I’ve read enough about and by Warren Buffett to be completely in awe of him. he remains, as Doug Kass calls him, The Mozart of Investing, cobbling together one masterpiece after another, always ahead of the curve.
That said, my eyes were opened by some of my favorite bloggers this weekend, and I will probably never be able to look at Buffett the same way again.
The blogosphere went bezerk over the weekend upon hearing about Buffet’s backing of Golman’s bid to protect their recent profits by buying up Fannie Mae tax credits from the government. The fact that a rescued investment bank that already has a PR nightmare on its hands would even be thinking this way has set quite a few people off.
Trader Mark of Fund My Mutual Fund puts it thusly:
If there is one man who bests Cramer at self promotion it is Warren Buffet. Now let’s be clear he is an investing genius… a marvel. But for anyone who thinks he is any different than “take your lunch money when your eyes are averted” top honchos at the investment banks, you have been duped. He is walking Capitalism 101 – the good, the bad, and the ugly. Carl Icahn with a far better publicity machine; operating in a corporate socialist state.
Mark also notes in connection with the transaction that:
…midweek Warren Buffet (who is now a major stakeholder in Goldman) swoops in and puts his backing behind the Goldman bid. Oh that cute and cuddly “grandpa” guy from Omaha….it must be “ok” then!
One of the more widely read and take-no-prisoners posts on the topic this weekend comes from Barry Ritholtz at The Big Picture:
This paper transaction would have provided precisely zero value to the taxpayers, and allowed these firms to add to the piles of bailout monies already received by avoiding billions of dollars in taxes otherwise legally owed. It would have been a license to steal.
The sheer arrogance, the colossal gall involved boggles the mind.And while we expect this sort of behavior from the Vampire Squid — they take pride at Goldman in not just being whores, but in being the highest paid callgirls in town — it is stunning to see such behavior from the usually politically astute Oracle Tentacles of Omaha. For Warren Buffett’s Berkshire Hathaway to team up with Goldman Sachs (which he now owns a healthy chunk of) is a bit of a revelation: We have been spun by his genteel manner, his aw shucks down-home-isms, his off Wall Street, less bloodthirsty approach to investing, into somehow believing he was different.We have been duped.We should not have been. Buffett has been the biggest shareholder in Moody’s — a collection of filthy whores and pederasts who were one of the main contributors to the economic collapse — should have raised serious questions as to his judgment in our minds. That he sat by silently as they did their worst, sodomizing the nations credit system for fun and profit was a powerful indictment of Buffett as someone far different than his public persona. In retrospect, as Moody’s was helping to destroy America’s financial system, his merely spouting off aphorisms about about Financial WMDs now looks too cute by half.