Business

Buffett Stands to Profit Handsomely From Mortgage Abuse Settlement

Warren Buffett Stands to Profit Handsomely From Mortgage Abuse Settlement

It appears that billionaire Warren Buffett will again profit from a major decision made by the White House.

“Warren Buffett’s stake in Bank of America Corp. increased in value by $154 million after President Obama and the U.S. Justice Department announced a $25 billion foreclosure abuse settlement with the five largest U.S. banks Thursday,” Patrick Howley of The Washington Free Beacon writes.

How did Buffet manage that?

Well, as it turns out, the man who has both publicly and repeatedly begged to have his taxes raised invested $5 billion in Bank of America (BofA) on Aug. 25, 2011.

“As part of his investment deal, Buffett gained warrants that allow him to buy 700 million shares of Bank of America stock at a strike price of $7.14 a share,” Howley writes.

However, on Dec. 19, 2011, it was reported that Buffett was $1.5 billion in the hole on his stock warrant because shares of BofA were trading at $4.94. But all that changed when President Obama announced the details of the $25 billion dollar settlement. After the White House explained the settlement Thursday morning, BofA stock closed at $8.13 a share.

The stock opened Friday morning at $8.31 and reached as high as $8.35 a share.

“If Buffett had exercised his warrants Friday morning, he would have made $847 million. $154 million of that profit would have been related to the foreclosure deal,” Howley reports.

And as mentioned in the above, this isn’t the first time a decision by the White House has paid off for the Berkshire Hathaway CEO.

Recall that in November 2011, it was reported that President Obama’s two-year postponement of the deadline to determine the future of the proposed Keystone XL pipeline would “force North Dakota oil producers to rely more heavily on the Burlington Northern Santa Fe Railroad.”

“Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit,” Bloomberg reported earlier this year.

Buffett’s Berkshire Hathaway Inc. holding company purchased the Burlington Northern Santa Fe Railroad Corp. in a total package worth $44 billion in 2009.

“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., said.

If Keystone XL “doesn’t happen, we’re here to haul.”

And let’s not forget that, as mentioned earlier on The Blaze, the billionaire philanthropist and market speculator has also been accused of using an “informational advantage” to make bets and investments on the market.

The man who once said, “Through the tax code, there has been class warfare waged, and my class has won,” might have been investing in the markets with information that only he and a handful of politicians had been given access to.

Ordinarily, this is called “insider trading” and it’s extremely illegal. Well, it is unless you’re a member of Congress — or perhaps extremely cozy with high ranking members of the administration.

Now, to be fair, perhaps Buffett’s good fortune at the hands of the mortgage abuse settlement is the result of keen investments and good luck. But then again, this is the second time in less than a month that he stands to make an impressive amount of cash because of something the White House did.

Comments (114)

1 2 3
  • barber2
    Posted on February 11, 2012 at 12:31am

    Just remember these famous Democrat words : Affordable Housing….Affordable HealthCare….Transforming America…Drain the swamp…99%….

    Report Post »  
    • Gonzo
      Posted on February 11, 2012 at 8:12am

      Look at all the areas Buffet profits from by supporting Obama. If a Republican was so blatantly scratching the back of one of his supporters, every media outlet in America would be talking about it, SNL would do skits about it, The Simpsons would mock him and every kid from 8 years old up would know his name and revile him. With Obama in the White House, he’s just good old uncle Warren.

      Report Post » Gonzo  
    • lillymckim
      Posted on February 11, 2012 at 8:25am

      Well of course he does and so does bankrupt California …it’s a just another bailout for them too wrapped up in pretty paper

      Report Post » lillymckim  
    • metalurgy
      Posted on February 11, 2012 at 9:27am

      @ Gonzo
      “Look at all the areas Buffet profits from by supporting Obama. If a Republican was so blatantly scratching the back of one of his supporters,…”
      *******************************************************
      Look at all the areas Buffet profits from by supporting Obama. If a Republican was so blatantly scratching the BLACK of one of his supporters,…

      Fixed it for ya…

      Report Post » metalurgy  
    • Ruler4You
      Posted on February 11, 2012 at 10:04am

      That’s two for him now, isn’t it? paybacks?

      Report Post » Ruler4You  
    • MCDAVE
      Posted on February 11, 2012 at 10:10am

      Another pay off by Obama with our tax money..follow the money its all going to the New World Order people..

      Report Post »  
    • copatriots
      Posted on February 11, 2012 at 10:49am

      And well-timed to give Warbucks Buffington more money at the beginning of campaign season. Dems aren’t trying to hide their blatant corruption.

