Sudesh Mesta

Today, CERN launched the largest computing grid in the world which is destined to analyze the data coming from world’s biggest particle accelerator, the Large Hadron Collider (LHC). The computing grid consists of more than 140 computers centers from around the world in order to be capable to analyze 15 million GB of LHC’s data.

A big contribution to CERN’s Worldwide LHC Computing Grid (WLCG) is made by the United States which has “allocated” 15 universities and 3 Departments of Energy (DOE) from 11 states. In order to make things work, the US are using the Open Science Grid that already was coordinating the national computing infrastructure of science and from now it will coordinate WLCG’s data, and it will provide computing power for the LHC.

The U.S. has been an essential partner in the development of the vast distributed computing system that will allow 7,000 scientists around the world to analyze LHC data, complementing its crucial contributions to the construction of the LHC,” says Glen Crawford from the DOE’s Office of Science where he is a member of the High Energy Physics program.

Open Science Grid members have put an incredible amount of time and effort in developing a nationwide computing system that is already at work supporting America’s 1,200 LHC physicists and their colleagues from other sciences,” says Ruth Porder, Open Science Grid’s executive-director from DOE’s Fermi National Accelerator Laboratory.

It seems like particle physics projects are very important in developing better computing grids all around the world, not only in the U.S., but I will let Ed Seidel to explain it better - “particle physics projects such as the LHC have been a driving force for the development of worldwide computing grids.”

“The benefits from these grids are now being reaped in areas as diverse as mathematical modeling and drug discovery,” added Mr. Seidel, the director of the Office of Cyberinfrastructure at the National Science Foundation.

World’s biggest computing grid is using dedicated optical fiber networks to send the data from LHC to 11 so-called Tier-1 computer centers in Asia, Europa, and North America. The latter includes New York’s Brookhaven National Laboratory and the Fermi National Accelerator Laboratory in Illinois. These two are very important as they distribute the data from CERN’s LHC to about 140 Tier-2 computing centers worldwide.

“Our ability to manage data at this scale is the product of several years of intense testing. Today’s result demonstrates the excellent and successful collaboration we have enjoyed with countries all over the world. Without these international partnerships, such an achievement would be impossible,” says the leader of the WLCG project, Ian Bird.

“Grid computing allows university research groups at home and abroad to fully participate in the LHC project while fostering positive collaboration across different scientific departments on many campuses,” says Ken Bloom, manager of seven from the twelve Tier-2 computing centers in the U.S.

When the LHC starts running at full speed, it will produce enough data to fill about six CDs per second. As the first point of contact for LHC data in the United States, the computing centers at Brookhaven and Fermilab are responsible for storing and distributing a great amount of this data for use by scientists around the country. We’ve spent years ramping up to this point, and now, we’re excited to help uncover some of the numerous secrets nature is still hiding from us,” says Michael Ernst, director of the Tier-1 computing center from the Brookhaven National Laboratory.

All the data coming from the LHC will be examined by worldwide physicists including the United States, and they will be looking for “something” that could lead to important discoveries about the Universe. For the moment, there is only one problem - CERN has shut down the LHC due to serious problems caused by faulty connection between magnets.

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A somewhat disappointing fact about Google Blogs is that the site has been written purely in JavaScript so all you’ll see is a blank page if you try opening Google Blogs Search in a browser that doesn’t support JavaScript (like screen readers) or a browser that has JavaScript disabled - something that’s quite common on mobile phones.

Maybe Google decided to go with a JavaScript-only site to prevent screen scraping or is it anything to do with Google Chrome that is known to render JavaScript faster than other browsers.

Another issue, as I mentioned before, is the amount of spam content in Google Blog Search. For instance, the following story is from a blog that is republishing content from TechCrunch.

Surprisingly, that spam blog made its way into a news cluster on Google Blog Search but the original story from TechCrunch can nowhere be found. This I think is an important issue that Matt didn’t touch up in his article comparing Google Blogs with Techmeme.

Personally, I don’t feel that Techmeme has anything to worry about yet.

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Persuasiveness is one of the most important skills anyone can learn because it is useful in countless situations. At work, at home, and in your social life, the ability to be persuasive and influence others can be instrumental for achieving goals and being happy.

Learning about the tricks of persuasion can also give you insight into when they're being used on you. The biggest benefit of this is that money will stay in your pockets as you realize just how sales people and advertisers sell you products that you don't necessarily need.

Here are 9 of the best tricks to be persuasive and influence others: 

Framing
Framing is a technique often used in politics. A popular example of framing is inheritance taxes. Politicians who are opposed to inheritance taxes will call them death taxes. By using the word death instead of inheritance, all kinds of negative connotations come to mind.

Framing is quite subtle, but by using emotionally charged words, like death, you can easily persuade people to your point of view. 

Mirroring
Mirroring someone is when you mimic their movements. The movement can be virtually anything, but some obvious ones are hand gestures, leaning forward or away, or various head and arm movements. We all do this unconsciously, and if you pay attention you'll probably notice yourself doing it, I know I have.

How to mirror someone is self explanatory, but a few key things to remember are to be subtle about it and leave a delay between the other person's movement and your mirroring, 2-4 seconds works best.

Scarcity
This is one that advertisers use a lot. Opportunities, whatever they are, seem a lot more appealing when there is a limited availability.

This can be useful to the average person in the right situation, but even more importantly, this is a method of persuasion to be aware of. Stop and consider how much you're being influenced by the fact that a product is scarce. If the product is scarce, there must be a ton of demand for it right?

Reciprocation
It's the old saying, "Do unto others...". When someone does something for us, we feel compelled to return the favor. So, if you want someone to do something nice for you, why not do something nice for them first. In a business setting, maybe you pass them a lead. If at home, maybe it's you letting the neighbor borrow the lawn mower. It doesn't matter where or when you do it, the key is to compliment the relationship.

Timing
People are more likely to be agreeable and submissive when they're mentally fatigued. Before you ask someone for something they might not be quick to agree to, try waiting until a more opportune time when they've just done something mentally taxing. This could be at the end of the work day when you catch a co-worker on their way out the door. Whatever you ask, a likely response is, "I'll take care of it tomorrow."

Congruence
We all try, subconsciously, to be consistent with previous actions. One great example is a technique used by salespeople. A salesperson will shake your hand as he is negotiating with you. In most peoples minds, a handshake equates to a closed deal, and so by doing this before the deal is reached, the salesperson is much more likely to negotiate you in to a closed deal.

A good way to use this yourself is to get people acting before they make up their minds. If, for example, you were out and about with a friend and you wanted to go see a movie but the friend was undecided, you could start walking in the direction of the theater while they make up their mind.

Fluid Speech
When we talk, we often use little interjections and hesitant phrases such as "ummm" or "I mean" and of course there is the ubiquitous "like". These little conversation quirks have the unintended effect of making us seem less confident and sure of ourselves, and thus less persuasive.

If you're confident in your speech, others will be more easily persuaded by what you have to say.

Herd Behavior
We are all natural born followers. It's sad but true. We constantly look to those around us to determine our actions; we have the need for acceptance.

A simple, effective way to use this to your advantage is to be a leader, let the herd follow you. 

Friends and Authorities 
We are far more likely to follow or be persuaded by someone we like or by someone who is in an authority position. Not only is this a good one to be aware of to combat persuasive techniques being used on you, it's also a good one to use on others because you would be surprised how easy it is to get people to like you and establish authority within groups.

