Yet more hypocrisy coming from Warren Buffett

I have been following Warren Buffett for a long time, as some sort of investment guru and also someone with a very high integrity and who would always say the right thing and stay transparent instead of just talking up his book. Needless to say, I have been very disappointed since the beginning of the current crisis. Looks like it's easier for Mr Buffett to show integrity and transparency when the markets go his way. "It's only when the tide goes out that you learn who's been swimming naked.", right Mr Buffett? This also applies to yourself...

Here are the previous posts regarding Warren Buffett and Berkshire Hathaway:

• When investors start worrying about Warren Buffett's Berkshire Hathaway
  
• Warren Buffett's Berkshire Hathaway hits the wall of reality
• Losing My Integrity - Warren Buffet's Next Book?
• Warren Buffet's unhappy new year

Mish as published an interesting post about Warren Buffett, yet again exposing him trying to talk up his own book. Here are some quotes:

(Bloomberg) Billionaire Warren Buffett, whose Berkshire Hathaway Inc. is the largest shareholder in Wells Fargo & Co., said the lender is a “fabulous” company.

“All banks aren’t alike by a long shot, and in our view Wells Fargo, among the large banks, has some advantages the others do not,” Buffett said today at Berkshire’s annual meeting in Omaha, Nebraska.

Buffett, who has said he values lenders partly on their ability to acquire funds from depositors, told shareholders today that he’d “love” to buy the entire bank and is unable to do so because Berkshire wouldn’t get permission from regulators.

(Bloomberg) Berkshire Hathaway Inc. Chairman Warren Buffett dismissed the importance of the government’s stress tests of major U.S. financial institutions in helping him assess banks he invested in.

“I think I know their future, frankly, better than somebody that comes in to take a look,” Buffett said before the start of Omaha, Nebraska-based Berkshire’s annual shareholder meeting today. “They may be using more of a checklist type approach.”

(Bloomberg) Buffett, in his most recent letter to shareholders in February, said he supported the U.S. government actions, while predicting bailouts will cause “unwelcome aftereffects” including inflation.

Mish comments:

Of course Buffet supports the bailouts. So does PIMCO and so does anyone holding corporate bonds of financial institutions in general. They stand to benefit from these taxpayer sponsored bailouts. It's as simple as that.

To not let a well capitalized company like Berkshire Hathaway to acquire a bank when banks are clearly struggling to raise more capital makes no sense. Since Buffet claims he would “love” to buy the entire bank I suggest he should be allowed to do so. Then we would get to see if he really wants it or if he is just talking his book.

One thing's for sure: It's far better for shareholders to to take the hit when this mess blows the second time than taxpayers in general. Yet, if Buffet is indeed right about the prospects of Wells Fargo, then by all means, Berkshire Hathaway shareholders should be allowed to profit from that position.