      What are the chances Buffett will voluntarily donate most of the profit to the Fed government? I know, none…..he can’t pay more taxes until the government makes him.

      Report Post »  
    • liberalescheisskopf
      Posted on February 11, 2012 at 1:03pm

      Why doesn’t Bershire Hathaway pay their back taxes? Instead of fighting the IRS? Hmmmm? After all, HIS secretary pays more than Warren does….How many secretaries do you know that have two homes and a six-figure salary? Warren is just another progressive ass-hat that should be in jail.

      Report Post » liberalescheisskopf  
    • Freedom from liberals
      Posted on February 11, 2012 at 1:24pm

      Buffett is the biggest hypocrite of all time. He has spent his entire life paying or avoiding as little
      tax as possible.He pays himself 100K on W-2 which he pays the regular tax rate. The other 500 million he makes per year is taxed at the 15% Cap Gains Rate. Hey, Warren, pay yourself 50 mil on a W-2 and pay the tax you A hole. And then to top it all off, Warren the great hearted individual you are, is going to give away his fortune.He is going to give way 40 Bil of his estimated net worth of 48 Bil . However, he is donating it all to the Bill gates foundation, which means he doesn’t have to pay any tax on the charitable contribution. This is a worthy cause and I would rather have Gates using the money than the Gov’t, however Warren don‘t berate all the other Billionaires for not paying their fair share cause you haven’t done that your entire life.

      Report Post »  
    • jzs
      Posted on February 11, 2012 at 11:02pm

      Personally I’m in favor of Americans making a profit on stocks. The stock, if you haven’t heard, is higher than it was since Bush left office. I don’t have a problem with rich people investing in America and making money as the economy improves.

      When I read the communist’s comments here though, I shake my head sadly. I guess you guys would prefer to live in a communist country. Why don’t you move there then, traitors!

      Report Post » jzs  
    • topcat128
      Posted on February 12, 2012 at 11:04am

      If you or I or a Republican did what “Warren Buffet” did with Bank of America, we would be called every name in the book. We might even go to jail for insider trading and make no mistake about it this was insider tradering of the worst kind, with the President of The United States making sure it happened.

      Report Post » topcat128  
    • georgette
      Posted on February 12, 2012 at 11:58am

      I wish to submit a timely election issue, given this news about Mr. Buffet
      ….–for every member of Congress, and every Presidential candidate, regardless of party, race, color, or creed..
      Repeal taxation of Social Security Benefits ……..a reprehensible practice begun at the recommendation of Greenspan in 1983…….

      —We were not asked…“we” were mandated to participate in Social Security..“they” get to tax it…………too many of us lost our retirements because of one shenanigan after another and have no choice but to live on on Social Security…..an ever tightening noose.

      Yet another Congress sits there making one unsound decision after another, for “our” benefit….they benefit from the information they have, the rules and laws they pass.

      I humbly ask you to take the time to remind them for as long as it takes–repeal that tax…remind them……..
      It’s We the People not We the Taxed Peasants..

      Report Post »  
  • barber2
    Posted on February 11, 2012 at 12:27am

    Big surprise. Why do you think many of his hated “ capitalist” bankers/ corporations settle for the Obama plans? Why do many people vote for Obama? All because of the human “greed” that his minions, the Occupiers, are protesting ! Why ? Because there is something in it for them ! Gimme..Gimme..Gimme.. This is the Big Lie Administration: 99% Baloney and bad math ! JFK asked what you could do for your country. Barack Obama wants you to ask what your country ( those evil rich tax payers ) can do for you ! Apples and oranges…

    Report Post »  
    • loriann12
      Posted on February 11, 2012 at 7:08am

      My grandma used to say (when I wanted something usually), “My name is Jimmy, I’ll take all you can gimme.” This is Buffet’s payback for supporting the “tax the rich” scheme Obama wants to enstall.

      Report Post »  
    • nelbert
      Posted on February 11, 2012 at 8:01am

      Absolutely.
      That anyone not suspecting some back room deals here is too naive to breathe.

      Report Post » nelbert  
    • Hollywood
      Posted on February 13, 2012 at 3:13pm

      The “ORACLE” has his wrinkled,chubby little hands, into all kinds of WHITE HOUSE largess re decisions. His 6% Guaranteed return on BILLIONS of $ in WARRANTS in B of A, to his company BH ownership of Burlington Northern, who will benefit by hundreds of millions re the WH thumbs down on the Keystone Pipeline. Burl North gets to Rail car the North Dakota oils,and any Cdn,instead. CRONY Capitalism at it’s PEAK!!! These people have NO SHAME!!!