Give some of these ideas a shot and let us know if you are suddenly selling more, having more favors done for you, or becoming a master of delegation and persuasion at work!

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BECKY QUICK, co-anchor (Omaha, Nebraska):

Good morning, everybody and welcome to SQUAWK BOX right here on CNBC. This morning we have quite a show in store for you coming up today. As you probably know, our special guest for the next three hours is a man who needs no introduction. We are talking about Warren Buffett.

And, Warren, good morning. Thank you for joining us this morning.

Mr. WARREN BUFFETT (Berkshire Hathaway Chairman & CEO): Yeah, early morning,
right.

QUICK: Very early morning. You've only had a couple of complaints about
that, right?

Mr. BUFFETT: No, I try not to complain too much...

QUICK: One of the things we'd like to get straight to...is what you see happening in the economy right now. We've been talking to you for some time about what you see as some significant problems in the economy. And, from your perspective, have things gotten any better? Have they gotten any worse?

Mr. BUFFETT: No, they've rippled out some, and that's what you'd expect. So
the excesses in credit, the deleveraging that was required, the weak credits
that are exposed, all that is--we're seeing manifestations out as the ripples
go out, and I think I said one time that, you know, you only find out who's
been swimming naked when the tide goes out. Well, we found out that Wall
Street has been kind of a nudist beach. There's--it's just one discovery
after another of firms that either didn't know what they were doing or that
did things that they shouldn't have knowingly. And all of the troubles have
not been revealed the first time around, usually, so there's considerable
disillusionment that's set in in terms of are these guys telling us the truth
now or maybe they just don't know what the truth is. So all of that's having
an effect, and what we're seeing in business, in our retail businesses...

QUICK: Mm-hmm.

Mr. BUFFETT: ...certainly, anything to do with housing is even a further
slowing down. I mean, June and July, both in terms of credit experience with
people that first got into trouble of house payments and now on credit card
payments and so on. And retail trade, it's not over by a long shot.

QUICK: Does that make you think that things are going to continue to decline
over the next, let's say, six months?

Mr. BUFFETT: Oh, I think they could easily go beyond that, yeah.

QUICK: What's your prognosis, or what's your best guess or your best estimate
of what...

Mr. BUFFETT: You never know. I've said in the past it ought to be longer
and deeper, and I think it is going to be longer and deeper, but no one knows
when--what you do know is that it will turn around. I mean, the country will
be doing far better five years from now than it is now, but it won't be, in my
judgment, it probably won't be doing better five months from now.

QUICK: You talk about how this has rippled out and it's affecting the
consumer at this point. Have the credit markets themselves gotten any better?

Mr. BUFFETT: Well, the credit markets have had this situation where
periodically it's seemed like they were getting better and then something else
comes along. So the bankers feel a little bit better for a while and then
something comes along and then they want to deleverage further. They find out
they've got more trouble. Right now, for example, they're taking back all
these auction rate securities. Well, they don't want to take things out of
their balance sheet. So it's just one more problem for them, and you've seen
these waves of problems and sometimes they create their own momentum. I mean,
if the stock prices go down enough of the banks, then they feel like they
can't sell securities. Of course, the extreme example was Freddie Mac
was--has sort of been chasing a rabbit down the hill...

QUICK: Right.

Mr. BUFFETT: ...and promised they would raise additional money and of course
the price of the stock got to the point where it became ridiculous. So
troubles feed on themselves.

QUICK: Let's talk about Fannie Mae and Freddie Mac, specifically. These are
two stocks that it seems like every time you turn around are touching new low
levels. There's a lot of concern out there on the market about these two
stocks right now. What's your general take on how they got here and what you
think's going to happen next?

Mr. BUFFETT: Well, how they got here was they had two businesses, basically.

QUICK: Mm-hmm.

Mr. BUFFETT: They insured mortgages on a huge scale, trillions, and then
they ran sort of a hedge fund, a carry trade where they bought mortgages and
borrowed extensively against them. And because they had really the backing of
the United States government--and everybody assumed they had the backing. I
assumed it. And the truth is they do have the backing of the United States
government in terms of their debt, not in terms of their equity--they were
able to borrow without any normal restraints in terms of capital or margin
requirements or anything of the sort. They had a blank-check from the federal
government.

QUICK: Mm-hmm.

Mr. BUFFETT: And they also had an added problem in that they had a dual
mission. The government expected them to promote housing and the stockholders
expected them to raise the earnings substantially every year. And as the
years went by, they emphasized the latter more and more. They started talking
about "steady Freddie," and Fannie Mae said, `We're going to increase the
earnings at 15 percent a year.' Any large financial institution that tells you
that sort of thing is giving you a line of baloney. I mean, they may do it
for a while, but when they can't do it with operations, they do it with
accounting and they cheat. And that's what happened at both those places on a
huge, huge scale.

And we have this--they're so wound up with national housing policy, that
they're a national problem and, with this dual situation, you know, Lincoln
said a house divided against itself, you know, must fall. And they existed
half-slave, half-free for a long time, and then the motivations became in
conflict, and when they got on the 15 percent a year merry-go-round and said,
you know, `We're going to deliver earnings up every quarter, and we'll meet
them to the penny,' when they can't do it operationally, they do it with
accounting.

QUICK: So what happens now? You mentioned that this is all tied up with the
national housing situation now. Are they two big to fail, and what does that
mean?

Mr. BUFFETT: Yeah, they're too big to fail.

QUICK: Yeah.

Mr. BUFFETT: So that doesn't mean that the equity can't get wiped out, and
it almost has in the stock market, and in practical sense as institutions,
they don't have any net worth. I mean, if you look at their obligations and
look at the fact they have big deferred tax assets as assets. They would've
been gone in any market where the government wasn't behind them long, long
ago. But the government is behind them, and they will stay behind them, and
people that own insured mortgages or who own their debt, I think--nothing's
going to happen to them. The equity and the preferred stock is another
question and I think you'll see some action fairly soon. You've already seen
it in the fact that the Treasury has made pretty much explicit what was
formerly implicit.

QUICK: Do you say that knowing anything? Do you know there's a
behind-the-scenes plan?

Mr. BUFFETT: No. I don't know. No. They--I'm not getting called on it.

QUICK: OK. You're not getting called on this, but you do...(unintelligible).

Mr. BUFFETT: I'm not getting called on that specific aspect of it.

QUICK: All right. Now you're telling me we're warm.

Mr. BUFFETT: They're looking--they're looking for help, obviously.

QUICK: Right.

Mr. BUFFETT: And the scale of help needed is such that I don't think it can
come from the private sector.

QUICK: So there could have been a situation where you've been called in the
past and you passed on any involvement?

Mr. BUFFETT: Yes. They were looking for--they, obviously, had been looking
for money. They say that.

QUICK: Mm-hmm.

Mr. BUFFETT: And they were told to look for money and--but even the amount
of money they were told to look for would be inadequate. I mean, 5 1/2
billion at Freddie would be, you know, that'd be like taking a spoonful out of
the Atlantic to try and save the Titanic.

QUICK: How much to you think they need?

Mr. BUFFETT: They need a lot. But to get back to the confidence that they
had and all of that, it takes far more now. I mean, an ounce of prevention
really is worth a pound of cure.

