I don’t ordinarily read the newspaper.  Newspapers contain a lotta words.  & as you know, I’m skeptical of words.  Too volatile & unstable.  No one can agree on the precise meaning of words.  Newsprint blurs when my nose touches the paper & it smells funny anyway.  

But GrandSire is always nested in his newspaper on Sundays when we go visit.  So I immersed myself in the following article yesterday.  Admittedly it’s only part of the article & taken out of context, so if you want to read the entire article, be my guest. 


By Charles Piller  The Sacramento Bee 

Warren Buffett increased his bank holdings in September, while he was arguing in the media that Congress should approve the bailout to prevent the collapse of the global financial system. 

"People can draw their own conclusions" about Buffett’s stake in the bailout, said Richard Coppes, an expert in business ethics at the international law firm Jones Day, and a former general counsel of the California Public Employees’ Retirement System. "But it shows one reason Buffett is so intensely interested in TARP."

The findings follow a recent controversy over some Buffett holdings that may have contributed to the economic crisisBerkshire owns more than 20 percent of Moody’s, a top credit-rating agency, making it by far the largest stakeholder. Moody’s has been faulted for enabling the global crisis by overvaluing mortgage assets.

Although Buffett has been outspoken about the need for government intervention in the crisis caused by the mortgage meltdown, he’s said nothing publicly about the role of a company in which his firm is a minority holder. 

Device decried  Buffett also has decried "credit default swaps" — which are similar to insurance policies, in which mortgage bonds and other financial instruments are insured against default — as "financial weapons of mass destruction."  He criticized the profligate use of these unregulated financial tools, or derivatives, widely blamed as a root of the credit collapse.  Yet Berkshire has issued tens of billions of dollars in derivatives. In a letter to shareholders, Buffett justified derivatives as relatively safe and likely to yield vast profits.

Leading economists, however, said Berkshire’s credit default swaps are much the same as those that sank American International Group (AIG), the insurer at the epicenter of the derivative fiasco.

"I assume that (Buffett) is being more responsible than they were," said Dean Baker, the co-director of the Center for Economic and Policy Research in Washington. "But this is a difference in quantity, not quality."

Surprising control  Simon Johnson, a professor at MIT’s Sloan School of Management and the former chief economist for the International Monetary Fund, said that despite the banking collapse, financial leaders such as Buffett have retained surprising control over the government.

"There’s this general presumption that Wall Street knows best. But they may not know best for the taxpayer," Johnson said. "We’ve gotten into the habit of deferring to them a little too much, including Warren Buffett."

Phillip Reese of The Sacramento Bee contributed to this article. 

I know I’m just a dog.  Don’t understand complex human affairs.  Don’t understand big words like collusion.  But I can google good as the next dog.  Look what I found:
    • – secret cooperation: secret cooperation between people in order to do something illegal or underhanded

& like I’m only a dog, but I know a thing or 2 about loyalty & trust.  & I understand breach of trust & conflict of interest just fine.  Not rocket science. 

So . . . it appears that Warren, mah man, Buffett is a stakeholder in all sectors of the finance & insurance industries & he’s been playing Heads I Win/Tales You Lose with the global economy for a long, long time. 

If you want sound financial advice from the Glitteratti, I would suggest the other Buffet , , , Jimmy.  He made enough money to buy Miami.  Or Dolly Parton.  Lotta people misunderestimate her skills & abilities too.

OpalK9 OTJ

This entry was posted in Business/Investment. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s