2:38 CT--Warren Buffett chastised big banks for irresponsible behavior and defended Berkshire Hathaway investment Coca-Cola for its sponsorship of the Olympics as he responded to shareholder questions at the annual meeting in Omaha today.

"The big investment banks have become almost too big to effectively manage from a risk point of view," Buffett said. "What you need is someone at the top whose DNA is very programmed against risk. In many ways these are firms are too big to manage."

But, he added, things could be worse.

"I think the Fed did the right thing by helping out Bear Stearns," Buffett said. "If Bear Stearns had been allowed to fail, it would have been a spectacle of unprecedented proportions, and would have led to another big bank failing within days."

When asked whether he could pressure Coca-Cola to withdraw sponsorship from the Olympics over China's human rights record, Buffett criticized the presumption, saying he thought it was a mistake to think that one country should be allowed to host the event but another one should not.

"The Olympics are a wonderful event, and the more people who are involved the better," he said. "I don't think we should get punitive about it."

Among other questions from a range of shareholders on a variety of topics (whether to invest in Kraft, why Buffett plans to travel to Germany, where he recently bought 1 million shares in Munich Re and hopes to add family-owned businesses there), he discussed the economy.

Comparing it to past economic crises, he said, "This one obviously had more of its origins in the mortgage field. Troubles that begin in one area have a way of spreading to other areas. I can't remember an economic crisis--this particular residential real estate bubble--that has sent out shock waves like this one. I don't think there is any magic to the analysis. Some stupid things were done that won't be done soon the same way. But it will be done again in slightly different ways."

On the credit default swap risk, he said, "The last number came out [of the value of the CDS market] is over $60 trillion. There's no doubt there is a lot of money of on both sides of this. There is no question that corporate default rate will rise. But as long as counter parties continue to pay, then I don't think what happened at Bear Stearns will be repeated in the credit default swaps market. There will be enormous losses, but there will also be enormous gains."

11:54 a.m. CT--Asked about the strength of the U.S. dollar, Warren Buffett says he's "happy" to invest in foreign companies because he expects foreign currencies will remain strong against the U.S. dollar, which he thinks will continue to depreciate over the next decade. To further make his point, he adds that if he came down from Mars (the planet, not the company he helped buy Wrigley's last week) right now with "Mars currency," he probably wouldn't convert it into U.S. dollars.

Buffett also addresses the familiar topic of succession for the leadership of Berkshire Hathaway, suggesting that it might be better of those who run the company (which will be headed by a chairman, C.E.O., and chief investment officer when he steps down) be young when they step in.

"On balance, it's a good idea to have a long run at this," he says. Of those on the Berkshire board, he notes, "Any one of the four could step in a do as good or better job than me. If I died, they would be here tomorrow morning. Compensation will not be a major factor. Any of the four would probably take less money to do this job than they are making now." Buffett says there will be no gap after he dies.

The one guy who won't succeed Buffett is vice chairman Munger, who at one point hits a familiar topic, ethanol, and, failing to mince words, calls the idea of turning corn into automotive fuel "stunningly stupid" and "monstrously dumb."

Of U.S. tax policy, Buffett says he'd like to see "the super-rich pay a little more and middle class pay a little less."

The auditorium breaks for lunch.

10:22 a.m. CT--Warren Buffett says he has "no idea" where the stock market is headed. But at the annual shareholders meeting of his Berkshire Hathaway in Omaha, Buffett would rather begin the day, a six-hour question-and-answer session, on a lighter note, anyway.

The morning opens with the traditional company video, this year featuring Berkshire vice chairman Charlie Munger deciding to run for president--at the urging of Berkshire board member Bill Gates--under the banner of the newly created National Independence Party.

Says Munger, "We need a leader who knows how to make money, rather than spend it."

The two men, Buffett, 77, and Munger, 84, then took the stage at the Qwest Center to answer familiar questions from the 30,000 attendees about their investing philosophy, noting their strategies in hiring good managers and their criticism of complex investing vehicles. They were their usual quippy selves.

"The idea of turning financial markets into casinos so that croupiers can make money has never been very appealing to us," said Munger.

Buffett also suggested that anyone who has problems with Berkshire take their money elsewhere.

"You may have something better to do with your money than buy Berkshire," he said.

--Sam Gustin