QUICK: If you imagine where things will go with Fannie and Freddie, and you
think about the regulators, where were the regulators for what was happening,
and can something like this be prevented from happening again?

Mr. BUFFETT: Well, it's really an incredible case study in regulation
because something called OFHEO was set up in 1992 by Congress, and the sole
job of OFHEO was to watch over Fannie and Freddie, someone to watch over them.
And they were there to evaluate the soundness and the accounting and all of
that. Two companies were all they had to regulate. OFHEO has over 200
employees now. They have a budget now that's $65 million a year, and all they
have to do is look at two companies. I mean, you know, I look at more than
two companies.

QUICK: Mm-hmm.

Mr. BUFFETT: And they sat there, made reports to the Congress, you can get
them on the Internet, every year. And, in fact, they reported to Sarbanes and
Oxley every year. And they went--wrote 100 page reports, and they said,
`We've looked at these people and their standards are fine and their directors
are fine and everything was fine.' And then all of a sudden you had two of the
greatest accounting misstatements in history. You had all kinds of management
malfeasance, and it all came out. And, of course, the classic thing was that
after it all came out, OFHEO wrote a 350--340 page report examining what went
wrong, and they blamed the management, they blamed the directors, they blamed
the audit committee. They didn't have a word in there about themselves, and
they're the ones that 200 people were going to work every day with just two
companies to think about. It just shows the problems of regulation.

QUICK: That sounds like an argument against regulation, though. Is that what
you're saying?

Mr. BUFFETT: It's an argument explaining--it's an argument that managing
complex financial institutions where the management wants to deceive you can
be very, very difficult. Or even when the management doesn't know what's
going on, and--just take Bear Stearns. Bear Stearns had--I read it,
anyway--750,000 derivative contracts. Now, you know, I could clone Albert
Einstein, you know, and--many, many times and have him work 12-hour days for
me and he would not be able to keep track of what's going on in an institution
like that. It's--the ones that are too big to fail may be too big to manage,
in some cases. And they're particularly difficult to manage if they're
promising Wall Street and their investors that they're going to do things that
can't be done.

QUICK: You've come out and said derivatives are the weapons of financial mass
destruction before. But you use derivatives, too.

Mr. BUFFETT: That's right. I don't say they're evil, per se.

QUICK: Yeah.

Mr. BUFFETT: I just say that once the genie opened the bottle on those many
years ago, that their proliferation, their variation, their inability to be
valued and their ability to allow institutions to pile up leverage like the
world has never seen can cause great systemic problems. And that doesn't
mean, you know--it's like gun powder or water. You can do damage with a lot
of things, but these have systemic--they pose systemic risks. And
incidentally, the government recognizes this. I mean, you've had a task force
working on, you know, what do we do to prevent these things from causing a
real problems? But they have caused problems so far. I don't think they're
going to cause problems at Berkshire Hathaway. I know every single derivative
contract we have. Now, when we bought Gen Re, they had 23,000 plus contracts.

QUICK: Mm-hmm.

Mr. BUFFETT: There was no way in the world I can get my mind around that. I
mean, if I--if I had spent full time and had all kinds of assistants and
everything, I never would've known what was in those contracts. We had one
contract that was due in 100 years, so that meant that for 100 years some guy
at our place put a mark on it every day and some guy at another place put a
mark and they got their bonuses based on it. I mean, that is a system that is
guaranteed to cause trouble. And so I got out of the business. It took me
four years under benign market conditions, and we lost $400 some million in
the process. So they are dangerous things. The ones we put on may be
dangerous things, too, but I do know every contract, and I know what my
gain-loss arrangement is and nobody else marks them. I mean, I keep track of
it.

QUICK: You do it yourself on every one. OK. Warren, we have a lot more to
talk about with you this morning. We'd like to get to some of your holdings,
more on the economy, but we also are going to take a very quick pause right
now for a quick break.

QUICK: All right, welcome back, everybody. You know, Warren, we know that you are a huge sports fan. You're somebody who watches all sorts of things, and, of course, one of your major holdings,
Coca-Cola, so what better way to tie all this up than Coca-Cola, sports,
you've got one of the major sponsors of the Olympics here.

Let's bring Carl back into this conversation from Beijing. And appropriately,
yeah, Warren is holding up his Coca-Cola just right now, Carl. So, as always,
he's got a cherry Coke by his side.

CARL QUINTANILLA, co-host: Cherry Coke, yes.

QUICK: Yeah, cherry Coke by his side. And, Warren, we've been talking all
things Olympics the whole way through. What do you think about Coca-Cola and
the major sponsorship that it has with the Olympics?

Mr. BUFFETT: Well, it has a long, long history with the Olympics, and
it--it's very important. I mean, Coca-Cola wants to be associated with
happiness around the world. Every major event they want to be here. And it's
important--with a brand, there's something in the mind about a brand. I mean,
you have something in your mind about Coca-Cola or--but you don't have
anything in your mind about RC Cola because they've never been, you know. So
we want that--we want that brand to be associated with something like the
Olympics where there's happiness, where there's competition, where the nations
are getting together. It's a venue we could not skip.

QUICK: There have been people in the past who have said, `Hey, these
sponsorships get more and more expensive.' There are other ways that other
companies can kind of make their way in...

Mr. BUFFETT: Yeah.

QUICK: ...without paying. Is that an option for Coca-Cola down the road?

Mr. BUFFETT: No, I--Coca-Cola would never be going on a country road when
the interstate's available. And it's--we're not--we're not there to be around
the edges, we're there to be front and center.

QUICK: You know, Carl, we've been talking earlier in the week about what some
of the Chinese media had been reporting about Buffett, about Bill Gates. What
have people been saying?

QUINTANILLA: Well, I think--I think the Coke comments are interesting,
Warren. We interviewed the chief marketing officer from Coke here last week,
and of all the Olympic sponsors, right, the global sponsors, the GEs of the
world, the Lenovos, in China the poll numbers show that they associate the
Olympics the most of all the sponsors with Coke. So the marketing machine is
obviously working. We did--we did talk earlier in the week back--maybe it was
last week--about Pangu Plaza, the big hotel and office park...

QUICK: Right.

QUINTANILLA: ...and shopping mall that's over my shoulder here. And The
Times did that story earlier in the week about whether or not Bill Gates had
rented out a penthouse for a year, and whether or not Warren was staying
there.

Any truth to that at all, Warren?

Mr. BUFFETT: No, I'd actually talked about going to the Olympics a little
bit with Bill, but I'm the kind of guy that has to have it explained to me on
television what happened, you know, that I just saw. So I enjoy it enormously
watching it on television, and Bill was over there for a week. Although the
day or two before he went over he was playing at a bridge tournament in Omaha
and then he came back to Omaha almost directly from the Olympics after about a
week over there.

QUICK: So that wasn't you? You weren't--you weren't the one they spotted
walking around in Beijing?

Mr. BUFFETT: No, that must be my double, George Clooney, actually that was
spotted.

QUINTANILLA: Has--Warren, has the--have the games, in all seriousness, have
the games made you think any differently about this part of the world--the
world, western China, growth opportunities, the ability for American companies
to operate effectively within a different government structure?

