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article imageReuters: Warren Buffett Made Millions on Bailouts

By Andrew Moran     Aug 5, 2009 in Business
In a new report, companies that Warren Buffett, the world's richest man, invested in needed Troubled Asset Relief funding.
As the world’s richest man said that government bailout of companies is a good idea, it is now released that the companies he has a sizeable stake in received bailout money. The companies received $95 billion from TARP.
However, one company, Berkshire Hathaway, has not received any money from the United States government and, instead, injected $5 billion into General Electric, Goldman Sachs and Harley Davidson.
Reuters writer Rolfe Winke noted, “Were it not for government bailouts, for which Buffett lobbied hard. Many of his company’s stock holdings would have been wiped out.” The Reuters write pointed out that nearly $100 billion went to Buffett’s holdings in Wells Fargo, Bank of America, American Express and Goldman Sachs.
Buffett is the 27 per cent owner of Berkshire Hathaway where he is the Chairman and Chief Executive and receives a $100,000 salary.
Recently, Goldman Sachs paid back the bailout money it received to prove to the investment world that it is financially stronger and would have failed if it did not receive any funds. Winke states, “Banks that couldn’t finance their balance sheets would have sold toxic assets at market prices, and the losses would have wiped out their shareholder’s equity. With $7 billion at stake, Buffett is one of the biggest of these shareholders. He even traded the bailout, seeking morally hazardous profits in preferred stock and warrants of Goldman and GE because he had “confidence in Congress to do the right thing” — to rescue shareholders in too-big-to-fail financials from the losses that were rightfully theirs to absorb.”
Winke further added that, “It takes remarkable chutzpah to lobby for bailouts, make trades seeking to profit from them, and then complain that those doing so put you at a disadvantage.”
At the present time, Buffett pays 19 per cent income tax and is a proponent for higher taxes and the estate tax. The Reuters writer released a chart of Buffett’s holdings.
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