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.htmAs 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.Thanks again FO!
Yes it's a good option to consider no doubt, however is it going to change California's direction in it's financial demise and the reason for the state to achieve such a poor financial status in the first place?
Or is it going to slap a quick fix on it dependent upon 1 person...Warren Buffett?