Investment Propaganda

[Finster]

http://www.bloomberg.com/apps/news?p...d=aOaWmFm58DAc

U.S. Index Futures Advance; European Stocks Are Little Changed

By Adam Haigh

Sept. 24 (Bloomberg) -- U.S. index futures and financial shares in Asia and Europe rose after Goldman Sachs Group Inc. won backing from Warren Buffett. The Dow Jones Stoxx 600 Index erased gains as ProSiebenSat.1 Media AG reduced its earnings forecast.

Goldman jumped 10 percent in Europe, UBS AG added 5.7 percent and Australia's Macquarie Group Ltd. rallied 11 percent after Buffett's Berkshire Hathaway Inc. said it's buying $5 billion of perpetual preferred stock in Goldman with a 10 percent dividend...

Berkshire also gets warrants to buy $5 billion of Goldman's common stock at $115 a share at any time in the next five years. In addition to raising money from Buffett, Goldman said it plans to sell at least $2.5 billion of common stock to the public...

It is sad witness the venerated Warren Buffet becoming a paid shill for stocks.

The S&P futures were said to have taken a hefty advance (some 10-20 points, hundreds of billions in market cap) on the news that the legendary value investor was apparently scooping up bargains in US financial stocks. Goldman's own stock popped some 4%.

But is that what's really going on here? According to the story, Buffett bought preferred shares yielding 10%. In addition, he retains the option to buy common at $115. Neither you nor I have anything like that available to us, yet we are supposed to follow Buffett's lead, and buy, buy, buy.

Buffett is getting a real sweetheart deal here. Transparently calculated to induce the ignorant masses to ante up their capital on far less favorable terms.

Shame.

[GRG55]

Re: Investment Propaganda

http://www.bloomberg.com/apps/news?p...d=aOaWmFm58DAc

U.S. Index Futures Advance; European Stocks Are Little Changed

By Adam Haigh

Sept. 24 (Bloomberg) -- U.S. index futures and financial shares in Asia and Europe rose after Goldman Sachs Group Inc. won backing from Warren Buffett. The Dow Jones Stoxx 600 Index erased gains as ProSiebenSat.1 Media AG reduced its earnings forecast.

Goldman jumped 10 percent in Europe, UBS AG added 5.7 percent and Australia's Macquarie Group Ltd. rallied 11 percent after Buffett's Berkshire Hathaway Inc. said it's buying $5 billion of perpetual preferred stock in Goldman with a 10 percent dividend...

Berkshire also gets warrants to buy $5 billion of Goldman's common stock at $115 a share at any time in the next five years. In addition to raising money from Buffett, Goldman said it plans to sell at least $2.5 billion of common stock to the public...

It is sad witness the venerated Warren Buffet becoming a paid shill for stocks.

The S&P futures were said to have taken a hefty advance (some 10-20 points, hundreds of billions in market cap) on the news that the legendary value investor was apparently scooping up bargains in US financial stocks. Goldman's own stock popped some 4%.

But is that what's really going on here? According to the story, Buffett bought preferred shares yielding 10%. In addition, he retains the option to buy common at $115. Neither you nor I have anything like that available to us, yet we are supposed to follow Buffett's lead, and buy, buy, buy.

Buffett is getting a real sweetheart deal here. Transparently calculated to induce the ignorant masses to ante up their capital on far less favorable terms.

Shame.

Completely disagree Finster. It is not Warren Buffett or Berkshire that is putting a positive spin on this; it's the usual Wall Street/Bay Street/City of London spin machine doing the touting.

Just prior to my posting this reply, Goldman announced the issue price for their common stock issue will be $123 per share...that means Berkshire's warrants are $8.00 per share in the money right out of the gate. Anybody with a one functioning brain cell can easily figure out, as you rightly point out, that Buffett has driven his usual hard bargain and secured a significant premium from Goldman; far above anything the rest of us can achieve. The problem is not Buffett, the problem is that many so-called "investors" appear to be lacking one functioning brain cell. Either that, or there is still far too much money still in the hands of people managing OPM, and the incentive system is still stacked in the managers favour and against the owners of that rapidly diminishing capital. ;)

[Finster]

Re: Investment Propaganda

Completely disagree Finster. It is not Warren Buffett or Berkshire that is putting a positive spin on this; it's the usual Wall Street/Bay Street/City of London spin machine doing the touting.

