In the wake of the $700 billion TARP bailout, Warren Buffett apparently shaped a plan to clean up toxic assets that Treasury Secretary Tim Geithner later adopted–resulting in massive profits for Buffett.
That’s the latest bombshell revelation from investigative journalist and Breitbart editor Peter Schweizer’s sensational new book, Throw Them All Out.
According to Schweizer, after the bailout bill’s passage, Warren Buffett sat down and wrote then-Treasury Secretary Henry Paulson a four-page private letter laying out a plan to clean up the toxic assets plaguing numerous financial institutions. Buffett proposed something he called a “public-private partnership fund.” For every $10 billion the private sector invested, Buffett said the government should put up $40 billion.
After Paulson’s exit, incoming Treasury Secretary Tim Geithner tweaked the plan and rolled it out in March 2009. But according to quarterly reports from Buffett’s holdings company, Berkshire Hathaway, between the time the billionaire crafted his plan and Geithner adopted it, Buffett quietly purchased 12.4 million shares of Wells Fargo stock and 1.5 million shares of U.S. Bancorp. Once the government unveiled its “Public-Private Investment Program,” bank stocks jumped, resulting in large profits for Buffett.
How much Buffett profited is hard to calculate, since there’s no way to know what his purchase price was. But prior to the government adopting Buffett’s plan, Wells Fargo had been trading at roughly $20 a share. In the weeks after Geithner’s announcement, the stock jumped to $30 a share. Likewise, U.S. Bancorp went from $8 in February 2009 to more than $20 a share by May.
Schweizer’s revelations contradict the image Warren Buffett has worked hard to create as that of a folksy, grandfatherly figure who stays above the political fray and rarely gets mired in the muck of partisan politics. Indeed, Throw Them All Out uncovers other alarming acts of apparent crony capitalism performed by the so-called “Oracle of Omaha.”
For example, Schweizer examines Buffett’s intense private lobbying efforts and deftly-timed stock buys that leveraged TARP bailout monies to create up to $3.7 billion in windfall profits for Berkshire Hathaway.
In September of 2008, Buffett invested $5 billion in the over-leveraged investment house of Goldman Sachs, having obtained impressive terms: Berkshire Hathaway would receive preferred stock with a 10% dividend yield, and the option to buy another $5 billion at $115 a share.
As the political debates surrounding the proposed $700 billion TARP bailout bill heated up, Buffett maintained an appearance of naivete, an “aw shucks” shtick that deferred to the judgment of politicians. “I’m not brave enough to try to influence the Congress,” Buffett told the New York Times.
Behind closed doors, however, Buffett had become a shrewd political entrepreneur. With his Goldman bet in place, the billionaire exerted his considerable political influence in a private conference call with then-Speaker of the House Nancy Pelosi and House Democrats. During the meeting, Buffett strongly urged Democratic members to pass the $700 billion TARP bill to avert what he warned would otherwise be “the biggest financial meltdown in American history.”
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Buffet is like an old school magician that lives his act. All in an effort to mask the fact that he is the biggest shark to ever walk the planet.
buffet is a fraud.
He was an early hero of mine, about a decade ago. I’ve been very disillusioned over the last 3 years to see how he has been operating.
the media is working overtime to disparage buffet…
wall street doesn’t want some “non-insider-wall-street-imaged-guy” to be revered. wall street and the media have alot in common, btw.
that noted, OF COURSE, he is a self serving guy. he has
1. never created anything
2. used his vast and epic intellect to play in the very casinos and “mass destructive” derivatives markets that he decries
lets be real, this ain’t your good old granpaps
the media licks old buffet balls all day everyday. it doesnt take intellect to game a system you own. although gettin to that point does.
lest we forget the other 10,000 morons in american politics that did the same.
damn that lefty illuminati puppet