He writes:
I don’t know precisely how you orchestrated these. But I did have a pretty good seat as events unfolded, and I would like to commend a few of your troops. In the darkest of days, Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch. And though I never voted for George W. Bush, I give him great credit for leading, even as Congress postured and squabbled.
Ah, no kidding, Buffett did have a pretty good seat. It's the only he would have put $5 billion into Goldman Sachs, when they were facing a liquidity crisis that would have sucked up his $5 billion faster than Buffett sucks up to strong-willed women (see Katherine Graham, Melissa Gates).
For Buffett to have put that kind of money into Goldman, he had to know two things:
1. That Bernanke was going to start pumping huge amounts of money into the system. (Which he did at the time)
2. That the Treasury was going to back Goldman up against any financial pressure. (In the Andrew Ross Sorkin book, Too Big To Fail, Sorkin tells us that Buffett knows how to read between the lines of what former Treasury Secretary Paulson says. "After years of friendship, Buffett was familiar with Paulson's code," writes Sorkin. Buffett had to have been tipped off by Paulson that the Treasury was going to back up Goldman, or Buffett wouldn't have made the investment. Yeah in their twisted minds, it was all okay because Paulson didn't say in the exact words, "I am going to protect Goldmam," but the code talk was there.)
Buffett concludes his Op-Ed this way:
So, again, Uncle Sam, thanks to you and your aides. Often you are wasteful, and sometimes you are bullying. On occasion, you are downright maddening. But in this extraordinary emergency, you came through — and the world would look far different now if you had not.How disgusting! There's no mention of the billions he made from the Goldman investment thanks to the bailout. No mention how everyone, outside of Buffett and the oligarchs, got screwed.
But, what has to be asked is why this howdy doody note from Buffett now? Buffett did not put this in by accident. The government is feeling pressure, specifically the Fed. The heat is getting to Bernanke and my guess is that he went to Buffett to ask him to put in a good word.
Bottom line: Buffett just paid back Bernanke for the billions in profits he made, with a letter in NYT decalring his love for Bernanke.
I never understood why Buffet was not charged with insider trading, re the GS & GE investments, at the same time he was advising Gov't to bail-out Wall Street.
ReplyDeleteThis morning on CNBC, Buffet said had there not been a bail-out, he would have been having his Thanksgiving Day meal at McDonalds. So now we know, he considers the end-of-the economic world, means going to McDonalds.
It may have been a slip by the Socialist, but that is the point: the market would have been able to handle the crisis, & likely McDonalds, & many other firms would have survived -- although likely Berkshire & much of Wall Street would have been bankrupt.
Disgusting indeed, thank you for the insight! When I read that Mr. Buffet was investing in Goldman Sachs I knew he had the inside dope. What a jerk!
ReplyDeleteWenzel,
ReplyDeleteGood catch! I think you're right. Old WB still holds a lot of sway with the more gullible in the investment community. This is definitely a "Don't worry... cause I said so!" argument from self-authority on Warren's part.
You do realize that if Buffet hadn't pumped $5Billion into Goldman Sachs the entire World Economy would have collapsed.
ReplyDeleteYou do realize it's going to collapse anyway... and it's going to be far worse than it would have been in 2008, because the average person will be older and orders of magnitude less capable of digging themselves out of the hole Bernanke has dug.
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