      Report Post » Hollywood  
  • JJBlazeReader
    Posted on February 10, 2012 at 11:56pm

    ..
    “Now, to be fair, perhaps Buffett’s good fortune at the hands of the mortgage abuse settlement is the result of keen investments and good luck. But then again, this is the second time in less than a month that he stands to make an impressive amount of cash because of something the White House did.”

    Doubt it, read “Throw them all out” by Peter Schweizer. This was the book that exposed how Congressmen/Senators and their friends get rich off insider stock tips, land deals and cronyism.

    He wrote a whole chapter on Warren Buffet.

    If you know in advance what a government policy affecting a business is going to be you can make a fortune or even better when you can influence a government policy to help you make money from that policy/decision.
    ..

    Report Post » JJBlazeReader  
  • proudamerican1990
    Posted on February 10, 2012 at 11:55pm

    Hey. The Buffett rule.

    Report Post »  
  • seeker9
    Posted on February 10, 2012 at 11:48pm

    Are we a banana republic yet?

    Report Post » seeker9  
  • lukerw
    Posted on February 10, 2012 at 11:35pm

    How much do the Ninjas charge for a Mission?

    Report Post » lukerw  
  • Elena2010
    Posted on February 10, 2012 at 11:34pm

    Beck said it best — Crime Inc!

    Report Post » Elena2010  
  • TeaBill
    Posted on February 10, 2012 at 11:25pm

    Anyone See A

    Bush

    in the photo?

    We are truly F’d!

    Report Post »  
    • MetalPatriot
      Posted on February 11, 2012 at 1:53am

      Yes. I was at first surprised, but then realized, “oh ya, he’s an elitist too”. He was the first president to mention the U.S. and the NWO.

      And everybody here wonders why the whole OWS thing is going on? I don‘t know if they’re loonies or losers or paid by Soros but do think WE should be occupying (maybe target practice) in their yards. Unions occupy & get off free. The rich get richer. The Senate and everybody else say appeasing words and get richer. It’s a RACKET.

      Tyrants need & deserve prison and likely death. Our Founders governement is dead. We have no say. More laws every single day to further constrain/restrict us.

      There’s not enough bad words to express the hatred and despair I have.

      God watches…maybe it’s the only thing on heavenly t.v….

      Report Post » MetalPatriot  
    • reform
      Posted on February 11, 2012 at 4:22am

      T-bill yes and is it not ironic that senior Bush and Jeb Bush both endorsed who? Oh why yes none other than Mitt Romney put two and two together folks the ship has a big hole in it.

      Report Post »  
    • TeaBill
      Posted on February 11, 2012 at 3:14pm

      … Oath of Office …

      Then, once we get our elected representatives to explain their votes based on their Oath, then we need to ask for the most critical subject.

      … Treason …

      We all need to be researching and asking our elected representatives who we trust, and also anyone of our contacts in the real world, what the process is to formally charge an elected representative with Treason.

      It is only with the combination of these two significant items will be get those who we elect to begin to repair this sinking ship.

      Report Post »  
  • The Third Archon
    Posted on February 10, 2012 at 11:18pm

    “Now, to be fair, perhaps Buffett’s good fortune at the hands of the mortgage abuse settlement is the result of keen investments and good luck. But then again, this is the second time in less than a month that he stands to make an impressive amount of cash because of something the White House did.”
    Yeah, isn’t capitalism just such a racket!

    Report Post » The Third Archon  
    • Psychosis
      Posted on February 11, 2012 at 8:22am

      if he had assistance from the white house, then this action wouldnt be capitalism

      but you already know that

      Report Post » Psychosis  
    • Joshua7
      Posted on February 11, 2012 at 1:38pm

      The government giving special financial infromation to one group or individual and keeping it from the rest is NOT capitalism. It’s just corruption.

      That reminds me, how such do you get paid to spam these threads?

      Report Post » Joshua7  
  • Patriot Z
    Posted on February 10, 2012 at 11:13pm

    I’m very happy for Mr. Buffett in his upcomming financial gain. I am sure that since he believes he should pay more in taxes, that he will more than happy to take all that money he gets and hand it over to the govt in order to pay his “fair share”.

    #thecheckisinthemail

    Report Post » Patriot Z  
    • barber2
      Posted on February 11, 2012 at 12:35am

      probably made a deal for a Get Out Of Jail Free Card/ the FBI and the IRS Won’t Investigate You Card .

