The Other McCain

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$5 Billion To B-of-A, And All The IRS Got Was A Lousy T-Shirt Full Of Platitudes

Posted on | August 25, 2011 | 12 Comments

by Smitty

Stop Coddling the Super-Rich, saith the sagebrush of Omaha on 15 August:

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

Oh boo-effing-hoo. Wait, what’s today’s news?

Warren Buffett’s Berkshire Hathaway announced a surprise $5 billion investment in Bank of America Thursday morning, sending shares of the struggling Dow component surging more than 25% in early trading.

So, why don’t you just pour your company’s money into the IRS? Surely, all that matters is keeping the USS Sacred Holy Ideological Theater steaming, right? Later:

Bank of America (BAC, Fortune 500) shares have taken a beating on concerns that the banking giant may need to raise capital to shore up its balance sheet. But the stock made a comeback Wednesday after influential analyst Meredith Whitney said Bank of America wouldn’t need fresh capital.

0:00 / 3:14 BullHorn: Is worst over for BofA?
The bank announced it would lay off 3,500 employees earlier this month, on top of the 2,500 layoffs that the company announced earlier this year.

Buffett’s investment is nearly identical to the $5 billion investment that Buffett made in Goldman Sachs (GS, Fortune 500) in September 2008 at the height of the financial crisis. That was seen as a major endorsement of Goldman’s then at-risk business model. Goldman bought back the preferred shares it issued to Berkshire in that transaction earlier this year.

It would be cool if we could rule out more federal reserve shenanigans. However, until such time as we return to a representative government, we can safely assume the bankers are, once again, financially raping future generations in favor of covering their sad little backsides.

Update: Surber-lanche!

Update II: And Buffet is hosting a BHO fundraiser? Really? Certainly his right, just as it is the right of this blog to consider fundraising for BHO a self-indictmnet. Get bent, Mr. Buffet.


12 Responses to “$5 Billion To B-of-A, And All The IRS Got Was A Lousy T-Shirt Full Of Platitudes”

  1. Paul Joslin
    August 25th, 2011 @ 4:15 pm

    Just waiting for the Sage of Omaha to start lobbying Congress to ‘help the economy” by not allowing the states to prosecute the tens of thousands of cases of fraud perpetuated by BoA.

  2. jwallin
    August 25th, 2011 @ 5:04 pm

    Hmmm, BofA and Citigroup (and most likely a bunch of other banks) forge foreclosure documents and it all comes out just as we’re discovering that a lot of those self-same mortgages were fraudulently bundled and sold as ‘securities’ thus burdening other financial institutions with toxic/negative value assets which was one of the reasons for our economic melt down in the first place.

    And NO one’s getting investigated or has gone to jail? In FACT they’ve gotten bailed out and put the country’s economy on an even slippery slope yet no investigations, no hearings in Congress.

    Not even the demagogic left wing Democrats are descrying the bailout of FAT CAT BANKERS. How can this be? I thought the D’s were all about ‘protecting the little people’  n’ stuff?

    Notice who’s awfuwy awfuwy qwiet? Bawney Fwank that’s who. The House half of the daring duo (Dodd in the Senate) that shielded Fannie Mae and Freddie Mac from closer scrutiny and getting audited along with putting forth financial institution rules that will cause millions of small customers of banks to have to pay extra fees to use their debit cards or stop using them (and there goes internet sales) and didn’t help anyone except the BANKS.

    Especially the ones who gave them (Frank and Dodd) special deals and donations. (can you say Countrywide Financial?)

    Dodd at least had the good grace to quit the Senate but Frank is still there. But  he must be wabbit hunting cause we have heard anything from him lately.

  3. PhilipJames
    August 25th, 2011 @ 5:10 pm

    I believe that there is collusion between Buffet and the Administration on all these investments. Remember how Buffet made out pretty good on the Goldman Sachs investment and helped out the Administration in supporting parts of the market that need it.
    Since Buffet wanted to pay more in taxes, Obama said…  “Hey, Warren, instead of blowing your money in taxes – which we will waste anyway – how about blowing your money into BofA to help us out?”

