THE DOT - if this turns orange or red be alert

Wednesday, January 20, 2010

Buffett has lost his grip and decency

Either Buffett has lost his mind or is a mean evil mind talking his book - no bank on this earth would have survived without the extreme efforts and trillions thrown at them and still are with zero interest rates ( just to name one) - which are deep negative interest rates as banks around the world have increased the interest they charge and the fee's. Goldman and Wells would be bankrupt as would Mr Buffett be who is probably the single biggest beneficiary of this bailout - sit down and shut up greedy old man.


Buffett Opposes Obama Bank Fee, Likens Plan to Taxing Congress

By Andrew Frye, Betty Liu and Jamie McGee

Jan. 20 (Bloomberg) -- Warren Buffett opposes President Barack Obama’s proposed levy on financial institutions because firms including Goldman Sachs Group Inc. and Wells Fargo & Co. already repaid bailout funds.

“I don’t see any reason why they should be paying a special tax,” said Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., in an interview on Bloomberg Television today. Supporters of the plan to tax the banks “are trying to punish people,” he said. “I don’t see the rationale for it.”

Obama announced a plan last week to impose a fee on as many as 50 major financial companies to cover as much as $117 billion in losses from the federal government’s Troubled Asset Relief Program. The levy would apply to firms with more than $50 billion in assets and would exclude Fannie Mae and Freddie Mac, the government-sponsored mortgage lenders that had to be taken over by the U.S.

“Look at the damage Fannie and Freddie caused, and they were run by the Congress,” Buffett said. “Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so.”

Berkshire has investments in Wells Fargo and Goldman Sachs, which have repaid their bailout funds. Bank of America Corp. and JPMorgan Chase & Co. were also among the biggest beneficiaries of bailout funds, and both repaid their rescues.

Unnecessary Rescue

“Most of the banks didn’t need to be saved,” Buffett said. “Including Wells Fargo.”

The president is tapping into voter anger that the government bailout may be followed by record Wall Street bonuses as the country struggles with a 10 percent unemployment rate. The tax would be imposed on firms including bank holding companies and some insurers. The administration estimates the tax will raise $90 billion over 10 years and $117 billion over 12 years.

“My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people,” Obama said Jan. 14 when he announced the Financial Crisis Responsibility Fee. “We want our money back, and we’re going to get it.”

Berkshire has holdings of Bank of America and Goldman Sachs and is the largest stock investor in Wells Fargo.

Buffett’s firm is also the top investor in Kraft Foods Inc., which agreed yesterday to pay 11.9 billion pounds ($19.4 billion) to take over Cadbury Plc. Buffett said Kraft is overpaying for the British candymaker because it is using its undervalued stock to fund part of the deal.

“I think this deal was a mistake,” he said in the interview. “Kraft was very undervalued before. I feel it’s less undervalued after doing this deal than before.”

‘Transforms Our Portfolio’

In an earlier interview with cable network CNBC, Buffett said he would vote against the deal if given a chance. Kraft raised the cash portion of its offer in its final bid, obviating the need to obtain the consent of shareholders.

Kraft believes the acquisition “transforms our portfolio for better long-term growth,” said Michael Mitchell, a spokesman for the Northfield, Illinois-based company, after Buffett’s comments. “We respect his opinion.” Trevor Datson, a spokesman for Uxbridge, England-based Cadbury, declined to comment.

Buffett, who usually shuns giving investors an opinion on Berkshire’s value, said in a separate interview with Bloomberg that his company’s shares are also undervalued. Still, he said his critique of Kraft’s bid for Cadbury didn’t apply to his plan to use Berkshire stock to fund part of his bid for railroad Burlington Northern Santa Fe Corp. The railroad fell about 15 percent to $76.07 in the 12 months before Buffett agreed to pay $100 a share.

‘Paying a Penalty’

“We are paying a penalty issuing shares at this price” for the Burlington deal, he said. “Even though I value our offer at more than $100 a share, I’m still OK with it. But it’s close.”

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