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  1. #11
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    Maybe you are right, maybe you are not. But remember, in the final analysis it was a firm (half or full, regardless) step in the right direction. And Buffet acknowledged that, whether he played a part or not in it. Collusion maybe, but for a right and good cause. Rejoice. A journey of a 1000 miles begins with a single step. This panic prevalent in the markets can't go on forever....

  2. #12
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    Berkshire tightens insurance for bank deposits
    Wednesday September 10, 12:36 pm ET
    By Ieva M. Augstums, AP Business Writer
    Berkshire Hathaway subsidary in Kansas to stop insuring bank deposits above FDIC limit

    CHARLOTTE, N.C. (AP) -- A Kansas company that is part of Warren Buffett's Berkshire Hathaway Inc. has stopped selling private bank deposit insurance above the amount guaranteed by the federal government, signaling that billionaire investor Buffett may be worried about future bank failures.

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    Kansas Bankers Surety Co. confirmed Wednesday that it has ceased soliciting new clients for their "bank deposit guaranty bonds," a product that backs deposits above the $100,000 limit that is guaranteed by the Federal Deposit Insurance Corp. for many bank accounts.

    It also plans to cancel existing policies in coming months.

    "We still insure a lot of deposits in a lot of banks and that did not stop Monday," said Chuck Towle, a senior vice president of the Topeka, Kan.-based company. "We are not offering the product any more."

    Towle said that existing policies would be recalled, and that eventually, "we are going to withdraw from the market."

    Towle declined to comment on why his firm was leaving the business, and he wouldn't confirm or deny Buffett's involvement.

    A spokeswoman for Omaha, Neb.-based Berkshire Hathaway said the company did not have an immediate response.

    Kansas Bankers Surety's decision to stop providing the coverages comes amid a rising number of bank failures nationally, including one in its backyard -- Columbian Bank and Trust Co. of Topeka, Kan.

    Eleven federally insured banks have failed this year.

    Some of those failed banks were acquired by institutions that bought all deposits -- insured and uninsured -- and made them available immediately to customers. Other uninsured depositors were able to recover only part or none of their funds.

    The FDIC backs deposits of as much as $100,000 on most accounts or $250,000 on some retirement accounts.

    Companies such as Kansas Bankers Surety offer private bank deposit insurance to help banks attract and keep wealthy customers who may want to deposit more than $100,000 at their institution.

    Banks buy coverage usually at the request of a large depositor, and then relay any fees associated with coverage to the customer.

    "It's a credit enhancement," said Scott MacDonald, head of the Southwest Graduate School of Banking Foundation at Southern Methodist University in Dallas. "It's a way of enhancing the credit quality of your investment."

    Whether or not a company continues to offer such a product, "I think it really comes down to whether or not the market's perception of the value equals the cost of them doing it," MacDonald added.

    "It looks as if they made a business decision," MacDonald said.

    An examination this year of Kansas Bankers Surety by state regulators showed the company was strong and financially sound, Kansas Insurance Department spokeswoman Cynthia Price said.

    The company, which has 18 employees according to Berkshire Hathaway's 2007 annual report, also provides other insurance products, including director and officer, safe deposit, employment practices, check fraud and Internet coverage.

    Hmmmmmmmmm............talking things up quite publically, while simealtaneously reducing exposure?

    Do as I say, not as I do?

    sounds disengenuous to me..........

  3. #13
    SRV is a God STRAT's Avatar
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    Quote Originally Posted by lakedaemonian View Post

    If Buffett's trying to calm markets, rather than speak his occasional bit of carefully worded harsh truth either things are even more fragile than believed or he's being tapped on the shoulder.

    Just my amateur opinion.
    Excellent thread lakedaemonian.

    " tapped on the shoulder" has a sound ring to it.

    Mind you Im rather partial to a good conspiracy theory.

