OMAHA, Nebraska (Reuters) – Warren Buffett on Saturday criticized his handling of recent turmoil in the banking sector and said a debt ceiling standoff could lead to “turmoil” in the financial system, even as he delivered a vote of confidence in U.S. conglomerate Berkshire Hathaway. Inc (BRKa.N).

Speaking at Berkshire’s annual meeting of shareholders, Buffett blasted the way politicians, regulators and the press have dealt with the recent failures of Silicon Valley Bank, Signature Bank and First Republic Bank, saying their “very bad” messaging unnecessarily scared depositors.

“Fear is contagious,” he said, adding that “you can’t run an economy” when people are worried if their money is safe in banks.

Buffett also warned of growing “tribalism” in Washington, where partisanship pushes people to talk to each other.

“We have to hone, in a certain way, our democracy as we move forward. But if I still have a choice, I want to be born in the United States. It’s a better world than ever before.”

Buffett spoke hours after Berkshire announced quarterly profits of $35.5 billion, and said it had bought back $4.4 billion of its shares, indicating that it considers the shares to be undervalued.

In contrast, it sold $13.3 billion in shares of other companies, in a quarter in which the S&P 500 Index (.SPX) rose 7%.

The sixth richest person in the world, Buffett has since 1965 run Berkshire, whose dozens of businesses include auto insurance company Geico, the BNSF railroad and consumer names like Dairy Queen and Fruit of the Loom.

Berkshire also owns $328 billion in shares, nearly half in Apple Inc (AAPL.O).

The meeting featured Buffett, 92, chairman and CEO of Berkshire, and Vice Chairman Charlie Munger, 99, answering five hours of shareholder questions. Vice-Presidents Greg Appel, 60, and Ajit Jain, 71, were joined in the morning.

Buffett reiterated on Saturday that Abel would succeed him as CEO, while adding that he had no plan if Abel couldn’t.

lit match

Buffett said regulators were right to guarantee Silicon Valley bank depositors, saying not to do so “would have been disastrous.”

He also said that bank shareholders and executives should take the risks of mismanagement, with Munger criticizing executives who are more interested in getting rich than customers.

“The lighted match can become a conflagration or it can explode,” Buffett said. “You must punish the people who do the wrong thing.”

Buffett also said he can’t imagine politicians or regulators willing to “disrupt the global financial system,” including if Washington fails to break the deadlock over raising the debt ceiling, or how much the government can borrow.

Anticipating questions about banking, Buffett elicited laughter by placing in front of him a sign that read “Available for Sale” and another that read “Keep breastfeeding” ahead of Munger.

These refer to how lenders account for their securities, a central issue in the recent banking crisis.

Buffett said Berkshire has been cautious about banks and has sold some bank stocks in the past six months.

Saturday’s meeting is the focus of a weekend that Buffett calls “Woodstock for Capitalists” that draws tens of thousands of people to her hometown of Omaha, Nebraska.

Attendance is up from 2022. Unlike last year, the downtown square that hosted the meeting was filled to capacity.

BUFFETT: “APPLE WORK BETTER”

When discussing Berkshire’s performance, Buffett said the majority of its operating businesses will probably do worse in 2023 than they did in 2022 as economic activity slows.

But he said Berkshire could offset that with more income from investments, including the $7 billion in Treasury notes it bought in April.

Buffett has defended the size of Berkshire’s $151 billion investment in Apple, saying that consumers are less likely to throw away their $1,500 iPhone than they are, say, their $35,000 second car.

“Apple is different from the other companies we own,” Buffett said. “It just works better.”

Berkshire recently acquired a 5.6% stake in Apple, and Buffett has said he may buy more.

“Portfolio management practices suggest there is definitely concentration risk with a lot of Apple in that portfolio,” said Cathy Seifert, vice president at CFRA Research.

He also said that while Berkshire owns roughly a quarter of Occidental Petroleum (OXY.N), it has no plans to take control of the company.

Munger, an ancient Chinese bull who led Berkshire’s investment in electric car company BYD, has called for a reduction in tensions and an increase in trade between that country and the United States.

Buffett cited these tensions in saying he feels more comfortable deploying capital in Japan than in Taiwan.

Wait on line

Before the meeting, dozens of uniformed pilots of Berkshire-owned NetJets demonstrated outside the arena, protesting low wages and long working hours.

Meanwhile, thousands of shareholders lined up outside the arena ahead of its 7 a.m. CST (1200 GMT) opening. Many realized it might be one of their last chances to see Buffett and Munger, given their age.

Vidya Vivekananda, an investment associate from Vancouver, Canada, said she and her husband showed up 30 minutes early for their first meeting.

“It’s been on our list for a long time,” she said. “We don’t know how long it will be with Warren and Charlie before they pass him on.”

Yongsheng Zhao, who lives in Shanghai and is a researcher at an asset management company, said that he appeared in the middle of the night with a chair to see Buffett and Munger for the eighth time.

“I was inspired by their passion and normalcy,” he said. “I hope they spend another five years or more.”

(Reporting by Jonathan Stempel) in Omaha, Nebraska; Additional reporting by Carolina Mandel and John McCrank in New York; Editing by Megan Davies, Ira Iosbashvili, and Diane Kraft

Our standards: Thomson Reuters Trust Principles.