He is the friendly, folksy billionaire next door. Or is he?

Jamming on the ukulele, munching chocolate, sipping cherry coke and dispensing homespun wisdom, Warren Buffett effortlessly revels in his popularity as middle America's favourite businessman. But as push came to shove, the world's third-richest man aligned himself firmly with the big beasts of Wall Street.

At this weekend's annual meeting of his Berkshire Hathaway investment empire, Buffett, 79, surprised many of his 40,000 followers with an emphatic defence of Goldman Sachs, showering compliments on its chief executive, Lloyd Blankfein, and declaring that he "loved" his $5bn (£2.7bn at the time) investment in the embattled bank.

"I don't hold it against Goldman at all, the fact that allegations have been made by the US Securities and Exchange Commission," said Buffett, describing himself as "100%" behind Blankfein.

He was scornful of $840m losses shouldered by Royal Bank of Scotland's ABN Amro subsidiary from an allegedly doomed derivatives contract written by Goldman. "It's a little hard for me to get terribly sympathetic with the fact that a bank made a dumb credit deal."

In a remark likely to horrify many campaigners for financial reform, Buffett relished the profits produced by credit-rating agencies, which are blamed by many in Congress for grossly underestimating the risk of a housing collapse and a financial meltdown.

"They succumbed to the same mania as the rest of the world. They couldn't see a world where the residential housing countrywide would collapse," said Buffett, whose Berkshire Hathaway group owns a stake in the rating agency Moody's. Yet he said: "If they're not forced to change the structure around them, it's a pretty damn good business."

In an unusually overt intervention in federal politics, Buffett has dispatched a senior Berkshire executive to Washington to fight the Obama administration's effort to clamp down on derivatives. The legendary investor is worried that he could be liable for billions of dollars in collateral to underwrite Berkshire Hathaway's $63bn of hedging contracts.

"If we were found to be a 'danger to the system' by a secretary of the treasury, then we could be required to post collateral on retroactive contracts," explained Buffett, who objects to having to go back and re-price potentially profitable deals predicting the direction of stockmarket trends. "We would lose substantial amounts of money."

Packed into Omaha's Qwest convention centre, Buffett's investors, who travel to his annual gatherings from as far afield as India, Europe and Australia, were as enraptured as ever, hanging on his every word and asking occasionally cult-like questions (one wanted to know Buffett's "unifying theory" of life).

A carnival mood prevailed, with visitors eagerly shopping for Fruit of the Loom underwear, Justin Brands cowboy boots, life insurance policies and Dairy Queen snacks from stalls selling the wares of firms owned by Berkshire Hathaway. There was a brisk trade in T-shirts bearing Buffett's smiling face and baby clothes bearing the motto "future Berkshire Hathaway shareholder".

One shareholder, management teacher Galen Lorem from Los Angeles, had his hair cut in a lime-green mohican with "BRK" – the firm's trading symbol – shaved into one side of his scalp and a dollar sign etched on the opposite side. The topiary, he said, was a tribute to Buffett: "He's such an amazing man, such an inspiration."

Yet the official tone at the gathering, often dubbed the "Woodstock of capitalism", was different. Justin Fuller, a Chicago fund manager who runs a website, Buffetologist.com, said Buffett had noticeably pulled back on his usual bashing of financial elites.

"He certainly stood up for Goldman Sachs a bit more than I'd have thought. And I was surprised he wasn't more critical of the general Wall Street culture," said Fuller. "In the past, there has been more criticism of investment banks and Wall Street generally than at this meeting, which I think is noteworthy."

At previous get-togethers, Buffett and his business partner, Charlie Munger, are usually only too happy to play to the crowd with jibes at the New York and Washington power bubbles. The pair make much of their relatively humble lifestyles – Buffett, whose wealth is estimated at $47bn, still lives in a suburban house bought for $31,500 in 1958 and he celebrated his second wedding in 2006 with a seafood meal at a chain restaurant, Bonefish Grill. Buffett once described derivatives as "financial weapons of mass destruction" and just last year complained that as the banking crisis ended, "nobody's going to jail, in fact a lot of them are walking off with tons of money." He is disdainful of remuneration consultants and refuses to pay tens of millions to senior executives, arguing that no business chief has ever left his company on the grounds of insufficient money.

He is notoriously anti-intellectual, shunning hi-tech stocks in favour of everyday consumer brands, insurance or bricks and mortar. He joked on Saturday about buying shares in Harley-Davidson: "I like a business where customers tattoo your name on their chest."

And Buffett bemoaned the decline in the popularity of newspapers, saying that although he loves newsprint, the "primacy" of the medium had withered. He owns one publication, the Buffalo News, and looked at buying the Philadelphia Enquirer before deciding the sums did not add up.

"The math is really tough – the distribution cost, the printing cost," said Buffett, who laments the decline of print media. "It's as vital to me as everyone but clearly, it's changed for the populus as a whole."

Berkshire Hathaway shareholders are overwhelmingly protective and supportive of Buffett, valuing the phenomenal returns thrown up by his business empire. The firm's book value has grown from $19 to $84,487 a share over 45 years, an annual growth rate of 20%. The company has only had four "down" years since 1980 and the price of a single A share is an eye-watering $115,325.

Mark Roth, a New York publisher, praised Buffett's "calm, rational thinking" and said it would have been foolish ever to doubt Buffett's affinity with Wall Street: "There's this notion that because he's in Omaha, he's not part of Wall Street. Anyone who engages in these financial transactions is a part of Wall Street."

But with bankers' popularity at a low ebb, if anything singes Buffett's popularity, it could yet be his push against the White House's legislation that seeks to make derivatives transparent and less risky. Last week, Buffett's home state senator, Ben Nelson, infuriated his party by becoming the only Democrat to vote not once but three times, against Obama's package of Wall Street regulatory reforms.

The overhaul ranges from a tax on banks to the so-called Volcker rule banning risky trading. Nelson, who has shares in Berkshire Hathaway and counts the company as his biggest campaign donor, admitted that he was siding with Republicans because he opposed the bill's derivatives measures. Nelson accepted that he had been lobbied on the issue by Buffett's company. But he insisted that other businesses in Nebraska would be affected and he lashed out at the "parlour game of wild speculation" when political political bloggers questioned his loyalties, complaining that he was a victim of a "cesspool of gotcha politics".