Obama is Bush part 3

Buffett's Big Bet: The Real Value of the Berkshire Investment in Goldman Sachs

Taxpayers SHOULD buy what Buffett is buying, instead of what he is telling us to buy.

He says the taxpayer overpaying for crappy mortgages is a great idea for all us little people -- but not good enough for him. He gets a much better deal for himself.

Buffett Enters the Fray

Buffet is a hypocrite.

Its fine for the taxpayer to buy $700 billion of crap mortgage securities -- but its not OK for Berkshire Hathaway to buy even $5 billion. BRK instead bought $5 billion of cumulative convertible preferred shares from Goldman Sachs... you know the sort of preferred shares that Henry Paulson adamantly rejects having the taxpayer buy.

This may be a cruel statement, but its 100% true. Given his age, Buffett will be dead long before the debt for this bailout comes due.

BRK will collect 10% dividend yield from Goldman, even if the mortgage securities continue to decline. The only risk is if Goldman itself fails, which now that it is a Fed protected bank is a very small risk.

If Buffet really believed the mortgage securities were such a great deal, he should have bought them directly. Given his (prior) reputation, such a vote of confidence would likely have brought in lots of other players and eliminated the need for a taxpayer bailout.

Buffett bought cumulative convertible preferred shares for himself while recommending the taxpayer buy all the crap.

Buffet: "Do what I say, not what I do"