Warren Buffett Pre-Annual Meeting 2011 - Dave Sokol, Economy & Inflation

Buffett expresses confidence going into the 2011 annual meeting despite the Dave Sokol scandal ('the drama'). He commits to answering all questions about Sokol without limits and promises to post all Q&A transcripts online immediately. Expects 38-40,000 attendees, with furniture mart sales up 11% indicating strong interest.

Buffett reports that almost all of Berkshire's 70+ businesses have improved month-by-month over the past year, except those tied to residential construction. He views the housing weakness positively as it clears excess inventory faster. Predicts employment will bounce back faster than expected once housing recovers, citing secondary effects on businesses like Shaw Carpet.

Buffett discusses his inflation concerns despite Chairman Bernanke's optimism. Challenges the 'excess capacity prevents inflation' theory by citing Berkshire's real-world experience. Even with weak demand and excess capacity, businesses must raise prices when commodity costs increase - using Shaw Carpet (oil-dependent) as example. Praises Bernanke as Fed chair but maintains inflation worries.

Buffett defends Wall Street's high compensation despite public criticism, noting it's always been the most lucrative field 'per point of IQ and per urge of energy'. Reframes the 2008 bailout as saving the entire US economy, not just banks. Emphasizes the crucial role of restoring confidence through government involvement with the 11 major banks, rather than the specific capital amounts.

Buffett dismisses concerns about high gas prices causing economic dip, noting every business (except residential construction) improves monthly. Declines to discuss the audit committee's Dave Sokol report before the annual meeting, wanting all 40,000 shareholders to hear his answers simultaneously. Promises complete transparency with no 'no comments' even if lawyers object.