  4. Republicanmother
    August 25th, 2011 @ 5:43 pm

    The reason the left isn’t decrying bankster shenanigans is that they haven’t been given the talking points to do so. They whine when the R is in charge and now its the Rs turn to point out corruption. Yeah, I’m pretty jaded, but its true.

    I’ve been reading up on Wall Streets involvement in the Bolshevik Revolution and I learned some wild stuff backed up by the State Dept files and telegrams:

    1. Guaranty Trust Company, a JP Morgan operation, finance Pancho Villa and helped with arms and money set up the Caranza regime in Mexico, the world’s first communist government.2. New York City Fed Chairman William Boyce Thompson wired the Bolsheviks their first million dollars and financed Soviet propaganda.Look up Wall Street and the Bolshevik Revolution and you will find themes relevant to our present day. The playbook remains unchanged because it has been so profitable for them. They get control of the media and lock up the countries wealth through socialism, themselves always being exempted. Check it out.

  5. Will Buffett cash in on a $91 billion bailout? « Don Surber
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  6. Steve in TN
    August 25th, 2011 @ 6:16 pm

    I wish someone would give me a simple Cliff’s Notes version of this since I don’t understand a whit of what was written…  Why is it bad that Buffett via Berkshire invested $5 billion in BoA?

  7. mike
    August 25th, 2011 @ 6:51 pm

    Didn’t Buffet leave money to the Gates Foundation to avoid paying taxes?  Turdhammer.

  8. Shawn Gillogly
    August 25th, 2011 @ 8:10 pm

    Steve in TN.

    It’s bad because it looks like Obummer gave Buffet a tipoff where to invest. If this were a private citizen, it very well might qualify as insider trading.

    At the very least, it’s crony capitalism by a man who (supposedly) made his name through ‘ethical’ trading. The truth of that is considerably less rosy than the media portrayal, but questions don’t get asked because he likes to give to Progressives out of White Guilt.

  9. Wilbur Post
    August 26th, 2011 @ 12:28 am

    The thing that must be understood about Buffet’s BOA buy is that he is NOT buying the common stock available to us bitter clingers.  He is buying a special preferred issue which pays a 6% dividend (try getting that in a T-bill.)  Preferred stock is also a senior creditor in case BOA is not too big to fail.

    Buffet is essentially making a LOAN to BOA at favorable terms to himself.  I doubt he would be interested in the issue otherwise.  But no one should take it as a sign of confidence in either the bank or the economy.  If Buffet really thought BOA was a great bargain, he would buy the common like he did for Coke, Amex, etc.  A healthy functioning business like Coke doesn’t need to give Buffet or anyone else 6% interest to get them to invest.

  10. Adjoran
    August 26th, 2011 @ 6:56 am

    The idea that banks have “forged” documents is outrageous.  The “robo-signing” issue involves the legal transfer of rights and ownership of mortgages.  Because of the way mortgage securities are packaged, the authority is generally transferred at once for hundreds or even thousands of specific holdings.  No one is defrauded.  The people who owe the money didn’t pay it.  They have forfeited their right to occupy the house.  But many states have ancient requirements that a physical signature be on any document attached to real property, and so this technicality is delaying the resolution of the huge foreclosure market.

    Delay helps only the deadbeat Democratic cheats who are living in their homes for free while idiots complain about the banks trying to reclaim their security on loans in default.

    New home construction, the domestic leader of all post-WWII recoveries (exports being the overall leader), cannot recover until the excess inventory of homes from the boom-bubble is depleted.  Throwing wrenches in the process may convenience the Obama voters, giving them time to come up with their next scam, but until those properties are foreclosed and on the market, there will be no recovery.

  11. Adjoran
    August 26th, 2011 @ 7:12 am

    That’s the Buffet MO, though, with those in distress.  BAC’s main danger is market panic – their chart sucks – and there is no guarantee of federal help in the current climate.  So Buffet’s reputation of snatching up bargains is far more helpful in the perceptions it creates than in the actual investment, only around 7% of their capitalization even at the current low price.

    Therefore he demands and gets the more favorable class of stock, but his investment seems safe enough.  The consensus estimate for BAC in a year is nearly $14, and the projected P/E will be just over 5.  Banks don’t lose money, their only problem is capitalization and the quality of their investments.

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