Warren Buffett Loves Uncle Intervention

Thursday, November 18, 2010
Posted in category Establishment Leftists

This is really a strange, little “letter,” or New York Times op-ed, from Warren Buffett to the world’s savior, Uncle Sam. Mr. Buffett expresses his gratitude to his Dear Uncle and the chorus of worker bee bureaucrats – Bair, Geithner, Paulson, Bernanke – who acted promptly to help stave off disaster and defend the portfolios of Wall Street’s wealthiest supporters. He refers to government actions as being “remarkably effective.” It is signed “Your grateful nephew.” There’s not much more one can say about this swooning tripe.

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11 Responses to Warren Buffett Loves Uncle Intervention

  1. liberranter says:

    November 18th, 2010 at 12:18 pm

    That’s Warren Buffoon, if you don’t mind.

    I guess this shouldn’t surprise anyone, although I have to think that Warren’s daddy, the late Congressman Howard, is churning in his grave over his son’s remarks. But, as more than a few libertarian commentators have pointed out, almost all billionaires are statists.

  2. Don Matesz says:

    November 18th, 2010 at 5:49 pm

    I couldn’t even read all that brown-nosing. Especially aggravating since things have not yet turned around for the general public, and all would have been better off if those insolvent companies would have gone belly-up.

  3. M. Terry says:

    November 18th, 2010 at 8:18 pm

    Here’s a simple translation:

    Dear Uncle Sam,

    Thank you for bailing out us fat cat bankers and fund managers – who bet both sides of the mortgage scam and got you and your former Goldman Sachs employees – who now run government finances to save us. We can now do anything we want and rest assured that the whores of DC will cover our asses. Birkshire Hathaway stockholders also thank you.

    BTW – there will be something extra in your stocking this year. You’re all doing a stellar job of protecting all us “members of the club.” For that we thank you. Merry Christmas to us. (not that we believe in anything other than the almighty dollar…)

    Yours truly, (and don’t spend your bonus in one place),

    WB

    P.S. Did you choke on your breakfast when you read my sycophantic ravings in the Gray Lady? Funny shit, eh?

  4. Iluvatar says:

    November 18th, 2010 at 10:22 pm

    Thank God some of you all replied!

    AS always, LIBER & M Terry – you guys rock! Luv you fellas@!

    But here is some additional input (my comments are semi-splattered there); it regards the mechanizations of a QE process, but does not consider the (absolute moral) hazard of bank-bailouts – DUDES! – we should have executed the Swedish model!!!!

    PS: The last link you really need to study…

    http://pragcap.com/fed-confirm-qe2-bank-bailout

    http://pragcap.com/carnage

    http://pragcap.com/ny-fed-president-printing-money

    http://pragcap.com/thoughts-an-open-letter-ben-bernanke

    http://pragcap.com/mechanics-qe-transaction

    PPS – I am so sorry for having splattered recently, & this is my ONLY opp to reply here – my boss has had enough of my recent behaviour – I am allowed 1 post per blog. He loves your site – but he hates seeing all my shiite over it – threats of lay-off are imminent! (I just don’t think he likes seeing me splatter on your site! – BOO!)

    But this is all I willpost on this particular blog post. Please enjpy the reading & I also aplogize (b/c you ARE SUPPOSED TO!) for referring to a different blog.

    But hey! Mish is good to read too@!

    Bon nuit, tout le monde, je t’en prie! (I’m not sure what that means anymore – but it it is good stuff!) – bye-

  5. Iluvatar says:

    November 18th, 2010 at 10:55 pm

    This is NOT a splatter post – but I forgot to mention that the W Buffet above was totally BULL – SHIITE!

    Sorry kids – cussing was invloved///

  6. Jeannie Queenie says:

    November 19th, 2010 at 1:59 am

    Barry Ritholtz of today’s Daily Reckoning cleverly rewrote that dear uncle sam letter to reflect reality, not the foaming fantasy of WB. It is lengthy but essential that you read all of this as Barry affords a clear and total picture of exactly what has happened..and so I quote in its entirety for you to read and weep…we have been had, dear friends by sickening sociopaths who slice and dice.

    “DEAR Uncle sam /Sucker,

    I was about to send you a thank you note for bailing out the economy…but then some nice men dressed in Ninja outfits came in and shot me full of truth serum. That led me to make one more set of edits to my letter thanking you for saving the economy.

