Buffett’s Betrayal

August 4, 2009

When I was 14, Warren Buffett wrote me a letter.

It was a response to one I’d sent him, pitching an investment idea.  For a kid interested in learning stocks, Buffett was a great role model.  His investing style — diligent security analysis, finding competent management, patience — was immediately appealing.

Buffett was kind enough to respond to my letter, thanking me for it and inviting me to his company’s annual meeting.  I was hooked.  Today, Buffett remains famous for investing The Right Way.  He even has a television cartoon in the works, which will groom the next generation of acolytes.

But it turns out much of the story is fiction.  A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.

Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money.  The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.

To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee. (Click chart to enlarge in new window)

buffett-bailout2

Without FDIC’s debt guarantee program, even impregnable Goldman would have collapsed.

And this excludes the emergency, opaque lending facilities from the Federal Reserve that also helped rescue the big banks. Without all these bailouts, the financial system would have been forced to recapitalize itself.

Banks that couldn’t finance their balance sheets would have sold toxic assets at market prices, and the losses would have wiped out their shareholder’s equity.  With $7 billion at stake, Buffett is one of the biggest of these shareholders.

He even traded the bailout, seeking morally hazardous profits in preferred stock and warrants of Goldman and GE because he had “confidence in Congress to do the right thing” — to rescue shareholders in too-big-to-fail financials from the losses that were rightfully theirs to absorb.

Keeping this in mind, I was struck by Buffett’s letter to Berkshire shareholders this year:

“Funders that have access to any sort of government guarantee — banks with FDIC-insured deposits, large entities with commercial paper now backed by the Federal Reserve, and others who are using imaginative methods (or lobbying skills) to come under the government’s umbrella — have money costs that are minimal,” he wrote.

“Conversely, highly-rated companies, such as Berkshire, are experiencing borrowing costs that … are at record levels. Moreover, funds are abundant for the government-guaranteed borrower but often scarce for others, no matter how creditworthy they may be.”

It takes remarkable chutzpah to lobby for bailouts, make trades seeking to profit from them, and then complain that those doing so put you at a disadvantage.

Elsewhere in his letter he laments “atrocious sales practices” in the financial industry, holding up Berkshire subsidiary Clayton Homes as a model of lending rectitude.

Conveniently, he neglects to mention Wells Fargo’s toxic book of home equity loans, American Express’ exploding charge-offs, GE Capital’s awful balance sheet, Bank of America’s disastrous acquisitions of Countrywide and Merrill Lynch, and Goldman Sachs’ reckless trading practices.

And what of Moody’s, the credit-rating agency that enabled lending excesses Buffett criticizes, and in which he’s held a major stake for years?  Recently Berkshire cut its stake to 16 percent from 20 percent.  Publicly, however, the Oracle of Omaha has been silent.

This is remarkably incongruous for the world’s most famous financial straight-shooter. Few have called him on it, though one notable exception was a good article by Charles Piller in the Sacramento Bee earlier this year.

Buffett didn’t respond to my email seeking a comment.

What saddens me is that Buffett is uniquely positioned to lobby for better public policy, but he’s chosen to spend his considerable political capital protecting his own holdings.

If we learn one lesson from this episode, it’s that banks should carry substantially more capital than may be necessary.  You would think Buffett would agree. He has always emphasized investing with a “margin of safety” — so why shouldn’t banks lend with one?

Yet he mocked Tim Geithner’s stress tests, which forced banks to replenish their capital. Why? Is it because his banks are drastically undercapitalized?  The more capital they’re forced to raise, the more his stake is diluted.

He points to Wells Fargo’s deposit funding model being more robust than investment banks’, but that’s no excuse for letting tangible equity dwindle to three percent of assets.  At that low level, the capital structure would have collapsed were it not for bailouts.

And by the way, the strength of Wells’ funding model is a result of FDIC insurance, among the government subsidies Buffett complains about in this year’s letter.

To me this feels like a betrayal.  There’s a reason he’s Warren Buffett and not, say, Carl Icahn.

As Roger Lowenstein wrote in his 1995 biography of Buffett, “Wall Street’s modern financiers got rich by exploiting their control of the public’s money … Buffett shunned this game … In effect, he rediscovered the art of pure capitalism — a cold-blooded sport, but a fair one.”

But there’s nothing fair about Buffett getting a bailout, about exploiting the taxpaying public for his own gain.  The naïve 14-year-olds among us thought he was better than this.

What would Ben Graham say?

182 comments

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Thanks for the article. I have been saying that since september last year when Buffett was making calls to Congress to bail out banks. It is quite pathetic to see Buffett stoop to this level. He looks just like any other operator playing the system, with billions, nothing more.

Posted by Joe | Report as abusive

Rolfe, you are correct in pointing out that many of Buffett’s investments have received bailouts, but I think you do not give enough credit to him for the things he has advocated that are beneficial to the public. His early call on regulating derivatives, staying away from leverage in investments, championing against the abolition of the estate tax, let along the valuable and safe tenants he has applied to make money, all fall on the other side of the scale. The bailouts his investments have received were not his fought or doing. The fact none of his investments went bankrupt inspite of a government bailout (such as AIG or Bear Stearns) is testament to his investing acumen. Your blame is akin to saying Tiger Woods has lost his golf ability because he might have shot 5 over par on a cold, rainy, windy day, which is outside anyone’s control. What you fail to mention is that everyone else shot at least 15 over par given the same climate.

Posted by Howard | Report as abusive

TRAITOR!!! Benedict Buffett

Posted by Defend the USA | Report as abusive

Well said.

Posted by Charlie Lefaux | Report as abusive

Howard, thanks for your comment. It gives me an opportunity to expand my argument.I do give him credit for advocacy. That’s my problem. This just goes to show that even the most pious among us will sacrifice their principles when their own money is at stake.Yeah, Buffett TALKS a lot about derivatives, about leverage, but what does he DO? He trades derivatives and, if I recall correctly, has said he doesn’t want to see more substantial margin requirements.And on leverage, Wells Fargo is one of the most highly levered banks there is. If he’s against leverage, he wouldn’t have spoken against stress tests that were designed to reduce it. He offered some smug line about knowing Wells business better than some bank examiner, but that’s patently false. Has he seen Wells’ term sheets circa 2005? Is he familiar with the kind of toxic loans they were underwriting even before they bought option ARM king Wachovia? I doubt it.And the reason none of his investments went the way of Lehman and Bear has nothing to do with superior fundamentals. Wells, GE, Goldman, Bank of America were all goners if it weren’t for bailouts. People conveniently forget this, now that government rescue facilities have provided the support necessary to boost stocks. But credit markets were closed to them.And I didn’t even mention the accounting shenanigans these guys are playing. Buffett SAYS a lot about accounting integrity, but his businesses are engaged in some very shady number fudgery.And what about the General Re case? Everyone forgets that now too.People give Buffett a free pass because they think, deep down, he really cares about their interests. I think he does too. Just not when they conflict with his own.

Posted by Rolfe Winkler | Report as abusive

It’s one thing to be a hard-nosed, self-interested capitalist which Buffett certainly is. It’s quite another to use a carefully cultivated reputation for moral rectitude to feather your own nest.Though Buffett has done many positive things, it’s about time someone exposed the unquestioning worship of St. Warren for what it is. Well done.

Posted by jjw | Report as abusive

What, exactly, is the meaning of “collateralization” of asset values, in terms of creating tradeable liquidity?

Actually Buffet investing in companies such as GE and Goldman was a vote of confidence for the financial sector if you remember. Buffet probably just negotiated much better financial terms than the US taxpayers got. Who’s fault is that? But yes I’m sure he benefited from the Federal money. And the Federal officials are not protecting the taxpayers sufficiently. They sure be hard-line but everything is all for the banks and the government continues to just give away taxpayer money and not even negotiating in favor of the taxpayers. The banks get all the benefits. Its scandalous in the worst sense.

Posted by rich | Report as abusive

Besides Goldman and GE Buffet already held positions in most of those companies. Actually Buffet helped Goldman and I almost wish he hadn’t. They don’t deserve it. Actually none of the banks deserve anything they got the Feds just thought it was necessary and after the Fed missed all the warning signals or didn’t care. Did any of them care as long as the ball was rolling? And taxpayers don’t deserve that they have to pay for it. That’s why it still burns me when the execs get millions in pay and bonuses.

Posted by rich | Report as abusive

Powerful stuff Rolfe. Powerful.

Posted by VK | Report as abusive

I agree with plenty of this article but not all of it. I agree with your overall point that not enough people talk about some of the toxic loans that Wells Fargo made, or that Goldman got a sweet deal from the bailouts and that Buffett just piggybacked on that. However, two of his huge financial holdings came about after the carnage. His Goldman and G.E. holdings came as a result of his having cash on hand at a good time. Everyone knew they’d get bailed out, Buffett happened to have kept his powder dry and then invested in a high probability event. The back-scratching between i-banks and the Fed churns my stomach as well. Buffett’s right-hand guy Charlie Munger aptly calls it a “daisy-chain of reciprocity.” However, I don’t fault Buffett for investing where he did.On the derivative issue, it does appear, on the surface very silly on Buffett’s part. These derivatives though were so custom-tailored though that they don’t even resemble the type Buffett has railed against in the past. I’d liken them more to an insurance play than an options play. He received a massive premium up front(“float”), and as I understand they are european style exercise not American. They also have a renegotiation feature that resets(at Buffett’s discretion) the exercise price at more favorable terms in exchange for a shorter maturity. Seen in its totality, it was one of the most shrewd, well thought out deals ever crafted.I have no dog in this fight. I myself was pretty shocked at the derivative position, and I’m still surprised at his push for the stimulus bill. I’m more with Jim Rogers who says just let the failures fail. Rogers is the only one i’ve heard even make the connection between this time around and the LTCM disaster a while back. Your man on the street-including Wall Street for that matter-probably doesn’t know the full extent of the rot in AIG. The AIG hubris and the mathematics of a small group there are kind of similar to the LTCM deal. Overall, I don’t side with those who think Buffett is a saint among all humanity, but by Wall Street standards I think he and Munger are in the upper echelons ethics-wise.

Posted by Aaron | Report as abusive

While I admire Buffett for the wisdom he has imparted an innumerable number of us throughout the years, I have to agree with Rolfe that Buffett certainly has his hands on more than a few taxpayer dollars. But is that Buffett’s fault, or our governments?

bingo! maybe munger is the man behind the curtain

If Buffett’s a greedy parasite, then all the rich and powerful are greedy parasites. Please bring on the regulators, but make sure there’s somebody or thing there to watch over the regulators. And while we’re at it, let’s “socialize” health care system. The reason the founding fathers created checks and balances in government was because they were smart enough to know that everyone is quite capable of acting selfishly and against the good of society (and quite likely to do so). We seem to have forgotten that and have become a nation of the rich and the dumb Joe-the-plumbers who worship the rich, with the middle class stuck in the well – middle, only knowing what they see on TV.

Posted by dp | Report as abusive

Interesting perspective but I notice some important details conveniently left out such as:- what were the BH holdings in these companies prior to the meltdown?- what percentage of all BH investible assets does this list equate to? I reviewed the 2008 f/s and see $265+ Billion in assets on the B/S (not all investible), whereas the list in the article gives enormous weight to the $26 billion figure of investments in these companies.- why is it a bad thing for a large shareholder to want their holdings to do well – the TARP money was going to come either way, why not support?More information might add some credibility to the critique.

Posted by Scott | Report as abusive

This story made my day Rolfe. I love seeing that phony exposed for the scum that he is.This monopoly man fascist would be disgraced and embarrassed after this if he wasn’t a psychopath and could feel emotions.WHAT A PHONY!!!I wouldn’t mind these globalist elites nearly as much if they didn’t go around acting like philanthropists all day, while they twist the knife in our back the minute our diligence wains.

Posted by The "Omaha Oracle" is just an insider con-artist IMHO | Report as abusive

This article just further confirms how good a investor he is, not only able to identify opportunities but also able to munipulate the market. truly a great investor.

Posted by Michael | Report as abusive

The “vote of confidence in the financial sector” bit is a flatulent load of drivel. The government and Wall Street tossed that out just like “freedom fries”…bumper sticker garbage is all. At the same time he invested in the banks, his “confidence in the sector” was nothing more than government guarantees of his investment. Call it what it is: when working and lower middle class is helped, it’s called socialism, when billionaires get a handout, it’s considered treachery bordering on treason to even mutter a word. If the financial sector was prosecuted under the RICO act like any group who knowingly cooperates in an illegal scheme, it’d stop. The honest, hard working capitalists would be reassured that they have a chance to compete on a fair field, and the public would be reassured that their nation isn’t being overrun by a thieving and corrupt fifth column.