      Report Post »  
  • packsack54
    Posted on February 10, 2012 at 11:11pm

    Maybe he should buy AIG & GM and then the taxpayor can get some of the loans to them back, what is a few billions to Warren? He would not touch those companies with a 100 foot pole. It won’t matter much anyway, inflation and the fall of fiat dollar is coming if Obama or any of those DS other than RP win in 2012. But I am thinking the water is coming over the deck of the SS America, what recovery? Unemployment at 8.3% and just over 360,000 new claims, but everything is fine. The military and CIA wants to get us in another War in Iran, and Syria. The big guy from China coming to the WH on 14 to tell Obama a thing or two. If they make a false flag attack in the Gulf, just kiss you sweet freedom and liberty away. That how they eat a elephant, one small pieces at a time, but there not much left to eat on this animal. I can not think that people are so DUMB. See no evil, speak no evil and hear no evil. They, I mean people are so clueless and are brainless, let them be marked and shipped to a wonderful rest camp. Michele can tell all those fat americans how they will eat more veggies. LOL everyone. Like the ant said to the grasshopper go and get the sh-t out of here.

    Report Post »  
    • GeorgieJo
      Posted on February 10, 2012 at 11:34pm

      PACK-
      Warren I do Love Obammy Buffet is building Joey Bidens railroad.
      A liberal friend of mine recently asked me if I knew anything about those “horrible/evil Koch Brothers”?
      My response was> Are they as evil as Warren Buffet or Franklin Raines or Marc Rich?

      OMG in 2012

      Report Post »  
  • ccprotect
    Posted on February 10, 2012 at 10:53pm

    i am waiting for the lefty trolls to come back with a good reason why we are wrong to feel the POTUS is not just a commont thug in bed with others of power that will help gain rule over the pepole, makes good reading.
    WELL!!!! i am waiting….
    (rich powerful pepole are not the problem it is the weak minded in DC that are willing to sell out there oath to the one’s that put them there that are the problem.
    Dont look at the one that offered the bribe to get out of a speeding ticket look at the one that took it.

    Report Post » ccprotect  
    • cosette
      Posted on February 13, 2012 at 2:04pm

      Common thug you say? You need look no further than the cesspool from which he slithered, Chicago. Or the alliances he made while residing in said cesspool. To refer to him as a thug is an insult to thugs everywhere. He is in league with Satan, he is a deceiver of the first order, he is a contemptible narcissist who is hell bent on destroying this nation. He must be stopped, but who will step up? The congress will not act because they fear a backlash from his minions, the violent hoards of addle brained followers who idolize this monster, who is on the level of Stalin and Mao. God help us all!

      Report Post »  
  • sillyfreshness
    Posted on February 10, 2012 at 10:51pm

    Hopefully that Bolshevik Buffett gets taxed at 97% like he’s been wishing for.

    Report Post » sillyfreshness  
  • seeker9
    Posted on February 10, 2012 at 10:48pm

    I thought this redistribution stuff was to take from the rich and give to the poor. Now, as we get closer to the utopiian US, it is from “bad” millionaires to “good” billionaires. The little people can be bought for trinkets and beads.

    Report Post » seeker9  
    • barber2
      Posted on February 11, 2012 at 12:33am

      Am surprised that Putin isn’t a bigger fan of Obama. Sounds like they are reading from the same plan book !

      Report Post »  
    • MCDAVE
      Posted on February 11, 2012 at 10:23am

      NO its take from the middle class and give to the super rich>Communism in action

      Report Post »  
  • MrMagoo
    Posted on February 10, 2012 at 10:47pm

    Its no wonder the OWS crowd wants a buffet.Let ‘em have at it(him).

    Report Post » MrMagoo  
  • Divothead
    Posted on February 10, 2012 at 10:40pm

    Buffet profits from bank bail outs.

    Buffet profits by stopping Keystone pipeline.

    Buffet profits from mortgage settlement.

    — If Obama wins in 2012, it’s time to invest in Berkshire Hathaway!

    Report Post »  
    • kaydeebeau
      Posted on February 10, 2012 at 10:51pm

      I can only take comfort in accepting the notion that it only takes 10% of us to change course….Adonai li v lo ira – the Lord is with me – I FEAR not

      Report Post » kaydeebeau  
    • seeker9
      Posted on February 10, 2012 at 10:53pm

      Should buy now if there is the usual Feb sell off.
      BRK/a 117,980
      BRK/b 78.79

      Report Post » seeker9  
  • abbygirl1994
    Posted on February 10, 2012 at 10:31pm

    Well of course he does, he’s right up there with George Soros.. you know the scum of the earth! Make them selves rich off the heartbreak of others. But I feel okay, because I know that God will take care of them! That alone makes it alright! God help us!