  4. #14
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    I think it's Becky who is tapping on Warrens shoulder???
    h2

  5. #15
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    Quote Originally Posted by h2so4 View Post
    I think it's Becky who is tapping on Warrens shoulder???
    She seems to have quite frequent access to him, seemingly more so than his regular journalistic partner Carol Loomis.

    Warren did have a somewhat uncommon arrangement in regards to his personal life, but with Warren's consistent history of strong judgement and governance on behalf of Berkshire Hathaway shareholders, I'd think it's safe to say that the health risks involved with getting funky with Becky would be negative for BRK shareholders, preventing him from doing so, so my conspiracy theory still stands!

    Of course, there is the possibility that Warren may be prepared to name his successor shortly and he's just partying like a rockstar and planning on going out with a bang.

    But on a serious note, here's another blurb:

    Since 1996, it has been owned by Omaha, Neb.-based Berkshire Hathaway Inc., which is led by legendary investor Buffett. Berkshire Hathaway officials could not be reached for comment Tuesday.

    The decision to drop coverage appears to have been made “somewhere up the chain,” according to Max Cook, president of the Missouri Bankers Association, which is the sole agent for Kansas Bankers Surety’s private deposit insurance in Missouri.
    I can only think of one extraordinary reason to exit bank deposit insurance exceeding the FDIC $100k limit:

    Buffett think's bank runs are more than just a slim possibility and will result in a total collapse of this insurance category

    I don't think this is a questions of Buffett thinking it's a question of simply out of whack risk/reward proposition on the insurance offered....his core business units are insurance and they have a LONG history of NOT exiting insurance categories.....BRK companies simply raise premiums until they achieve an underwriting profit and let Warren focus on achieveing a premium investment profit.

    Warren also tends to take a hands-off approach to subsidiary company operations, with his job being to suck up cash excess to needs and investing elsewhere.

    BUT, he has stepped in on occasion to make command decisions.....I'm thinking this decision MAY have his fingerprints or that of his key sidekick and possible successor Ajit Jain

    An e-mail message that banks received from the Kansas Bankers Association painted the decision in somber tones and said it too was seeking alternatives.

    “We recognize this is a very serious situation, both for your bank, and for the KBA as an organization,” said the message to Kansas banks’ chief executive officers.

    Kansas Bankers Association officials did not return a call for comment.

    The message told bankers they would receive notice from Kansas Bankers Surety asking the banks to surrender the bonds as quickly as possible.

    Cook said he understood that banks had 60 days to find alternatives for the customers who were covered.

    After that, Kansas Bankers Surety will send cancellation notices directly to the depositors. The notice will give the depositors 90 days before coverage ends.

    Banks that have used Kansas Bankers Surety deposit guarantee bonds said coverage was limited at each bank and was only one of the options they suggested to customers seeking protection beyond the FDIC limits.

  6. #16
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    Quote Originally Posted by lakedaemonian View Post
    She seems to have quite frequent access to him, seemingly more so than his regular journalistic partner Carol Loomis.

    Warren did have a somewhat uncommon arrangement in regards to his personal life, but with Warren's consistent history of strong judgement and governance on behalf of Berkshire Hathaway shareholders, I'd think it's safe to say that the health risks involved with getting funky with Becky would be negative for BRK shareholders, preventing him from doing so, so my conspiracy theory still stands!

    Of course, there is the possibility that Warren may be prepared to name his successor shortly and he's just partying like a rockstar and planning on going out with a bang.

    But on a serious note, here's another blurb:



    I can only think of one extraordinary reason to exit bank deposit insurance exceeding the FDIC $100k limit:

    Buffett think's bank runs are more than just a slim possibility and will result in a total collapse of this insurance category

    I don't think this is a questions of Buffett thinking it's a question of simply out of whack risk/reward proposition on the insurance offered....his core business units are insurance and they have a LONG history of NOT exiting insurance categories.....BRK companies simply raise premiums until they achieve an underwriting profit and let Warren focus on achieveing a premium investment profit.

