Filed under: Berkshire Hathaway (BRK.A)

The Associated Press reports that Berkshire Hathaway Inc. (NYSE: BRK.A) is betting some capital and its AAA credit rating on the municipal bond insurance business. To do that, it is buying the reinsurance unit NRG of ING Group (NYSE: ING) for $436 million.

What interests me is that Buffett — whose Berkshire has $47 billion in cash on its balance sheet — opted against putting any of that cash to use in the recent flurry of bank capital infusions. This decision tells me that Buffett believes banks have further to drop and that perhaps he has had enough trouble for one lifetime as a major investor in a Wall Street firm. That’s because he got tied up in a Treasury bond trading scandal in the 1990s after a big investment in Salomon Brothers.

Continue reading Buffett bets on muni bond insurance, not banks

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This entry was posted on Friday, December 28th, 2007 at 2:41 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.