Mr. BUFFETT: Yeah, well, I was over there almost a year ago--Becky was with
me--and I was blown away by what I saw. I'd been there--the time before that
was 1995, and I really had never seen a country change so much in a--in a 12
or so year period, and clearly, when you think of the size of the country, to
effect that sort of change. So I--no I've been a big believer in China before
the Olympics and certainly they've put on a marvelous show during the
Olympics. And--but I would have expected that. You get--you get a bunch of
very, very bright people who care enormously about putting on a wonderful
event, they're going to get the job done.

QUICK: What about Chinese stocks? Does--do those--does the stock market
there interest you? You've been looking around the globe?

Mr. BUFFETT: Yeah, you know, you still can't buy stocks within China except
under special circumstances.

QUICK: Right.

Mr. BUFFETT: But, yeah, I--we owned that PetroChina stock at one time.
There's one other stock over there that we actually made a bid on here not so
long ago, and it wasn't accepted. But it's a terrific--it's going to be a
terrific area for business. So, under the right circumstances, you could see
us with a lot of money there.

QUICK: What was the stock that you made the bid on?

Mr. BUFFETT: Oh, surprise, surprise. I never thought you'd ask.

QUINTANILLA: Nice, Beck.

Mr. BUFFETT: No, that--I have sort of a mind blankout after I learned...

QUICK: But it's not--it's not impossible to say that, yeah, you are
continuing to look at stocks and you would make a bid from time to time if you
found something that interested you.

Mr. BUFFETT: We made--we made a half a billion dollar bid on something,
right.

QUICK: You made a half a billion dollar bid?

Mr. BUFFETT: Dollar bid, right.

QUICK: OK, if you don't remember the--if you don't remember the stock, what
was the industry?

QUINTANILLA: Oh sure, now you tell us.

Mr. BUFFETT: Yeah, it's bigger than, yeah--you're good, but...

QUICK: But not that good. No dice on this one? All right, well, Carl...

Mr. BUFFETT: She thought she'd get me at 5 in the morning, folks, and I'd be
punchy.

QUICK: Yes, and maybe you wouldn't quite be on the defensive just yet.

But, Carl, we do have about two and a half more hours where we can try and
work on him and squeeze more details out, so...

QUINTANILLA: Yeah, I've heard--I've heard that if you get enough cherry Cokes
in him, he will spill everything.

QUICK: We've got them lined up.

Mr. BUFFETT: It acts like truth serum, yeah. There's no question about
that.

QUICK: Yeah, well we've got those cherry Cokes lined up, and we'll keep them
coming.

All right, folks, coming up, we're going to go from Wall Street to Washington,
as a new movie is out there creating some shock waves this morning. This
movie is all about debt and why it could be putting the future of our country
at risk. We'll get to the men behind the film who'll be joining us when
SQUAWK BOX returns live from America's heartland.

QUICK: Welcome back, everybody, to this very special edition of SQUAWK BOX.
Yeah, you hear the "Love Boat" music playing today. We are in Omaha where
last night we got to watch a new movie premier that came out. We're going to
be talking about that more. But we figured while we had Warren Buffett here
and we're in this movie theater of sorts, Warren, we'd ask you about the first
time you ever took a date to a movie theater.

Mr. BUFFETT: It was in eighth grade right here in Omaha, and a friend of
mine wanted particularly to ask out one girl and he was afraid to go by
himself, so he talked two others of us to each asking a girl. And we picked
these girls up sequentially to go to the streetcar, and they lived miles
apart. By the time we got to the streetcar they were all exhausted, and we
came downtown to the movie. We picked a movie called "The Cat Woman" with
Simone Simon and "The Mummy's Hand" with Lon Chaney. And we felt that the
girls would get terrified and jump onto our laps or something of the sort.
And what happened is, instead, we got terrified, and the boys jumped on each
other's laps. The girls were very cool. We finally got them home, and I
don't think anybody ever when on another date for about two years after that.

QUICK: All right, so it cured you the first time out. We'll take it as that.
You know, Warren, we have a lot more to talk about with you today. That was a
quick little fun one, but we also want to start asking you about some of the
holdings of Berkshire Hathaway and where you see the economy going. We're
going to get to all of that in just a few minutes.

BECKY QUICK, co-anchor (Omaha, Nebraska): We're in Omaha this morning, folks, for the world premiere of a new documentary that's resonating with Americans from Wall Street to Main Street.
It is appropriately titled "I.O.U.S.A"... David Walker...served as comptroller
general, and he plays a major part in this documentary. He's joining us this
morning on set. And, Mr. Walker, thank you for being here today.

Mr. DAVID WALKER (Former U.S. Comptroller General): Good to be with both of
you this morning.

QUICK: All right. Well, we were just listening to what you were talking
about, a major problem that you've laid out. How serious and drastic is this
problem, in your view?

Mr. WALKER: Well, I--it talks about four deficits, the film does. The
budget deficit, the savings deficit, the balance of payment/trade and the
leadership. I think they're all a problem. But the biggest problem's the
leadership deficit. We have too many people today focusing on short-term
issues, not enough trying to take on structural problems to try to help make
sure that our future is better than our past.

QUICK: Mm-hmm.

Warren, you said at the beginning of the show you didn't necessarily agree
with everything, but you do agree with taking a longer term look at some major
problems out there.

Mr. WARREN BUFFETT: Absolutely. I admire what Dave's doing, that he--the
future does not--has not had much of a constituency in this country in recent
years and, you know, it's because the electoral cycle's shorter than the
policy cycle on many issues, and it's hard to get worried about what's going
to happen 10 or 20 or 30 years out. And we're feeling the effects of that in
energy and, obviously, every fiscal decision you make today has an impact
forever, really...

QUICK: Yeah.

Mr. BUFFETT: ...in the country. So I--like I say, I admire--I admire Dave
and Pete Peterson in terms of what they've done here.

QUICK: David, you've been looking at the budget and studying these things for
about a decade and a half and being really aware of every single thing that
happened as the nation's chief auditor. When did you really get worried that
things were headed down a terrible path?

Mr. WALKER: You know, I came in as auditor general of the United States, or
the comptroller general, in 1988, and things were going pretty well. You
know, we had tough budget controls in place, the economy was doing pretty
well, we were moving to surplus, we had surpluses for four years in a
row--although only one of them without the Social Security surplus. In 2002
the budget controls, the statutory ones that were in place that helped us take
us from deficits to surpluses expired, and Washington totally lost control.
It was more spending, enhanced entitlements, more tax cuts. Out of control.

QUICK: Is there a sense that right now--with American people facing some
tougher times, with an economy that's in crisis, is there a sense that this is
a message that's starting to resonate?

Mr. WALKER: Well, first, I've had the good fortune of being able to go to
over half the states, over 40 cities...

QUICK: Right.

Mr. WALKER: ...over the last two years talking directly to the American
people with others about this. They get it. The question is, do people in
Washington get it? The risk is, is that, clearly, as Warren said, there are
things that need to be done today. We do have challenges today. People are
hurting today, and we need to do some things to deal with that. But we must
also deal with our structural, systemic problems and not exacerbate the long
range by doing things that might be good today but further mortgage our
future.

QUICK: What--in short order, what would you like to see done if you had a
wish list, maybe three things that could get done right away?

Mr. WALKER: Well, for the presidential candidates, I'll give them two
things.

QUICK: OK.

