When I saw Senator Ben Nelson of Nebraska vote against the financial reform bill yesterday, I assumed that it was because he is in political trouble in his state after reversing his vote on healthcare reform. I was wrong.
Today's Washington Examiner reports the following:
"On the financial bill, at the request of Warren Buffett's Berkshire Hathaway, Nelson had added a provision to the financial reform bill that would exempt existing derivatives contracts from new collateral requirements. The provision would have saved Berkshire Hathaway the trouble of setting aside $8 billion in collateral.
"But Senate Democrats killed that provision before yesterday's failed vote."
The provision that the Democrats killed will cost Berkshire Hathaway up to $8 billion in money they will have to set aside to meet the requirements of the new reform. The company holds $63 billion in derivatives contracts with very little collateral. Holding that much of any financial product without collateral is risky, but frankly I would be more inclined to trust Warren Buffet with my money than the government.
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