Posted by Brian | Report as abusive

bingo! i guess munger is the man behind the curtain

Rolfe,While I freely admit this is a mostly uninformed opinion, I think you are tagging Warren too harshly. Certainly he advocated government intervention, but that was not only in his best interest – but in the best interest of everyone.I agree bankers, insurers, mortgage brokers, regulators – etc, should never have allowed the financial system to reach the precarious spot we so unfortunately found ourselves in, but the fact is we were there. The entire financial system was in free-fall the effects of which (even WITH the government programs) are still being felt today.Can you imagine if nothing had been done – if as you say, instead of providing government debt guarantees the authorities allowed all of those institutions to fail?You should not limit your nice chart to direct recipients of government “bailouts” but include all of Berkshire investments (and all of yours & mine), as the entire ship was sinking (not just the financial sector). I would argue that otherwise strong companies that had little to do with the mess would have been dragged into bankruptcy given the freeze in the credit markets. Did that equity deserve to be wiped out as well?Your argument is akin to saying Jimmy Stewart’s charechter was being disingenuous in It’s a Wonderful Life. After all he certainly had an economic stake in the building and loan while advocating that depositors calm down and stem a run on the bank.

Posted by John | Report as abusive

Buffet is an insurance man, an art he learned at the foot of his mentor, AIG’s Greenberg. His simple formula was to invest “free money” (premiums) in yield paying stocks and bonds. He never did any “due diligence”, never understood “business models” and so relied on “brand names” like GE, Coke, GS et al. As for “bailouts”, you are correct. For a few months there he was panicked that he would be wiped out ..but for the grace of Geithner, Paulson, and the ….dumb public..and even dumber Congress…

So what’s the difference …Buffett or Madoff – I long suspected their smug and sombre looks are just a cloak. Great expose Rolfe …keep em comin!

Posted by Paul | Report as abusive

wow… exposed the true side of Buffet… the side i didn’t know could existed and wish to be not true…But i’ll rather know the truth than live like a fool, thanks Rolfe

Posted by ck | Report as abusive

It seems the “vampires” of this civilization have their blood substitute.

Posted by Len Filut | Report as abusive

The FDIC guarantee is NOT paid for by taxpayers, it is paid for by a premium from BANKS…do your research Rolfe.If you look at what happened as a result of Lehman’s collapse, can you imagine if just 1 or 2 or those companies listed had also failed??? The S&P would still be around 7-800…sure Buffett’s interests went up, but so did every other investor, which will lead to a faster recovery.

Posted by Buffett's right | Report as abusive

The guy accumulates huge wealth, doesn’t lavish it on himself or other individuals, gives it away for charitable distribution?…and he’s the bad guy? Do you think he would support a position that would destroy the US financial system— and the ponzi social security and pension systems we all depend on in the future? Think you guys are more than a little bit off kilter….

Posted by john K | Report as abusive

It seems to me that Berkshire may have gotten too big to fail for more than one reason. :)It is also amazing to me that Goldman Sachs – company Mr. Buffett invested a lot of money in – seems to consistently know what is coming next sooner than anybody else. Could there be another explanation for this other than their sheer briliance?

Posted by BBB | Report as abusive

Rolfe sounds like another whiney media pup who couldn’t get a job on Wall Street. I bet he applied to every WS firm around.Those that can do.Those that can’t write.Rolfe – you write well – you don’t know anything about the reality of managing moneyGene Wiley

Some great points made in the comments section. Thanks all.I take issue with those who suggest his investments in Goldman/GE were some sort of altruistic vote of confidence. He said very clearly at the time that it was a bet the companies would get bailed out.What’s particularly interesting is the timeline. These companies were saved from the grave multiple times. The first time with TARP. And again two months later with FDIC’s TLGP. Folks forget that when TLGP went into effect in late November things had gotten pretty bad. As I note, even Goldman was on the verge of failure. Converting to bank holding company status gave them access to TLGP, which saved them from pretty certain death. The same is true for the banking sector as a whole. Things really were THAT BAD. On that point Buffett is right.But I think it’s wrong to suggest, therefore, that the bailouts were a net positive for the economy. I think we had a remarkable opportunity to recapitalize the financial sector in the early part of this year, after the first two bailouts proved inadequate. All along it’s been clear the banking system suffers from a solvency problem, not a liquidity problem. Shoveling more money at them solves nothing, just allows them to carry busted loans on their books indefinitely. Is this really what we want? A Japanese solution that protects the richest among us from absorbing losses?The government SHOULD have wiped out the equity and forced losses on creditors via debt for equity swaps. Yes, it would have been very messy. But the alternative doesn’t really avoid that outcome in my opinion. Instead we just kick the problem upstairs to a bigger balance sheet, Uncle Sam’s. Want to know how ugly it’s going to be when his balance sheet cracks? A lot worse than if we’d dealt decisively with busted banks.As for my previous comment, in which I referred to accounting fudgery, I didn’t think the point needed elaboration. Why did FASB repeal fair value accounting rules, if not to give banks a break? What about accounting for the massive book of option ARMs on Wells balance sheet? While folks are making minimum payments on those loans, the bank is recognizing billions worth of “deferred interest” as income. All of this income will have to be reversed when option ARMs go toxic on recast. How about all the games banks are playing with commercial loans in order to pretend they’re still “performing” so as to avoid impairments?I should re-emphasize that I don’t dispute Buffett’s ability to make money. He made a great trade on Goldman and GE, no doubt. Just like Bill Gross made a couple billion on the subordinated debt of Fannie, or friends of mine who made thousands investing in Citi credit because they knew the government wouldn’t let ‘em lose a dime. It seems to be that all of these gains were ill-gotten.What bothers me is that Buffett talks out of both sides of his mouth. Out of one side he (very correctly) complains that bailouts are corrosive for the financial system, out of the other side he lobbies for them.

Posted by Rolfe Winkler | Report as abusive

Excellent article….It’s truly disturbing to see how the “too big to fail” even applies to an individual like Buffett. Heaven forbid the “great American capitalist” fail!!! He knew his socalled “bets” were guaranteed to pay off….only wish the rest of us were so lucky!!!

Posted by L Marceau | Report as abusive

The one thing that jumped out at me regarding Buffett’s “genius”….He was somehow smart enough to not invest in GM and lend them a capitalistic hand…why not? Because Uncle Sam wasn’t on board to guarantee his healthy return…what a PIG!! And please keep talking about the truly horrific bottom line for Wells Fargo…I’m sick of hearing how he’d put all his money into it if he could…Talk about obvious manipulation.

Posted by L Marceau | Report as abusive

Look at history. the big recessions were caused by people trying to get something for nothing. this recession is no different and Trading derivatives on margin is no different. Eventually the house of cards will come down just like our economy when people tried to get houses without paying for them (with government encouragement and support).Wake up and get America out of this “entitlement mentality” and stopping buying in to the “something for nothing” promises of politicians.We all need to stop expecting free money/healthcare/houses from the government and start asking where the money is eventually going to come from.

Posted by Brian | Report as abusive

Howard, you are very knowledgeable person.I am very impressed that you are very informed.Since, I was kid, my father used to teach me. He used to say my son, there are two sides, listen to both side and scrutinize the matter wisely, you will certainly reach close to the truth. Recent, financial problem is very complicated and dangerous. America heavily depends on foreign debt and confidence is extremely important. I do give thank to Mr.Buffett for his hard work to rebound the American economy.

Warren Buffet calls himself an ‘investor’. Well, an investor takes other people’s money, buy up shares of other people’s labor, and skim deep profit out of other people’s blood. Financial investors, there are far far too many of these greedy quick-buck bastards and parasites in Wall Streets, have never created anything of value, never invented or discovered anything of substance, never moved civilization forward, never contributed a cent worth of meaning and happiness to society.So we have this guy, WB, who somehow has certain magic, who presents an image of a trusty wise man, who delivers amazing ROI while playing the cleanest game in town. Supposedly an investor of the most esteemed kind. What a beautiful TV image.For years I though WB brings a good name to the word ‘investor’. Boy was I wrong. Turns out he is not an investor of any kind at all! He is an ‘operator’. He plays games manipulating the government’s public money for fantastic profits. Just like the big bad CEOs who bought up the politicians like so many heads of cabbage. Just like the Goldman Sucks guy who cries with one hand out for TARP freebie bucks, then suddenly produced incredible profits, and bonus, out of thin air.The triumph of American fascism is now complete. Even Mr Buffet is now part of the gang. Trouble is, with the government already bought off, what will the big corporation ‘investment’ gang buy next? May I suggest Mexico? There is good blood money down there you know.

Posted by The Real Deal | Report as abusive

To “Buffett’s right,” yes the debt guarantee program takes in premiums from banks. But your implication, that somehow that makes the program not a taxpayer subsidy, is just not true. The banks who borrowed from TLGP probably couldn’t get money at any price in private markets when the program was launched. If they could have the spreads would have been huge. The fact that taxpayers have not yet been forced to eat losses on any of this debt is comforting, but doesn’t change the fact that they’re shouldering the risk via an explicit “too-big-to-fail” guarantee.To Mr. Wiley: actually I did the hedge fund thing. Was an analyst for years on the buy side, at a very respectable shop that followed a Buffett-style strategy focused on quality of earnings and cash flows and returns to capital. Even have my CFA charter. I gave it up because I prefer writing.

Posted by Rolfe Winkler | Report as abusive

Wow, gene wiley’s post goes through and mine is moderated. Well, at least he got across some of what I wanted to communicate.Perhaps you confused me with the other Stuart Thiel, the ex-econ prof. and critic of Bush, of polkatz fame (I’d actually love to hear my doppelganger’s opinion on this)? Perhaps you didn’t want to address the issue that you haven’t posted any facts on the matter (your table doesn’t count. It may be accurate, just hardly relevant), just an emotionally stirring attack on someone who seems about as honest as they come in his field. More at issue seems to be your disappointment with reality, endemic in the young.If Buffet had not invested as he had, would the average taxpayer in the US be any better or worse off? Isn’t that what it comes down to?

Posted by Stuart Thiel | Report as abusive

Rolfe,Nice article but I believe you are being a little bit too harsh on Warren here. It is true that a lot of companies he has invested in would have failed without government assistance. But when only mentioning all of these financial companies that would have failed had it not been for the dozens upon dozens of government programs, you fail to see the big picture. If AIG, BOFA, Goldman, and GE all went under then so too would our whole economy. Companies not even related to the financial industry would have collapsed. As you may recall, had it not been for the government’s commercial paper assistance many companies would have failed due to the failure to issue commercial paper. If the government had not intervened it wouldn’t have only been Buffet’s investments that went under. Walmart, GM, Ford, HP, IBM, Boeing, P & G etc etc would have all been in big trouble. As a previous poster said, the financial system should never have been allowed to reach the point it did, but the fact was, it did. He lobbied for the bailouts not for his own profit, but for the benefit of the American economy as a whole. Obviously if the American economy collapsed so too would his investments, but so too would all of yours and everybody elses.You also mentioned (in your response to another person’s post) that Warren talks about derivatives but yet trades them. The types of derivatives Warren talked down on were highly complex. The types of derivatives he trades in are options, futures, swaps, and other less complex issues.And finally you spoke about some of his companies having poor operations. If you read his annual letters you would see that he generally tries to stay out of the day to day operations of his companies. He becomes an owner and not a manager. He lets the manager of the company manage the business. So it is not as if Warren LET Wells fargo build up huge leverage.So before we are all ready to throw Warren under the bus lets take a step back and think about it a little bit more deeply.

Posted by JohnDoe | Report as abusive

Rolfe,Just want to say “thanks”. Great article. And one editorial comment: I applaud your willingness to criticize an icon. In contrast, though, I’m still angry about the complete obliviousness of the business press to blow the whistle on the home-loan fiasco that went on and on. If you lived in California, and were only 12 years old, you would have recognized that a bubble was being inflated and lending had gone wacko as early as 2004. How is it that no one was willing to shout “fire”? I guess there were too many diners on that gravy train and the watchdogs were asleep.

Posted by Howard Perry | Report as abusive

Notice how Warren always considered derivatives to be nuclear missiles – yet never did anything about them as a shareholder in insurance companies, GE, Goldman, AmEx.Notice how Warren always bashed stock options as shareholder theft but sat on the compensation committees of some of the biggest abusers of options – such as Coke.Notice how Warren is against lower taxes and eliminating the death tax – yet all his insurance companies are funded with tax deferred annuities.Notice how Mr. Tax me more – has an Off Shore reinsurance company where taxes are lower.