Mr. WALKER: Number one, publicly acknowledge that we're in a $53 trillion
hole that gets deeper 2 to 3 trillion a year even if we balance the
budget--unfortunately, we're headed the wrong way--and that they'll make
addressing that a priority. And secondly, for them to endorse the need for a
capable, credible and bipartisan commission to make recommendations to the
next president and the next Congress for an up or down vote; things like
budget controls, Social Security reform, round one of tax reform and round one
of health care reform. That would be a tremendous positive step.

QUICK: Warren, what do you think about that?

Mr. BUFFETT: Well, I think I--probably the second point I agree with more
fully. I think that you've had situations like the Greenspan commission on
Social Security...

QUICK: Right.

Mr. BUFFETT: ...back in 1982. There are times--usually commissions are a
waste of time. I mean, you know, the report goes in a drawer someplace and--I
mean, just think of the last six or eight that you can recall and how much
came out of them. But there are occasions and, frankly, a time of recession
would make the country more receptive. And you would need--you would need
people on them that, in effect, the president couldn't ignore after the report
came in. But there's--it makes perfectly good sense to have people that are
smart, that care about the future of the country sit down. There are things
we can do to improve ourselves always, and the time might be ripe for
something like that.

QUICK: Mm-hmm. Dave:

Mr. WALKER: You know, we've got to learn how to walk and chew gum in
Washington. You know, we need to be able to do more than one thing at a time.
And that's why a commission is particularly critical, because we need to make
progress on reinstituting budget controls. Social Security reform is easy.
We can do that if we go about it the right way. Health care is the real
challenge. And we do need tax reform, too. So if we had the right kind of
commission with an up or down vote--and that's what's different from a number
of the other recent commissions--then we could make progress on multiple
fronts, and that's what we need.

QUICK: Have you reached out to the two campaigns? I mean, you said you've
been across more than half the country. What about the two political
candidates right now?

Mr. WALKER: Yes. I met with the top economic policy advisers of both of the
campaigns--they both happen to be friends of mine--to help them understand
where we're coming from in the foundation, what we believe is important. And
I'm hopeful that the general election campaign will make fiscal responsibility
and intergenerational equity a higher priority. But we'll wait and see.

QUICK: OK. You say that you're hopeful that the campaign will push that.
Does that mean you didn't get a great reception from either one of these two
when you sat down with them?

Mr. WALKER: Well, you know, that means most politicians like to gain votes
rather than lose votes, OK? And that's why I think it's unrealistic to expect
that they're going to get to a great level of specificity about, `Well, this
is exactly what we're going to do to Social Security or taxes or health care.'
That's why this proposal acknowledging the problem, endorsing this type of
commission is the right way for both of them, because then they don't have to
get into the specifics but yet they then have an ability to take on the issues
after they're president. And for the sake of our country, our children and
grandchildren, they need to.

QUICK: All right, Dave, we're going to talk more about the film later this
morning. We'll also be joined by Pete Peterson coming up. But thank you for
getting up early with us to talk about this right off the bat. And we'll get
back to you just a little bit later this morning.

Mr. WALKER: Great.

QUICK: Again, we also have Warren Buffett who's with you this morning. We'll
be talking more about "I.O.U.S.A.," but also the state of the economy. We're
going to talk about the "Oracle of Omaha," where he's investing in the stock
market right now--at least we'll try and get that out of him. Some of his
investments, his thoughts on the state of the banking system. Stay tuned,
this is a very special edition of SQUAWK BOX right here on CNBC.

(Announcements)

QUICK: All right, welcome back, everybody. As we mentioned a little earlier,
the movie "I.O.U.S.A." premiered across the country last night, and we got the
chance to host a live town hall in Omaha that was simulcast to theaters across
the country last night. Our CNBC team was on the ground at some of those
theaters across the country. They got the chance to catch up with crowds from
the East Coast to the West Coast.

And, Warren, a lot of them heard you were going to be at this town hall
meeting, and so we had our cameras ask some of those people some questions
that they wanted to pose to you. Are you ready?

Mr. BUFFETT: I'm ready.

QUICK: All right. Let's get to some...

Mr. BUFFETT: Where's the popcorn?

QUICK: Oh, there--they didn't provide popcorn quite this early...

Mr. BUFFETT: All right.

QUICK: ...but we do have some questions that are coming up. Let's get to the
first question for Mr. Buffett.

Unidentified Man #1: Do you think there's a characteristic about American
democracy that leads to American debt?

QUICK: A characteristic about American democracy that leads to American debt.
What do you think?

Mr. BUFFETT: Well, there's nothing inappropriate about having debt in
America. I mean, Berkshire has debt, and it's helped us grow over time. And
it's when debt gets out of control that you worry. But the American
democracy, it's always fun to spend a little more than you take in, and that
applies to individuals, it applies to governments. And in a $14 trillion
economy, having debt that's 60-odd percent of GDP is not inappropriate. It
wasn't inappropriate when we had 120 percent of GDP in debt after World War
II, because we had to fight a war.

QUICK: Although you can't expect to maintain deficits like that endlessly.

Mr. BUFFETT: Yeah, you can expect to maintain a deficit that's a given
percentage of the GDP. I mean, Berkshire can expect to have debt forever, and
the larger we get in terms of our equity and earning power, the more debt we
can sustain. And I don't think our shareholders would want us to
operate--take on some rule where we're going to operate debt-free in the
future. So it's--what you worry about is when the debt starts spiraling out
of control, when it goes up year after year after year as a percentage of GDP,
because eventually when that occurs people--if you try to borrow money around
the world in your own currency, the world will say no. That's what happened
in South America in the past, it happened in the--in the Asian arena. We are
able to borrow money in dollars. The world trusts the dollar. If we tried to
run our debt up to 3- or 400 percent of GDP, nobody would want debt
denominated in dollars.

QUICK: OK. Let's take another question. This one comes from Irvine,
California.

Unidentified Man #2: Hey, Mr. Buffett, I would like to know what is going to
happen with Fannie Mae. Are they going under?

QUICK: That was, again, what would be the best investment to hedge against
the upcoming debt crisis?

Mr. BUFFETT: Yeah. Well, I would say I don't think there's going to be an
upcoming debt crisis, but if you believe that fiscal activities that the
government will get out of control and that we will get on a situation where
the debt skyrockets, you will have, obviously, you'll have
inflation--significant inflation. No government likes to pay back its debt in
dollars that are equivalent to the kind they took in. The best thing you're
going to have is develop your own talent. I mean, if you're the best doctor
in town, if you're the best teacher in town, if you're, you know, the best
salesman in town, you'll do well no matter what the currency does.

QUICK: Mm-hmm.

Mr. BUFFETT: I mean, you will get your share. So investing in yourself is
always the best thing.

Now, second best thing is to own products or stocks that have products that
don't require much capital investment, because you don't want to be--have a
lot of required capital investment during inflation; where they have very
little capital investment but they are sort of a royalty on whatever the
current price level is in the country. I mean, if you take--I don't know what
product you might buy regularly, but what--whatever you use for your hair
or...

QUICK: (Unintelligible)

Mr. BUFFETT: You're not going to change that if the price level doubles.

QUICK: Right.

Mr. BUFFETT: And if they don't have to build new plants or anything, they
just ride along that curve.

