'Coach' Buffett Steps In Again, Buys Some GE

The recent actions of super-investor Warren E. Buffett, chairman of Berkshire Hathaway and the world's richest man, are looking more and more like those of another rich guy who single-handedly saved the stock market a century ago, J.P. Morgan.

General Electric, whose stock was hammered earlier today on capital concerns, is getting $3 billion in new capital from Buffett's Berkshire Hathaway, which just announced it is buying into the industrial giant.

GE is "the backbone of the American industry," Buffett said by phone from an airplane powered by GE engines moments ago on CNBC. "They're going to be around five or 10 or 100 years from now."

Buffett's deal is very similar to the one he got when he bought into Goldman Sachs last week and very, very different from what the investor walking in off the street would get.

Buffett is getting $3 billion in perpetual preferred stock offering a dividend of 10 percent. It is callable, at a premium of 10 percent, in three years. He also got warrants to buy $3 billion in common shares at $22.25 over three years. Bottom line: Very sweet.

GE today announced a $12 billion common stock offering for non-Buffett investors.

The truth is, GE needed Buffett.

On CNBC, Buffett said GE approached Goldman Sachs about soliciting Buffett to buy into the offering, and Goldman approached Buffett, who bit on the deal.

In response, naturally, shares of GE popped up, as did the wider market. At about 2:30 p.m., GE is trading at about $24.60.

Buffett also said that the proposed $700 billion Wall Street rescue plan is such a good deal, he would buy into it for one percent if he were assured that the troubled securities would be purchased at market price and other conditions were met.

"I'd love to get one percent of this action," Buffett said.

By the day, it seems, Buffett becomes increasingly critical to the flagging U.S. economy. Fellow billionaire T. Boone Pickens referred to Buffett as "the coach," counseling Treasury Secretary Hank Paulson.

Buffett is looking more and more like turn-of-the-last-century financial giant J.P. Morgan, who single-handedly bailed out Wall Street twice.

Buffett has plenty of cash lying around -- he said he likes to keep a minimum of $10 billion in cash on hand at Berkshire Hathaway -- so this is a perfect time for him to Hoover up plenty of stocks that likely will rebound.

By this time next year, the world's richest man may have significantly widened his lead on the field.

-- Frank Ahrens

October 1, 2008; 2:38 PM ET  | Category:  business
Previous: Breaking: House To Vote Friday on Rescue Bill | Next: Markets Close Slightly Down, Await Senate


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Funny stuff. "Buffett also said that . . . he would buy into [the $700 billion bailout] for one percent IF he were assured that the troubled securities would be purchased at market price and other conditions were met." Yeah, me too. That "IF" makes a heap of difference, even to someone as wealthy and wise as Mr. Buffett.

Posted by: John | October 1, 2008 2:51 PM

Warren Buffet should not be the only billionaire or multimilionaire who is helping US out.

Pres. Bush should call on the private sector to pay this off. He should resurrect his father's "a thousand points of light" theme and tell those who profited hand over fist, from the mortgage backed security derivatives and hedge funds, that it is their moral and patriotic duty to come to the aid of this nation in our time of need.

If our country has given you the American Dream then you should not turn your back on the Main Street Americans and their posterity who will be living the American Nightmare of inflation and a deflated dollar as a result of Wall Street greed.

Posted by: Madeleine | October 1, 2008 2:53 PM

I saw the interview on CNBC. What is not being reported is that Buffett said it is not prudent to invest using debt to pay for the investment. He pays cash and keeps a 10 Billion $ reserve of cash. The Bail Out a/k/a Rescue Plan involves a purchase using taxpayer DEBT!!!! It goes against what Buffett preaches. Don't do it.

Posted by: Roy D. Turner | October 1, 2008 2:58 PM

note his "at market price" caveat which right now is somewhere from 15 to 22 cents on the dollar. big Ben was talking about paying FULL price. at "market price" yeah there is a profit to be made some day. at FULL price the only way you will make money is to REIGNITE the housing bubble again. people who say the govt will make money w/o qualifications either still live in a fantasy or just want a bailout pure and simple.

ask yourself this: will you buy a house in your neighborhood at 2005 price?

Posted by: Anonymous | October 1, 2008 3:01 PM

Today the U.S. Senate will vote to bailout Wall Street. We wouldn't be in this crisis if it weren't for the billions of dollars Wall Street lavished on politicians, and the deregulatory policies Congress passed for them in return.




Posted by: Anonymous | October 1, 2008 3:02 PM

"...IF he were assured that the troubled securities would be purchased at market price..."

Bernanke already said the non-performing assets would be bought at hold-to-maturity price. Saying "I'd buy a lottery ticket IF it was a winner" makes as much sense.

Posted by: moot point | October 1, 2008 3:07 PM

Why is Warren Buffet the only billionaire doing this where are the other 999 billionaires in the US, according to Forbes. Have they given up on America?

