Tuesday, September 23, 2008

Warren Buffett: Thespian

Just as things are getting shaky again, and on a day that Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, and SEC Chairman Christopher Cox endure the slings and arrows (not to mention helpful guidance) of the Senate Banking Committee [Thank you Founding Fathers for ensuring the separation of powers!] to defend their bailout plan, Warren Buffett, with the dramatic flair of JP Morgan a hundred and one years ago, steps into the breach and invests $5 billion in investment banking firm Goldman Sachs. But he made this deal not without his pound of flesh, as the Goldman preferred shares he is buying yield a juicy 10%, and the warrants he gets are already in the money.

Nice deal Warren, and nice timing too. [Ya big ham - you know they're gonna be talking about this one for a while.]

Does the Financial Panic of 2008 now morph into the Financial Buying Panic of 2008?

Tough call - I'd guess yes, mainly based on observations of an orgy of negativity.

And there are probably a number of people short who have now overstayed their welcome.

Bloomberg: Goldman Gets Buffett's Backing in $7.5 Billion Fundraising Plan.