Just prior to my posting this reply, Goldman announced the issue price for their common stock issue will be $123 per share...that means Berkshire's warrants are $8.00 per share in the money right out of the gate. Anybody with a one functioning brain cell can easily figure out, as you rightly point out, that Buffett has driven his usual hard bargain and secured a significant premium from Goldman; far above anything the rest of us can achieve. The problem is not Buffett, the problem is that many so-called "investors" appear to be lacking one functioning brain cell. Either that, or there is still far too much money still in the hands of people managing OPM, and the incentive system is still stacked in the managers favour and against the owners of that rapidly diminishing capital. ;)

I'm completely right. While you claim to disagree, you then proceed to argue points I have not made. I've nowhere remotely suggested the media aren't playing their scripted role here, so that's a non-issue. While the relevant facts are reported, the spin omits any suggestion of what I've just pointed out.

In fact, this calls into question Buffett's entire record since he achieved investing fame. To what extent has he profited from a keen investment eye, and to what extent from selling his name and reputation?

[Supercilious]

Re: Investment Propaganda

It is sad witness the venerated Warren Buffet becoming a paid shill for stocks.

The S&P futures were said to have taken a hefty advance (some 10-20 points, hundreds of billions in market cap) on the news that the legendary value investor was apparently scooping up bargains in US financial stocks. Goldman's own stock popped some 4%.

But is that what's really going on here? According to the story, Buffett bought preferred shares yielding 10%. In addition, he retains the option to buy common at $115. Neither you nor I have anything like that available to us, yet we are supposed to follow Buffett's lead, and buy, buy, buy.

Buffett is getting a real sweetheart deal here. Transparently calculated to induce the ignorant masses to ante up their capital on far less favorable terms.

Shame.

Finster, I don't understand why are you getting upset. How do you think you get 21% yoy for the last 20 something years ??? By doing the.... "right thing" every time .

You cannot get to that amount of success if you don't play the game.
You cannot become a made man without whacking somebody.
There is no white-pure knight on the Wall Street.

[phirang]

Re: Investment Propaganda

Finster, I don't understand why are you getting upset. How do you think you get 21% yoy for the last 20 something years ??? By doing the.... "right thing" every time .

You cannot get to that amount of success if you don't play the game.
You cannot become a made man without whacking somebody.
There is no white-pure knight on the Wall Street.

I recall Buffet advocating 100% inheritance tax, ostensibly to "equalize" things, but there's also an incentive for him to drive people into tax-protected annunities that he runs!

It's like T Boone with his "Pickens Plan": he wants wind farms to secure land rights to get access to water (see Mesa Water), and he wants NGV to increase the value of natural gas(which I dont find objectionable).

[c1ue]

Re: Investment Propaganda

Finster,

I've said on numerous occassions that while I personally admire Sir Warren the man as well as his track record, that there are numerous instances of him playing ball with the financial gang.

Salomon brothers was a fine example: an institution literally steeped in the defrauding of S & L bankers - he went in and used his reputation to straighten it out.

AIG - there was a tie-in between Greenberg and Berkshire although Buffet was never officially involved. But I very much doubt Sir Warren was completely uninvolved in deals of that magnitude.

But the conclusion I draw from this deal isn't the sweetheart nature nor Warren's lending his reputation to Goldman.

It is that Sir Warren apparently believes Goldman is either not insolvent or is not going to be insolvent such that preferred shareholders won't get their money back.

So either the Level 3 at Goldman truly isn't as bad as it could be, or else he is betting on Goldman scooping up enough other assets to survive. For the good of the American people. By devouring countless regional banks.

[Finster]

Re: Investment Propaganda

Finster, I don't understand why are you getting upset. How do you think you get 21% yoy for the last 20 something years ??? By doing the.... "right thing" every time .

You cannot get to that amount of success if you don't play the game.
You cannot become a made man without whacking somebody.
There is no white-pure knight on the Wall Street.

Who said Buffett didn't play the game? Who said he didn't whack anybody? Who said there was a "white-pure knight on the Wall Street"?

Apparently some folks don't like what I've said. So far, however, no one has pointed out where I am wrong.

[Supercilious]

Re: Investment Propaganda

So far, however, no one has pointed out where I am wrong.

Because nobody can prove you are wrong .... although some of us find difficult to accept reality even even when conclusion are obvious ... that's the human nature.

[GRG55]

Re: Investment Propaganda

Because nobody can prove you are wrong .... although some of us find difficult to accept reality even even when conclusion are obvious ... that's the human nature.

And Finster can't prove that he's right either...

[tombat1913]

Re: Investment Propaganda

I can't understand what is going on with Goldman Sachs but I still believe BNSF and Constellation were good calls.

[Rantly McTirade]

Re: Investment Propaganda

Buffett drove a tough bargain & got a great deal on a specific; this is what we all should strive to do. Unfortunately, most of us lack comparable
resources &/or skills.

