Why Warren Buffett Said No to Lehman and AIG in 2008

Discussion in 'Wall St. News' started by dealmaker, Sep 9, 2018.

  1. dealmaker

    dealmaker

     
    trader99 and fan27 like this.
  2. RedDuke

    RedDuke

    Do not really care what he says. He was bailed out by not having his positions marked to market. He would have lost all his fortune had he have to folow the rules we are forced to folow.

    Then again Ceasar and commoners are never facing same rules. Way of the world we need to folllow.
     
  3. dealmaker

    dealmaker

    Warren Buffett Explains the 2008 Financial Crisis

     
  4. What do you mean by that? (marked to market comments)
     
    Sig likes this.
  5. JSOP

    JSOP

    If I were Warren Buffett, I wouldn't have given Lehman Brothers or AIG anything either and I think the majority of the ET members here would think the same thing. These two companies are not young start-up's who are in the process of developing their businesses and that they are "desperate for cash". These two companies are established financial companies that are almost the pillars of wall street and the financial industry itself with 100+ years of history in Lehman Brother's case and $trillions in assets and yet they are "desperate for cash"??!! Something is obviously extremely wrong. Either they weren't running the company right or there was fraud to the point that they are beyond help. So WHY would I throw my money away for some company that's beyond any hope. If I can realize this, Buffett would've definitely realized this probably long time ago way before they presented him their Form 10-K's. I mean even the US government didn't even want to help Lehman Brothers at the end and they expected Buffett would foot the bill, to throw his good money away to the bad? LOL
     
    mr_byte31 likes this.
  6. tm689

    tm689

    What difference would it have made? For his personal fortune he wouldn't care how the market valued his position. Berkshire still has to follow GAAP accounting rules, correct?
     
    Last edited: Sep 10, 2018
  7. Lol The closest his fortune has to being wiped out was early 90's when he purchased some bank that ended up with huge legal trouble, he admits to that in various interviews. In 08', Berkshire was sitting on $35-$40B in cash which is why he was able to make those lucrative warrant deals with BAC and GS to name a few then buy Burlington Northern, a few years later. If you mean his S&P500 puts he sold those weren't due for a decade and netted him billions. Those were marked-to-market, every year, which is why Berkshire shows a "loss" sometimes even when it's minting money. At no point was Berkshire in trouble, the only time their rating hasn't been AAA, I believe is in the railroad purchase which is why BRK.B was created.
     
  8. Sig

    Sig

    Yeah, you're gonna have to explain that, it's not the kind of accusation you can just lob out and expect this group to lap up without further details.
     
  9. SunTrader

    SunTrader

    The something wrong is this ridiculous nonsense.

    Even trillion dollar market cap Apple doesn't have trillions of dollars of assets.
     
    mr_byte31 likes this.
  10. RedDuke

    RedDuke

    He would have lost all his fortune in forced liquidation of his derivatives trades at the most unfavorable prices. In his case it would have been even worse since these were OTC contracts.
     
    #10     Sep 10, 2018