    Report Post » abbygirl1994  
  • Whitey4West
    Posted on February 10, 2012 at 10:27pm

    Close your eyes little sheeple…nothing to see here, now move along!!

    Report Post »  
  • SilentReader
    Posted on February 10, 2012 at 10:24pm

    These Obama bureaucrats have no shame. They’ve lost their souls long ago! Disgusting!

    Report Post » SilentReader  
    • seeker9
      Posted on February 10, 2012 at 10:31pm

      Just remember, this is the left wing idea of “fairness”.

      Report Post » seeker9  
    • abbygirl1994
      Posted on February 11, 2012 at 1:19am

      He and George Soros must be related.. both seem to like too make their billions off the misery of others misfortunes! God will take care of them in the end!

      Report Post » abbygirl1994  
  • MarcusFL
    Posted on February 10, 2012 at 10:22pm

    Dang!!!

    Didnt he just make a ton off the Keystone (not gonna happen) Pipeline thing?

    How much more does he need??????

    Report Post »  
    • CatB
      Posted on February 10, 2012 at 10:34pm

      Going to buy his way into h e ll.

      Report Post »  
    • pamela kay
      Posted on February 11, 2012 at 6:26am

      MARCUSFL, You are right he did. How come he owes back taxes? I quote from private first class Gomer Pyle….”SURPRISE,Surprise, Surprise!”

      Report Post » pamela kay  
  • Detroit paperboy
    Posted on February 10, 2012 at 10:16pm

    I hope he dies from rectal cancer, i actually used to respect him not that long ago…. What a peice of turd he turned out to be …… Shameless liberal billionaire… 1% er right ? Will they occupy his front lawn and take a dump in his marble fountain ….. No cuz he is a lefty …. Fu– him !!!

    Report Post »  
    • Baddoggy
      Posted on February 10, 2012 at 10:38pm

      Geeeeeeee and they call me bad….sheesh…

      Report Post » Baddoggy  
  • corcoran
    Posted on February 10, 2012 at 10:13pm

    These are the same banks Obama was chastising for his inept policies. He takes no responsibility in the lending process which he started and was supposed to regulate and oversee.

    He is a schmuck!

    Report Post » corcoran  
    • kentuckypatriot
      Posted on February 10, 2012 at 10:19pm

      You have my permission to use more descriptive language than “schmuck ”

      Report Post » kentuckypatriot  
    • Whitey4West
      Posted on February 10, 2012 at 10:42pm

      uhhhh….THIS scumbag didn’t start the lending process that created the financial crisis. That happened long before he stepped into his kingdom.

      Report Post »  
  • godhatesacoward
    Posted on February 10, 2012 at 10:13pm

    Of course he does. Is there anybody paying attention to the downfall?

    Report Post » godhatesacoward  
  • DD313
    Posted on February 10, 2012 at 10:07pm

    Are we surprised? Wasn’t Buffett a big supporter of the Current Occupant?

    Report Post » DD313  
    • louise
      Posted on February 10, 2012 at 10:12pm

      yup

      Report Post » louise  
    • CatB
      Posted on February 10, 2012 at 10:14pm

      Nope .. Obama’s friends get richer .. we (and our children and grandchildren and on and on) get the bills .. most corrupt administration (or anything else) I HAVE EVER SEEN!

      OMG 2012!

      Report Post »  
    • kaydeebeau
      Posted on February 10, 2012 at 10:19pm

      Color me surprised…not …Funny how all of O’s big supporters make out like bandits while those of us paying the bills seem to be raped and pillaged…..oh wait – I forgot this must only be a coincidence since O said there would be no lobbyists or favoritism and all would be transparent

      Report Post » kaydeebeau  
    • barber2
      Posted on February 11, 2012 at 12:28am

      Kay: Just remember Joe Wilson’s famous words: ” You lie !”

      Report Post »  
    • rambosharley
      Posted on February 11, 2012 at 9:30am

      I like Rep. Joe Wilson!!!!

      Report Post »  
  • Exrepublisheep
    Posted on February 10, 2012 at 10:05pm

    GREAT! Since all of us Lefties are paid to be lefties, maybe I can finally get a raise!

    Report Post » Exrepublisheep  
    • 13th Imam
      Posted on February 10, 2012 at 10:10pm

      They don’t share with the drones. You are now a Demosheep. Eat your peas.

      Report Post » 13th Imam  
    • seeker9
      Posted on February 10, 2012 at 10:36pm

      Remember, you can’t make it on your own. You NEED BHO to cover your back. Write him a letter and ask for a raise – 1600 Pennsylvania Ave.

      Report Post » seeker9  
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