QUICK: OK. And very quickly, that Irvine, California, question, I think we
heard the wrong one. The Irvine question, another one he was just asking
about was what's going to happen with Fannie Mae? Are they going under?

Mr. BUFFETT: Well, in a sense they've gone under in that--in that they only
are existing because the federal government has said that they're going to
back up their obligations, so that...

QUICK: Right.

Mr. BUFFETT: ...from a standpoint of an independent entity, it--it's--the
game is over on that, pretty much. And that does not mean the Fannie debt or
the guarantee on Fannie mortgages is bad. Fannie Mae's an important
institution in the--in the United States. But they priced risk wrong.

QUICK: Mm-hmm.

Mr. BUFFETT: They did some things in accounting that were bad, they tried to
obtain goals that couldn't be achieved, and in the--and they leveraged up to
an extent that was kind of crazy and certainly was crazy to do it with the
assets that they were using the leverage for. So essentially the equity got
wiped out.

QUICK: OK. We're going to take a quick break right now, but folks, when we
come back we're going to talk about Warren and Bill's excellent adventure.

We'll get the inside story of your summer expedition with Bill Gates. You
just went this week to look at the tar sands.@

Mr. BUFFETT: True.

QUICK: All right. We're going to talk about all of that when we come up, and
we'll be checking in with questions from more viewers across the country, too.

Unidentified Man #3: I was very curious, in your recent 10-Q, that you had
not purchased any bank stocks, very surprised that you had not jumped on that
in July. I was wondering how low they have to go before you're interested.

(Announcements)

Announcer: This is a special edition of SQUAWK BOX live from the Holland
Performing Arts Center in the heart of beautiful Omaha, Nebraska. Now, once
again, here's Warren Buffett and Becky Quick.

QUICK: Welcome back, everybody, to this special edition of SQUAWK BOX. We've
been talking all morning long with Warren Buffett of Omaha, Nebraska, since
we're live in Omaha today.

And, Warren, we've covered a range of topics, but there has been an awful lot
of people who are interested in the trip you made this week. On Monday you
headed up with Bill Gates and you got to take a look at the tar sands. What
happened?

Mr. BUFFETT: Well, what happened was Bill and I talked some months ago about
just how interesting the whole thing was from a geology standpoint and from
the standpoint that that represents one of the few big upcoming sources of
more oil production in the world, or very few. And we both thought we'd
understand a little bit better if we went up and looked at it than simply by
reading about it. So on Monday six of us, Bill and a few other fellows--the
Kiewit company arranged it. They're--they've done a lot of construction up
there. And we went up to northern Alberta and we saw a very big mining-type
project. There are two ways that they recover oil from the tar sands. And
then we went to this in situ project also, and we had some perfect people
explain a lot about how it worked both from a economic standpoint and from a
physical standpoint.

QUICK: Uh-huh. And was this something that you came up with, that Bill came
up with, your friend, Walter Scott, from the Kiewit company? Who came up with
the idea?

Mr. BUFFETT: Well, Walter Scott arranged it for us.

QUICK: Right.

Mr. BUFFETT: Walter's a whole lot smarter than I am about what goes on in
mining and all of--anything to do with the real world. I'm good with numbers.
And so he arranged the trip for us. But it was something that Bill and I
cooked up by--a couple of months ago when we were talking about the tar sands.
We said why don't we go up and take a look? And so we found a date when six
of us could do it. Walter arranged the trip. We had some wonderful people up
there in Alberta at both projects that explained how the things really work,
the costs involved. And they just couldn't have been more helpful.

QUICK: OK. So having seen that, there's already been a lot of people who've
been speculating that you must be interested in investing in this arena. Are
you?

Mr. BUFFETT: No, no. I go to the movies, but I don't buy movie companies.
I mean, I--I'm always interested in understanding the math of things and
understanding as much as I can about all aspects of business. And what I
learn today may be useful to me two years from now. I mean, if I understand
the tar stands today and oil prices change or whatever may happen, I'm--I've
got that filed away and I can--I can use it at some later date. And that's
really the wonderful thing about investments is your knowledge is cumulative.
So if you learn about coal or you learn about retailing or something, 40 years
you--it's useful at some point.

QUICK: Wait, does that make you think that an investment in a tar sands
company, somebody who's making--taking advantage of that would not be worth it
at $120 a barrel for oil?

Mr. BUFFETT: Well, the biggest variable in whether it's a good investment is
the price of oil. Now, it's important to know how much they can get out and
what their costs are going to be and what the capital costs--all of that is
important and that fits into it. But you still have to figure out what your
own feeling is about what oil's going to be selling for three years from now
or five years from now. Because you could be the world's greatest mining
engineer, but if you were wrong about the price of oil in a big way it would
negate all that knowledge. So it--I can tell you that if 100--if you had $120
oil from now till, you know, 50 years from now, that the tar sands would
be--would work out very well. But I don't know the answer to that. And I may
form an opinion at some point, and I've got it--I'm prepared to form that
opinion now.

QUICK: But you are not actively looking right now to invest in any of these
companies?

Mr. BUFFETT: Do I have a buy order this morning? The answer's no.

QUICK: OK. Warren, we have a lot more to get to with you this morning. When
we return, we're going to be speaking more with Warren Buffett. Again, this
is a big day. We've still got two hours left and we've still got two big
stories coming up. Again, I'm here live with Warren Buffett in Omaha. We're
also going to be covering everything that's happening with the Olympics. Carl
is standing by live in Beijing. This is day 13 of the Olympics, coming to an
end. We'll have more SQUAWK in two minutes.

CARL QUINTANILLA, co-anchor (Beijing):

But first we're going to start with the man of the hour, Beck--actually, he's
the man of three hours--Warren Buffett with you in Omaha.

BECKY QUICK, co-anchor (Omaha, Nebraska):

That's right, Carl. We are live in Omaha today because last night there was a
groundbreaking event in the world of finance and politics and it took place
right here. This was the world premiere of a documentary that's called
"I.O.U.S.A." This film takes a look at what it thinks are America's four key
deficits and it explores into all the risks of these deficits, what it means
to the future of this country and its citizens.

Now, Warren, you were in the documentary last night right along with Robert
Rubin, with Paul Volcker and with Alan Greenspan. So let's take a quick look
at a brief clip from the film last night.

(Clip from "I.O.U.S.A.")

QUICK: OK. Again, that was a clip with Alan Greenspan from the movie last
night. It premiered on hundreds of movie screens across the country last
night, including right here in Omaha. After the debut, I got the chance to
moderate a town hall meeting with the men who were behind the movie,
Blackstone's Pete Peterson and the former US Comptroller General David Walker.
This is a quick look from that.

And Warren, we did have a big discussion last night about what the big
problems are and exactly where things are going at this moment. In your--in
your view, we just heard from Alan Greenspan, he said that you need to be
looking at what's happening down the road. What do you think about that?

Mr. WARREN BUFFETT (Berkshire Hathaway Chairman & CEO): Well, I think in any
personal activity, business activity or certainly governmental activity, you
know, there should be--you should be thinking plenty about what happens down
the road. That's one of the jobs of government is to think about what is
going to be our energy situation if we don't change 20 or 30 years from now.

QUICK: Mm-hmm.

Mr. BUFFETT: What's going to be the fiscal situation. And so unfortunately,
you have a many--the most important things in society, the policy cycle is
longer than the electoral cycle.

