Warren Buffet supports the bailout deal

[thewiseguy]

I guess some on DU do know more than him.

Given the circumstances, this is the best we can do. People are going to lose their jobs, their savings, and their retirement funds.

I guess we could let the markets bleed and enter a severe depression. :sarcasm:

http://www.dailymail.co.uk/news/article-1060825/We-face-economic-Pearl-Harbour-Billionaire-investor-Warren-Buffett-demands-confirmation-700bn-U-S-bailout.html

[moodforaday]

1. "We face an economic Pearl Harbour"

SO GIVE US YOUR MONEY!! I can't believe anyone's taking Buffet and his ilk seriously enough to put them in print.

Apparently 9-11 wasn't Pearl-Harbour enough for these people.

[thewiseguy]

5. The man has enough money.

WTF are you talking about?

[moodforaday]

7. This is part of the problem

Somehow you must have tons of money to be considered a reliable source on how to fix the problem. Why can't Ken Lay come back from the dead, he would know what to do for sure!

Warren Buffett's interest is not mine and it isn't yours, unless you are financially in his league. The bailout is not the only way out of this crunch, and it may not help at all. Long run, it'll probably be disastrous, since you're propping up what's already rotten.

My solution, which I have posted before in another thread: establish a fund to provide an extremely low-interest line of credit to people who are defaulting on their mortgages. Banks will get their loans repaid, people will keep their homes, no need to pump billions into the market to further weaken the dolar. Yes, the fund would still be a burden to taxpayers, but it would actually do a lot of good to the people who are most hurt by the current crisis.

[lurky]

2. While he often makes wise statements,

he also just bought a big chunk of Goldman. He now has a personal stake in the bailout.

[Stuart G]

3. He bought the stake to shore up the market...

If it were totally selfish, he would have stayed clear of it all. And also a totally selfish person would be supporting a different candidate..If I recall, he supports Obama........right?

[moodforaday]

11. Yeah, he bought a stake

in the one banking institution in which Hank Paulson also happens to have a stake. If I had five billion dollars to invest, I'd do the same thing.

How about a five billion dollar fund to help pay people's mortgages before they are kicked out of their homes? Let me see Buffett do that and I'll be impressed.

[Selatius]

13. He didn't buy it to shore up the market. He bought it to exact his pound of flesh from Goldman.

Reread what he did to Goldman Sachs when he bought it.

He bought 5 billion's worth of Goldman preferred stock. It pays a 10 percent dividend and is callable at any time at a 10 percent premium. That dividend means that whatever net income Goldman Sachs declares at the end of the fiscal year, Buffett automatically takes 500 million dollars in profits away.

And he gets the right to buy another 5 billion of Goldman's common stock at only 115/share for the next five years, or over 30 percent below where GS was trading back in August. For Goldman, Buffett's "bailout" was nothing short of expensive.

[thewiseguy]

4. Damn that greedy man for trying to shore up trust in the market!

OMG he used his own money to do that!

[moodforaday]

8. Exactly. And he knows

Paulson won't let Goldman get hurt. If I were to bet (never do), I'd say Buffett is expecting Goldman to be the last bank standing when the smoke clears.

[Batgirl]

6. It's really hard sorting out the varied opinions about this

For instance, when Paul Krugman writes:
"But right now it’s not even clear who to rescue, and the credit markets are freezing up as you read this (1-month t-bill at 0.04 %, TED spread at 3.5)", I might as well be a labrador retriever for all my ability to comprehend the words that are in parantheses. However, reading the entire thing gives me a general understanding that Krugman, who doesn't seem to have an axed to grind, is laying out his reasons for an admittedly very reluctant acceptance of the plan.

Couple more grafs from his tatest blog post:

" ... putting myself in Barney Frank or Nancy Pelosi’s shoes, I’d look at it this way: the Democrats could start over, with a bailout plan that is, say, centered on purchases of preferred stock and takeovers of failing firms — basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary. That’s what the plan should have looked like.

Maybe such a plan would have passed Congress; and maybe, just maybe Bush would have signed on; Paulson is certainly desperate for a deal.

But such a plan would have had next to no Republican votes — and the Republicans would have demagogued against it full tilt. And the Democratic leadership cannot, cannot, be seen to have sole ownership of this stuff.

So that, I think, is why it had to be done this way. I don’t like it, and I don’t like the plan, but I see the constraints under which Dodd, Frank, Pelosi, and Reid were operating."
http://krugman.blogs.nytimes.com/

[Imagevision]

9. Warren put two BILLION into AIG last week...

[Not the Only One]

10. He wants his Goldman Sachs investment to shoot up. Duh!

http://www.msnbc.msn.com/id/26903059/">Why Would Warren Buffett Stoop So Low?

[western mass]

12. He's going to make some serious $$$

He just dropped $5 billion into goldman sachs stock at rock-bottom prices. He's a smart business man. You think he's not going to make out like a bandit when the bailout sends the value of goldman sachs back up again?

Gee, I hope the next thing you're going to say isn't that Buffet is a saint who got as wealthy as he did by only throwing his money at charities without a thought about return on the investment?

[Spike from MN]

14. Well, he has about 5 billion reasons to support it. nt