Posted by: Edward | October 1, 2008 3:07 PM

Good for Mr. Buffett.
Is he in it for the long run, or just waiting for the $700 billion bailout to surge the stock market so he can make some quick billions?

Posted by: maphound | October 1, 2008 3:11 PM

i thought the credit markets were "frozen"

Posted by: faithfulservant3 | October 1, 2008 3:13 PM

Warren Buffet bought into CIT's home lending business, Goldman Sachs, and now GE since July of 08. What do they all have in common?
CIT bad mortgages, Goldmand- bad mortages, GE- bad mortgages through its subsidary HouseHold Finance. This guy is in the know of the scam, and this is who our Congressmen take advice from.

Posted by: sukkie34 | October 1, 2008 3:26 PM

So, why don't we give Buffett the $700B to spend as he likes, charge him the going rate of interest on 5 year t-bills (or 30 or whatever -- the spread is so small that it won't matter) that is payable on generous terms, and offer to split the profits? It limits the taxpayers' downside, ensures that prices will be advantageous, it props up the market, Buffett will be conscious of where he's buying and how the beneficiaries of those dollars will treat things like executive compensation, and at the end of the day taxpayers are EXTREMELY likely to make a significant profit.

The only difference between this and the current proposal is Paulson gets nothing out of his purchases so his incentives are unclear.

To be certain, it was not the free market that go us into this mess, and we can't get out without a lot of pain, but we can minimize it by using some quasi-free market principles.

Posted by: Pangerho | October 1, 2008 3:34 PM


This bailout nee' rescue nee' welfare thing was hawked to the American people the same way time shares are sold in Cancun.

When I was about younger my brother and I were at home getting ready to eat some corn flakes....

We poured them in the bowl and poured the milk over them..

immediately we noticed the milk was soured....

no matter how much sugar we put on it, the milk was still spoiled and we added a LOT!

This is the problem.

The system is spoiled.

No matter how much sweetener we add in the form of money..we are still going to have a rotten deal.


Posted by: Anonymous | October 1, 2008 3:35 PM

Thank god someone has saved "30 Rock"'s parent company for another season!

Posted by: Christian in NYC | October 1, 2008 3:36 PM

If he operated the bailout we wouldn't need a bailout. The modified bailout is new and improved. The assets are still toxic, but truth be told there's enough trash to go around. I'm trying to come up with a couple of grand for hospital and ambulance bills, so some problems are greater than others. They're finding children in the freezer a couple of towns over, so the country is looking morally bankrupt so the finances just reflect the state of society. Then we have the grave robbers plundering the cemeteries for a quick pop here and there. The upper crust scum are going to get their money even as they lose money. It's a can able economy and the war will keep raging because it has a deeper meaning. We're not fighting for territories. We're fighting for a morbid ambition, so we are fighting ourselves and we are losing. Capitalism is punishing us, for the goal of it is to maintain this great nation in a perpetual state of peace and plenty as it's always been. The stakes are high, the fate of the whole world we hold in our hands. The contest between democracy and autocracy must be fought to the bitter end. Without arms, free people unwilling to seize the sword will be crushed in their native land and the imperial eagle will swoop down on them at an hour when it will be too late to organize resistance. It's never too late for good action. It's too late for toxic assets. There's no liberty in those. That's why nobody wants them, so they poison the government with them at our expense and call this a bailout. It's more akin to non-stop rape. It's a moral hazard fellow Americans. Worthless is always worthless.

Posted by: JD in PA | October 1, 2008 3:50 PM

Oprah Winfrey should help. With her billions. How extremely sweet!!!!!

Posted by: Anonymous | October 1, 2008 3:52 PM

Buffett knows a good deal when he sees one.

Posted by: Yuri Lipitzmeof | October 1, 2008 3:54 PM

Yup, it is important to note that Buffett is using cash for his investments, not credit.

Also, GE makes the wind turbines Buffett's company buys. Despite all the publicity for Pickens, Buffett's companies are way ahead of him in existing wind turbines and still building more.

There isa shortage of wind turbines at the moment. If the production tax credit is approved that will continue and this little investment might help Buffett's companies be first in line.

Posted by: RG | October 1, 2008 3:56 PM

I hope he uses his share to get rid of MSNBC, the most unprofitable of GE enterprises.

Posted by: hazwalnut | October 1, 2008 3:56 PM

Warren Buffett, though not infallible, is a very pragmatic investor and our Government (Congress) should be as well.

This Bailout/Rescue should be looked at as an investment by the investor of last resort, the U.S. Gov't.

Though Mr. Buffett has a huge conflict of interest, I believe that he has the good of the Country in First Place.

--- Karl Lingenfelder

Posted by: Karl Lingenfelder | October 1, 2008 3:58 PM

The U.S. should get the oil people in the middle east for the $700B bailout. They definitely can afford it.