    It also helped me recall some things I seemed to have forgotten in my other public pronunciations about the bailouts.

    I suddenly recalled who it was who allowed the banks to run wild in the first place: You. Your behavior before, during and after the crisis was the epitome of a corrupt and irresponsible government. You rewarded incompetency, created moral hazard, punished the prudent, and engaged in the single biggest transfer of wealth from the citizenry of the United States to the Wall Street insiders who created the mess in the first place.

    Kudos.

    Before I get to the bailouts, I have to remind you that in:

    1999, you passed the Financial Services Modernization Act. This repealed Glass-Steagall, the law that had successfully kept main street banking safely separated from Wall Street for seven decades. Even the 1987 market crash had no impact on Main Street credit availability, thanks to Glass-Steagall.

    1997-2010, you allowed the Credit Rating Agencies to change their business model, from Investor pays to Underwriter pays – a business structure known as Payola. This change effectively allowed banks to purchase their AAA ratings, and was ignored by the SEC and other regulators.

    2000, you passed the Commodities Futures Modernization Act. It allowed the shadow banking industry to develop without any oversight by the Commodity Futures Trading Commission, the SEC, or the state insurance regulators. This led to rampant creation of credit-default swaps, CDOs, and other financial weapons of mass destruction – and the demise of AIG.

    2001-04, the Fed, under Alan Greenspan, irresponsibly dropped fund rates to 1%. This set off an inflationary spiral in housing, commodities, and in most assets priced in dollars or credit.

    1999-07, the Federal Reserve failed to use its supervisory and regulatory authority over banks, mortgage underwriters and other lenders, who abandoned such standards as employment history, income, down payments, credit rating, assets, property loan-to-value ratio and debt-servicing ability.

    2004, the SEC waived its leverage rules, allowing the 5 biggest Wall Street firms to go from 12 to 1 to 20, 30 and even 40 to 1. Ironically, this rule was called the “Bear Stearns Exemption.”
    These actions and rule changes were requested by the banking industry. Rather than behave as adult supervision, you indulged the reckless kiddies, looking the other way as they acted out. You were the grand enabler of the finance sector’s misbehavior. Hence, you helped create the mess by allowing the banking sector to run roughshod over decades of successful constraints. (Kudos again on that).

    There were voices warning about the upcoming crisis, but you managed to turn a deaf ear to them: Warnings about subprime lending, problems with securitization, against the false claim that residential real estate never went down in value, or that the models forecasting VAR were wildly understating risk. An economy driven by growth dependent upon credit-fueled consumption was unsustainable, and yet you encouraged that reckless credit consumption. The compensation schemes for Wall Street were hilariously short term (ignored by you); the crony capitalism of Boards of Directors that undercut market discipline was similarly ignored. You encouraged the hollowing out of the US economy, allowing it to become increasingly “Financialized” at the expense of industry and manufacturing. What was once a small but important part of the economy became dominant, yet unproductive, with your blessing.

    Bottom line: You were at a loss for understanding the many factors that led to the crisis in the first place.

    When the crisis struck, you did not seem to understand the role you should play. Instead of stepping up to halt the financialization, to unwind it, you gave away the shop. You failed to extract concessions from firms on the verge of bankruptcy. Your negotiating skills were embarrassing. In the face of meltdown, you panicked.

    You could have undone the decades of radical deregulation at that moment. You could have fired the incompetent management, wiped out the shareholders who invested in insolvent companies, given the creditors and bond holders a major haircut for their foolish lending. Instead, you rewarded them for their gross incompetence.

    The solutions you ran with were ad hoc, poorly thought out, improvised. You crossed legal boundaries, putting the Fed in the position of violating its charter and exceeding its mandates. You created a Moral Hazard, the impact of which may not be felt until decades in the future.

    Very few of your senior elected and appointed officials understood what was going on.

    Rather than offer an intelligent response to the crisis, you delivered brute force: Trillions of dollars were thrown at the problem, papering over its symptoms but not its underlying causes.

    Well, Uncle Sam, you delivered a motherload of cash. Considering the dollar sums involved, your actions were remarkably ineffective. What was left over afterwards was a wildly over-leveraged consumer whose credit limits had been reached; State and municipal budgets were heavily dependent upon that excess consumer spending, creating huge budget holes because of it. Net net: The resultant economy was in the worst recession since the Great Depression.

