Buffett on the Bailout

[Puppycow]

Pretty Good for Government Work

DEAR Uncle Sam,

My mother told me to send thank-you notes promptly. I’ve been remiss.

Let me remind you why I’m writing. Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G., the world’s most famous insurer, was at death’s door.

Edited by Tricky: 

Edited for rule 4. Follow the link to read the entire article.

 

[keale]

Eh hes part of the leftist commies. All he knows how to do is spend spend spend. What the hell would he know about finance or the economy suckin on the government welfare teet. /end wackonutjob rant

 

[AlaskaBushPilot]

Buffett's self-interest is pretty clear if you followed how he invested in the bailout:


In September of 2008, the financial crisis floodgates broke open.

Fannie Mae and Freddie Mac are taken over Sept. 7.

Merril-Lynch taken over by Bank of America Sept 14.

Lehman Brothers files for Bankruptcy Sept 15.

AIG Downgraded Sept 16.

Federal Reserve emergency loan $85 billion to AIG Sept 17.

Now for the key events leading Buffett to make his move. Prior to this, Buffett had made his money by evaluating balance sheets, income statements, product quality, etc. But now he made a huge political bet:

Sept 18 Secretary of the Treasury Paulson of Goldmann-Sachs meets with key legislators and Ben Bernanke of the Federal reserve to get the fix in on the $700 billion giveaway to the banks.

Sept. 19 Secretary Paulson of Goldman-Sachs unveils the plan to congress. The question at this time is not whether an act will be passed, but how spectacularly generous to the banks it will be and how little oversight it will have.

Guess who is picked to dispense the dough? Neel Kashkari of Goldman-Sachs. Who was Clinton's Treasury Secretary? Robert Rubin of Goldman-Sachs. Who is the Secretary of the Treasury now? Tim Geithner, Lobbyist for Goldman-Sachs.

Buffett, at this critical nexus, on Sept 24 of 2008, invests Five Billion dollars in Goldman-Sachs. He buys ten percent of Goldman-Sachs.

Prior to that of course the financial sector had taken a beating in the stock market. So Buffett is coming in at what he's betting on will be a trough, and with the taxpayers bailing out the banks, and with Goldman-Sachs running the show as it always has, he figures he'll make a killing.

Results:

Buffett comes in at $115 per share.

Goldman Sachs now $165 per share.

Profit: $2.2 billion.

I'd say thank you too.

 

[timhau]

So... we should write a thank-you note to Goldman Sachs too?

 

[Tippit]

So... we should write a thank-you note to Goldman Sachs too?

Given the revolving door from the US Treasury to Goldman Sachs, I'd say a thank you note to the government should suffice. They don't call it Government Sachs for nothing.

 

[Francesca R]

Response from taxpayer to Buffett courtesy of "Bond Girl"

 

[Astrodude]

If he thought GM needed a bailout, I'm sure Berkshire Hathaway could have delivered rather than the Feds.