Posted by: Anonymous | October 1, 2008 4:00 PM

Warren Buffett is no fool. He is as rich as he is for a reason. He is buying in to make money. The wealthiest people often do the best in bad times because they get incredible bargains.

Posted by: bill | October 1, 2008 4:06 PM

You can risk everything in the United States and you might lose short-term, but long-tern you can't bet against the United States and win. We are the ones that bail everybody else out. Everything I've ever done that's been worth anything, I've caught hell for and now we're all catching some hell for it. Thrown all the toxic assets on a new trading exchange and let people take a shot at trading them. With enough shopping them, the value might make them strategic. You can put them on the books and use them as corporate tax write offs. Some of them might even go up in value given enough time. You know that the government will just make them more toxic, like it does with most other investments.

Posted by: JD in PA | October 1, 2008 4:10 PM

Because the brokerages and banks were not willing to sell assets at market prices, we will all get screwed by the necessary bailout. Employers are already being affected by the limited liquidity in the credit market. Big Ben and Paulson want the bailout at 2004 or 2005 market prices. That's why Paulson made millions on wall street by finding suckers and Big Ben is a public servant. Buffet is holding cash and reduced his financial services exposure because they were unsound and could not even tell investors what there assets were worth. He has made his money cautiously over 50+ years and dodged such bullets as the current crisis and tec meltdown. He also believes that since America has allowed him to be so successful taxes on the wealthy should be raised not lowered as a sign of greed and he has already given away several billion dollars and will be doing more as will Bill Gates. I believe he also knows how many houses he owns and is still living in one purchased years ago.

Posted by: george32 | October 1, 2008 4:13 PM

I'll take some of the toxic assets. Most everything I have left now is priceless, so what the hell, it's worth a shot. That way the government can go back to figuring out the screwed up war financing and collapsing bridge fund.

Posted by: JD in PA | October 1, 2008 4:17 PM

We need 10 billion to fix bridge around here. The things are falling apart and the state is banking on casino revenues and the casino went broke as they were building it. If they get it built and we all lose enough dough, we'll all be in the bread lines. So now we have toxic assets tied up in a half baked casino. We won't need the bridges and we won't be able to afford the gasoline. All of which works because car repos are way up because people can't swing the car payments along with the mortgages. It's looking like a new bailout will be needed to save us from ourselves. It's always something or something else.

Posted by: JD in PA | October 1, 2008 4:31 PM

GE should be allowed to fail too. They're an awful polluter and they make cr@ppy applicances.

Posted by: TreeHuggingDirtWorshipper | October 1, 2008 4:35 PM

Hmmm, big investor steps in with big purchase during finacial crisis..this sounds familiar...

Stocks Up in Strong Rally; Rockefellers Big Buyers; Exchanges Close 2-1/2 Days
By Ferdinand Lundberg
-- New York Herald Tribune, October 31, 1929

Revived by spontaneous investment buying and declarations of large extra cash dividends by leading companies, and free of the delirium that has recently gripped share owners, the stock market yesterday received a fresh start and scored a record comeback. Volume on the Stock Exchange totaled 10,727,320 shares, the third largest day on record.

The high spot of the day from a stock market viewpoint was the statement by John D. Rockefeller that there was no need to destroy values and that he and his son, John D. Rockefeller Jr., had been heavy buyers of stocks for investment in the last few days, and would continue to buy at present prices...

Posted by: Stephen | October 1, 2008 4:41 PM

With greed the pauper and rich person are almost one in the same as the old Swiss say. This economy is looking like Swiss cheese with lots of holes. You guys better get yourselves some corks. We're now beyond the brink and creating more paupers and more rich people at the same time. We're going from democracy to autocracy. People are complaining about the bailout and the Treasury says it is a grave matter. Things cost what they cost though.

EDITORS ENTERPRISE: The Independent takes hold of a wretched public evil and shakes it and bullyrags it in the following determined and spirited manner this morning:

"Our friend, Mark Twain, is such a joker that we cannot tell when he is really in earnest. He says in his last letter to the ENTERPRISE, that our undertaker charges exorbitantly for his services - as much as $150 for a pine coffin, and $50 for a grave and is astonished that the Independent has not, ere this, said something about this extortion. As yet we have had no occasion for a coffin or a bit of ground for grave purposes, and therefore know nothing about the price of such things. If any of our citizens think they have been imposed upon in this particular, it is their duty to ventilate the matter. We have heard no complaints."

Posted by: JD in PA | October 1, 2008 4:44 PM

mr ahrens even jp morgan's most laudatory biographers do not give him credit for single handedly saving the stock market. using his immense prestige as well as his company and personal assets he brilliantly and forcefully led a coalition of investment houses, banks and even the treasury to stabilize the markets and the us economy. it would be interesting to see if Ben, Paulson, Bush 2 and the Senate and House members would put their personal assets on the line as part of this bailout instead of just our grandchildren's debt burden. Buffet put his money where his mouth was, he could have stayed in cash rather than put several billion of berkshire funds at risk.

