Haven't seen Warren Buffett around for a while, but yesterday some comments from his Berkshire Hathaway Inc. annual letter were posted on Drudge via Bloomberg, such as: “Large numbers of people who have ‘lost’ their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost. In these cases, the evicted homeowner was the winner, and the victim was the lender.”
I thought his present position was interesting because he now controls the biggest shareholding of the largest U.S. mortgage lender, Wells Fargo & Co. which is owned by Bank of America Corp. in which he invested $5 billion last year. In 2010, which was before his BOA investment, he also publicly defended Goldman Sachs against accusations it mislead clients.
So I guess his belief is that if someone like him buys into a floundering bank, taking advantage of their weaknesses, that's perfectly alright because he's a good guy. But if borrowers profit from a market opportunity, they're not. And that seems odd to me because Buffet seems to me like a guy who'd kill anyone for a quarter and not even think about it.
I also can't help but remember that he apparently got a sweetheart deal on the B of A via an inside track provided by the White House, and then went out and said that the wealthy should willingly pay higher taxes because they can afford it.
And what's more interesting than that is the fact that the mortgage industry's facing criticism from Democrats, including the president who said in his State of the Union address that bets by lenders prompted the 2008 credit freeze and “left innocent, hard-working Americans holding the bag.”
However, as I've mentioned many times in the past, it was the president himself and Project Acorn, along with guys like Dodd and Frank, who forced bankers to lend to credit-less wannabees and deadbeats in order to level the home ownership playing field. And after causing that debacle which he's completely walked away from, he now blames the very same banks he put into financial turmoil himself.
So, I guess when it comes to politics and money, it's always the same old, same old. It doesn't really matter to certain types of folks how they amass as much as they can for themselves, but nonetheless they really don't want that known by anybody else.
That's it for today folks.
Adios
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