Oracle Of Omaha Defrocked

It would all be well and good for Warren Buffett to be the model for increased taxes on the wealthy. But it would be a sanctimonius model, at best if Buffett, the principal advocate of Obamanomics, were so accepted by the too often shorn American taxpayer. The noted investment authority is a “prize catch” cast as He who brings the economic expertise and (if you will) the moral authority of the right on that question to Obama’s administration.

Warren Buffett increased his bank holdings in September, while he was At the very time Buffett argued publicly that Congress approve the bailout to prevent the collapse of the financial system he was busy increasing his holdings in the very companies he petitioned Obama to buoy up.
The thesis is supported by reporting of the Securities and Exchange Commission (Dec. 31, 2009) releasing on Treasury Department disclosures of federal stock purchases.

For overall shareholder figures, the 28 firms that received at least $600 million from the Troubled Asset Relief Program (TARP) were considered, totalling about 92 percent of TARP disbursements.

TARP-assisted California banks were separately reviewed if their market capitalization was at least $25 million. The figures cited exclude federal investments in American International Group and federal loans and investments for auto companies.

References to Berkshire Hathaway's total stock portfolio include a $5 billion investment in Goldman Sachs Group. That investment pays a 10 percent annual dividend and includes the right to purchase an additional $5 billion in Goldman stock.

Buffett's company, Berkshire Hathaway, hasn't received any of that federal aid, but Berkshire, based in Omaha, Neb., owns stock valued at more than $13 billion in the top recipients of TARP funds, including Goldman Sachs Group, US Bancorp, American Express and Bank of America, which analysts thought were in deep trouble before TARP was approved in October.

That total, the investigation found, ranks Berkshire fifth among all investors in TARP-assisted companies. Berkshire's TARP holdings constitute 30 percent of its publicly disclosed stock portfolio, and that proportion reflects at least twice as much dependence on bailed-out banks as any other large investor.

Berkshire, for instance, is the largest shareholder in San Francisco-based Wells Fargo, which got $25 billion, 91 percent of the TARP funds invested in institutions headquartered in California.
Buffett increased his bank holdings in September, while he was arguing in the media that Congress should approve the bailout to prevent the collapse of the global financial system.

"If I didn't think the government was going to act, I would not be doing anything this week," Buffett told CNBC after investing $5 billion in Goldman Sachs. "I am, to some extent, betting on the fact that the government will do the rational thing here and act promptly."

Buffett, whose company Berkshire Hathaway, is the largest investor in Goldman Sachs and American Express, declined to be interviewed. Far from helping the little guy Obama has ensured that his Administration is in the same boat as Wall Street and he share the same boat with little room for the average American, as large shareholders such as Buffett have been the primary, and perhaps only, significant beneficiaries of TARP. Bank stocks have recovered in recent weeks — Goldman's share price has more than doubled since November — and no TARP bank has failed.

Certainly Obama’s TARP propped up Wall Street against bankruptcy at the expense of taxpayers. The Treasury Department anticipated that TARP wouldopen the lending tap for small business and homeowneres, but the market has barely thawed, and unemployment has soared.


Designed out of public view, TARP was always intended to bestow favoritism and special treatment on its allies. The Obama administration said it would offer transparency and openness. But the single most important thing they are doing is being done largely behind closed doors, and the design is by, for and in the interest of large banks, hedge funds and private equity companies.

Ironically, Buffett’s holdings that probably contributed to the economic crisis in the first place.
Berkshire owns more than 20 percent of Moody's, a top credit-rating agency, making it by far the largest stakeholder. Moody's of course contributed to the global crisis by overvaluing mortgage assets in the first place. While Buffett has been outspoken about the need for government intervention, he's said nothing publicly about the role of a company in which his firm is a minority holder becoming a chief beneficiary.

Just another corporate welfare bum it would seem.