Posted by: george32 | October 1, 2008 4:54 PM

Well the prosperity undertakers enjoy at the hands of tragedy never changes. The economy lives to see another day and we must take it all in stride.

Write your congressman asking for a free burial plot and wait for a reply..."for the poor, cremation would be better than burial, because so cheap -- so cheap until the poor got to imitating the rich, which they would do by and by. The adoption of cremation would relieve us of a muck of threadbare burial witticisms; but, on the other hand, it would resurrect a lot of mildewed old cremation jokes that have had a rest for two thousand years." Mark

The bailout is burning bright and live. Can we cremate those toxic assets or is that beyond reason or is ruin our only option?

Posted by: JD in PA | October 1, 2008 5:04 PM

GE "the backbone of the economy" as Buffet called it lost a ton of money when it started a mortgage company and sold sub prime loans. that is why is is hurting.

some backbone

in fact some lie to the amerian people mr Buffet.

Posted by: JohnAdams1 | October 1, 2008 5:04 PM

Sorry,Frank...Mr. Buffet is NOT the world's richest man...He is one of the richest..ask your editors..:-)

Thad in San Antonio

Posted by: Thad De Groot | October 1, 2008 5:08 PM

"Why is Warren Buffet the only billionaire doing this where are the other 999 billionaires in the US, according to Forbes. Have they given up on America?"

The rest are leeches, Buffet is the noble exception to a class of parasites. Bravo to him, we'll not see his like again.

Posted by: Old MSgt | October 1, 2008 5:28 PM

John Rockefeller and Jack Morgan started the rumors about Heinz that led to a rush on his bank that led to the panic of 1907. Rockefeller was competing with Heinz over control of a copper company.

Jack and John then bought assets and failed banks for pennies on the dollar. The only people they helped out were themselves.

Now,as Chase, ironically buys Morgan and WaMu assets for pennies on the dollar, the same thing is happening.


Posted by: Web Smith | October 1, 2008 5:29 PM

Warren Buffett is doing more to restore confidence in America than Congress. Ain't that nice.

Posted by: JimBob | October 1, 2008 5:29 PM

Warren E. Buffett you are a natural born leader. God Bless you. You are HOT!

Anymore FatCats want to get on the ball? We'll build you a statue. You want to keep those toilets clean and yard work done by someone else; don't you? Anty-up, anty-up.

Warren E. Buffett, you are just too hot for words. Thank you.

Posted by: LadyLiberty | October 1, 2008 5:31 PM

Richest Man?? B.S.

Anybody ever heard of Evelyn Robert de Rothschild?
THE person truly behind all of this mess.
OWNER of The Federal Reserve.
The bankers are praying for a depression!
Where they can buy all of it for pennies on the dollar! JUST like your hero J.P. Morgan did.

Posted by: Anon04 | October 1, 2008 5:39 PM

""Does a coffin pay so well? Is there much profit on a coffin?"

"Go-way! How you talk!" Then, with a confidential wink, a dropping of the voice, and an impressive laying of his hand on my arm: "Look here; there's one thing in this world which isn't ever cheap. That's a coffin. There's one thing in this world which a person don't ever try to jew you down on. That' a coffin. There's one thing in this world which a person don't say - 'I'll look around a little, and if I find I can't do better I'll come back and take it.' That's a coffin. There's one thing in this world which a person won't take in pine if he can go walnut; and won't take in walnut if he can go mahogany; and won't take in mahogany if he can go an iron casket with silver door-plate and bronze handles. That's a coffin. And there's one thing in this world which you don't have to worry around after a person to get him to pay for. And that's a coffin. Undertaking? - why it's the dead-surest business in Christendom, and the nobbiest.

"Why, just look at it. A rich man won't have anything but your very best; and you can just pile it on, too - pile it on and sock it to him - he won't ever holler. And you take in a poor man, and if you work him right he'll bust himself on a single lay-out. Or especially a woman!" Mark

Quality pays for itself and if you are to be boxed in, well might as well search for the right woods. Folks are hollering about the bailout, pile it on and for a few extra billions we can all be into mahogany. "As for me, I hope to be cremated." Please forward my ashes to Maine if I should not arrive there in a lively condition and spread me over Deer Isle for things do keep getting more dear, and how they do. I am now packing boxes with belongings with the hope that I will not be in a box before I can reach my new home. Murphy could have other plans as the law will allow.

"Half male, the others female."
"From a hundred years up."
"Up to where?"
"Six hundred."
"Ah - going to Chicago; good idea, too. Surgeon's name?"
"We have no surgeon."
"Must provide a surgeon. Also an undertaker -- particularly the undertaker. These people must not be left without the necessities of life at their age

I've never been to Chicago and never plan to make the trip. I have a New England concept and the bridge of opportunity is always open, so it's been an honor. The bridge of crisis is busy, so it always has been a struggle for the majority. They have voted themselves benefits they now can't afford and promised to pay later only to find the benefits missing. I have three lives, all of them are mine and fate could make for four and then some more. We must pay as we go and stay good to go before we are all-gone. Remember the Maine Thing, because it is looking like another long cold winter once again.

