Comment by TheSkeptic | Hacker News Reader

Comment by TheSkeptic | Hacker News Reader

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You should do your research before making statements like "especially since he's stayed away from wall street's games and made extraordinary efforts to keep things above board for decades."

Buffett didn't sit idly by while his holdings were threatened. He lobbied for, and supported, bailouts.

Not content with bailouts of companies he owned large stakes in, he made sweetheart deals to invest in Goldman Sachs and GE knowing what was going to happen. Have you ever explored those?

If his GS and GE investments aren't convincing enough, here are a few choice examples of the Oracle of Omaha's hypocrisy:

1. While he promotes higher tax rates for high-earning individuals, he lobbied against a tax that would have sought to recoup TARP losses from bailed-out banks (see http://abcnews.go.com/Business/buffett-bank-tax-higher-rich-...).

2. Buffett once famously warned that derivatives were deadly, but when it came time to put his money where his mouth was, he lobbied against proposed derivatives regulations that would have cost Berkshire billions (see http://www.independent.co.uk/news/business/news/buffett-lobb...).

3. In 2010, Buffett once defended the ratings agencies (see http://www.wnyc.org/articles/wnyc-news/2010/jun/03/buffett-d...), but apparently he's only willing to defend them so long as they agree with him (see http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn...).

Bottom line: whatever one may have once thought about Warren Buffett, his actions over the past several years make it clear he is no investor, he is a corporatist. And quite a successful one at that.

I've done my research about Buffet. I've read 2 biographies, a compilation of his annual letters, some of his early partnership letters, and most of his op-eds and TV interviews. The people who criticize Buffett usually don't know much about him and it shows in how they paint him in the stereotypical tycoon brush.

I sincerely believe that he was in favor of the bailouts because he thought that it was the least bad option at the time. Without more liquidity in the system, things could have turned out much worse than they did.

Sweetheart deals in GS and GE? Buffett had lots of cash and they needed it, so he made deals that were very profitable to BErkshire and they took it because they didn't have a choice. I'm sure he expected the government to step in because it was obvious to him that they didn't have a choice, but I don't think he had inside information.

Buffett has explained his derivative investments in recent annual letters, and his explanation made perfect sense. I'm sure you can find it, it was probably in the 2009 one ±1 year.

Both Buffett and Munger have been very critical of rating agencies and accountants, but I'm sure they've also defended both against criticism that they think is unfair. It's not because you're wrong that you're wrong in all ways, always in bad faith, and about everything.

Hmm, long laundry list, and somewhat valid.

Yet he is the only one who amongst the super rich in America who is talking about raising taxes. He is doing this specifically because of the positive impact it would have on finances for the country, despite the fact that this would have a disproportionate/fair share effect on his tax payments.

I only had time to skim the first article (getting late here), but I agree with Buffett's reasoning on the TARP issue. If the banks DID pay back their debt, then why should they be the ones taxed? He's not saying that industries shouldn't be taxed to cover losses, he's saying that the government should go after specific industries (like the auto industry) that aren't performing as well as they should be. Chase, if I remember correctly, was very good about repaying their loans on time. Now why should they be punished for that?

Oh, and Warren Buffett plans on donating the vast majority of his wealth away upon his death, so I usually give him the benefit of the doubt and believe that his suggestions are intended to improve the economy as a whole rather than build up wealth. What's it matter to him if he makes or loses another billion when he's giving it away in the end? Nah, I think he's a good guy.

None of the positions you linked are inherently contradictory. Especially in the derivatives trading I have the feeling you have no idea what you're talking about. Going back and requiring existing derivatives contracts could cost a huge amount of money and time that wasn't taken into account when they were first bought. Applying the regulation to future contracts is a perfectly reasonable suggestion (especially since the vast majority of derivatives contracts are short term).

btw, When Berkshire acquired Gen Re (a massive reissurer), they closed down its derivatives book. It cost Berkshire hundreds of millions and took years, but they closed that book because they couldn't understand these derivatives.

The ones that Buffet has invested in are way more straightforward, don't pose any systemic risk, and have very different collateral requirements than the toxic stuff.

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