Posted on 08/06/2009 6:24:15 AM PDT by SeekAndFind
When I was 14, Warren Buffett wrote me a letter.
It was a response to one I’d sent him, pitching an investment idea. For a kid interested in learning stocks, Buffett was a great role model. His investing style — diligent security analysis, finding competent management, patience — was immediately appealing.
Buffett was kind enough to respond to my letter, thanking me for it and inviting me to his company’s annual meeting. I was hooked. Today, Buffett remains famous for investing The Right Way. He even has a television cartoon in the works, which will groom the next generation of acolytes.
But it turns out much of the story is fiction. A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.
Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.
To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee.
Without FDIC’s debt guarantee program, even impregnable Goldman would have collapsed.
And this excludes the emergency, opaque lending facilities from the Federal Reserve that also helped rescue the big banks. Without all these bailouts, the financial system would have been forced to recapitalize itself.
Banks that couldn’t finance their balance sheets would have sold toxic assets at market prices, and the losses would have wiped out their shareholder’s equity.
(Excerpt) Read more at blogs.reuters.com ...
This hit yahoo tech ticker yesterday and the responses were pretty ugly.
That’s kind of a stretch.
If people believe the bailouts actually worked and were needed; then with that logic, most companies in the US would have been wiped out in a spiraling depression.
The other way to look at, the bailouts were not needed, and these Buffet companies would have made it through anyway, because they were fundamentally sound.
Put in perspective, this means fully 27% of Buffet’s holdings are shaky banks propped up by TARP and guaranteed by the taxpayers. No wonder this phony philanthropist is a Democrat!
Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.
Every liberal I know quotes Buffett - guess paying the old man off has been worth it.
BWAAA HAAA HAAA HAAA!!!
But it turns out much of the story is fiction.
As is your article. And no, I'm no big fan of Buffet, unless we're talking Jimmy.
What’s the stretch? The banking system is unsound, and the FDIC is near broke. They would have collapsed without support. ALL of the major banks and brokers would have collapsed last year.
Fits the “privatize the profit, socialize the loss” model. Many people that have followed Buffet for some time have known the Saint Warren does what is in the best interest of Saint Warren - ALWAYS. Even when he invites all of his investors to Omaha to celebrate their money, Buffett turns the whole event into another marketing opportunity. Actually the genius of both Buffett and Gates is to recognize the value of products that other people have created and to turn them in to cash machines. I don’t know if either one of them ever produced an original idea on their own unlike the giants of the past. This story also adds more evidence to the case that most of the rich are libs that view the government as a tool to manipulate the market to their advantage.
“They would have collapsed without support. ALL of the major banks and brokers would have collapsed last year.”
That is a huge leap. Maybe true.
Or maybe most of the spending was wasteful and the free market would have sorted things out with much less govt involvement.
And the strong companies that Buffet owned would have done even better?
“They would have collapsed without support. ALL of the major banks and brokers would have collapsed last year.”
That is a huge leap. Maybe true.
Or maybe most of the spending was wasteful and the free market would have sorted things out with much less govt involvement.
And the strong companies that Buffet owned would have done even better?
Great article thank you for posting it.
He is a huge BO supporter the buffet all you can eat of the taxpayers dollars.
...and the smaller, non-money center banks, have had their FDIC insurance rates skyrocket to subisdize their bigger, poitically well heeled, competitors.
Buffett as a bull on America bet heavily on two major US financial institutions when few others would, and will be paid handsomely for being right about them.
What silly position does the writer or poster think Buffett or anyone else subscribed to, is "betrayed" in any way by a particle of it?
And why is everyone trying to smear rich financiers for successful bets?
Here is a hint - you don't.
Acting in your own self interest is fine. Millions do it everyday, and it makes the system work. Acting in your own self interest is amoral, however, and does not qualify you as a saint in my understanding of the definition of the word. My dog acts in his own self interest, too, but I don’t consider him a saint.
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