Posted by: JD in PA | October 1, 2008 5:39 PM

Where's Bill G., Michael Bloomberg, Ross Perot, the Walton Family, Principals in the Carlyle Group, etc.... It's time to belly up boys.

Posted by: Steve S. | October 1, 2008 5:42 PM

I dont know what the houses in receivership
look like in other areas but the ones in our area are junk.

Posted by: david mcninch | October 1, 2008 5:42 PM

Buffett isn't doing this to save the economy. Anyone offered the deal he got would be an idiot to turn it down. Read closely:

"Buffett is getting $3 billion in perpetual preferred stock offering a dividend of 10 percent. It is callable, at a premium of 10 percent, in three years. He also got warrants to buy $3 billion in common shares at $22.25 over three years."

He is pretty much guaranteed to make money (and lots of it).

Posted by: Anonymous | October 1, 2008 5:43 PM

Get use to BAILOUTS.... It will be around for ever.... This is just another spin for us to play. Fear not.. in Five years it will be better and you won't remember or care.... This happens all the time.. BUT, something is happening in NOV............! think about it....

Posted by: Hans | October 1, 2008 5:43 PM


GE doesn't own Household, HSBC does.

Posted by: wil99 | October 1, 2008 5:44 PM

Warren Buffet should not be the only billionaire or multimilionaire who is helping US out.

Pres. Bush should call on the private sector to pay this off. He should resurrect his father's "a thousand points of light" theme and tell those who profited hand over fist, from the mortgage backed security derivatives and hedge funds, that it is their moral and patriotic duty to come to the aid of this nation in our time of need.

If our country has given you the American Dream then you should not turn your back on the Main Street Americans and their posterity who will be living the American Nightmare of inflation and a deflated dollar as a result of Wall Street greed.

Yeah, it's called taxes, and Biden was right...paying taxes is patriotic. Stop complaining and pay your share.

Posted by: Andy | October 1, 2008 5:49 PM

As usual, the posters on the forum have no clue what they are talking about. The Govt is not handing out $700 B, it is only making it available if necessary, and it will almost certainly not be necessary if it is made available. If the Govt ends up buying the mortgage debt it will already be repriced to market with the loan default rate and the underlying value of the asset baked into the price. Under all the plausible scenarios the Govt will make a very handsome profit on the deal, that is why Buffet would like to by into it.

Posted by: anonymous | October 1, 2008 5:53 PM

Heres the deal. If Buffett doesnt come into play to save these companys they fail. So far he saved energy giant Constellation, Goldman Sachs and now Ge. They all approached him and gave him a deal he couldnt pass up. They needed the money. It looks like Buffett is the white knight of america. He probably will buy 3 or 4 more stakes in the best companys in the world before this is over.

Posted by: buzz | October 1, 2008 5:53 PM

Please...Buffett is not saving the stock market, neither is he the richest man in the world. David Rockefeller is much wealthier, so is Jacob Rothchild.

Two errors at the start of the article = no credibility.

Posted by: Lou | October 1, 2008 5:55 PM

It's a well oiled political crisis designed to run the average American citizen into the ground financially to take over huge swaths of the landscape. It's as old as the hills. They are destroying families to make other families more powerful. It's UnAmerican and it's a disgrace to the sacred honor of or Founders, all with a big pricetag. The kids and grandkids are supposed to pay the tab on their frauds. Be prepared for more losses. The house of cards always gets blown over. We are not the prisoners of our own pricetags. It's not bailfast guys. They make me sick.

Posted by: JD in PA | October 1, 2008 5:56 PM

Dear Mr. Buffett,

I am the proud owner of a 1987 Ford Aerostar with about 170,000 miles on the odometer.

The rocker panels are rusted out, there are some holes in the upholstery, and it pulls to the right since I hit a low concrete wall in an alley once.

Can you please ask Henry Paulson to buy it from me for the price it sold for new in 1987?

I'd really appreciate the bailout, er ... rescue.

Posted by: Symphony Sid | October 1, 2008 6:01 PM

All the patriots are taxed out of their own homes because they came up short and didn't make the mort-gage and took it on the fannies. It's an Idiot Revolution proclaiming loss as the American Way. Happiness is positive cash flow and the rest is death and taxes. You guys are power brokers and movers and shakers. More sheriffs sales ahead and busy tow trucks hauling away unpaid cars. The new pub taxes aren't being paid and we are looking at new beer taxes on top of it all. The whole thing is now the bailer going to the bottom and the bottom is falling out. Tax the corporations. They have all the dough in the world. The people are tapped out. Just on gasoline alone, the piggy bank is a bust. Let the fire burn out of control. Keep your taps wet.

