Skip to comments.Gasparino Goes After Warren Buffet on Fox Business Today
Posted on 01/31/2012 10:57:31 AM PST by RinaseaofDs
Gasparino actually said in plain English:
1. The 2008 Real Estate Bubble was caused in large part by the three ratings agencies 2. That Warren Buffet had ownership of Moody's and made millions at the time. 3. That the Lubrizol purchase was a continuation of a trend that Buffet has shown toward these sorts of ethical lapses in very large, economy moving transactions.
So far, this is the very first time that anyone in the MSM has uttered such things, and the last place I thought I'd see it was on a Fox channel. Kudos to Gasparino for actually reporting the facts.
At one point, Gasparino actually addressed the 'how did it happen?' question, and then called out the rating agencies, and how the market moved on securities based, as it always had, on the ratings.
Could Buffet come under investigation (finally)?
Kudos to Gasparino. There’s more that Buffet should have to answer for regarding his pronouncements versus his behavior. Such as his advocacy for high estate taxes while pledging to avoid them entirely by gifting his money to the Gates Foundation Trust - where Bill Gates has also removed his future estate from tax liabilities he too advocates.
Fox Business Network is where it’s at. Lou Dobbs at 7:00pm eastern has been all over Fast & Furious - every night.
Giving it away isn't the only sign of his hypocrisy. He also owns life insurance companies who sell their products as a means to avoid the estate tax. How much less would his insurance companies be worth if there was no estate tax and how much more would they be worth if the estate tax was much higher?
and buffet wants the inheritance tax because he sells death tax insurance.
no death tax then no use for his “product”
just like killing the pipeline protects his railroad.
Warren Buffett’s “country cousin” routine has worn thin.
No doubt about it. This is the ONLY station with any type of credibility.
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Correct. And don’t forget that he promised that none of his children would inherit his massive wealth. So Warren funded his three childrens’ charities to the tune of $1 billion each. Administering those funds, one expects management fees will have to be accounted for.
Warren Buffet was Arne the “Girly Man’s” economic advisor in California when he was the governator.
He advised Arne to Scr*w the people and turn hard left.
Arne listened to Warren, and look what it got him.
You got that right. Even when they are talking about something uninteresting, it is still worth viewing.
I’m sure that after they’re done with John Corzine, Buffett will be next on the docket.
Our interests are being protected by a bunch of idiots.
Huuuuu Buffet another wealthy Obama supporter like Soros !
Isn’t it ?
“My problem is that during the crisis both Paulson and Geithner were soliciting advice from Buffet directly. Unless he stopped making ANY trades or acquisitions during that time how could the specter of insider trading NOT come up?”
Such as the $5 billion loan to Goldman Sachs during the crisis that he made $3.7 million on in 3 years? Nice return.
Also, certainly no conflict of interest for a major stakeholder in Wells Fargo (Buffet) being an insider with the Secretary of the Treasury during a banking crisis. However, if an employee of a publicly traded company and tells his neighbor orders are down and the neighbor sells the stock based on that information, the employee can be found guilty of insider trading and sent to prison.
And we thought we eliminated royalty in 1776.
I agree. Ever since Fox Business became an option for me, I barely watch FNC anymore. FNC has become practically unwatchable.
Could Buffet come under investigation (finally)?
Buffett’s Berkshire Hathaway is a shareholder in Moody’s, it does not have management responsibilities. If anyone is in trouble at Moody’s it would be the analysts and senior management if they knew ratings were being played with.
His holier than thou act is wearing thin but legal action is not in the cards.
From 2004 up to 2009, Moody’s was 20 percent owned by BH, but the way they do business Buffett was plugged into what was happening.
There was HUGE pressure from the top to reverse proper ratings on dirtbag securities that deserved ZZZ ratings.
In the end, it was Buffett who bailed out Goldman, which was interesting because Goldman was investing based on ratings too, until of course the defaults started rolling in, and the CDO’s kept climbing in price. They were the first to try and leave the burning building, nailing the door shut behind them on their clients.
Buffett got a TEN percent dividend on preferred shares he bought for a song and then resold at a very handsome profit.
You are overstating a number of things here:
Buffett has ALWAYS been a passive investor in his company’s stock investments. He won’t make the investment if he feels he has to make management-level decisions. The pressure didn’t come from the INVESTOR, but from the competitive pressure to get the business in the battle between Moody’s, S&P, Fitch, etc. Most rated securities only chose one ratings agency as the official rater, while the others would publish unpaid-for reports to stay competitive in the marketplace.
Buffett was PART of the Goldman bailout, but was not the MAJORITY of it. That was the CDS payments made via AIG, where Goldman was able to collect over $12 billion in ‘insurance payments’ (that after all is what a CDS is for) via the TARP program and AIG bailout. Buffett’s PREFERRED STOCK ‘investment’ was $5 billion at 10% as you put it.
That capital infusion (not an equity investment, which Buffett has never made in Goldman) was very profitable in a cash flow sense, not in a capital gain one to Buffett but it came at the expense of equity shareholders not the general public or Treasury. He DID NOT SELL the holdings at a profit, he was REDEEMED at face value. $5 billion in and $5 billion out. He was a LENDER to them, not an INVESTOR.
The securities themselves obviously don’t deserve AAA ratings but the ZZZ is also inaccurate. They way they performed the proper ratings were somewhere in the Single-B category. There was cash flow from these and every time a mortgage was refinanced or paid off (via sale, etc) principal was paid down. The earlier sub-prime securities DID outperform the later ones pretty easily.
Don’t get me wrong, I am tired of his sainted reputation when most of us in the industry know him as a vulture investor (all of his preferred stock investments over the years have worked out well except for the US Airways one) and as a bit of a publicity hound in his later years, never mind the unusual personal life.
But lets criticize him based on the facts, not implications. I do believe that the ratings agencies needed to face civil lawsuits (criminal charges on the ratings are difficult to prove if ALL the major companies make the same judgment - just like if all the economists make the same prediction no one loses their jobs - LOL!).
“Buffett has ALWAYS been a passive investor in his companys stock investments. He wont make the investment if he feels he has to make management-level decisions. The pressure didnt come from the INVESTOR, but from the competitive pressure to get the business in the battle between Moodys, S&P, Fitch, etc. Most rated securities only chose one ratings agency as the official rater, while the others would publish unpaid-for reports to stay competitive in the marketplace.”
I saw the Benjamin Moore purchase up close, and this is part of his shtick. He’s not going to leave a paper trail detailing what decisions he’d make if he were in the chair, but when BH takes a positive control position in your company, Buffett gets consulted one way or another, because if he sells his position, your company is going to get it in the grill.
I’ve seen this happen in government too. Some burearcrat will say, “It’s the sense of the ________, that you should be ____________ at this particular time.”
Sense of the board, the council, the committee, etc.
Buffett is the elephant in the room at all times. Paulson was CONSTANTLY in Buffett’s ear during the 2008 collapse, and nobody feels bad about it because Teddy Roosevelt was bailed out by JP Morgan in 1893 in the same manner.
The planet will be better off with him dead. I don’t say that about a lot of people, but he’s one of them.
This Keystone XL deal? Guess where the refineries in WA state are getting their stock (in part)? 200 cars a day from Montana from shale. BNSF gets all of that business.