In times of financial turmoil there is no shelter

In times of financial turmoil, there is no shelter. After Toyota and General Electric, an icon of American finance, Warren Buffett investment company, Berkshire Hathaway, fell from its pedestal. Ahead of Moody's, owned 20 by Warren Buffett, and Standard & Poor's, Fitch Ratings rating agency announced March 12 the decommissioning of the note Berkshire Hathaway's AAA to AA and AAA to AA for its unsecured debt with negative because of its potential losses involved senior on the derivatives actions and credit and the fact that its investment strategy remains largely dominated by its President. The AAA of the subsidiaries of insurance and reinsurance of Berkshire notes have, been maintained.

"Fitch believes Berkshire investments in a number of industrial enterprises, distribution and services as a way to offset this exposure but does not consider this sufficient degree of diversification to address concerns about the AAA level," says the agency Fitch in its release. Stating that his fears are not related to the age of Warren Buffett (78 years), the Agency does not hide that it is not a good look at the fact that Berkshire investment strategy remains "intimately connected" to the personality of its President, who remains "key man" in the identification of investment targets.

These last twelve months, the course of Berkshire Hathaway fell 36 and profit by 62 in 2008 due to concerns about the impact of credit derivatives bets, that Warren Buffett describes himself as financial instruments "of mass destruction."

Return to the U.S. market

Fitch initiative is largely related to long-term options taken by Berkshire on major global stock and its investment in derivatives linked to loans of companies ("corporate junk bonds"). A risk of latent loss estimated at more than 14 billion at December 31, 2008 if it refers to the accounting rules requiring a value in the price of the market ("mark to market"). In an interview with Bloomberg Television, Warren Buffett, who remains at the head of the second largest global fortune ($37 billion, against 62 billion a year earlier) after Bill Gates in the last ranking "forbes", announced its intention to intensify its investments in the US market. "Seen how things are going, a lot of opportunities will arise in the United States" made no secret of the billionaire, which the company still has "war chests" $ 25.5 billion.

A kind of reversal from its previous "tour" in Europe, where he had served its intention to concentrate its investments. In addition its 3 billion of preferential shares in Dow Chemical in July, Berkshire has already invested $ 8 billion in General Electric and Goldman Sachs in recent months by reducing its exposure in Johnson & Johnson, Procter & Gamble and ConocoPhillips.

Last month, in addition to the repurchase of debts of enterprises (Harley Davidson, Tiffany), the company has also invested 3 billion Swiss francs in convertible bonds from Swiss Re.

After the decommissioning of Berkshire in the wake of General Electric, the number of US companies rated AAA the highest mark possible fell to five (ExxonMobil, Microsoft, Johnson & Johnson, Pfizer, Automatic Data Processing), against some 60 in 1982.