Posted by Jeff | Report as abusive

The question that needs to be asked and properly answered is the following:How did Buffett legitimately gain control of GEICO at such a young age? GEICO is a government subsidized entity very similar to USAA Insurance. Like Wells Fargo, GEICO has very low cost of capital which gives it a major advantage compared to the competition.GEICO is the platform from which Berkshire Hathaway was built. The government and Buffett are hiding the facts but I do NOT know if we’ll ever be able to peel the union back enough to know what really transpired.What do you think?

Posted by Evan Swillett | Report as abusive

Good article, goes to show that Buffett is not as good a trader/investor as he and the media makes himself out to be.

Posted by socrates | Report as abusive

Astonishing, or not, how easily swayed the plebs among us are. This article, justified or not, has provoked a typical array of response by, largely, left-wing anti capitilists. Of course, I could be wrong, but I’ll stick to my first impressions.Many among us, still open-mouthed, reel at the sums of money involved in ‘assisting’ banks in times of need. However, not much emphasis has been placed on the cost to the economy (of the world) had these funds not been made available. Now, I don’t know what that cost might be, but I make a plausable stab in the dark that the economies of this globe may have suffered something akin to an atomic bomb in their own living room. It worries me that this ‘consensus’ of “the bailouts only helped the rich investors” is actually gaining momentum – it only goes to show how ‘sensationalist’ reporting really can get through – rather worrying really.Mr. Buffett, undoubtedly, acting in the interests of his shareholders (nothing wrong with that) took advantage of an opportunity rather than a situation; perhaps he was the only one with cash on the hip to do so?But this is really all about public sentiment and not Warren Buffett. The argument seems to be; I ruined my sterio system whilst hosing my burning house – damn! Now it’ll take me two years to save up for another one. No mention of the fact that it would have taken him three life times to save up for another house, had he not hosed it.Therefor, let’s concentrate our anger on, what, or whom, allowed this proverbial fire to start in the first place and not on the firemen who used their proverbial hose indiscriminately to put it out. Is it a collection of people, or is it the system?

Posted by Darwin | Report as abusive

Rolfe,Do you really believe the “bailouts” regarding the financial institutions are going to “crack” Uncle Sam’s balance sheet? The ones on your table that you have taken such exception to? In my opinion, unlike some other spending programs, those government interventions have been and will continue to be profitable, though agree there is wood to chop.This was more than a solvency problem, there was a near indiscriminate crisis of confidence – the credit markets effectively shut down – there was widespread fear. Sure you could say without support many of the solid banks were insolvent, but not because of underlying fundamentals but because of widespread panic and lack of confidence in the system as a whole. Do you really believe that the government’s interventions regarding Goldman simply allowed the institution to carry busted loans? The same institution that paid back the direct investment and is already grossly profitable?Your writing is far too intelligent for me to think that you actually believe what you are writing. Instead I think you are riding a populist wave of anti capitalism that is helping you build debate around your writing – and increase views of your material. Perhaps your coldhearted capitalist mentor from 14 taught you more than you let on…

Posted by John | Report as abusive

Excellent start to an expose, but it is only the tip of the iceberg.Finally, someone willing to proclaim, “The Emperor has no clothes!”

Posted by The Maven of Mesa | Report as abusive

Buffett has acknowledged that he will take advantage of the opportunites afforded all of us by government. It would be an injustice to his shareholders if he did not take advantage of legitimate legal opportunities to earn a profit. However, on a personal level he has advocated changing the rules for everyone to create a healthier economy. You must separate Buffett the CEO of Berkshire from the Buffett you watch on CNBC.As a basketball coach you may feel the three point shot is bad for the game, but you don’t tell your sharpshooter to pass up the wide open three. It’s within the rules of the game, and passing up the opportunity to score may be the difference between winning and losing.

Posted by Means | Report as abusive

hard to believe the venom from so many weak investors;why do the such and such when the lock opportunity is recognized and buffet takes advantage while other investors stand with their thumb up their asses like you flunkys.love my brk.aaaaaa’s

Posted by dan dagerman | Report as abusive

Buffet, Federal Reserve, Goldman Sachs and most of the financial institutions that we know are part of the same network of international bankers. They print money, they give it to themselves to play to legitimize the counterfeiting by Central Banks. The world financial system is mostly a ponzi money laundering scheme.

Posted by Sammy | Report as abusive

Even if Buffet did use his influence to nudge the regulators his way, the only thing he gets is that his stature is maintained. I’m fine with people stoking their egos. All of his wealth and stock holdings are already pledged to charity. I would rather the manipulation end up helping charities.

Posted by Gaurav | Report as abusive

Buffett’s father was in the US House of Representatives, so he already had a head start building government connections. When I first heard this little tidbit, I suspected he was a sham. This article confirms it.

Posted by Fred | Report as abusive

” THERE ARE TWO THINGS YOU SHOULD NEVER SEE IN YOUR LIFETIME, HOW THE MEAT INDUSTRY MAKES IT SAUSAGE AND HOW WARREN BUFFETT MAKES HIS DAILY BREAD!!!! “

Posted by LOUIS WOOLF | Report as abusive

ROLFE’S the MAN! Good work. Capitalist America, wtf. Rich people and rich people and rich people and rich people get bailout from the cents & pennies & blood of beggar citizens. What a bailout, now we are in for a REAL inflation push RECOVERY!!! People without jobs, paying higher utilities and gasoline? Bullshit! Happily bankers and players with their new-found wealth from the market rally spend!Oh!!!! Federal reserves opinion: When rich people become richer, they can spend, and it create jobs for us to serve them, isn’t it great? E.g. A borrower using our money, and orders us what to do because they are “TOO BIG TO FAIL”, and held US at ransom!!!!!!!!!!!! Rich people become richer, “US”, we become slaves in seek for a decent living. Isn’t this communism? Forgive me, our black brothers, but our president has chosen a team of fraudsters, because the government is a team of fraudsters. Wealth of a nation, is what our forefathers leave for all of us in equal opportunity. Why born a slave? Are we enslaving ourselves? Why are we leading our wealth to bastards on Wall Street to let them spend on $200 pizzas, for us to serve? Why can’t we eat the pizza for them to serve? Is it because they are smarter? Does the policies favor US? This country my friends, have become crooked. I don’t even know if this article will be published, cos the people up “there” are looking after US! God heavens, god save us, America!

Posted by Die a beggger | Report as abusive

The only thing you can ever count on people to do is to be themselves. They will never lie to you. Eventually their actions indicate the thoughts that guide them. Buffet is a human being and nothing more. The only real problem here is that he did what many felt was in very poor taste. He represented himself to be of certain opinions in public while acting contrary to those opinions in private. Or to put it another way, he’s being a bit of a hypocrite.It shouldn’t surprise anyone though. He’s got his own interests to secure if he wants to continue living comfortably. It is perhaps a bit sad that his principles appear to have given way to more practical concerns. But at least now a fuller understanding of his character has come to light. Hopefully he won’t be worshiped quite so much.But in fairness. His message of a sound simple investing model has a great deal of value. In the end he’s not a bad man. He’s just a man. And he’s going to look out for himself first.

wow i see a lot of bitter folks around herethis again prove hes one of the smartest investorand i can’t believe some of you are calling him a scum or madoffmust i remind you all of you how much charity work he does?i can’t believe this article made the front pagewhile it brings very bring insight, the author’s language is disgusting and hateful

Posted by Justin | Report as abusive

I guess the fact that Warren Buffet is leaving the bulk of the money he has earned to charity makes the whole thing easier to digest. I think this is all a big game to him and he is at the top of the leader board. If the rules allow him to take advantage of government subsidies, why not.

Posted by Willard | Report as abusive

People need idol. What I know is till now, nobody did better than him.

Posted by Nan | Report as abusive

Great article Mr. Winkler! Please do get back to your readers if you recieve any sort of response from Mr. Buffett or his representatives.Also, could you please comment and hopefully blog on Mr. Buffett’s insurance investments. I am no finance wiz, but I do find that aspect of his investments very interesting. One of my lecturers mentioned how Buffett was able to make a huge profit after buying up insurance after Hurricane Katrina. Could you elaborate on that please? Look forward to hearing from you.

Posted by TheObserver | Report as abusive

After reading of this writers column, pained to recollect of Buffet betrayal to Americans.No civilized human beings will do such bad actsHereafter,Americans will show much maturity for future investments.This is a drawing lessons to all future investors.

Why don’t you put Buffet’s ownership of Moody’s in this context? Then we are talking, for instance about massive conflicts of interest.

Posted by Hugo | Report as abusive

This response it a bit off topic.I’m new to investing, so feel free to enlighten me.It seems to me that this general reduction in price value of equities markets (DJIA 9,200) which has brought the PE average down to a more reasonable number, is going to allow for a new speculative market (bubble) to occur. Those who didn’t lose their shirts on the way down can now ride the US bull market all over again, as if it were the start of ’97–and in so doing make twice as much(?). And now that a lot of de-leveraging has occurred, investors can have more confidence by telling themselves that the price of a share is “fairer” and not too inflated. So, it seems to me that these are great times for investing.~My two cents on WB. Buffet, has adopted a guise as an ethical and conservative investor, but really he is just as moral or immoral as the rest of us. This recession has exposed him fairly well. It would be naive to think that he is not a shark. Yes, he probably would not sell the US into a depression but neither would most of us. I wouldn’t invest in BH at this point in time but I still follow his moves.RW

Posted by rowan wood | Report as abusive

RolfeWell done!Buffets has also commenced trading in CDS swaps while at the same time calling them “weapons of financial destruction” (guess it depends on who gets destroyed)He has also taken the ludicrous position the not only are these “stimulus packages” a good idea but that we need much much more of them.Buffet and Munger have veered off the high ground and into the ditchZap

Posted by Zap | Report as abusive

Banks do not pay for the FDIC premiums, people who usethe bank’s services do. You ever wonder why it cost 3.00for an AMT withdrawl. So, I guess the one postingunder “Buffet’s Right” should do his/her homework. Yousee, the taxpayer ultimately pays for all the mistakes.The method in which these payments are gained are ascrafty as the very people who run the the Fed, Sec, FDIC,Treasury, GS, WFC, MS, ect… These people are comingfrom a perspective of entitlement that most averageinvestors cannot grasp. They control the media, gov,educational institutions, and any other center ofinfluence where the necessity of positive public opinioncan be created. Their main goal is to preserve theirown wealth at all costs; regardless of method. Theonly thing needed is your consent. An by Joe, they gotit. And if they did not, then check to see how yourcongressman voted for the bailout, and hold themaccountable.Essentially, I think that Rolfe’s main argument centerson the idea that Buffett is no different than theothers, in that, the illusion that these institutionscreate to justify their legitimacy have been exposed forwhat they are: Greedy Parasites. As Rolfe stated atthe opening about writing to Buffett when he was 14, youcannot escape the idea that a now older man has becomedisappointed by someone he once held in high regard.It was the illusion that Buffett has projected over theyears that is coming into question, just as thoseinstitutions that we have grown to trust during our lifehave disappointed us. In the words of Ma Joad, in “TheGrapes of Wrath”, she said “we got nothing to trust”.For me, this is the most severe indictment these peoplecan get. I guess it is up to each of us to do our partto shout our dissatisfaction.

Posted by RP | Report as abusive

“His Goldman and G.E. holdings came as a result of his having cash on hand at a good time. Everyone knew they’d get bailed out..”Moral hazard investing at its finest, by the way did everyone really “know” certainly down at Goldman they “knew” what with their cozy relationship with the Fed, after all weren’t Goldman and Morgan original Federal Reserve “shareholders”….Moral hazard, insider information”On the derivative issue, it does appear, on the surface very silly on Buffett’s part. These derivatives though were so custom-tailored though that they don’t even resemble the type Buffett has railed against in the past.”ALL CDS Swap positions should be FLATTENED..who cares if Buffett made a shrewd play…he legitimizes the derivatives market by playing in it.Moodys, bailouts, derivatives, shilling for quantitative easing and more stimulus…..like I said, right from the high grouund and permanently into the ditch with the rest of the cheap bankster crooks.Zap

Posted by Zap | Report as abusive

This piece completely misses the point. His holdings are sufficiently diversified into a multitude of activities. He would still have a great track record if all his bank holdings had gone to zero. His bank holdings are $26bn and his book is four or five times that ammount and his leverage is negligible. He is a genius and any rational investor would seek government support when it is on offer. More to the point his larger holdings, such as Goldman and GE, were purchased post distress not before so has was part of the solution not the problem. He is a hands off manager and lets the magagement get on with it. These holdings are all minority stakes so why would he be privvy to operational detail? Buffett has been warning of financial excess for years so to suggest he is the bad guy is just wrong. The 14 year old still has a powerful role model to look up to.

