Buffet just served Congress

[radbag]

"Look at the damage Fannie and Freddie caused, and they were run by Congress," Buffet said. "Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie?"

Buffett Opposes Obama Bank Fee, Likens Plan to Taxing Congress 2010-01-20 17:16:16.671 GMT


By Andrew Frye, Betty Liu and Jamie McGee
Jan. 20 (Bloomberg) -- Warren Buffett opposes President Barack Obama’s proposed levy on financial institutions because firms including Goldman Sachs Group Inc. and Wells Fargo & Co.
already repaid bailout funds.
“I don’t see any reason why they should be paying a special tax,” said Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., in an interview on Bloomberg Television today. Supporters of the plan to tax the banks “are trying to punish people,” he said. “I don’t see the rationale for it.”
Obama announced a plan last week to impose a fee on as many as 50 major financial companies to cover as much as $117 billion in losses from the federal government’s Troubled Asset Relief Program. The levy would apply to firms with more than $50 billion in assets and would exclude Fannie Mae and Freddie Mac, the government-sponsored mortgage lenders that had to be taken over by the U.S.
“Look at the damage Fannie and Freddie caused, and they were run by the Congress,” Buffett said. “Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so.”
Berkshire has investments in Wells Fargo and Goldman Sachs, which have repaid their bailout funds. Bank of America Corp. and JPMorgan Chase & Co. were also among the biggest beneficiaries of bailout funds, and both repaid their rescues.

Unnecessary Rescue

“Most of the banks didn’t need to be saved,” Buffett said. “Including Wells Fargo.”
The president is tapping into voter anger that the government bailout may be followed by record Wall Street bonuses as the country struggles with a 10 percent unemployment rate.
The tax would be imposed on firms including bank holding companies and some insurers. The administration estimates the tax will raise $90 billion over 10 years and $117 billion over
12 years.
“My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people,” Obama said Jan. 14 when he announced the Financial Crisis Responsibility Fee. “We want our money back, and we’re going to get it.”
Berkshire has holdings of Bank of America and Goldman Sachs and is the largest stock investor in Wells Fargo.
Buffett’s firm is also the top investor in Kraft Foods Inc., which agreed yesterday to pay 11.9 billion pounds ($19.4
billion) to take over Cadbury Plc. Buffett said Kraft is overpaying for the British candymaker because it is using its undervalued stock to fund part of the deal.
“I think this deal was a mistake,” he said in the interview. “Kraft was very undervalued before. I feel it’s less undervalued after doing this deal than before.”

‘Transforms Our Portfolio’

In an earlier interview with cable network CNBC, Buffett said he would vote against the deal if given a chance. Kraft raised the cash portion of its offer in its final bid, obviating the need to obtain the consent of shareholders.
Kraft believes the acquisition “transforms our portfolio for better long-term growth,” said Michael Mitchell, a spokesman for the Northfield, Illinois-based company, after Buffett’s comments. “We respect his opinion.” Trevor Datson, a spokesman for Uxbridge, England-based Cadbury, declined to comment.
Buffett, who usually shuns giving investors an opinion on Berkshire’s value, said in a separate interview with Bloomberg that his company’s shares are also undervalued. Still, he said his critique of Kraft’s bid for Cadbury didn’t apply to his plan to use Berkshire stock to fund part of his bid for railroad Burlington Northern Santa Fe Corp. The railroad fell about 15 percent to $76.07 in the 12 months before Buffett agreed to pay $100 a share.

‘Paying a Penalty’

“We are paying a penalty issuing shares at this price”
for the Burlington deal, he said. “Even though I value our offer at more than $100 a share, I’m still OK with it. But it’s close.”
Berkshire is paying $26 billion for the 77.4 percent of the Forth Worth, Texas-based railroad it doesn’t already own. The company will issue about $10 billion in stock, and is tapping Wells Fargo and JPMorgan for an $8 billion loan. The remaining
$8 billion is coming from Berkshire’s cash hoard.

Stock Gain

Berkshire advanced 2.7 percent on the New York Stock Exchange last year, compared with the 23 percent rise in the Standard & Poor’s 500 Index, the company’s worst performance against the index in 10 years. Two analysts tracked by Bloomberg have price forecasts on Berkshire averaging $125,000.
Berkshire rose $1,164 to $101,194 at 11:49 a.m. in New York Stock Exchange composite trading. Investors who bought Berkshire stock at that price paid about $1.25 for every $1 of net assets.
That’s about 8.5 percent more than the figure for the financial companies in the S&P 500. Berkshire’s multiple to book value, or assets minus liabilities, has averaged about 1.76 over that past 15 years, compared with 2.17 for the S&P 500 financial firms.
Berkshire investors today approved a 50-for-1 split of the company’s Class B stock to facilitate the rail deal.

[G8rMom7]

Sorry Buffett, you're a day late and dollar short...you were one of the reasons that many rational and independent voters took the chance on Obama in the first place. None of you even cared that he had ZERO experience in owning or even managing any sort of business. What would make you think he would make good financial decisions? Oh, that's right...people kept seeing you standing there supporting him and assumed you would be giving him sound advice. Again, they also assumed he'd listen to you.

[MinGator]

And who do the supports think will really pay this tax? The banks?? Please! Just like any business this will be passed on to the consumer.