    As a student of the Great Depression, Ben Bernanke should have had the best grasp – but his bailout of Bear Stearns revealed him to be just another banker, intent on saving the banks – banking system be damned. To give you a clue of exactly how lost Hank Paulson was, he spent his time praying, and creating documents that exempted himself personally for liability. He’s from Goldman, so we know that “team first” ain’t exactly his style. Tim Geithner, who did such a stupendous job overseeing the banks in the first place, was in way over his head. And while I never voted for George W. Bush, I give him great credit for hiding under the bed and pretty much staying out of everyone else’s way. I would call him clueless, but that wouldn’t be fair to the legions of clueless around the world.

    Sheila Bair grasped the gravity of the situation earliest, and put numerous failed banks through the insolvency process. If we were smart, we would have allowed her to work her way through the entire finance sector, effecting a GM-like prepackaged bankruptcy for Citigroup, Bank of America, Merrill Lynch, Morgan Stanley, AIG, etc. It would have been painful as hell, but we would be much better off had we allowed her to tear the Band-Aid off quickly. Instead, we are suffering through a death of a 1000 cuts, Japanese style.

    I would be remiss if I failed to mention my personal positions in this: I made a killing in Goldman Sachs and GE. My investments in Wells Fargo would have been a disaster if not for you. Don’t even get me started with me being the largest shareholder in Moody’s – that was some joyride. And considering all of the counter-parties that Berkshire Hathaway has, we risked being just another insolvent investment firm along with everyone else had nothing been done.

    So I must say thanks to you, Uncle Sam, and your aides. In this extraordinary emergency, you came through for me – and my world looks far different than if you had not.

    Your grateful but wide-eyed nephew,

    Warren

    Regards,

    Barry Ritholtz,
    for The Daily Reckoning”

  7. Jeannie Queenie says:

    November 19th, 2010 at 2:11 am

    An addendum to the above feedback is this powerful, but short video showing how blueblooded elitists play a punitive role in determining our fates….these blood sucking leeches are the guys who pull the strings behind the stage…non other than the bankers, today commonly known as the banksters. Bonnie and CLyde were just pipsqueeks compared to the sociopaths that reign supreme. At least B & C were immoral in their doings, but the guys at the top don’t deserve that almost virtuous tag, being mainly amoral, a far more dangerous and deadly sin.
    http://www.youtube.com/v/peX4dBEF0Vg&hl=en_US&feature=player_embedded&version=3

  8. miles says:

    November 19th, 2010 at 8:40 pm

    If you dont like Warren Buffet, you can financially avoid doing business with him by not patronizing Geico Insurance and Dairy Queen, two large holdings of his.
    I deal with neither myself. I wish I knew what all Citibank, Goldman Sachs, and Bank of America had large holdings in, so that I could withold my business from those entities also. Fight back, with your money.

  9. Charles Everett says:

    November 20th, 2010 at 2:53 pm

    And what does GEICO stand for? Government Employees Insurance Company. That’s right, Warren Buffett really loves Big Government!

  10. Phil Manger says:

    November 20th, 2010 at 10:38 pm

    I posted a rather lengthy piece about Buffett today on my own blog:

    Warren Buffett’s crony capitalism”

    Phil Manger

  11. Iluvatar says:

    November 22nd, 2010 at 11:44 pm

    @ Phil

    Excellent precis.

    But it goes beyond that. I have not been able to locate a certain research piece by the Wash. Post that has the then head of the CFTC arguing for the reulation of MBS/CDOs – it’s at work I am afraid.

    But these two links are interesting in their own right:

    http://www.washingtonpost.com/wp-dyn/content/story/2008/06/14/ST2008061401569.html

    http://www.cadwalader.com/assets/article/050108ZwirbCFTCSEC.pdf

    Much of this started before the rescue – and there are a lot of others saying “thank-you”.

    Perhaps laissez-faire capitalism is not such a great idea in the (absolute) presence of collusive market agents, or for that matter, business cartels and oligopolies?

    I think life is more complicated than unbridled capitalism – for the simple reason that we don’t have a “fair” capitalism anymore (for the myriad of reasons that we don’t).

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