leadership, but has faith that Arnold can turn it around. Putting his money there is the biggest vote of confidence for Arnold.
Of course all this is being ignored by the media, beyond the brief mention in the WSJ article.
Here is what Buffett said recently, which ran in the Kansas City Star, but not in the main media:
Buffett, a multibillionaire, also said serving as an adviser for the Republican Schwarzenegger does not mean that he intends to switch his political affiliation from Democrat to Republican.
"That doesn't make any difference to me," Buffett said. "If you are fighting in a war and someone is providing cover for you, my guess is you don't care whether he is a Republican or a Democrat."
Everyone should be concerned about California's financial and political problems, Buffett said.
"Everybody in Nebraska, everybody in Kansas, everybody in Missouri has an interest in California," Buffett said. "It is a big economy. You can't have problems out there without it chilling the rest of the economy."
http://www.kansascity.com/mld/kansascity/business/6548901.htmIf Buffett in effect loans money toCA, that will buy CA TIME, to make adjustment and maybe solve the problems without tax increases.
If you are going broke, there are certain fixed expenses you have and your choice is either to generate revenue now, as in raising taxes, or borrow money, which will give you some breathing room to figure out and implement the best measures.