Posted by Charlie | Report as abusive

“I bet he applied to every WS firm around.Those that can do.Those that can’t write.Rolfe – you write well – you don’t know anything about the reality of managing moneyGene Wiley”Hey Gene,Where ya been man,in a cave, don’t you mean MISMANAGING money?Im sure Rolfe here could mismanage money with the best of them, perhaps the problem is he hasn’t learned to STEAL.Zap

Posted by Zap | Report as abusive

Don’t worry, Buffet is already bankrupt and disgraced so he will get what’s coming to him. Accounting gimmicks are all that is keeping his charade of a company afloat. The derivitives have destroyed all his wealth and the wealth of his company and soon the market will reveal that Berkshire is swimming naked!:))

Posted by kyle | Report as abusive

good article Rolfe – well donethere are 2 sides to every coin. but the facts remain simple: US Taxpayers bailed out the financial system, and now US Taxpayers will stomach the bill for the next 50 years (how much debt does your government really have outstanding if one includes bail-out funding, future bank recapitalization requirements once CRE and corporate defaults hit the roof, social security spending and the higher interest-payment burden?)on the other hand, GS decides to pay $2bn to the taxman and hold over $6bn for employee bonusesAIG – well let’s not even talk about the bonuses there…ok so your average middle-class/working-class taxpayer may lose their home when interest rates reprice due to higher Govt bond issuance demands, and will probably lose their job when their employer goes bankrupt because of economic factors…but hey, its all ok, ‘cos we saved Wall Street’…. and ensured they still got their bonuses..’

Posted by ernie | Report as abusive

Anyone remember the photo of Buffett with Lord Rothschild and the Governator?Google “Rothschild, Buffett, Schwarzenegger, image” if you’ve never seen it. Tells you all you need to know about money and power.Maybe he had a good set of working financial principles, but he also rode a generationally-long bull market. Until it stopped. Now he has to get down and dirty in full view. Mind you, I’ve long suspected that there’s a darker history waiting to be written about kindly Uncle Warren.

Posted by Bear of Little Brain | Report as abusive

Finance is a dirty business. There is no two ways about it. Buffet has played it well and has used his winnings for very positive things.Just because Buffet has spoken out against things like derivatives and turns around and uses them to his advantage while he can does not make him evil in the least. He recognizes they are a tool, a very dangerous one,but he CAN use it wisely. He would prefer the tool not be there but while it is he will use it better than the other guy.When will every American realize that ALL of us are only wealthy because of government largesse, EVERY SINGLE ONE OF US. The convoluted, hard to love, easy to mock government has GIVEN us all, in one way or another, all our wealth.Either by defending us abroad, protecting property here, keeping money supply flowing, creating corporations that can be treated as individuals or any number of other things, we ARE wealthy because of our government.We are not more intelligent than the Chinese, more industrious than the Vietnamese or more anything else than any number of cultures. We are successful because of our government. Period

Posted by Greg | Report as abusive

Is Warren Buffet A Big, Fat Hypocrite?…People I’ve talked to in the financial industry have been complaining about Warren Buffett’s hypocrisy for some time.Reuters’ Rolfe Winkler: (emphasis added)A good chunk of [Warren Buffett's] fortune is dependent on taxpayer largess. Were it…

To be fair, wasn’t most of his purchases of these companies made after their stock prices were crushed? And after some of these were already at the government feed mill? I think the article is unjustly critical.

Posted by c aberle | Report as abusive

I am amazed at the excellent analysis. Greed is the mark of the capitalist breed. It seems he fits perfectly in to that definition. His concern for public policy extends only when it adds something to his coffers.

Posted by J Hyde | Report as abusive

A very interesting article. This is the first I’ve ever seen criticizing Buffett, who frankly has always seemed to deserve nothing but praise.The actions and behavior you report here are not praiseworthy, and, until now, I would have thought, not “Buffett-like.”Thank you.Robert EllerMilan, Italy

Posted by Robert Henry Eller | Report as abusive

call a spade a spade. well done.

While yes, he probably dealt in Pure capitalism…I’d say oh, when he first started, the Capitalism that we have is not capitalism, or he’d not have a say or atleast so Obvious, because he owns so many shares of Corporations 27%? That’s more like another example of What corporate Lobbying is doing to this country. How he’s entitled to have a say more so than a Proffessor of Economics with little to no stake except reputation…I will never understand. Super Star advice is usually Stupid Star advice imho.

Posted by sarah | Report as abusive

[...] Rolfe Winkler at Reuters has a criticism that rings particularly true. Even as the “Oracle” has bemoaned the [...]

I hope Buffet reads this. The man has lost a part of who he was- his trustworthiness. He has joined the ranks of Goldman. Its a shame we have chronic ADD in this country, as 3 years from now few will remember the events that have transpired. The wealth of media (24/7) exacerbates this.

Posted by Matt T | Report as abusive

Gosh, and to think Obama and his campaign seeked WB’s advice when the economy tanked last Fall. Didn’t they know he was evil?

Posted by Carol | Report as abusive

[...] it not for government bailouts, for which Buffett lobbied hard,” writes Reuters’ Rolfe Winke, “many of his company’s stock holdings would have been wiped [...]

This is very sloppy and dishonest.While playing up Berkshire’s holdings in bailout-recipient companies, nowhere in the entire article do you bother to compare those to, or even mention, Berkshire’s total market capitalization. As of this morning, that stands at $157.5B – of which its holdings in bailed-out companies represent only 16.5%. Obviously, Berkhshire – and Buffet personally – are affected by the fortunes of those companies, but in only minimal degree compared to their other financial interests. Obviously also, a player of Buffet’s stature simply cannot avoid influencing the market in which he himself participates – there’s nothing he can do that does not result in some indirect influence on his own holdings, whether or not he intends it. (If he were to dump these holdings to render himself pure in your eyes, surely that would be worse not only for himself but everyone else as well.)Likewise, you criticize him both for speaking in favor of the bailout for some companies, and for not speaking out against companies that are at fault in the financial collapse, when he owns stock in both groups.And your criticism that he invested in companies expected to rebound in the upcoming financial recovery is perverse: isn’t this what we want people to do? Isn’t this exactly what is necessary to make a recovery possible? You may regard the bailouts as an example of moral hazard, but, given that they are occurring, isn’t it both financially prudent and civic-minded to invest in the economic recovery they make possible? Do you really advocate shunning companies whose market value is increasing as a result of the bailouts and other recovery programs – thereby hampering the recovery – just to be innocent of “moral hazard”?What can Buffet possibly do that would not not come in for your across-the-board and disproportionate criticism? And on what basis do your criticisms rest, given that they seem to consist of advocating (on other people’s parts) the deliberate avoidance of financial profit in a rising market simply because you don’t like the policies that make it rise – hardly a sound business strategy, however resentfully virtuous it makes you feel.

Keith writes: “Likewise, you criticize him both for speaking in favor of the bailout for some companies, and for not speaking out against companies that are at fault in the financial collapse, when he owns stock in both groups.”Yes, both behavior is bad and self serving. What is your problem with criticism of it?

Posted by Erich Riesenberg | Report as abusive

Rolfe,Looks like you are picking on Buffet just because it will get you more blog traffic. Sensationalist writing always does, as a journalist you’d know that.If you were in Buffet’s shoes last October, and GS came to you for cash (since you are the only one in town with ready cash), would you have said ‘No thank you. Since you are getting tax-payer dollars and will profit from it, I cannot lend you the money’.I didn’t think so. Following Buffet’s investment philosophy would tell you that this is exactly the kind of situation for which he keeps his cash.Let’s all look at the bigger picture. Buffet did not play any part in causing the problem; in fact he warned about ‘Financial Weapons of Mass Destruction’ long before the crisis developed; he put his weight behind the govt actions later because otherwise there would be financial mayhem globally, never mind his own investments. His investments benefitted, but so did the investments of thousands of other investors in large and small companies who would have collapsed had the govt not stepped in.Some factual errors: 1) The deposit insurance is financed from member-bank premiums, not the taxpayer. Of course there is an implicit govt guarantee, as there is for many firms these days (Citi, GS, Fannie, GM, etc). The debt guarantee is a separate facility, offered by the Fed after this crisis happened, which one can say is straight taxpayer money. A debt guarantee is different from deposit insurance.2) Buffet has not said he is against all derivatives. He uses options and futures extensively. He is against the kind of opaque, complex derivatives derivatives that even a financial expert could not see through, like CDOs, which he described as WFMD.

Posted by pandu | Report as abusive

This is the redistribution of wealth that we heard President Obama talking so much about before the election. Robinhood in reverse “Take from the poor and give to the rich.”

Posted by Gary Bailey | Report as abusive

Kevin also writes: “You may regard the bailouts as an example of moral hazard, but, given that they are occurring, isn’t it both financially prudent and civic-minded to invest in the economic recovery they make possible?”How does propping up failed companies help the economy? How does making bad investors whole on the taxpayer dole benefit society? How is calling Goldman a bank and giving it access to the Treasury, Fed and FDIC a noble act?Were you around when the Fed started the housing bubble? That did not turn out well. Trying to do it again strikes many people as odd.

Posted by Erich Riesenberg | Report as abusive

When Republican Millionairs do this it’s Greed, When Democrat Millionairs do what Buffett is doing it’s for the people…….Almost like the tried and true line ALL politicians use “It’s for the Children”….Buffett = Greed

Posted by Civil War Starts Jan 21 09 | Report as abusive

Dear community, and I say to all of you the very nieve. What were you expecting, do you not know that our most eloquent citizens have done the same. History tells us that this is not new, our country was formed in this mentality, the one were if you are slick, astute, and asimilate a fox, you can ride the tide for many years. The sad part is that we will sweep the information under the rug and continue as if Mr. buffets wisdom was that of a superior being, when in fact the truth says otherwise. There will be more of this kind and life goes on. We dont have the courage to call a crook by his birth name. at least not here in our country

Posted by rgp | Report as abusive

Rolfe, seriously? I see where you are coming from but you are a little bit of what you preach against as your article lacks objectivity. It is a little presumtious and possibly disingenous to say Buffet’s push for the bailouts was for self interest and not for the fact that it made simple economic sense. O.K so he had enough cash on hand to profit from the opportunities that were available at the time, who wouldn’t? Thats his job. Your premis is, he should have foregone the investment opportunities based on principle. Well in the world of capitalism that is equivilent to being mentally retarded.On your point about about solvency and liquidity.-Yes you are right, banks needed to be solvent and increased liquidity infussion did not solve that problem.The issue here is there was an even greater and possibly catastrophic problem. There was a need for Short term capital within the economy and the economy as whole could not just wait arround for banks to slowly become solvent while SMALL BUSINESSES went under. Hence the government had to pump in cash so as to meet the demand for credit by businesses.Your whole article criticizes Buffet based on principles but lacks depth as to how the alternatives you suggestt would have affected the common man…like me, UNEMPLOYED.Lets spare the self righteousness and consider the big picture.

A businessman playing the game doesn’t worry me so much, what get’s up my nose is the politicians who roll over for the few at the cost to the many. The politicians need to remember that they are there to represent the people, not a handful of wealthy businessmen and women. There is of course a balance to be had as the business community is vital to the overall health of the economy, but for my understatement of the day, that balance seems to have been lost.

Posted by Peter H | Report as abusive

[...] out that Warren Buffett sure is a genius — at getting money from the government! Rolfe Winkler in Reuters writes: Buffett was kind enough to respond to my letter, thanking me for it and inviting me to his [...]

Buffet has an obligation to do what’s best for his shareholders, even if he benefits in the process.

Posted by Logical | Report as abusive

I don’t agree with you, because even though 26 billion is a lot of money, it isn’t a lot of money for Berkshire Hathaway. You aren’t putting the amount in perspective compared to his other holdings and assets.

Posted by C | Report as abusive

Well done! Clearly and concisely explained. One more myth/bubble punctured.

Posted by Albert | Report as abusive

A company is in business to make money.

Posted by Kevin | Report as abusive

Your article is nothing more than guilt by association. Many Americans own stock from companies that received a bailout, but that does not make them responsible. Does your investment portfolio have stock from any of those companies?You will certainly sell all of the stock that you currently own in each of those companies in order to remain consistent with the “moral high ground” that you claim in this article. How are you any better than Buffett?Also, it is far easier to pull someone off of a hill than it is to climb to the top yourself. There is a reason that Buffett is worth billions of dollars. He is worth billions of dollars because he is a man of action who is willing to take risks.

