Warren Buffett defends Goldman Sachs, Ben Bernanke

Warren Buffett

Warren Buffett vigorously defends Goldman Sachs. Image from Wikimedia Commons.

Over the weekend, investor extraordinaire Warren Buffett came to the defense of embattled investment house Goldman Sachs.  Goldman has been under fire for some time, for the role it played in the Wall Street meltdown and the recession.  Buffet asserted that the fraud allegations and investigations are unwarranted.  He also came to the defense of Ben Bernanke, and that the Fed Chairman was right in the course the Federal Reserve took in its actions in making out short term loans to ailing Wall Street firms and banks.

Warren Buffett offers support of Goldman Sachs

Warren Buffett defended Goldman Sachs against the charges of fraud leveled in a Securities and Exchange Commission lawsuit.  The purchases in question were a bundle of mortgages in collateralized debt obligations (CDOs) packages, sold as the product Abacus. Hedge fund Paulson and Co. bet on the securities losing money. The charge is that Goldman Sachs purchased the securities without notifying stockholders of the bet against Abacus. Warren Buffett said in Reuters: “I don’t have a problem with the Abacus transaction at all,” and that “I think I understand it better than most.”

Buffett Defends Bernanke

Warren Buffett also leaped to the defense of Ben Bernanke.  Bernanke, the Chairman of the Federal Reserve, has taken a bit of a beating in the press for seeming to be too willing to pump cash into Wall Street. Buffett said that “there’s no one in the United States  that I know of whom I would rather have running the Fed than Ben Bernanke.”  Bernanke, sometimes called “Helicopter Ben” orchestrated the emergency infusion of cash into troubled Wall Street firms.

Berkshire-Hathaway owns a hefty stake in Goldman

Warren Buffett, through his company Berkshire-Hathaway, has a wide variety of concerns and investments, and a hefty one is a stake in Goldman Sachs. Buffett owns more than $5 billion in Goldman shares.  He would be in a unique position to see whether a transaction could be fraudulent or imprudent.  He seems to be satisfied with the actions of Goldman Sachs and executive Lloyd Blankfein.  Buffett, after all, is an Investment Wizard, and wouldn’t back a company if he didn’t have a legitimate reason to do so.

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