tj444
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Joined: 3/7/2010
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ORIGINAL: Musicmystery
I'm sad such crappy writing comes from a Ph.D. in finance. Must have had to get out his blog post quickly that day.
His first point, whining about Buffett's warning about following journalistic macro opining, then slamming Buffett for sharing a macro opinion (and a very well established one at that), ignores the issue--journalists are not financial experts; Buffett is. Buffett mentions looking at the data instead of the macro predictions, and here he looks at the data. What's the problem? I'd listen to Buffett too. In fact, the author even notes the value of Buffett's advice in the article, a couple of times.
The rest is what appears to be "really" his point, that Bershire-Hathaway holds investments in financial institutions that received bail-out money, and therefore, Buffett (and every other investor, btw, though he never mentions that--including Grandma's mutual fund) is a crook. While that's a stretch, at the very least harsh, it's really what's crawled up his butt.
He just figures his blog will do better with a provocative title like "Warren Buffett is a crock." Kind of manipulative of the author, don't you think? And not terribly honest...the hypocrite.
But this statement -- how does Buffett get a free pass? How did Buffett not earn his position -- one he held LONG before the bailout, and one very successful during the economic crisis as well?
Seems the author is conflating coincidence with cause and effect, and, well -- a Ph.D. in finance should know better, especially one who's going to publish a finance blog.
Buffett was not merely a shareholder, the reason he is a sleazy crook is that he pushed hard for the bailout, thru the media, and directly to the govt/Paulson in letters he wrote and addressing congress, etc.. When someone uses his power & influence to affect the outcome you can not consider him a mere bystander (like grandmas are or average shareholders are), he is one of the architects of the f'n bailout.. and he actually increased his holdings in those banks while he was pushing for the bailout.. he criticizes other companies for trading derivatives while his own companies do the very same thing.. The guy is a real piece of work.. But how he invests is nothing new, nothing really special about what he does, what is different is the political influence & clout he has,.. and his political influence has certainly helped his bottom line.. he certainly would not have fared nearly as well.. And of course he was not the only one to benefit from the bailouts.. several other congressmen lined their pockets too.. sleazy, sleazy, sleazy.. there is no morality there at all.. screw anyone for a buck.. I guess this is what America is all about..
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.
'Reeks of favoritism'
When told of The Sacramento Bee’s findings, Robert Kuttner, the author of a recent best-seller on the economic crisis, said they reveal a bailout program designed out of public view, and one that “reeks of favoritism and special treatment.”
“TARP was designed that way,” Kuttner said, “to concentrate power with almost no effective oversight. That, to me, is the scandal.”
The Sacramento Bee’s findings follow a recent controversy over some Buffett holdings that may have contributed to the economic crisis.
Berkshire owns more than 20 percent of Moody’s, a top credit-rating agency, making it by far the largest stakeholder. Moody’s has been faulted for enabling the global crisis by overvaluing mortgage assets.Although Buffett has been outspoken about the need for government intervention in the crisis caused by the mortgage meltdown, he’s said nothing publicly about the role of a company in which his firm is a minority holder.
Buffett also has decried “credit default swaps” — which are similar to insurance policies, in which mortgage bonds and other financial instruments are insured against default — as “financial weapons of mass destruction.” He criticized the profligate use of these unregulated financial tools, or derivatives, widely blamed as a root of the credit collapse.
Yet Berkshire has issued tens of billions of dollars in derivatives. In a letter to shareholders, Buffett justified derivatives as relatively safe and likely to yield vast profits.
http://www.chron.com/business/article/Buffett-champion-of-bailout-is-also-a-leading-1735017.php
A number of Senators and Congressmen were buying and selling Buffett’s Berkshire Hathaway stock before, during and after they passed the bailout, including Sen. Ben Nelson (D-NE), Sen. Dick Durbin (D-IL), Sen. Orrin Hatch (R-UT), Sen. Claire McCaskill (D-MO). Others were buying Goldman Sachs’ stock at the same time, including Rep. John Boehner (R-OH), Sen. Jeff Binghaman (D-NM) and Rep. Vern Buchanan (R-FL).
To make Warren Buffett’s vision of a taxpayer funded railroad fortune appear out of nowhere, his company Berkshire Hathaway increased its number of Washington lobbyists almost ten-fold. In 2008, Buffett’s firm spent $1.2 million on lobbying. In 2009, that amount jumped to $9.8 million. As Peter Schweizer’s research reveals, the rail lines of Buffett’s Burlington Northern that crisscross the nation, just happen to practically match a map of President Obama’s proposed national high-speed rail line.
http://www.whiteoutpress.com/articles/q12012/warren-buffett-the-devil-in-the-details213/
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