Posted by Robert | Report as abusive

[...] Warren Buffett has been a big beneficiary of the government bailout of the financial sector.  (Rolfe Winkler also [...]

“This was more than a solvency problem, there was a near indiscriminate crisis of confidence – the credit markets effectively shut down – there was widespread fear.”The fear was because of the solvency problem. Oh sure, we could go through life happily thinking those pieces of paper in our wallets mean something, simply because they have fancy ink and a government imprimatur.Even now we talk about how much we borrowed from China, so we really didn’t just print more.And yet, some of you seem to have forgotten all the analysis from years past that that is effectively what China does.Instead of printing more out of fiat, we’re playing the shell game and outsourcing the lie.I’m a born and bred capitalist.I’m just not blind, deaf, and dumb.Nor am I particularly inclined to subsidize anyone. So some of you (supposed capitalists) can whine “The whole world would have imploded. Billions lose their jobs” and I’ll look at you and say very clearly “stay out of my wallet, hippie.”I especially don’t want to subsidize someone with a better car than I have.You know what would have really happened if a meltdown had occurred?A bunch of rich people would have been ruined. The value of their holdings severely diminished. And those of us who were a little more careful about husbanding our resources would have stepped in and gladly paid .01 cents on the dollar.None of the factories would have spontaneously combusted. None of the tangible assets would have disappeared into chasms that opened up in the ground. The jobs lost? They’ve already been lost.

Mr. Buffett is a shrewd capital allocator. Hence, we think he is simply doing his job for his shareholders with all legal means possible. Great job Mr. Buffett!

Great article and informative. I forwarded this to many friends — all of whom were Buffett fanatics.

Posted by John | Report as abusive

You are still naïve Rolfe. You are holding Warren Buffett to standards that would befit a saint, and then see betrayal! He never was a saint. He is a straight-shooting, darn honest, cold-blooded capitalist, always looking to make a buck the legal way. The avuncular garb and PG-13 sexual-innuendo laced humor in his words make him seem more benign than he actually is. Dishonest he is not.Few, if at all, knew how wide and far reaching the fall out of the collapse would be. Buffett did not directly nor indirectly cause this collapse. He readily admits that in spite of his cautions, he never expected the magnitude and rapidity with which it ensued. In managing an investment size as large as his, he is bound to have large exposure to the financial institutions that were part of the entities that contributed to the collapse. His investment holding entities weren’t prime culprits but average players.Buffet rarely directly interferes with the management of the companies he has holdings with. He invests after checking out their balance sheet and evaluating the character of their management. Neither indicates the likelihood of their taking on risk that was dangerous, in an environment where peer pressure melded with system complexity had muddled the operations of even the highly conservative. The bailout was the only way to stave off complete financial collapse that would have threatened the fabric of the nation much more than we have ever seen. It is natural that Buffett ekes disproportional benefits compared to the average Joe – because he has disproportional, widespread assets in the first place.In the Salomon Brothers mess, when Buffett took over, he emotionally proclaimed to Salomon employees: “Lose money for the company, I will be understanding. Lose a shred of reputation, I will be ruthless”. He should now amend that to: ” Lose a shred of reputation, I will be ruthless unless you are a bit player in taking the entire financial system down!”

Posted by Uday | Report as abusive

It’s hard to find any significant businessman with interests in banking who hasn’t been affected by the Government’s programs. There are many reasons to criticize Buffett — this isn’t one of mine.Far better to criticize the government, who got scared into a big giveaway to the financial sector. If the government sets bad rules, and offers out money with few strings attached — who is to blame, the one taking the money or the government?Personally, I think more firms would have survived the crisis than many suppose if the government had done nothing, including Goldman Sachs. Instead, they get cheap financing, paying nominal sums to be able to borrow at preferential rates.The government is the problem, not Goldman Sachs or Buffett.

This is the guy who is for people paying more taxes. I suppose if I was a billionaire, that position would be easy to take. For one who touts “accounting as the language of investing,” he did nothing to prevent the disaster from occurring and now stands by to profit from it. His legacy will be that greed and little else.

Posted by Pablo | Report as abusive

Buffett is a lobbyist now? That’s a stretch. The author of this article is ignorant to Buffett’s investing and the way Buffett thinks. To lobby one must register as such person. Are you saying that Buffett is registered lobbyist? Now Buffett is influential and he used to comment on what he thought would be “right thing” after the collapse of 2008.Author makes us feel that Buffett was invested in all these companies before the collpase undermining his skill. The huge bets he placed in Goldman Sachs and GE where in concert with the bailout, becasue buffet knew these companies would survive. So he did right by shareholders which is ultimately the people he works for. He got a great deal on these investments I might add. If you read the letters to the shareholders you would know that Buffett is not a big fan of banks as business models in general, because they require so much leverage. Couple of missteps and your equity is wiped out.Author of this article is naive to think that all that banks need is to have enough capital. That is a smaller problem in comparison to dumb bets that all the banks made.My friend sent me this article. And I apreciate the disconfirming evidence. But his is just bad quality.People who criticeze Buffett for derivatives, just have no clue what it means in terms of cost of capital.Let me remind you that many where laughing at Buffett when he avoided the whole internet bubble. Guess who was laughing in 2001 and all years after that.

Posted by sergej popov | Report as abusive

A couple of things…First of all, Buffett lives off his meager 100K per year salary and has already committed to donating his entire estate to the Gates foundation upon his death. So personal greed is his motive? I think not.Second, Buffett has a fiduciary responsibility to his shareholders to pursue investment and management decisions that most benefit shareholders short and long term interests. As the head of a publicly traded company, he would be open to serious litigation from shareholders if he did anything other than try to protect their interests. BRK is nothing more than a collection of private investors (pension funds, municipal funds, private citizens) whose money Buffett has a duty to protect and to grow.Third, who didn’t benefit from the TARP et al bailouts? Everyone from Buffett all the way down to the guy that cleans the floors in Buffett’s office benefited by stabilizing the finincial system. Yes, Buffett is the largest shareholder of BRK stock, but he is by no means alone in those that benefited.I’m not claiming Buffett is above reproach, but to ascribe motives to him that are clearly false when looked at logically is foolish.

Posted by Matt | Report as abusive

GREAT ARTICLE. I APPLAUD YOUR COURAGE IN FINDING FAULT WITH THE GREAT ORACLE OF OMAHA. ALAS, BUFFET IS NEITHER GREAT NOR AN ORACLE, BUT A DOUBLE-SPEAKING OLD WEASEL, WHO PROFITS BY USING HIS NAME AND POSITION AND BY PLAYING UNFAIRLY.

[...] Warren Buffett’s all-you-can-eat taxpayer buffet (h/t @maxkeiser & @Youri Carma) [...]

GREAT ARTICLE. I APPLAUD YOUR COURAGE IN FINDING FAULT WITH THE GREAT ORACLE OF OMAHA. ALAS, BUFFET IS NEITHER GREAT NOR AN ORACLE, BUT A DOUBLE-SPEAKING WEASEL, WHO PROFITS BY USING HIS NAME AND POSITION AND BY PLAYING UNFAIRLY.

Mr. Winkler,You, and all those who play ‘pile on’, have exhibited shameful behavior in your attack of Warren Buffett (Buffett’s Betrayal:Rolfe Winkler). Your examples are sketchy and are of partial truth at best. But what is most shameful is the way you go to motive and the way you attack the character of Warren Buffett. True students of Mr. Buffett have great confidence in his character, and have seen a lifetime of his not being motivated by personal gain. His richness is a product of his principles, his personal integrity, and the culture he has built at BRK. Making money for his own personal gain, fame, or enhanced life-style has never been his game plan.While you have gone straight to motive in your personal attack of Warren Buffett, I shall not do the same to you. I can only guess about what motivates you, but I do not guess about the foolishness of attacking the character of a man who has done more to set honorable examples than then next ten men or woman in line.

after all propping up the economy may work in a short run ,but in long run complete reboot will get red of the ill areas that will only be a burden for taxpayers anyway,Buffet’s dirty goal may not be money but influence and power,without a powerfull army of influenced people a hole fortune will be gone in no time.

Posted by Obi | Report as abusive

I am a capitalist, but not a crony. As such, it’s sad to see the vast middle of the sheeple, even the fairly well-educated middle bought the self-interested argument from the finance oligarchy that we just had to bail out “the system” — i.e. the dumb mega-banks, the leveraged financiers, the enormous pile of bad debts, those who co-created and feed at the trough of the enormous debt-production system than the US economy has essentially morphed into over the last 30 years. People don’t seem to realize that we don’t need Wells Fargo or American Express or Goldman Sachs in particular to exist, we simply need a banking and capital markets system, which is a completely different matter from saving dumb firms which got themselves into trouble. Even a total collapse of the existing players would have sent hundreds of smarter, more nimble, wiser capital allocators into in the breach. Alas, they didn’t have the political pull.Mr Barea has it right when he says: “You know what would have really happened if a meltdown had occurred? A bunch of rich people would have been ruined. The value of their holdings severely diminished. And those of us who were a little more careful about husbanding our resources would have stepped in and gladly paid .01 cents on the dollar.”It’s one thing for WB to invest how he chooses. It’s another for Warren to use the considerable moral financial capital he has built up over the decades to advocate for very, very self-interested policy that one can show will be borne on the backs of the taxpayers. WB is a brilliant capital allocator to be sure, but he ain’t no capitalist. He’s a statist-corporatist.A former BRK.B holder.

Posted by Jeff | Report as abusive

Very good article. Glad to see my same feelings put to print.

Posted by Rich | Report as abusive

I thought it was so sad and pathetic when Buffet was pressuring/extorting money from the gov’t. Does everyone remember his editorial trying to convince everyone to buy into the stock market in November? I suppose that’s how he justified his rampant theft of taxpayer’s money; he tried to give us a piece….of our own money. What a nice guy!Are you ready? A New Era Begins…..http://www.youtube.com/watch?v= VRhyWZnGjyc

[...] The story. Subscribe to comments Comment | Trackback | Tags: buffet, corruption, wall street [...]

So sell your BRK stock and shut up. I’m keeping mine.

Posted by billsharkey | Report as abusive

buying into this love affair of business and government elites who have twisted and turned monetary policy towards their own benefit..aka greed…serves the average American little except higher prices and taxes..it is sad to think that the generation before never suffered this appallingtreatment, but now the baby boomers and all generations to come after, will…who will believe in the American dream then?

Posted by edna thackeray | Report as abusive

Most of the investing was done when the perception (GE, Goldman, Wells Fargo) were at low prices. One can say that WB may take advantage of government largesse, but even if that were true, and I suspect that it is not, Graham would have been impressed. Why? Because the stock prices were low and the book and intrinsic values (relatively) high. The fact that the government, which, after all, gets paid back, provided funding is practically irrelevant to the stock purchases. As to American Express, it’s been in the portfolio for many years; again, the fact of government intervention has nothing to do with the logic of the investment. Again, when blood was running in the streets, WB did the one thing most of us are frightened of doing, he bought stock and warrants.

Rolfe,I often find it intriguing why people spend so much time critiquing great individuals instead of study them. Your case is especially intriguing.I applaud you for getting into investing and discovering Warren Buffett at such a young age. I only wish I discovered him as early as you did. However, it saddens me to see you write such an article.First, to say a good chunk of his fortune is dependent on taxpayer largess is simply false. He invested cash into the companies you mention so had he not invested in those companies, he would still have his “fortune”. The results of his investments are uncertain as he has not exited from them and do not plan to exit from them so I’m guessing you’re simply stating your belief that the investments he made amidst the financial fallout were very wise ones that will generate enough profits for him in the future to become a large part of his already staggering fortune.Second, please be clear that he invested in these companies before TARP. He simply made a bet that these companies will be profitable in the future and will pay him his 10% dividends. If the government had not bailed these large institutions out, you would probably be out of a job. And keep in mind that the shareholders did get wiped out in a majority of the cases. Therefore, it is only fair to say that he made a bet and it paid off. (I figure his thinking was the government will do something and thus his move will be a profitable catalyst to instilling confidence. And if the government does nothing, then there will be much bigger things to worry about).Third, I wonder if you are also the type of person to complain about the government’s misspending of our tax dollars. If you are, and you also seem very righteous in promoting what’s good for society and humanity, then I don’t see what your complaint is because Buffett is donating most of his wealth to society so be patient, the money that he’s making from these “detestable” institutions will come back to causes you perhaps would champion. Heck, wouldn’t you rather he get paid and donate the proceeds to charity than goldman having $1B more each year to dole out to the people you so dispise. Also, consider that he states repeatedly that the Fed, through massive money-printing, is taking the necessary actions but will have consequences in the future. What the Fed is doing is basically a huge ponzi scheme. We are the shareholders of America so if you want to talk about share dilution, the fed is the main diluter. Warren Buffett is the largest private shareholder in America so he would get hurt the most on an absolute scale but he still proposes the necessary actions. I’ve yet to hear of him lobbying for the gold-standard to avoid his share-dilution.Lastly, derivatives aren’t all bad. He and Munger condemn derivatives because of their potentially crippling effects due to the leverage and counterparty risks often involved. In Buffett’s case, there is no counterparty risk and there is no leverage. There is only a chance for him to use the float to earn a return or for all four indices to plunge to in 15 years and Buffett paying the money.As an investor, I am proud that the business world still has people like Warren Buffett and Charlie Munger. They will do more good to society than any businessman or saint has ever done. Therefore, I can only say take my tax dollars Mr. Buffett and makes lots of money with it and donate it in a way that the government, the banks, and the saints can’t.p.s. I don’t see how Buffett has betrayed anyone and certainly how he has betrayed you. He has never promised any of us anything but that he will grade himself with his internal scorecard. If you ask him whether you, and fellow 14-year-olds should look up to him as the moral guidance, he would perhaps humbly respond that you’d be better off looking in a monastery. And if it is the annual meeting he invited you to when you were 14 that you took as his loyalty to you, then I’m sure he will still be happy to have you. perhaps the title should be “Rolfe’s betrayal”.

