Skip to comments.Capitol Cronyism: Obama-Backer Buffett Helped Shape Bailout Rules, Made Massive Profits from Them
Posted on 11/17/2011 3:56:38 PM PST by opentalk
In the wake of the $700 billion TARP bailout, Warren Buffett apparently shaped a plan to clean up toxic assets that Treasury Secretary Tim Geithner later adoptedresulting in massive profits for Buffett.
Thats the latest bombshell revelation from investigative journalist and Breitbart editor Peter Schweizers sensational new book, Throw Them All Out.
According to Schweizer, after the bailout bills passage, Warren Buffett sat down and wrote then-Treasury Secretary Henry Paulson a four-page private letter laying out a plan to clean up the toxic assets plaguing numerous financial institutions. Buffett proposed something he called a public-private partnership fund. For every $10 billion the private sector invested, Buffett said the government should put up $40 billion.
After Paulsons exit, incoming Treasury Secretary Tim Geithner tweaked the plan and rolled it out in March 2009. But according to quarterly reports from Buffetts holdings company, Berkshire Hathaway, between the time the billionaire crafted his plan and Geithner adopted it, Buffett quietly purchased 12.4 million shares of Wells Fargo stock and 1.5 million shares of U.S. Bancorp. Once the government unveiled its Public-Private Investment Program, bank stocks jumped, resulting in large profits for Buffett.
How much Buffett profited is hard to calculate,... But prior to the government adopting Buffetts plan, Wells Fargo had been trading at roughly $20 a share. In the weeks after Geithners announcement, the stock jumped to $30 a share. Likewise, U.S. Bancorp went from $8 in February 2009 to more than $20 a share by May.
..When the TARP bailout passed, Berkshire Hathaway firms received a staggering $95 billion in bailout cash from U.S. taxpayers. In total, TARP-assisted companies made up almost a third (30%) of Buffetts entire publicly disclosed stock portfolio. The payoff: by July 2009, Buffetts Goldman bet and his congressional jawboning had yielded profits as high as $3.7 billion
(Excerpt) Read more at biggovernment.com ...
Capitol Cronyism: Obama-Backer Warren Buffett Helped Shape Bailout Rules, Then Made Massive Profits from Them
Warren Buffett: The Vulture of Omaha.
Come on you guys. We all know Buffett is too big to fail.
..revelations contradict the image Warren Buffett has worked hard to create as that of a folksy, grandfatherly figure who stays above the political fray and rarely gets mired in the muck of partisan politics.
Indeed, Throw Them All Out uncovers other alarming acts of apparent crony capitalism performed by the so-called Oracle of Omaha.
WOW! now thats a surprise! News flash from Tom Cobern, Bruce Springstien and Bon jovi, you know “the man of the people” Down with Capitolism millionaires are recieving farm subsides from the federal government. Can’t help but remember the house parties they had for rat candidates and conerts performed for thier benefit.............and now thiers! All the hypocrites raise thier hands please.
Buffett, Soros - both are financial buzzards waiting until the economy is about dead to swoop in and feed off the wounded carcas, then taking their profits as the victim comes back to health.....
Buffet is poised for vast profits resulting from Obama’s delay/termination of the Keystone pipeline. He owns the railroad which is hauling the oil.
....and he is just like us, living in a modest home, driving a modest car, with a modest wife, living like a common ordinary man. Buffet is THE MAN.
So this insider trading bit is the real issue here.
The fact that he owned 20 percent of Moody’s while Moody’s was blessing mortgage backed securities backed by bundles of $750,000 loans to illegal aliens making $14K/year with AAA ratings isn’t the real news.
In most companies the size of Moody’s, 5 percent is ‘controlling interest’, 20 percent is enough to form a dictatorship.
These boxes of crap with AAA ratings could then be purchased by pension funds, insurance companies, church and college endowment funds, which of course makes the apetite for these things go through the roof.
