Buffett got better Goldman deal than taxpayers

[Robbien]

Source: Houston Chronicle

Treasury Secretary Henry Paulson may be the most powerful manager of money in the world. Even so, his $700 billion bailout of American banks didn’t do for U.S. taxpayers what Warren Buffett did for his shareholders by investing in Goldman Sachs Group Inc.

Paulson invested $10 billion in Goldman Sachs in October, twice as much as Buffett — the billionaire chairman of investment firm Berkshire Hathaway Inc. — did the month before. But in return Paulson got warrants to buy stock worth a quarter as much as the Buffett, according to data compiled by Bloomberg. And the terms of Paulson’s investment in Goldman Sachs were repeated in most of more than 170 other bank bailouts.

The transactions are “just egregious,” said Simon Johnson, former chief economist for the International Monetary Fund and a fellow at the Peterson Institute for International Economics in Washington. “You want to do it the way Warren does it.”

. . .

“With 20/20 hindsight,” the bank-capital injections have achieved their objectives and the decisions on the TARP will “prove to be the right ones,” the Treasury secretary said in an interview Jan. 9.

“We were not looking to replicate one-off private deals,” Paulson said. “The market was under great stress and the private sector was extracting very, very severe terms. What we were attempting to do, which I think we did successfully, was design a program that would be accepted by a large group of healthy banks with terms that would replicate what you would get in normal market conditions.”

Read more: http://www.chron.com/disp/story.mpl/headline/biz/6210784.html

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For twice as much money we got less than a quarter of what Buffet got. And this is the model Paulson set up for all the TARP funds.

So if Buffet paid a dollar for a warrant, we paid two dollars for a quarter of a warrant. Or eight bucks for a total warrant which Buffet got for a dollar.

No wonder Paulson and crew didn't want to release their TARP records.

[Alcibiades]

1. And it's worthless preferred stock

That doesn't even give taxpayers a vote as shareholders.

Can we impeach now?

[No Elephants]

2. We wuz robbed by a lying Pub Executive Branch and an enabling

Dem Congress, reaching across the aisle to each other, over our well being, that of our kids and that of our grandkids, maybe even great grandkids (if God and global warming allow).

Doncha just love bi-partisanship?

[Baby Snooks]

3. And who do we have for Secretary of the Treasury?

Instead of someone like Warren Buffett who knows what he's doing we have someone who can't even figure out his taxes let alone pay them.