    Warren also tends to take a hands-off approach to subsidiary company operations, with his job being to suck up cash excess to needs and investing elsewhere.

    BUT, he has stepped in on occasion to make command decisions.....I'm thinking this decision MAY have his fingerprints or that of his key sidekick and possible successor Ajit Jain
    Buffett buys into Goldman Sachs

    10:35AM Wednesday Sep 24, 2008

    Warren Buffett's Berkshire Hathaway is investing at least US$5 billion in Goldman Sachs Group.

    The announcement today from Goldman involves preferred stock that carries a dividend of 10 per cent.

    Berkshire also will receive warrants to purchase US$5 billion of Goldman's common stock with a strike price of US$115 per share. The shares are exercisable at any time for a five-year term.

    Goldman is also raising at least US$2.5 billion in a public offering.
    US stock index futures surged in extended trading after the surprise announcement.

    Goldman Sachs shares shot up 8.4 per cent after the news, closing at US$125.05, up $4.27.

    "It's clearly a positive when Warren Buffett sees value in a company.
    Buffett is so highly regarded as an intelligent value investor, if he's putting a lot of money into a company that's been beaten down, it sends a message to the market that maybe not every financial company should be ignored at this point,".

    Richard Sichel, chief investment officer of Philadelphia Trust, told news agency Reuters.

    At last report, Berkshire had total assets of nearly US$278 billion, including significant stakes in companies such as Wells Fargo & Co., American Express and the Washington Post Co.
    - AP

  7. #17
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    http://www.economist.com/business/di...ry_id=12342006

    Wonder if he wants a small island nation in the South Pacific to add to his collection??

  8. #18
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    Quote Originally Posted by CAM View Post
    http://www.economist.com/business/di...ry_id=12342006

    Wonder if he wants a small island nation in the South Pacific to add to his collection??

    Well that's rather cozy....Warren Buffett, via Berkshire Hathaway, Via GE, Via NBC, now co-owns CNBC.

    The propaganda cycle is complete!

  9. #19
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    Quote Originally Posted by shasta View Post
    Buffett buys into Goldman Sachs

    10:35AM Wednesday Sep 24, 2008

    Warren Buffett's Berkshire Hathaway is investing at least US$5 billion in Goldman Sachs Group.

    The announcement today from Goldman involves preferred stock that carries a dividend of 10 per cent.

    Berkshire also will receive warrants to purchase US$5 billion of Goldman's common stock with a strike price of US$115 per share. The shares are exercisable at any time for a five-year term.

    Goldman is also raising at least US$2.5 billion in a public offering.
    US stock index futures surged in extended trading after the surprise announcement.

    Goldman Sachs shares shot up 8.4 per cent after the news, closing at US$125.05, up $4.27.

    "It's clearly a positive when Warren Buffett sees value in a company.
    Buffett is so highly regarded as an intelligent value investor, if he's putting a lot of money into a company that's been beaten down, it sends a message to the market that maybe not every financial company should be ignored at this point,".

    Richard Sichel, chief investment officer of Philadelphia Trust, told news agency Reuters.

    At last report, Berkshire had total assets of nearly US$278 billion, including significant stakes in companies such as Wells Fargo & Co., American Express and the Washington Post Co.
    - AP
    I wonder if Warren's sudden dumping of cash is a signal he believes that the inflation tsunami is on the horizon?

    I reckon he's quite premature.....time will eventually tell of course.

    If he dumps money into some commodity producers....like PetroChina 2.0 I'm thinking that would be a gigantic flag for his belief of pending inflation.

  10. #20
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    Warren was also premature in making it clear that you can't get rich by living in a house, by pointing out the follies of subprime before it was a well known word, slamming excessive CEO pay and linking it to destructive short term thinking and calling derivatives weapons of financial mass destruction.

    He was also right.
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    Never try to teach a pig to sing. It wastes your time and annoys the pig.
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