OTOH, Buffett has clearly become a pimp for the developing economic,
political & social order(he's a 'transnational progressive', in the vernacular). This has emerged in the past dozen or so years & is a fascinating contrast to his Congressman father. His shilling, in a disingenous manner for the Paulson/Bernanke plan is in line with this & confirm his disinterest in what's best for the nation and taxpayers generally.

Buffett's opinion on matters other than specific stock/investment selection should be given no more weight than those of others who
have shown exceptional ability at one rather narrow skill, i.e., Brett
Farve,Oprah, Renee Fleming, etc., etc. In fact, they should be evaluated
in light of the political, cultural & (broad)economic views his actions(not
rhetoric) associate him with.

[GRG55]

Re: Investment Propaganda

I'm completely right. While you claim to disagree, you then proceed to argue points I have not made. I've nowhere remotely suggested the media aren't playing their scripted role here, so that's a non-issue. While the relevant facts are reported, the spin omits any suggestion of what I've just pointed out.

In fact, this calls into question Buffett's entire record since he achieved investing fame. To what extent has he profited from a keen investment eye, and to what extent from selling his name and reputation?

Not so.

This is part of what I posted...

"...Anybody with a one functioning brain cell can easily figure out, as you rightly point out, that Buffett has driven his usual hard bargain and secured a significant premium from Goldman; far above anything the rest of us can achieve..."

...which reiterates exactly what you said.

What I disagreed with is your conclusion.

Berkshire has something that what remains of the US financial system needs badly. Capital. That Buffett was able to secure favourable terms is not a surprise, nor is it anything new for him. Without the ability to bring capital, his reputation would matter not one whit, would it.

Sometimes it is useful observing what is going on in the USA from a foreign vantage. This is an extremely emotional time for the citizens of the USA. Yesterday's angry exchange about "the taxpayer is already on the hook" between Paulson and an elected representative speaks volumes. So I can understand that any moves in the financial markets are met with scepticism and the immediate assumption of collusion and ulterior motives.

Perhaps you are correct. Buffett is a shill, Berkshire is a fraud, and without behind the scenes favourable treatment it could not possibly have made those returns for its shareholders decade after decade.

Then again, maybe it's simpler than that. Buffett and Berkshire's shareholders were lucky to be in the right place at the right time and rode the 25 year FIRE economy for all it's worth [the tech bubble phase excepted]. ;)

[Finster]

Re: Investment Propaganda

And Finster can't prove that he's right either...

That's false. And I can prove it. In fact, I did prove it, right in my intial post. I said that "Buffett bought preferred shares yielding 10%. In addition, he retains the option to buy common at $115." And I provided a link right to the Bloomberg press report.

[Finster]

Re: Investment Propaganda

Not so.

This is part of what I posted...

"...Anybody with a one functioning brain cell can easily figure out, as you rightly point out, that Buffett has driven his usual hard bargain and secured a significant premium from Goldman; far above anything the rest of us can achieve..."

...which reiterates exactly what you said.

What I disagreed with is your conclusion.

Berkshire has something that what remains of the US financial system needs badly. Capital. That Buffett was able to secure favourable terms is not a surprise, nor is it anything new for him. Without the ability to bring capital, his reputation would matter not one whit, would it.

Sometimes it is useful observing what is going on in the USA from a foreign vantage. This is an extremely emotional time for the citizens of the USA. Yesterday's angry exchange about "the taxpayer is already on the hook" between Paulson and an elected representative speaks volumes. So I can understand that any moves in the financial markets are met with scepticism and the immediate assumption of collusion and ulterior motives.

Perhaps you are correct. Buffett is a shill, Berkshire is a fraud, and without behind the scenes favourable treatment it could not possibly have made those returns for its shareholders decade after decade.

Then again, maybe it's simpler than that. Buffett and Berkshire's shareholders were lucky to be in the right place at the right time and rode the 25 year FIRE economy for all it's worth [the tech bubble phase excepted]. ;)

My facts are correct and verifiable. My conclusion was and is that the implication that people should buy stocks because Buffett saw value in the deal he got from Goldman is invalid. Your rebuttal offers no contravening facts and, while you may not like it, does not even colorably inform the reader why he should reject my conclusion.

[D-Mack]

Re: Investment Propaganda

Isn't that nice?

Billionaire investor Warren Buffett, likening the market turmoil to an ``economic Pearl Harbor,'' said his $5 billion investment in Goldman Sachs Group Inc. is a vote of confidence in the Treasury's $700 billion plan, known as the Troubled Asset Relief Program, or TARP.

http://www.bloomberg.com/apps/news?p...W4E&refer=bond