QUICK: Mm-hmm.

Mr. BUFFETT: So it's very tough to elect people every two years and ask them
to be thinking about something 20 years down the road.

QUICK: OK. We're going to talking more about this film in just a little bit.
David Walker will be joining us again, Pete Peterson, to talk about some of
these issues.

We also, though, have you here for a lot of things that are happening right
now in the economy. And at the top of the last hour you talked about where
you think the economy is headed. You still think that the trouble in the
economy, it could get much deeper from here?

Mr. BUFFETT: Well, I think you're seeing the ripples go out from what's
started as a crisis in home lending and the fact that we had a--we had a
housing boom fueled by a lot of lending by people who didn't know what they
were lending on. And that's caused enormous problems in the financial markets
as people have started looking at these instruments which they thought were
triple-A and they're finding out they're about triple-F and--but those
problem--problems have a way of spreading, and that caused the banks to start
want--starting to want to start deleveraging in a big way. And when banks
start deleveraging, that has--sends ripples out. So there's consequences to
every pebble that's dropped in the ocean and we had a pretty big pebble
dropped in.

QUICK: Now, you--your view of the economy comes not only from your own
holdings, all the companies that you own outright--everything from GEICO to
Dairy Queen to Gen Re to Acme Brick Company, all the companies that you
hold--but also the holdings that you have in other big companies, correct?

Mr. BUFFETT: Right.

QUICK: What sort of insight does that give you?

Mr. BUFFETT: Well, it--obviously, I pay a lot of attention to what's
happening. And we'll say at American Express--and Ken Chenault talked about
that here a month ago--but they are experiencing credit deterioration and
they're experiencing it sort of in all segments. So they're seeing the rich
customers slow down in payments, slow down in purchases. And American Express
can describe that rather than I, but I pay a lot of attention to that sort of
thing. And incidentally, it will get cured at some time in the future, but
right now the situation is getting worse and I would say I don't see any early
end to that.

QUICK: We want to talk to you about...

Mr. BUFFETT: But I do see an end.

QUICK: You do see an end, but no early end. I mean, is that six months, is
that 12 months, is that 18 months?

Mr. BUFFETT: I don't know.

QUICK: Can you put a time?

Mr. BUFFETT: Yeah, I don't know the answer to that. All I know is that it's
not--I don't think it's going to be really soon. I think that--my candidate
is Obama, so I think President Obama is going to have plenty on his plate in
January.

QUICK: OK. Let's talk about your most recent disclosures for some of your
holdings. When we saw the last numbers, your shares in Anheuser-Busch, a lot
of people were surprised to see that you had gotten out of those shares before
a deal went through with InBev.

Mr. BUFFETT: That's right. I sold about 60 percent of them in the second
quarter.

QUICK: Why?

Mr. BUFFETT: Well, I wasn't--it was an evaluation of whether I thought the
deal would go through and the desire to sell at least some of the shares. I
mean, Anheuser-Busch did not want the deal to go through and they hired
investment bankers, very expensive. They spent $72 million with two
investment banking firms. And believe me, most of that was spent with the
idea of trying to keep InBev away. So who knew how it was going to come out?
And InBev persevered, they raised their price and on the remaining shares
we'll do somewhat better; although there's still a time factor and we've used
the money for other things. But in retrospect, I was wrong to decide to
partially sell the holdings.

QUICK: What...

Mr. BUFFETT: But that--that's not news. I'm often wrong.

QUICK: What price did you sell at? It did not say in the filings.

Mr. BUFFETT: Oh, I--we probably averaged around 61 or 2, something like
that.

QUICK: OK, 61 or 62, you still had a third. Are you--do you still hold that
position?

Mr. BUFFETT: Yeah. We--yeah. We hold the shares, yeah. You didn't ask me
that last time, so yeah.

QUICK: I know, I didn't. I had to circle back this time a lot. So you still
have those shares.

One of the other things from that filing that Berkshire filed with the SEC
noted that you weren't talking at that point about what's going on with
ConocoPhillips.

Mr. BUFFETT: That's right.

QUICK: OK. Well, we have you here right now. That means a lot of people are
out there assuming that you're either buying or selling shares of Conoco
and...

Mr. BUFFETT: That's certainly correct.

QUICK: And if I was a betting man, would it be right to think that maybe you
were selling and taking profits based on where oil prices have gone?

Mr. BUFFETT: Well, if you were a betting man, you'd be betting.

QUICK: Oh, so you're not going to necessarily come out there on that.

Let's talk about the price of oil in general.

Mr. BUFFETT: Sure.

QUICK: Price of oil has gone rapidly higher in the last few days. Once
again, about 120, still down from where it was...

Mr. BUFFETT: Mm-hmm.

QUICK: ...just a month ago. But 120, you think that that's a comfortable
price for oil?

Mr. BUFFETT: It's very hard to tell, but what you do know is that the
situation in respect to supply and demand in oil has changed dramatically in
the last five or six years from what has existed ever since World War II. I
mean, ever since World War II we've always had a significant amount of
producible capacity beyond the demand that existed. Now, maybe for one reason
or another it wasn't being produced.

The Texas Railroad Commission used to--which was kind of--kind of a domestic OPEC--used to shut down the wells in Texas because there was so much producing capacity and they didn't want to knock down the price, which was $3 a barrel then. So we've always had the
situation post World War II where it's been a lot more supply could come on
than there was demand. In the last 10 years, the first five years oil demand
went up around four million barrels a day, and then in the next five years it
went up another eight million barrels a day. That's 12 million barrels a day.
We did not bring on, in the world, anything like that in terms of productive
capacity. So at 86 million barrels a day, which is the present demand,
roughly...

QUICK: Mm-hmm.

Mr. BUFFETT: ...the world that has no real buffer stock in terms of the--you
can't turn the tap on and get 90 or 95. And that means that prices have been
and will be quite volatile and probably--well, they have been at a--certainly
at a higher level. It is a different world in terms of supply and demand on
oil than existed five years ago.

QUICK: What's your thought as to what the nation needs to be doing right now?
I know you've spoken with Boone Pickens about his plan.

Mr. BUFFETT: Yeah. Well, Boone's on the right track. And then one way or
another, you know, we're using 20 million barrels or so a day of oil, we're
using a quarter of the oil, roughly, in the world. We and the world cannot
certainly keep increasing our demand for oil. If we--if we required another
10 million or 12 million barrels a day in the next 10 years, I'm not sure
where it would come from or at what price it would come from. We just don't
have that. The tar sands would actually--will increase some, but oil
depletes, production of oil depletes.

QUICK: Hm.

Mr. BUFFETT: And so one way or another, we're going to have to learn to use
a lot less oil. And my guess is we're using less oil right now in the United
States because of price factors.

QUICK: Yes.

Mr. BUFFETT: But I'm not sure that the world demand is--maybe it's decreased
a million barrels a day or something like that, but that isn't going to do it
over 10 years. We're going to have to use less oil.

QUICK: OK, Warren, we're going to be checking in with you again after we come
back. We'll have more from Omaha, folks. But we're also going to be checking
in with Carl. He's got plenty more coming up in Beijing. Carl:

QUINTANILLA: Becky, if Warren breaks any more news we're going to have to
just go off the air here, our heads are going to explode for all he
information that's coming from him.