Posted by Peter Shi | Report as abusive

Good article.You write: “If we learn one lesson from this episode, it’s that banks should carry substantially more capital than may be necessary. You would think Buffett would agree. He has always emphasized investing with a “margin of safety” — so why shouldn’t banks lend with one?”The banks were investing with a “margin of safety”: They (at least the big ones) knew that the government or the Fed would be there to bail them out. In effect, the Fed is their source of virtually unlimited backup capital reserves.This is what the Fed was (unofficially) set up to do: Bail out the big banks that form its core “Class A” shareholder base, and the firms that are associated with them. With this assurance against paying for their losing speculations, these special firms, always deemed “too big to fail”, can and have made those otherwise risky bets with impunity.We are now seeing this bailout function in action, to the tune of trillions of dollars. The Fed is performing is prime function perfectly: protecting its own.This is all explained in the book “The Creature from Jekyll Island”, specifically in Chapter 2, titled “The Name of the Game is Bailout”.

Posted by MarkV100 | Report as abusive

Rolfe,It’s a pity you, like so many of your readers, stopped learning about Finance at the age of 14. What makes Buffett so special is his ability to see things in simple terms, things which the rest of us in the industry spend days on–drawing conclusions from complex mathematical models. I’m comfortable with my models, but then again, nobody knows me from the next schmuck. And that anonymity has meant that most of us don’t care about what happens outside of the 1′s and 0′s on the computer screens or in our bank balances. Think what you like, but let me say this: without getting into specifics, trust me when I tell you that Buffett is one of the few guys in this industry who actually cares about this country, for what he’s done over the last 7-8 months, he might be the only true patriot left.

Posted by Aaron K | Report as abusive

I bought goldman sachs at 54.13 . Sold them for154.78 . I made over thrity thosand dollars profit.My big buy tip on gs was a news article stating thatbuffet bought five billion worth. thanks warren

Posted by JIm Boyd | Report as abusive

The way in which the article is written implies that Buffett was the single and most influential factor in the government’s decision to bailout the banks. Albeit, that he may have had some influence, but by that time I believe the Feds, whether they made it public or not, had decided a bailout was neccessary. Even if the Feds haven’t made the decision yet, others would have lobbied the government for a bailout. Thus, whether or not Buffett voiced his opinion he would have been bailed out.Furthermore, the statistics used in the article are misleading. The focus should be on the investments that Buffett made around the time that the financial crisis unfolded (i.e. focus on GS and GE) which make up less than half of his bank holdings. And even then, he invested in preferred shares (albeit there are warrants to purchase common shares attached).

Posted by sam | Report as abusive

This artile is misleading in two major ways. First off, $50 billion (over half) of the TARP money he mentions went to 2 firms where Berkshire holds about $100m total in equity, vastly skewing the results (just look at the chart). Second, his investment in Goldman Sachs (the largest one listed) only came about after the crisis and was part of the solution in conjunction with the government bailout, so his $$ here was never in real jeopardy even absent the bailout. He just saw an opportunity where a solid company was being overly penalized by the market due to a run on the sector and made a smart investment. Goldman, incedentally, has already repaid the TARP money with interest.

Posted by Donald | Report as abusive

I don’t think Buffet was the only one promoting bank bailouts.Many people saw a collapsing financial market in 2007 and I personally sent an email to the Federal Reserve while I was attending a California University, requesting them to generate funds for the banks liquidity.The government has done everything correctly, except it should have restored liquidity earlier to prevent such a financial collapse. Apparently it takes a financial collapse to get an act of congress.Our debt loving country is to blame for the collapse and Warren Buffett is a hero for lobbying the correct policies for an economic recovery.Anyone complaining most likely didn’t buy financial stocks in March and was probably following the Nationalization retards.

Posted by William | Report as abusive

To comment on the general premise of the article:Firstly, all Buffet is doing is being an activist investor. His investment thesis could have been fully aware of the potential worst case scenario for the companies he was invested in as well as he could have speculated that in a time of crisis and with lobying from the right people there would be a bailout. Managing money is like golf, there’s no room on the scorecard for pictures.A hole in one is still marked down a one even if it hits off a tree…Additionally, in my opinion you cannot talk about the hypothetical of banks going insolvent when evaluating a manager because without the bailouts we could be in a very different world period. If the banking system would have collapsed the majority of holding companies / funds would have gone down simply with their clearing firms. Without the bailouts Buffet would have gotten hurt really badly sure but the only way he could have avoided losses had the bailout not occured would have been to sell everything before the break… That would simply not be possible for the largest line in the world BRK.A bigger chirp to Buffet is that he is underperforming the S&P. Anyways, good talk.

Posted by S W O | Report as abusive

Can’t believe that someone thinks Buffet lives off a $100K salary. Yea, right and all his travel, medical expenses, taxes, etc. come from that 100K salary . He’s got you fooled.As for his Gates donation, he is donating his entire estate upon death – what’s keeping him from helping make a better life for the millions of starving people in Africa, India, Mexico, etc. Oh, I forgot he is too busy investing and trying to make more money.

Posted by Pablo | Report as abusive

What you completely ignore is that because of the size of his portfolio, it’s much harder to Mr. Buffett to make the same return on his investment these days. He could beat anyone in the game at investor smaller sums in smaller companies, where growth in the company and thus the stock price is much easier to realize. For him to keep up the same growth levels, he has to invest much larger sums of money, and usually in much more establish companies.You’re entire argument is based on the fact that he’s invested a lot in companies that received bailout money? Well, put it into proportion. There are tens of thousands of investors out there who own an equal proporation of these stocks compared to their asset base, it’s just that because Buffett is bigger, he becomes a target.It’s a lot easier to be a critic.

Posted by EJ | Report as abusive

And Buffett betrayed who exactly?Do you think the US taxpayer would have been better off if there were no bailouts and all the banks collapsed 1929 style?

Posted by Tim 333 | Report as abusive

Buffett has had a positive influence on my investment process, and I can’t blame him for trying to protect his capital. In serving his own interests, Buffett served the interests of all of us. If these companies, which Buffett happens to own, were to fail, the entire financial system would have failed. This is a well written article that highlights Buffett’s self interests, but Buffett did not pursue his self interests at the expense of the American taxpayer. We all would be much worse off if these companies were not bailed out.

Posted by Tony | Report as abusive

re Darwin,I find it curious that you label people who question (or are outraged by) the bailouts as “left-wing anti capitalists”… I’ve always been under the impression that true capitalism regards beurocracy/taxes/handouts/regulation as asphyxiating… i guess, that is, until something is needed from the government it/they bemoan?I’m poorly learned when it comes to the nuances of finance and am confident the economy would have been far worse off without the bailouts (at least in the short term)… but it seems ironic that someone named Darwin is concerned that the damn lefties want the weak to look after themselves.

Posted by BlueAss | Report as abusive

[...] has more than $26 billion invested in eight financial companies that have received bailout money, writes Rolfe Winkler. “The TARP at one point had nearly $100 billion invested in these companies and, according to [...]

Here is my view of St. Warren…http://www.financialsense.com/edi torials/collum/2009/0129.html

Posted by David B. Collum | Report as abusive

Good article. I’ve got nothing against Warren Buffet, and I do admire the man for his successes. He does, however, have enough money and doesn’t need help paying a mortgage, getting enough food to eat, paying for medical problems. So I do wonder why we are shielding him from taking the hit that the market would inflict on him and his businesses. Those resources spent keeping him whole could be put to much better use.

Posted by Weevie | Report as abusive

[...] Rolfe Winkler » Blog Archive » Buffett’s Betrayal. But it turns out much of the story is fiction. A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out. [...]

This old bastard crook has been manipulating the congress for bailout. This SOB is one of the biggest crooks and uses every opportunity to get publicity.

Posted by Buffethater | Report as abusive

Remember Buffett opposing elimination of the Death Tax (inheritance tax)? His LIFE INSURANCE companies LOVE the Death Tax because it forces family businesses to spend lots of money on LIFE INSURANCE, to keep the company in family hands. Meanwhile the superrich like Buffett avoid the Death Tax by setting up giant foundations and putting their relatives on its payroll. Does anyone think the Rockefellers or Buffett or Bill Gates pay ONE CENT in Death Taxes?

Posted by Mike Hardiman | Report as abusive

This wonderful human being is being vilified just like Jimmy Carter was,who also was one of the most honest, decent and truly one of the most benevolent human beings on earth. What’s wrong with Mr. Buffet trying to protect my investment in Berkshire (almost 1 share of class B)!!!Mr. Buffet is a supreme capitalist —- not a priest!

[...] myth, debunked by UBS – FT AlphavilleCan one inflate away debt deflation problems?Buffett’s Betrayal – Rolfe WinklerYes, like PIMCO, Buffett has invested to gain from government largesse. But most of his financial [...]

According to my quick calculations: Berkshire Hathaway’s market cap today is @ 170 Billion and the 7 billion in equity that Warren stood to lose if all his financial company stock holdings went to zero amounts to @ 4% of Berksire’s market cap.Something inclines me to believe that if Goldman, American Express, General Electric, US Bankcorp, Wells Fargo, Bank of American and Sun Trust Bank (among many others) were simply allowed to fail (moral hazard aside) it is very likely that ever poster here and virtually everyone else in this country stood to lose a great deal more than Warren.As for Moody’s it was a great ride while it lasted, however, with the perverse incentives in the bond-rating set-up it was inevitable that chickens would come home to roost one day.IMHO

Posted by NLC | Report as abusive

Wow, I never realized how many people work for Berkshire Hathaway until I read this. I thought you were being too generous to Buffett. He is a colossal hypocrite who has always made his money through corrupt government programs. You forgot to mention his large investment in Fannie Mae over the years.Behind every great fortune is a great crime.

Posted by morgan | Report as abusive

Berkshire Hathaway investment strategy vs. The Taxpayer’s/government’s investment strategyTaxpayer’s GS return vs. Mr. Buffett’s GS return on the date of the transactionBerkshire HathawayBuffett’s investment in Goldman was $5 billion worth of perpetual preferred stock @ a 10% dividendHe has 5 years to exercise his warrants on $5 billion of common stock @ a strike price of 115 a share.43.5 million warrants valued by Black-Scholes @ $3.6 billion or $82.18 eachTaxpayers investment in Goldman was $10 billion TARP and $12.9 billion from AIG12.2 million warrants worth $882 million or $72.33 each.This my friends is why he has one of the best investment records and reputations in the investment industry.BottomlineWarren Buffett’s investment in Goldman will net Berkshire Hathaway billionsThe taxpayer’s investment in Goldman which IS FOUR TIMES as much will not even break even.Warren Buffett was Goldman’s Saint while the Taxpayer bailout was Goldman Sach’s Messiah

Posted by alberta911 | Report as abusive

What was the point of this piece? That Buffett betrayed… the taxpayers? Did I just wake up in a world where Warren Buffett is now a politician?He is not a saint. He is a capitalist–one of the best. His day job and duty is to his shareholders, and on that measure he is doing just fine, thank you. This shareholder does not feel betrayed. And to say Buffett exploited the taxpayers is laughable. That’s like saying you exploit child labor because you wear Nikes.The facts in this piece are fine. The way they are spun to generate sensationalism is positively Murdoch-ian. I expect better from Reuters.

