Warren Buffett wins Florida on a bet

These are tough economic times for many states. Budgets have to be met with large budget shortfalls being predicted. Couple that with some of the damage certain states have to pay for and insure because of hurricanes or tornadoes or other God based attacks. What is a state to do? Apparently make wagers with Warren Buffet where he promises to fund your bonds if your state is destroyed and you pay him money if it isn't.

Billionaire Warren Buffett’s Berkshire Hathaway Inc. won a $224 million bet that Florida would escape major damage from hurricanes this year.

Florida’s option agreement that would have compelled Buffett to buy $4 billion of bonds to finance storm recovery will expire Dec. 31, Dennis MacKee, a spokesman for the State Board of Administration, said in an interview today. The state earlier paid Buffett $224 million in return for his commitment to buy the debt if needed. The calm season meant Florida had no need to raise the money.

Florida turned to Omaha, Nebraska-based Berkshire to erase doubts about the state’s ability to raise money after a hurricane. The state sells coverage to homeowners and private companies at below-market rates, and plans to fund cash shortfalls in the bond market. Finding investors could be a “very challenging task,” Fitch Ratings said in March.

This is also in addition to a separate bet they made with Buffett over a hand of blackjack the result of which means Governor Charlie Crist has to streak from Jacksonville to Atlanta and pay Warren $100 million. Kids, never hit on 18. This new strategy of making bets with billionaires has caused a budget shortfall for the year after payouts had to be made. But good fortune has given Florida the opportunity to win the money back. If they correctly select the red queen in a game of three card monte, Buffett will make up the shortfall, if they can't, Florida owes double. No worries there, they've worked out a scheme with Bill Gates whereupon Bill will make up the difference if he gets to sleep with Florida's wife.

Running a state, it's serious business.