BERKSHIRE Hathaway CEO Warren Buffett declared his support for Goldman Sachs Group CEO Lloyd Blankfein, and said he has no plans to sell his company's stake in the bank.
Mr Buffett and Berkshire vice chairman Charlie Munger praised Goldman before a crowd of about 40,000 at Berkshire's annual shareholder meeting.
Both executives said they're happy with Mr Blankfein's leadership and said they don't view the Securities and Exchange Commission's civil fraud charges against Goldman as a strike against him.
"There's really no reason to think about somebody else running Goldman," Mr Buffett said when asked whether someone besides Mr Blankfein should be leading the investment bank.
The charges filed April 16 have raised questions about Mr Blankfein's tenure.
Mr Buffett previewed his company's first-quarter earnings report at the meeting at Omaha's Qwest Center.
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He said Berkshire rebounded from last year's first-quarter loss and earned $US3.6 billion ($3.87 billion) as the economic recovery began and Berkshire absorbed Burlington Northern Santa Fe railroad.
The full report will be released Friday. In the first quarter of 2009, Berkshire lost $US1.5 billion.
Mr Buffett said Berkshire's quarterly results show the economy is improving because manufacturing and retail income grew 85 percent to $US477 million.
Berkshire's assortment of businesses, including clothing, insurance, furniture, utility, jewelry and corporate jet companies, gives Buffett insight into the health of the overall economy.
Berkshire also has big investments in companies including Coca-Cola Co. and Wells Fargo & Co.
Last year's loss included $US241 million on the sale of investments. Berkshire also took a $US1.9 billion charge from writing down a ConocoPhillips investment.
Mr Buffett has been one of Goldman's biggest supporters before and since the SEC filed its civil lawsuit against the bank.
The Government charged that the investment bank misled investors about a deal involving complex mortgage-related investments that later plunged in value.
During questioning by shareholders, Mr Munger noted that the SEC vote to file the charges was 3 to 2. He said that if he had been a member of the SEC, he would have voted against the suit.
Mr Buffett and Mr Munger both expressed confidence in Mr Blankfein.
"There are plenty of CEOs I'd like to see gone in America, and Lloyd Blankfein is not one of them," Mr Munger said.
On Friday, Goldman stock plunged 9 per cent on reports that the Justice Department had opened a criminal investigation of Goldman.
Mr Buffett said Berkshire's $US5 billion of preferred stock in Goldman is a good investment because it generates 10 per cent interest a year.
"We love this investment," Mr Buffett said.
Mr Buffett and Mr Munger also discussed the financial overhaul legislation now before Congress. Mr Munger said the regulatory system should be changed to be much less permissive for investment banks.
The House has passed a version of the bill, which among other things would limit the kinds of lucrative trading that banks including Goldman Sachs do. The Senate has yet to begin debate on its version.
Berkshire has objected to one provision of the financial overhaul that could require companies to post collateral on existing derivative contracts. Derivatives are complex investments that have been blamed in part for the 2008 financial crisis and the recession. Banks lost billions of dollars on derivatives, and that and the recession led the government to bail out hundreds of financial companies.
But Mr Buffett said he doesn't believe the bill, as it's written now, would require Berkshire to post any additional collateral on its 250 derivatives because the company is unlikely to be considered a threat to the system.
"If the bill passes tomorrow ... we would not have to put up a dime," Mr Buffett said.
Mr Buffett also talked about the European debt crisis. Negotiations were continuing this weekend on a bailout package aimed at helping Greece avoid default on loans that are coming due May 19.
Mr Buffett said Greece sets its own budget, but can't print its own money because it shares the euro currency with 15 other countries. So that limits its options and keeps them from printing money to help with its credit problems.
"I don't know how this movie is going to end," Mr Buffett said. "This will be high drama in my view."
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