When push comes to shove its not how where the money comes from its do you have it or not. When my enemy points a gun at me I do not start waxing all moral/ethical on him. Is Warren working to make money? If so he is great at it. If he is trying out to become a saint he has a little polishing to do. Like most I have opinions on how the govt spends my tax dollars. On the other hand I would love govt contracts to come my way and if I was given money by the govt for work or perceived work would I argue? Fred

Posted by fred | Report as abusive

If smarmy windbags talking out of both sides of their necks when it comes to bailouts in untold amounts with no strings attached to mismanaged banks and desolate ruins of once-proud arbitraged-to-death corporations, nothing in return for the working stiffs who fund them, no punishment for those who misappropriate them, and above all, no sign of humility or even gratitude on the part of those receiving them… if this is what bothers a 14-year-old, then there are a lot of 14-year-old Children of the Corn out there. And they’re coming to town.No amount of happy-face greenwashing a la Gates Foundation is going to save the guilty parties. Warren and all, they’re doomed, period.

Posted by The Bell | Report as abusive

Wow! I must say you must have balls of steel to question the man’s integrity.But you do present a compelling argument there.Well done! Balls of Steel Man! :)

Posted by balls | Report as abusive

This is nuts. Buffet made his fortune on Gilette and Coke and all sorts of investments long before the current crisis arose. When it did arise, was he really obliged to let Berkshire fold “on principle”? He legally protected the interests of his shareholders, the people whose money he manages. So whom has he betrayed? You? What does he owe you? Yikes.

Posted by Lawrence Kramer | Report as abusive

I disagree with the points in the article:1. Buffett’s fortune is definitely not dependent on taxpayer largess, in fact, Berkshire Hathaway is a large taxpayer itself, paying paying an average of 4 1/2 billion dollars in taxes a year from 2005 to 2008. The investment in these institutions is a small fraction of his net worth (maybe 10% to 15% – much less if you only count those investments prior to the calamity). In my analysis at the time, I concluded that none of these institutions would have failed even without any government assistance. (There are many companies that would not have failed even if the government had not provided financial assistance.2. The bailout is somewhat of a misnomer. The Government is and will make a profit on this money and the Government required some of the institutions to take the money. For example, the Tarp money is not free money but was given in return for convertible preferred shares that paid 5% (10% after 5 years) and are convertible into common stock at various prices. The Tarp also came with numerous restrictions, such that some many of the institutions wish they hadn’t taken it.3. Goldman and GE wanted to capital and Buffett agreed to provide it, in return for convertible preferred paying 10% and convertible to common stock at a particular price. There is nothing wrong with this. There were others with money that Goldman and GE could have struck a deal with.4. Buffett tends to avoid attacking specific companies or people, although he does on occassion. To the extent Buffett criticized the financial industry and it applied to Well’s Fargo, American Express, etc., I saw nothing indicated that Buffett excluded them. In fact, I took some of the criticism to be referring to some of them. He is only a shareholder, he does not own a majority stake in or run any of the financial companies mentioned.5. Buffett has spoken publicly of Moody’s and indicated that they made mistakes in their ratings and Munger, his partners, has also publicly so indicated. I can find and provide the cites if you need them, but with the internet, I am sure you can find them as well.6. buffett did not mock the stress tests. His point, with which the government and perhaps you disagree, is that Well’s Fargo was adequately capitalized and not in danger of failure, particularly in light of their large earnings power. I happen to agree with this analysis. Wells Fargo would not have gone under, in my opinion and in Buffett’s I believe, even without government intervention. You may disagree.7. I also agree with Bernanke’s action in quickly provided substantial liquidity to a variety of markets during the financial crisis and I agree with Buffett’s voval support of this course of action. Without such help, thousands of banks and thousands of companies would have gone bankrupt, causing a spiraling downward that would have had disastrous consequences far worse than what we have seen. At least this is my opinion and I believe it is Buffett’s opinion.8. buffett did not get a bailout and did not exploit the taxpaying public, of which he is one of hte largest ones, for his own gain.There is no doubt that Buffett, like all of us, has his flaws. I don’t think he, or anyone else, would dispute that. HOwever, as you can see, I disagree with virtually every point made in this article. Furthermore, while Buffett is wealthy, he has managed to be relatively modest in his spendings (althoug, let’s face it, he still spends substantially more than most of us even if he is thrifty) on himself and most of his money will go to charity.

Posted by Seasaw | Report as abusive

YAAAAAWN! What’s your point? That the US would be better off if those institutions hadn’t received government help? No, we’d be heading toward a repeat of the Great Depression. Guaranteed.

Posted by James Ludemann | Report as abusive

if all the company in your chart collapsed do you know how big a disaster that would be? not just buffett will lose, everyone will. buffett is good in the sense that he knows they are not gonna fail (thanks to federal aid). if you had known they won’t fail would you buy the stocks since the prices has gone so low?

Posted by adsf | Report as abusive

[...] this news, Buffett’s Betrayal,  in my Google Reader [...]

I am glad that my initial sentiments and reactions toward Mr Buffets actions last year are finally being discoursed by others. To be fair, we do not know exactly when Berkshire took stock positions in these other banks. When the Goldman warrants deal was announced, my initial reaction was that of a smart deal for Buffet. But, when he publicly began supporting the government bailouts of these various firms, at terms that were far less favorable to the taxpayers than those he negotiated for his own company I lost any and all respect for a man I always admired.

Posted by mspen | Report as abusive

Great Article, takes guts to trow one at the incumbent investment genius, my hats off, and may you please continue opening our eyes.

Posted by Carlos | Report as abusive

This is the very best piece on Buffett I have ever read. What is going on does not surprise me at all, excellent work.

Posted by Thom | Report as abusive

[...] Rolfe Winkler » Blog Archive » Buffett’s Betrayal | Blogs |- They sure be hard-line but everything is all for the banks and the government continues to just give away taxpayer money and not even negotiating in favor of the taxpayers. The banks get all the benefits. ….. How about all the games banks are playing with commercial loans in order to pretend they’re still “performing” so as to avoid impairments? I should re-emphasize that I don’t dispute Buffett’s ability to make money. He made a great trade on Goldman and GE, no doubt. … [...]

Good article. I divested myself of BRK after Buffet stated that the bailout and stimulus was “the right thing to do”. With BRK being so loaded in financials it was obvious what he meant.

Posted by GTWRECK | Report as abusive

[...] the headline “Buffett’s betrayal,” Reuters’ blogger Rolfe Winkler has a poignant comment this morning about Warren Buffett: Berkshire Hathaway, in which Buffett owns 27 percent, according [...]

I wish the US taxpayer would stop complaining. Any time they want to compete in the real world without all there subsidies and barriers, good luck. Just think about it, how does anyone working in the US car industry think they compete with any asia carmaker. They don’t they are being supported just like Mr Buffet. So just be quite and thank your government for printing phoney money so you can continue to believe the US are the masters of the universe.

Posted by gd | Report as abusive

Just another example of Buffett’s hypocrisy (he advocates that companies pay dividends–but his own doesn’t. He rails against insider Boards, but look at his own packed with kids and cronies. He advocates corporate disclosure, but his own reporting is of the “trust me” variety.) Maybe at one time this guy could invest under the radar and buy undervalued companies and be a portfolio genius, but now he simply has too much money to make it worth his while to make money off doing good deals with private owners–the only entity left is the biggest sucker of them all–Uncle Sam, courtesy of Professor Ben and Easy Al.As to the people who suggest that his only duty is to his shareholders–if it is, then he should stick to that and not give advice to the rest of us. Perhaps he could preface his well-publicized remarks that he is solely motivated by doing what is best for Berkshire Hathaway–somehow I doubt he would want that. But you can’t have it both ways.

Posted by But What do I Know? | Report as abusive

Say it aint so Warren. Thx for the news. Not something I read in the Times. Is this info widely known?

Posted by Ben Mahler | Report as abusive

Your comments about Buffett stand up just fine but you miss the long term point. Using a Property and Casualty company as an investment compamy all these years have given him significant tax advantages. All I would say is follow the reserving if you want to see his wealth accumulate. I am envious of him for this. But then his very early partnerships, US Air and Salomon brothers are never mentioned. He also did the best job ever of hiding an eary G-4 and mistress. God bless him, Regards, Walt Kirkbride

Posted by W. Kirkbride | Report as abusive

[...] commend to you an insightful post, “Buffett’s Betrayal,” by Rolfe Winkler of Reuters, who at age 14 joined the Warren Buffett fan club. It describes [...]

I don’t think your arguments hold much merit, sounds like sour grapes to me. I don’t see he defrauded taxpayers. You seem to forget that anyone in the world had the opportunity to make essentially the same investments as Buffett, but at less than half his basis. (True that he has preferred, with dividends and some extra warrants) but he purchased GS when it was around $125 with warrants at $115 back in September. Since then, anyone with a brokerage account could have purchased GS for as low as $60 and at many, many times less than $80. The opportunity to purchase around $60 was also available after TARP. Buffett invested before TARP, it was possible that they would not have been bailed out, hence he might have had a large loss. I suspect there are quite a few people who did jump in and buy GS at $60 and they are quite happy now, and very glad to have Buffett advocating for their stock. A similar case can be made for GE, but only the public had the opportunity to buy in even lower.

Posted by Jim | Report as abusive

[...] Buffett’s Betrayal Reuters (04 Aug 09) [...]

I have also been a Warren Buffet fan for years, and have not agreed with his rejection of investing in technology “because he doesn’t understand it”, but the author is not being fair. Buffet believes in buying and holding without taking an active management role. He bought most of those financial stocks years and years ago when they were great “buys”. Yes, their managements screwed up and needed bailouts, but so did every other financial congomerate in the world. Was the author suggesting he should have come out against bailouts rather than supporting them. Get real!

Posted by Ron Wright | Report as abusive

wow, great article and great response to howard comment. I feel duped, Buffet is sort of a hero to me, someone from near the ground up make it to the top purely on investing. this hurts but better to find out the truth. I wish more of this exposure was public knowledge. Not just about Buffett, but about all, including congressmen and their investments.

Posted by Adam | Report as abusive

Now we know why Buffet backed Obama, don’t we?

Posted by AGB | Report as abusive

It is easier for a camel to pass through the eye of a needle than a rich man to enter the kingdom of Heaven.

Posted by Lilliana Ross | Report as abusive

The notion that Buffet backed Obama for a bailout is the usual right wing paranoid blather. I know the guy who posted that so I’m not surprised. The TARP bail outs began under Bush, remember? And had McCain and dingbat been elected they surely would have continued….so saying that Buffet backed Obama because he was expecting a bailout is ludicrous of course…

If you truly followed Warren’s career as an investor, as you claim, and what he generously and openly shared with us over the years you would have been more kind in your article. Our Government would have spent the bail-out money regardless of who benefited from it. Let’s not blame our own shortcoming, as active citizens, of letting our irresponsible Government, that has been on spending spree over the last thirty years, on an individual whose records speak for themselves.

Posted by Fred Hashtpari | Report as abusive

After all is said and done, Buffet has made a truck load of money in the stock market. Something that few people has done. The only thing this article proves is that Buffet is a greater investor than I thought.

Posted by J-R | Report as abusive

ET TU, BRUTE?

Posted by CEH | Report as abusive

While I admired Mr Buffet from afar I realize that he is just a cog in the wheel of a very crooked market designed to exploit the very ones who need to improve their financial wellness–and have untill recently trusted the system..Its time for change in the financial markets—

Posted by Mark Adams | Report as abusive

Over time Warren Buffett has lobbied hard and long for his Berkshire Group. Would you expect any less? He does not make the rules but understands how to use them to his advantage. He will give most of his money away upon his passing as will Bill Gates, and thank goodness he had the veracity to work behind the scenes of this crisis, one which by the way he did not cause.I too have received correspondence from the Oracle of Omaha on a real estate deal I proposed. He was polite in his declining, and I could tell he had bigger fish to fry. Who would you rather extol as an example. Some Gordon Gecko type hedge fund manager that comes out of left field to fleece his investors with untold immediate and outrageous fees and bonuses, or a mid-western hard working icon that has been at since 12 years old creating real wealth for his investors; ALL OF WHOM WISH THERE WERE MORE LIKE HIM. To me, and I suspect 99% of us that is a no brain-er. I do not own any Berkshire stock but wish I did. SG.

Posted by Steve Gravett | Report as abusive

Remember both Soros and Buffet chiding Americans to pay more taxes (Death tax,etc.). They’re both Democrats and both on the “redistribute the wealth” bandwagon. Don’t forget to take their advice regarding whom to vote for. I’m sure “Uncle Warren” and “Uncle George” just want what’s best for you. The Repubs are pathetic but at least they’re not in our faces and pockets every waking hour like the “reformers” in there now.Give me some old fashioned freedom and common sense.

