Friday, February 11, 2011

Warren Buffett: We Will Always Need Government Bailouts of the Banksters

I now believe Warren Buffett's conversion to full bankster oligarch is complete.

"You will always have institutions that are too big to fail, and sometimes they will fail," Buffett told the Financial Crisis Inquiry Commission in May, according to Bloomberg. His comments were released Thursday by the FCIC.

"We still have them now. We'll have them after your commission report."

The idea that institutions in a free market would grow to absurd sizes so that they can't be properly monitored is absurd. Who would put money in such an institution?  The only time such financial institutions exist is when the government plays daddy via the FDIC and the Fed. It creates moral hazard, eliminating the concern of depositors as to the quality of loans being made by the banks.

End moral hazard and depositors would very quickly pay attention to the loans made at the banks, where they deposit money.


  1. Better yet, individuals using banks would take more caution in making sure there deposits were deposits and their loans were loans.

  2. Sort of begs the question if we will always have institutions that are too big to fail, and it will always be the job of the national government to bail them out, why is it the people that wrote the document that outlined the roles of that national government didn't include something about this.

  3. Buffett got $6 billion in TARP funds personally -

  4. Buffet hasn't been converted into an oligarch. He's always been one. Like Maurice Greenberg.

  5. Lila

    It is very nice to run into you again.

    And you are correct, the homespun Buffett is an act. He plays the inside very well.

  6. Wilbur Ross got his fourth bank over the weekend, Peoples State Bank in Hamtrack, Michigan. Sheila Bair did a loss sharing deal, the third for a Ross invested bank. The three loss sharing deals total $6 billion.

    Recall who made out on BankUnited, where the FDIC put up 70% of the capital, $2.3 billion in cash.