Liberal Super-Hero and Friend of Obama Was Consulted As Architect of TARP Plan, Then Profited Based On His Insider Knowledge

Quick, let's raise taxes on other people to right this abuse.

According to Schweizer, after the bailout bill’s passage, Warren Buffett sat down and wrote then-Treasury Secretary Henry Paulson a four-page private letter laying out a plan to clean up the toxic assets plaguing numerous financial institutions. Buffett proposed something he called a “public-private partnership fund.” For every $10 billion the private sector invested, Buffett said the government should put up $40 billion.

After Paulson’s exit, incoming Treasury Secretary Tim Geithner tweaked the plan and rolled it out in March 2009. But according to quarterly reports from Buffett’s holdings company, Berkshire Hathaway, between the time the billionaire crafted his plan and Geithner adopted it, Buffett quietly purchased 12.4 million shares of Wells Fargo stock and 1.5 million shares of U.S. Bancorp. Once the government unveiled its “Public-Private Investment Program,” bank stocks jumped, resulting in large profits for Buffett.

How much Buffett profited is hard to calculate, since there’s no way to know what his purchase price was. But prior to the government adopting Buffett’s plan, Wells Fargo had been trading at roughly $20 a share. In the weeks after Geithner’s announcement, the stock jumped to $30 a share. Likewise, U.S. Bancorp went from $8 in February 2009 to more than $20 a share by May.

Helping write the plan wasn't enough; he needed it to pass, too. So, having placed a large bet, he then lobbied Nancy Pelosi and other swell people to pass TARP, crying that without it, we'd have a financial armageddon.

posted by Ace at 01:06 PM

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