AIG, fat, dumb, and happy sees a stream of people asking, “Hey, can we buy insurance (Credit Default Swaps) on these mortgage backed securities? They are AAA rated, so what kind of rate can we get?”
AIG’s thinking, “Hmmm, you want insurance an AAA rated instrument? We’ll give you a good rate, the risk to us is low, and we’ll gladly pocket the fee.”
The line forms around the block for these Swaps. AIG thinks they’ve stumbled on found money: “Why anyone would buy insurance on something as solid as an AAA bond is beyond us, but we’ll sell it to you.”
Turns out the buyers were people in hedge funds like Frontpoint that had already figured out the MBS’s should have been rated as junk. How do you short a bond like that?
Buy insurance on it. Frontpoint bought at least a billion, and there were a few others that figured it out too and bought billions more.
Word started to leak, and the appetite for these thing Swaps became unbelievable. Goldman figured it out first, and while they were selling MBS’s to clients through the front door, they were buying Swaps against those clients out the back. Goldman then tried to dump everything they had and then the word was out. Goldman was the only bank that got out of the burning theater, but not without catching fire on the way.
In September of 2008, Every investment bank on Wall Street was in very big trouble, and Geitner hatched a plan where big commercial banks would buy troubled investment banks and turn them in to commercial banks regulated under commercial banking laws with access to the Feds discount window, depositor cash, and FDIC insurance.
Goldman was the only one out there with no dance partner.
Like every other bank, everyone is looking at the AAA ratings and saying, “How can we lose?”. Moody’s was the one leading the other two weaker sisters (S&P and Fitch, who did the same thing just to hang on to clients, since the guy asking for the rating was the same guy paying the agency’s invoice).
So, one or two days away from Goldman shutting their doors, who rides in?
Buffett. $5B in preffered stock at a 10 percent yield. About equivalent to a payday loan amongst players at that level. Same guy that commits the fraud in the first place is the guy who bails out the fools who bit on the fake rating.
But now we’re mad that he actually hatched the nationalization program with Paulson. It forced 9 big banks to sell preferred stock to the US government at gunpoint. The two banks who didn’t want the cash injection - State Street and Wells - they were forced to as well in order to provide cover to the other weaker banks.
Treasury didn’t want the acceptance of a cash injection to be a signal to the market that the bank was weak, you see.
So what does Buffett do?
He screws Paulson, Geitner, and the taxpayers by revealing WHICH ONES WERE THE HEALTHY BANKS ANYWAY BY BUYING A GIANT BLOCK OF THEIR STOCK.
Not only did Buffett know those banks were healthy, but he also knew they were going to buy back those shares at a higher price as soon as Treasury would let them.
And it is for all those reasons, that Warren Buffett should be stripped naked, helicoptered into the high dessert with a canteen, and then licenses be sold to kill that man with rifles - first man to bag him get’s 1,000,000 shares of preferred stock in Berkshire Hathaway.
The lesson here, children, is if you are going to steal:
1. Steal big, as big as you can, the bigger the better
2. Make sure the government is helping you in the crime
3. Make sure you steal from companies, so you can steal money from the poor in order to ‘save the world’.
The only thing a defense attorney could say in old Warren’s defense is the following:
“There were dozens of idiot congressmen all crying about the injustice done to the poor in not being able to buy a house. They were willing to use unlimited public money to underwrite those loans, and since there were no insider trading laws on legislators, many, if not all, purchased stock in mortgage loan shops, home builders, etc.
I saw 20, 30, 100 people all walking out of Uncle Sam’s living room carrying off anything they could get their hands on. All I did was bring a moving truck and got my loot more efficiently than the idiot congressmen did. Go ahead and shoot me, but I’d buy more ammo if that’s the mood you’re in.”
Thus endenth the lesson, kids.
Warren Buffett is a scumbag crook. He’s probably banging the redhead on Fox Business so he’ll give her exclusive interviews, popping viagra like its Chiclets.
Being shot with a rifle’s to painless a death for that guy.
This current system is so damn corrupt, it’s just breathtaking in its breadth and depth.