Posted by: JD in PA | October 1, 2008 6:07 PM

This is no time for complaining, it's time for action. Get them up close and personal. Too many people, too few livestock results in negative cash flow also known as taxes. We have gone way into negative territory. Pat Robertsons 700 Billion Dollar Club and we're all getting beat with it, without mercy.

Posted by: Anonymous | October 1, 2008 6:13 PM

Jokers to the left of me and clowns to the right of me and here I am stuck in the middle with You.

"They're planning a $700 billion auction of stolen goods starting next week." See the WSJ for detailed information. Everything must go. Anybody want to buy the Brooklyn Bridge?

Posted by: JD in PA | October 1, 2008 6:19 PM

McCain will save you. No Barack will save you. Who will save them?

Posted by: Anonymous | October 1, 2008 6:26 PM

Why isn't Bill Gates buying? and other big shots, hey help us out.

Posted by: Anonymous | October 1, 2008 6:31 PM

Some who visit this forum probably saw the essay by Mr. William Isaac on Saturday the 28th in this venue ("A Better Way To Aid Banks"), proposing an alternative plan, one which would not require the taxpayers to burn up an additional $700-Billion in this nation's credit, while defusing the vicious cycle of bank insolvency which appears to be brewing.

Newt Gingrich did an op-ed which seconded Mr. Isaac's analysis and action plan which was printed in Forbes. Now Rep. Peter DeFazio has a 'No Bailouts Bill' in the House which implements most (if not all) of the essential elements of the Isaac plan.

(links to all three may be found here:

While Warren Buffet is getting all the credit for rescuing the economy, those who bother to read Mr. Isaac's analysis and the Newt Gingrich Op-ed as well will perhaps notice a disturbing detail. The simple remedy to market turmoil (suspending Mark-to-market asset valuation, given the time-bomb which was created by the Sarbanes-Oxley Act of 2002), was a well known hypothesis long before September 19th of this year when President Bush decided to predict economic collapse. However, just as in the war on terror, Mr. Bush chose to do the thing he wanted to do, as opposed to working towards finding the thing that would actually solve the problem, even after our intelligence community clearly articulated the risks of a long devastating quagmire that might follow. George Bush wanted 'Shock and Awe' to overwhelm Saddam Hussein's regime, and he got it, for about two weeks. And then we got 4000 plus American military deaths (and counting), 30,000 more with serious injuries, many of them permanently disabling, and $700-Trillion in the cost of the war to date (and counting).

Now, the media continues to provide superficial reporting of talking points and sound bites, creates a heroic picture of Warren Buffet trying to keep the economy alive long enough for the voters to come to their senses and accept Mr. Bush's latest great idea. Meanwhile, the prudent (albeit less spectacular) remedial measure of simply issuing an executive order that could quench the problem, even now, is pushed aside in favor of Mr. Bush's original bad idea, and for no other reason than his tenacious and all consuming narcissism, a perfect example of what David Brooks calls 'Decisiveness as a cover for lack of competence' (in so many words).

The price tag for this macabre repeat of the previous worst mistake by any US President in our history? Coincidentally, it's $700-Billion too, although in this case, we'll burn through that in a matter of months, rather than years.

They say things happen in threes. I wonder if that means George Bush has yet another flash of brilliance in store for us between now and January 20th. The world is a target rich environment now, thanks to his earlier work, I wonder which one he'll go after next.

Posted by: ted in pdx | October 1, 2008 7:13 PM

You go from family business to this.

Vulture Capital
"A vulture on board; bald, red, queer-shaped head, featherless red places here and there on his body, intense great black eyes set in featherless rims of inflamed flesh; dissipated look; a business-like style, a selfish, conscienceless, murderous aspect -- the very look of a professional assassin, and yet a bird which does no murder. What was the use of getting him up in that tragic style for so innocent a trade as his? For this one isn't the sort that wars upon the living, his diet is offal -- and the more out of date it is the better he likes it. Nature should give him a suit of rusty black; then he would be all right, for he would look like an undertaker and would harmonize with his business; whereas the way he is now he is horribly out of true solutions."

The free press is then converted into a loss leader and would be profits follow the free market and a death spiral is assured, leaving us with a mere puppet press controlled by one puppet master, the vulture, pulling the strings. Cue violins.

"You see, the combination started this way. When I got up to Redding and had become a doctor, I looked around to see what my chances were for aiding in the great work. The first thing I did was to determine what manner of doctor I was to be. Being a Connecticut farmer, I naturally consulted my farmacopia, and at once decided to become a farmeopath."

The result is a pathological propaganda edition calling for the spread of the toxic and cancerous growth to all quarters of society, assuring the rapid destruction of both capital and capitol alike in a powerful manner in character with said vulture.

The further the pendulum swings out over woe the further it is bound to swing back over mirth and votes are wooed. Woe are us and the final insult is fit for print.
It is the same old story with a different end line.

