Bailout Bonanza for Berkshire and Buffett

(MoneyWatch)  I commend to you an insightful post, "Buffett's Betrayal," by Rolfe Winkler of Reuters, who at age 14 joined the Warren Buffett fan club. It describes how Berkshire Hathaway and the Sage of Omaha have cleaned up from the taxpayer funded bailout of companies it invests in. Here are a few crucial observations Winkler makes:

-- Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.

To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee.

-- [Buffett] 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.

-- To me this feels like a betrayal. There's a reason he's Warren Buffett and not, say, Carl Icahn. ...

[T]here's nothing fair about Buffett getting a bailout, about exploiting the taxpaying public for his own gain. The naïve 14-year-olds among us thought he was better than this.

Excellent journalism that you won't find in the papers.