***

Mr. BUFFETT: (From town hall meeting) Every line in the tax code is
important to some constituency. I'm not sure every line in the Bible is,
though. The--and actually, you know, you've got thousands of lobbyists there
protecting each line in the tax code and I'm--again, I'm not sure about
whether the Bible has an equal army of people in--on K Street.

QUICK: All right, that was Warren Buffett answering a question on taxes
during our town hall right here in Omaha last night. Again, this was a town
hall that was celebrating and looking into the opening of "I.O.U.S.A.," that's
a new documentary that opened and premiered last night in theaters across the
country. That question that came was from someone who wrote in asking why the
tax code is longer than the Bible. Well, it's something we got to talk about
with plenty of our participants last night. In fact, we're joined right now
by some of the other participants in that conversation.

Pete Peterson is here with us this morning. Also David Walker and Bill
Novelli, the CEO of the AARP.

And gentlemen, thank you for being here once again this morning on the same
stage where we were last night. I'm guessing everybody is working on
adrenaline at this point, practically all-nighters for everybody involved.

Pete, let's start out with you. The movie last night, "I.O.U.S.A.," is
something that the Peter G. Peter--Peter G. Peterson Foundation did put some
financial backing into. Why did you get interested in it? What's important
that you think in the message?

Mr. PETE PETERSON (Peter G. Peterson Foundation): Well, Dave and I have
concluded unanimously, the two of us, that the country faces some long-term
challenges that if we don't address them are undeniable, at least in our
opinion, unsustainable, and yet they're, politically speaking, not touchable.

QUICK: Mm-hmm.

Mr. PETERSON: And our job, we think, in a democracy like ours is to use
every means we can, and this film is only part of a much broader program to
educate the American public and to activate them and motivate them to do
something about it. And the doing something about it is essentially to let
our elected representatives know that this is serious and they want action.
At the present time they feel--that is, our representatives feel that if they
confront some of these long-term problems, since all of them involve somebody
either giving up something or paying more for something, that it will
result--not only being politically incorrect, but politically terminal.

QUICK: Mm-hmm.

Mr. PETERSON: And we've got to change that around so that they feel that if
they don't do anything, then they're going to be in re-election trouble.

QUICK: David Walker, we spoke with you earlier this morning. Again, David
Walker who's the former comptroller general of the United States. If you have
to look and put your finger on one issue that you think is the most pressing
thing, what is it?

Mr. DAVID WALKER (Peter G. Peterson Foundation): Health care costs are
totally out of control. Health care costs represent 34 trillion, just
Medicare alone, 34 trillion of our $53 trillion hole. The United States is
the only country on the face of the earth that's dumb enough not to have a
budget for health care. Every other country does. We need to engage in
fundamental reform of health care to achieve universal coverage for basic and
essential health care, have a budget for health care. We need universal
practice standards, evidence-based practice standards, and we need to enhance
personal responsibility and accountability.

QUICK: All right. Bill, you represent the AARP, and some people have said in
the past that seniors get very concerned when you start taking away benefits
or changing things that have been set up. What are--what does your
constituency think about the plan presented here?

Mr. WILLIAM NOVELLI (AARP CEO): Well, we've done a tremendous amount of
research among our 40 million members and the rest of the public down to 18
years old, and we're pretty sure that the public is ahead of the politicians.
People do want change. The generations in this country are very closely
connected to each other and they have one thing in common, they want this
country to be strong for the future, for their children and their
grandchildren. And so what we have here is a big opportunity. This video
that has been done here is a good kind of wake-up call, and from an AARP
standpoint we can do town hall meetings across the country, thousands of them.
So this is an opportunity to make change.

QUICK: Warren, you're not convinced that things are quite as dire.

Mr. BUFFETT: No, I--the short-term outlook is not. But we've had a number
of recessions in this country; in fact, we had a Great Depression, we
had--we've got world wars. And throughout, the genius of the American
economy, our emphasis on a meritocracy and a market system and a rule of law
has enabled generation after generation to live better than their parents did.
And, I mean, most of the people in this room, practically all of them last
night, lived better than John D. Rockefeller lived. I mean, all kinds of
things have happened. And in the 20th century alone, the standard of living
of the average American went up seven for one. There's never been a period
like it in history. And that's not an accident. It's because we unleash
human potential and will continue to do that in the future. And we'll always
have challenges and we'll always have disputes between different demographic
groups and income groups. The rich don't want to pay their share of the
taxes. The poor probably, you know, they--in the last 20 years, the net worth
of the Forbes 400 has gone from 220 billion to a trillion five hundred and
forty billion. So you'll always have fights within the family about who gets
what of the pie, but the pie will grow.

QUICK: But there are points that all four of you agree on. What's the
closest point where, I mean, you say, `Yes, this is something the American
people need to hear'?

Mr. BUFFETT: Well, I think you should always be thinking about the future.
I mean, I think you're crazy if you're not--if you're not planning out where
you'll be in 10 and 20 or 30 years. You'll get surprises in those plans.

QUICK: Mm-hmm.

Mr. BUFFETT: And frankly, American ingenuity will tend to surprise on the
upside much of the time. I also think that it's dangerous politically over
time. It doesn't endanger the economy in a huge way, but it's dangerous
politically over time to run very large current account deficits whereby
there's a massive transfer of assets or IOUs to the rest of the world from
America. I think that will cause a lot of demagoguery and potentially some
real problems 20 years down the road. We'd still have a more prosperous
society.

QUICK: Mm-hmm.

Mr. BUFFETT: But it wouldn't be--wouldn't be as good as if we didn't do it.

QUICK: David?

Mr. WALKER: I think we agree on two things. I believe all four of us do,
based on listening last night and talking this morning. Number one, we need
to focus on the future.

QUICK: Hm.

Mr. WALKER: We're a great country, we need to do a number of things to make
sure we stay great. And secondly, we support a capable, credible and
bipartisan commission to be able to make recommendations to the next president
and the next Congress to deal with some of these challenges so we can start
making a down payment on our big hole and try to increase the likelihood that
our future will be better than our past.

QUICK: You've had conversations with both

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InformationWeek confirms that Google Chrome will have add-ons, a move that could have an enormous impact on Chrome's viability among the power users and early adopters in the Firefox camp. In addition to regular extensions, Chrome will also support scripts à la Greasemonkey:

"There's two different kinds of add-ons," [Google engineer Ojan] Vafai said. "The Firefox things extend your browser, so to speak, and then there are user scripts. We intend to do both of those in Google Chrome." Greasemonkey's founder, Aaron Boodman, actually works on the Google Chrome team.

Additionally, Vafai says Google will work to ensure its extensions are more stable than Firefox, where "there are problems with instability." That statement may sound like slap in the face to Mozilla, but Chrome will likely be a boon no matter which of two browsers you prefer.

Mozilla CTO Brendan Eich, joining the panel along with Vafai and Microsoft Internet Explorer platform architect Chris Wilson, said that Mozilla was looking at how Google treated tabs as a potential way to improve stability when dealing with browser add-ons. "There are good process-isolation tricks that Chrome does that we're looking into, so we're simply going to look at better isolation techniques for security and integrity," he said.

The upshot: No matter which browser you choose in the end, Chrome and Firefox will push each other into innovative, fast, and hopefully more stable territories with each release.

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Ajanta and Ellora Caves (India, Maharashtra)

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