"Then I got circulating about, and got in touch with Ferguson and Ruggles. Ferguson joined readily in my ideas, but Ruggles kept saying that, while it was all right for an undertaker to get aboard, he couldn't see where it helped horses..."

The vulture feeds on the corpses of the horses of course, gets fatter as a result and the presses grind to an astonishing halt. We then pass through a new dawn without even knowing why and the free press is consumed in the fire of greed with everything else and cash or paper are no more exchanged for the fire has consumed all the labors of generations, while offering a future of unlimited war and destruction to the vultures delight. Peace and plenty, no more no less loss amounts to gain. Freedom is slavery and the bailer keeps going to the bottom quarters to reach profit and gloom is eternal. What was dear is all dead and lost to the future, for there was not enough to go around or come around in good time.

Bad time became the standard and the call would be made. I think you & Onion ought to have my future pile. I shall be all consumed climbing a rainbow, with love for the better nature not found in the vultures greed. Old traditions and honors all dead and freedom laying in the grave for the sake of men without vision, blinded by ambitions killing wealth. An American Dream murdered and a baby born into debt today to save the vultures. Mercy to the guilty is death to capital and everything for defeat makes victory impossible. Endless war consumes all the rest for none follow and all fall down into a grave of debt without redemption in the name of God as they mock religion and the city burns. The weak are crushed and the children are slaves to a lesser know God they are in constant search for and all are sad, I see on those little faces the disappointment. There are appointments that must be kept, just as promises and greed serves none in the end. Greed is terrorism, so the children get none all for a future of ruin. Thanks guys, for nothing and the bill for the ride.

Posted by: JD in PA | October 1, 2008 7:52 PM

They don't care pdx. It's all about search and destroy wealth. The neocons and silicons building big ego filled companies and killing local economies to aid the dying global economy. It's googlization and dotcom 2.6789 and guys with big sailboats

Posted by: Anonymous | October 1, 2008 7:56 PM

If J. Mccain can get nominated at his age because of heroism decades ago, W. Buffett should be able to run independantly because of his heroic actions today. W. Buffett for president!

Posted by: jesse schwab | October 1, 2008 8:19 PM

The name J P Morgan has recently been flagged in the press throughout the world. It could perhaps be interesting to hear his comment to a former Swedish minister H. Lagercrantz while in Cairo1914. The Swedish minister knew J P Morgan well from his time in Washington 1907. The conversation started with Morgan mentioning the financial crisis at that time when he was also called to court to answer questions about the crisis which also was an attempt by the President to curtail the reckless financial operations and monopole attempts by Messrs Vanderbilt, J D Rockefeller, Andrew Carnegie, J Pierpont Morgan et al. He then came to discuss the excavation in Egypt that he was paying for and suggested that he perhaps was being cheated. Than he mentioned the gold standard and that within short time all gold in the world was to be owned by Americans. On Lagercratntz query what solution Morgan would suggest to replace the gold standard the old banker replied that he had given it a lot of thoughts and proposed a world bank from which countries could draw credits depending on each countries wealth and print monies on that basis. On Lagercratnz comment that countries would not accept that another country valued their assets and infringed on their sovereignty the banker replied brusquely. – “Ah, they will have to accept what we decide for them”. In fact since the Second World War when the World Bank was formed have USA taken control and appointed all its presidents, and told countries all over the world to introduce legislation that have often hurt the inhabitants from Argentina to Congo and called for much opposition. In other words the Morgan concept has been implemented. The 11th President now being Mr. Zoellick who have worked as Vice Chairman, Goldman Sachs Group and served as an Executive Vice President of Fannie Mae where he supervised the affordable housing business, and also in the State Department as Trade Representative where he forged an activist approach to free trade at global level.

Posted by: Arthur Franberg | October 1, 2008 8:19 PM

We now have a monopoly of misfortune and possible beggary. Elmira, N.Y. 1876

People think it's all something new and the Boston Patriots opposed to taxes were the bad people and the rewritten history is going to win hearts with destroyed minds at the helm of the pirate ship, so we're all headed for the rocks. Pay us or we'll build a bigger tax hell and put you deeper into the hole. Joe and Hugo are bringing free heating oil over to the house and some other committee is burning it down for way and means. Bread lines and soup kitchens ahead. Why? Because we care and we'll bail you out as we push you under. Get it to a vote and make sure you include perks for all the vultures, lobbyists and Duke Cunninghams pals. Don't forget to include some grease for Ted Stevens pals who are on the skids. Then there's Cicago and all the futures player, selling and buying the future in real time on new Dell servers at warp speed. Go offshore and put the winnings in acct. 6539843399089 and make it snappy. Bill Clinton is low on cash, so put something into the bill for him and all his consultants and hangers on. Make it an even trillion and that should get things running smooth.

