Q: Amount of derivatives now, something like $30 trillion?
A: When BRK unwound Gen Re's derivatives book, it was shown as positive but the money disappeared when we tried to reach for it. Net result was a loss. Accounts on both sides of transaction show profit, but that can't be. Will end badly. Repeated point of not being able to buy insurance on someone unless you have an insurable interest.
Q: Clarify comment about BRK earning more in an inflationary environment?
A: If a business has a competitive advantage, constant margins imply that increasing prices will translate to more profits. CM would much prefer no inflation to earning more in this fashion, however.
Q (from Tilson): No questions about the Q1 earnings drop at the BRK meeting?
A: Yes, significant - like Sherlock Holmes pointing out the dog didn't bark when it should have. Maybe it's all part of the "seamless web of trust" we've been talking about.