Posted by Wayne Daniel | Report as abusive

Its About time someone called this fake. (Buffett).He had acess to the top information, and was down 30 to 40% even with taking taxpayer money. I had no inside information,or super computers and was up 10% for the year.The robber barons of the 20s, built libraries, and parks, to give Americans a boost up, This guy and gates, take taxpayer, and American money, and give it to creepy causes, to boost everyone , but Americans.They created American competitors, with American money, made by laying off American workers. Buffett, didnt even have the decency, to leave his Ill gotten gains to his own family.The American military, is risking their life, to protect world trade, at American taxpayer expense, while these guys loot America and give it to anyone except america.The world is getting a free ride, at taxpayer expense Where are the health clubs for American injured, military. Where are the new American Libraries, Where are th computer libraries, for out children? They are given to everyone but Americans.

Posted by R. Janowsji | Report as abusive

Buffett was way behind the blogs in outlining the huge housing bubble and what it would do to the US. He made some nice investments early on but has done more than his share of shady deals over the years. In the end he is another guy who made it rich the right way, then got corrupted by the need for more and more. Giving away a large part of his fortune was nice but it does not change his lifestyle…5 billion or 50 billion, you still live the same! And it was great PR.I read various blogs and followed their advice, getting out of the market at 13800 in June 2007, went into gold at 500 and out at 900, sold my 2 vastly overpriced Florida houses in 2006.So people following the blogs did A LOT better than Buffett the past few years, that is for sure!

Posted by Jon King | Report as abusive

All is well; Goldman has declared the beginning of the next Bull Market. Goldman has given a whole new meaning to “Bull” Market.

Posted by Pete | Report as abusive

What Rolfe fails to realize is that the financial companies that benefited from TARP were not operating companies of Bershire. They are minority equity investments. Buffett doesnt run those companies, and he doesnt have a say in whether the TARP money would be accepted.Anything Buffett draws attention and sells papers/draws clicks. Too much misunderstanding and poor logic with this article.

Posted by JLo | Report as abusive

Well articulated–would LOVE to see Buffett’s response!

Posted by msmith | Report as abusive

Attacking Buffet for supporting and pushing for the bailouts is ignorant. Regardless of Buffet’s focus on his self-interest, I believe that his self-interest coincided with the needs of the American Economy. Without the government bailouts for the financial sector there is an extremely high chance that the financial sector would have collapsed, in which case the American people would have had to pay for the FDIC to cover their own deposits.P.S. Everyone persues their own self interest.- Economics 101

Posted by Robert Ball | Report as abusive

[...] blog post was thought-provoking for me (link). If you look at it on Rolfe Winkler’s side (and I believe he makes a compelling [...]

From this article, one might form the opinions that Mr. Buffet singlehandedly engineered the bailouts and was a majority shareholder in the largest corporations in the US. In addition to his personal financial salvation from Recovery Act, billions more in investor wealth were preserved.Who else protected client investments that well through this financial abyss?What would have happened to our economy if there were no bank bailout?Banks do need regulation that protects depositors, investors, and the FDIC (the taxpayer).Mr. Buffet is a not-so-perfect, yet extremely successful, ethical, charitable “good-deed-doer” capitalist in the icon of capitalism. While I am sorry for your personal disappointment, I feel this was undeserved bashing by an idealistic writer.

Posted by GSH | Report as abusive

This article is a crock of cr^%. Buffet helped the banks far more than he should have. He probably should have stayed away when they were in financial trouble, but thought he had a responsibility to our country.The BANKS and the mortgage BROKERS are the crooks – banks backing bad loans made on no documentation in scary circumstances.If the government would not have intervened, our financial system would have melted down and ALL OF US would be out, not just Buffett.Not only did he protect HIS holdings, but he protected MINE too, so thanks Warren.

Posted by doug | Report as abusive

Very interesting story. Something everyone should keep in mind: All those people we are now criticizing for their roles in the financial meltdown have operated under the rules enacted by our representatives in Washington, D.C. Perhaps we should all look in the mirror to see the culprits.Lemonade

Posted by Joel Neecke | Report as abusive

Welcome to CAPITALISM!! New age USA style. Lets face it, its going to be a cold day in hell when the Buffetts of the world will not do what needs to get done in order to save their Empire. hell I would have done the same thing because I would have been legally allowed to do it. One would like to think, that when the Oracle passes on he will leave a lasting legacy to the people of the USA, where his funds profits are put back into the Community, Lock, Stock and Barrel!

Posted by Nick kapes | Report as abusive

Talking about Goldman et al collapsing – there’s so much talk about debts – but what about CREDITORS – the people holding all the WINNING derivatives?And by the way, our so-called “representatives” who deregulated or looked the other way were installed by computerized vote-rigging machinesCheck out the HBO documentary AMERICAN BLACKOUT:http://video.google.ca/videopla y?docid=-5965670944815984616Or:Blackboxv oting.orgvotefraud.org

Posted by glo | Report as abusive

Yeah, Lets not give bail outs, lets have most Americans bank accounts closed.

Posted by Brandon | Report as abusive

Buffett also has lobbied for securing loose nukes. No doubt greedily trying to protect his investments by making sure US cities are not vaporized.Self-interest is not always contrary to public interest. We need continuity in the banking system, even when they don’t deserve it. So a rescue, or at least an attempt, was foregone. He traded on a certainty, and lobbied for rationality.Recapitalizing banks through debt, rather than equity, adds vast amounts of risk capital that is senior to Buffett’s equity. If that capital goes bad, he loses everything, so his incentives are well aligned.I’m amazed I need to write this to Reuters.

Posted by Odious Swaggering GSBer | Report as abusive

YOUR US GOVERNMENT IS THE FOOL…WHY WOULD THEY BAILOUT THOSE LOSING COMPANIES?IN A CAPITALIST ECONOMY LET THE MESS UNDO ITSELFDon’t YOU ALL HEAR TIME HEAL ALL WOUNDS?

Posted by David Trisnadi | Report as abusive

I find the numerous comments that choose to whitewash morality quite funny. The notion that by taking advantage of what one has classed a morally suspect option because it is profitable and available one has somehow bypassed the original moral dilemma requires some incredibly flexible morals. To put the absurdity in clearer light, let’s take a profitable enterprise that is generally universally condemned as immoral: slavery. The argument that some here are taking is that if an investment were available in some slave-holding operation in a country that had not made it illegal, it would be immoral as a fund manager to NOT invest in it if it increased your investors net worth.

Posted by Gregor Former | Report as abusive

What is truly sad is that it takes this sort of behavior before Buffet is seen as greedy and selfish.How is it that in a world in which much of humanity lives on one or two dollars a day, and some forty thousand children die each day from avoidable causes, we worship those who hoard literally BILLIONS of dollars in assets and live in absurd and wasteful luxury?That Warren Buffet is a hero for anyone is a measure of how sick we’ve become (or perhaps always were). That this comment will be ignored suggests that there is no hope for us.

Posted by Jon Gerst | Report as abusive

I think the main point of Rolfe’s article is Warren doesn’t practice what he preach when it’s not in line with his interest. I leave the moral judgment to someone else though.

Posted by Parry | Report as abusive

I just do not get it. Why is everyone at all surprised? Is Warren Buffet truly a role model for anyone…seriously?!This guy is seriously deranged. He has billions and still needs more? Anyone see anything wrong with that? Let me say it again, he has billions, he does not need anymore, and in his little mind he still needs more. How miserbale can one already get?So why be surprised when hacks like this say what is printed above in his meeting? Why should he be different? It is this mentality that got him his money in the first place…in a world of greed a guy like this is touted as some kind of role model.Give me a royal break.

Posted by Keith | Report as abusive

….The tide went out and now we see who has been swimming naked……Good article. About time.

Posted by A.S. | Report as abusive

Nice article, but a bit offside. As far as Buffett lobbying for something that is in his best interest, sure he did, but it was also in the best interest of the country at large.What do you think would happen if the banks you mentioned in your article, collapsed? It would filter down so quickly and violently, that you would be writing an article about how the government should have stepped in to stop the carnage.As for Buffett, last I checked, his will stipulates that a sizeable portion of his holdings be given to charity.That sounds pretty greedy to me…..sarcasm!

Posted by j mathew | Report as abusive

With billions of tax payer money being paid out in corporate bonuses in the worst year in American Capitalistic history I do not feel all that bad about walking from my home. However the real poetic revenge is knowing that Buffet is truly condoning these bonuses that should have gone to share holders creating a real catch 22. Buffet has been my role model for years when it came to investing, but it goes to show that the bigger they are the harder they fall.We are going to see another fiasco happening soon in the banking climate. Why? Well Joe and Jane walk from their homes which they owed 500K on and then it was sold in foreclosure for 300K, but the banks are still counting the 200K difference as a long term recievable which the banks put in as asset in the balance sheet and future income on the income statement. They are again tricking the FED to lend them more money than the have backing for. Correct accounting should dictate that they are never going to collect from Joe and Jane. The banks are still up to their same old tricks.Watch the real collapse come again, but next time no government cash to fill the pockets of CEO’s

Posted by Yabba Daba Doo | Report as abusive

class war? Yeah, there/s a class war going on. An WE are F|ing winning!/WB

Posted by Springer08 | Report as abusive

public record warrants…This post enabled me to come out which fresh content on public record warrants. Any similar posts like this?…

I seem to recall that Berkshire is exempt from having to make timely reports on its investments, so that such news will not roil the markets. Just another example of too big to have to follow the rules that apply to the small timers.

Posted by swaps | Report as abusive

Ty móc strona internetowa o nowy i opóźniony model i projekt Replika fake Omega nasz strona internetowa.

[...] He is similarly annoyed with St. Warren — but rather than engage in my sophmoric venom spew, he went to the spreadsheet to discover that Buffet owns major stakes in 8 companies that have received more than $100 billion in government bailouts. [...]

[...] He is similarly annoyed with St. Warren — but rather than engage in my sophmoric venom spew, he went to the spreadsheet to discover that Buffet owns major stakes in 8 companies that have received more than $100 billion in government bailouts. [...]

[...] Winkler is a Reuters columnist and blogger.  One of Winkler’s blog posts provides his analysis of the degree of TARP funding that Buffett’s companies received.  [...]

[...] He is similarly annoyed with St. Warren — but rather than engage in my sophmoric venom spew, he went to the spreadsheet to discover that Buffet owns major stakes in 8 companies that have received more than $100 billion in government bailouts. [...]

[...] He is similarly annoyed with St. Warren — but rather than engage in my sophmoric venom spew, he went to the spreadsheet to discover that Buffet owns major stakes in 8 companies that have received more than $100 billion in government bailouts. [...]

Insightful article and so NECESSARY.Similar conflict of interest is apparent in Buffet’s estate-tax stance.When Buffet always talks about how he’s for the death tax (because it’s supposedly so “fair”), keep in mind that he personally benefits from the death tax because it hits so many small family-owned companies that he likes to buy up or “rescue.”Nobody in the media ever calls him on this. Instead, he is presented as being somehow altruistic or wise or whatever Obama and people who are for “sharing the wealth” want the sheeple to believe.

Posted by Diane | Report as abusive

[...] eight banks in which Berkshire had a stake.  From the end of ‘08 through July of ‘09, 75 percent of the debt sold by these eight banks came with the explicit government guarantee offered by TLGP. [...]

Sounds like “The Rich get Richer and the Poor get Poorer”

Posted by appayne1 | Report as abusive

[...] Reuters, as our water goes dry. [...]

[...] Reuters, as our water goes dry. [...]

[...] it not for government bailouts, for which Buffett lobbied hard,” writes Reuters’ Rolfe Winke, “many of his company’s stock holdings would have been wiped [...]

[...] personal enrichment from the bailouts, Ritholtz could have gone even further. Rolfe Winkler posted this chart at Reuters in August [...]

[...] Thinker:  “Warren Buffett, Robber Baron?”Rolfe Winkler, Reuters:  “Buffett’s Betrayal”Related posts:Warren Buffett: The Billionaire “Too Big to Fail”  By Jane Jamison Good [...]

[...] And what of Moody’s, the credit-rating agency that enabled lending excesses Buffett criticizes, and in which he’s held a major stake for years? Recently Berkshire cut its stake to 16 percent from 20 percent. Publicly, however, the Oracle of Omaha has been silent. (Reuters) [...]

[...] And as a reminder, here is just why Buffett happens to be a big fan of bailouts, especially of Wells Fargo. [...]