Posted by: Anonymous | October 1, 2008 8:34 PM

Between Goldman, The Post, GE and a couple others, they should be capable of cleaning up the mess. They're all smart people. It does seem that the mess keeps growing in spite of the tremendous wealth in this nation. All these people gave all, Normandy and the Pacific to Korea and Viet Nam up to and including now. Iraq has been a financial loss leading to future losses and what do we get? Rewards for failure and pass the buck, we're going to make it right. In the process they are destroying national security and even home ownership is becoming out of reach. The people fighting the war get to watch their savings disappear and pay for the fraud at the gas pump and pay more to feed the children. We should be having trials for the people who have done this and we're going to hand out hundreds of billions of dollars to save Wall Street because it could not save itself. I guess the GE plan is as good as any other. I know if you kill the free press, which they are working on, we're in even worse shape than we are. It's the Microsoft plan, the elimination of publishing on paper in ten years. I guess the first thing to go is paper money so there goes ink. Maybe they will fix the credit card business first, which is a toxic mess explained decades ago. Visionaries and bailouts. We'll all get to burn our books and loot our libraries next for a chance at the future at the speed of thought. Bunch of nonsense.

Posted by: Anonymous | October 1, 2008 8:59 PM

More proof the bailout is worthless.

Wall Street has been bailed out of every crappy crisis it's created since the "turn of the century".

Then maybe Warren Bad-a$s Buffet should pay for the $700B bailout himself. That's some 'action' I'm sure he'd like to get a piece of.

Posted by: Monitor | October 1, 2008 9:36 PM

By the way, GE hasn't paid taxes in how many years?

I know of 2 years so far since 2001 that GE has managed to get by paying $0.00 in taxes.

And the working poor are paying for this bailout why?

Posted by: Yukari | October 1, 2008 9:38 PM

If Warren is so concerned about the state of our economy maybe he should have conference call with the other 399 guys (and gals) on the Fortune 400 list (who hold over 1 Trillion of our money) and ask them to pitch in. After all FREE MARKET Capitalism is supposed to be a "trickle down" economy. Come on guys! It's a patriotic thing to do!

Posted by: Johann Wagener | October 1, 2008 9:40 PM

It's a full court press. The paper has to carry the water for the big guy even if it's public be damned. You talk to some guy who got all shot up in a battle and he just laughs at it. It's people on private jets, trying to maintain that lifestyle with the limo and all the trappings. A little more pain is ahead or maybe a lot more. No pain, no gain. Nothing for failure. Maybe the best thing is to try to bring WPO down a few hundred dollars, wait a while and let things shake out. Buy it all up at fire sale prices and put things on a good course. Send some shockwaves and get some panic going. It can be the Post Bailout after the Fraud Bailout runs the course. Future headline: Post in Freefall or All You Ate Buffett Closing. I love the Post, but this pill is a little to big to swallow. It's like a horse pill and we went through this before. Getting into trouble is easy. It's getting out that's difficult. They want to make it seem easy and we know it's not easy. It can get easier, but in this environment it's going to get more difficult. I know it's difficult here, especially for some of the people I'm helping. They're helping themselves and public be damned. That deserves some rough justice. It needs more thought. Don't wreck the place. We have one wrecked newspaper up this way and they wrecked it themselves. It started with the swallow your pill business and it turned out they OD'd on the pills we didn't swallow. Millions in losses and all those jobs being eliminated is a heartbreaker. Put me in first class, screw coach.

Posted by: Anonymous | October 1, 2008 10:15 PM

OBAMA BIDEN 08!!!!!!!!!!!

Posted by: NETHERLANDS ANTILLES | October 1, 2008 10:21 PM

Barack Obama sold us out.

At this point he's someone with a pulse to fill the oval office while we tear down the White House.



Posted by: Marc Schlee | October 1, 2008 10:30 PM

I liked that GO-OG YO-YO trick. Butterfly Effect and the stock is bouncing like a superball and people are at their terminals saying WTF? Election rigging O50, the joke's on them. The market looked better today. Parts of Washington looked dark as hell. All you can count on is the paper and the other important things. This digital stuff is getting a bit unreliable. In God We Trust.

Posted by: Anonymous | October 1, 2008 10:35 PM

Now the White House is getting torn down? A good tourist attraction. Make it into a library and have the president stay in an apartment building. Save some money since the entire government is now bankrupt or worse. Maybe they can move the capitol out to Omaha. I always thought it should be more in the middle of the country. Washington could be all military. Maybe the White House could be used better as a command post for a real commander instead of the mess taking up space there. I'd feel safer if it was empty right now. Maybe we could move the Washington Post offices to the White House if we can turn it into a national library. It's big enough and the librarians wouldn't mind. The Post would pay rent, to help reduce the debt. Then there's the Lincoln Bedroom which can be rented out or used for sleepy reporters. I'll need to think it over and get back to you.

Posted by: Anonymous | October 1, 2008 11:05 PM

Homelessness among veterans is rising.
The rich get richer.

Posted by: Anonymous | October 2, 2008 4:34 AM

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