El-Erian: "Buffett versus the Fed: What’s better for markets?"

Following up on Saturday's "Berkshire Annual Meeting: Buffett Didn't Buy the Dip and That Has ZeroHedge Worried (BRK)".

From Yahoo Finance:

In his traditionally impressive manner, Warren Buffett shared, for over four hours on Saturday, his insights on the economy, investing, and American capitalism, as well as on individual companies and sectors. His remarks at the virtual annual meeting of Berkshire Hathaway, livestreamed by Yahoo Finance, ignited a flurry of reactions: From the sale at a loss of the entirety of his holdings in U.S. airlines and the importance of a fortress balance sheet in such an uncertain economy to what’s ahead for the economy and why he never bets against America long-term.

Buffett also framed well an important debate that could easily pit the current well-being of stock investors versus their long-term prosperity, as well as amplify worries about persistent inequalities in our system (those favoring companies over people, the connected over the marginalized, the rich over the poor, and the establishment over the rest).

What’s better for the economy and markets over time: The large-scale intervention of the Federal Reserve in this crisis or the bigger window for private rescue financing that accompanied the 2008 crisis?

There are compelling arguments on both sides, as indeed acknowledged by Buffett.

The Fed’s exceptional market interventions in March and April — which were significantly greater than what it did in 2008-09, both in scale and in scope — quickly normalized market segment after market segment....MORE 

Mr. El-Erian does not mention something that ZeroHedge suspects, that Mr. Buffet may believe he will get another chance to buy somewhere down the road.

That was one of the reasons I introduced the ZH piece with an example of how quick Warren can move when he chooses to. And considering the S&P dropped 35% from its all-time high on February 19 to the recent low on March 23, Buffett had plenty of opportunity to deploy that $128 billion cash and equivalents BRK is sporting on the balance sheet.

Warren's waiting.

On the other hand the Yahoo piece does mention that Mr. El-Erian is President-elect of Queens College, Cambridge where he gets a cottage.