Warren Buffett is one of Goldman Sach’s largest stockholders, and since Goldman stocks have taken a pounding in recent days, it’s no surprise Buffett would try to defend the firm in which he has so much invested. But what are we to make of this?

From the New York Times Dealbook coverage of Buffett answering questions at Berkshire Hathaway’s annual shareholder meeting:

A bit more surprising is how strongly Berkshire’s head, Warren E. Buffett, is defending the firm. (He told Bloomberg Television before the meeting that he backs Goldman’s chief executive, Lloyd C. Blankfein, “100 percent.”

Mr. Buffett said that he feels little sympathy for the firms the S.E.C. says were hurt by Goldman’s purported lack of adequate disclosure. Of one firm, ABN Amro, Mr. Buffett said: “It’s hard for me to get terribly sympathetic when a bank makes a dumb credit bet.”

So what is Buffett saying? Sounds like Buffett thinks any bank/investor who invested in a Goldman-created synthetic CDO fabricated by Goldman’s fabulous market makers was making a "dumb credit bet."

I’m sure all of the investors doing business with Goldman will be thrilled to hear this assessment. And so will Goldman’s attorneys and public relations folks trying to fend off the emerging impression that Goldman was running a massive fraudulent enterprise to bilk its naive customers.

Nice to know.

NYT: Goldman Shares Plunge on Inquiries and Downgrades
NYT: Buffett offers firm support of Goldman at meeting