By Lloyd Graff
A popular sports talk show in Chicago has a feature that exposes hypocrisy. They call it “Who you crapping?”
This crap goes out to Warren Buffett. After listening to Lloyd Blankfein, head of Goldman Sachs, tap dance in front of a Congressional inquiry about his company’s conduct during the subprime mortgage catastrophe, and reading Michael Lewis’s book, The Big Short, detailing the stupidity and duplicity of the ratings agencies, including the once venerated Moody’s during the same period, I was shocked to hear Saint Warren defend both at the annual Brookshire Hathaway pig roast in Omaha last Saturday.
But I suggest the real reason he defended them is that Buffett owns a big stake in both firms. Brookshire lent $10 billion to Goldman at 10 percent interest during the depths of the Wall Street chaos. He also has warrants to buy the company’s stock at $122 per share. He also owns 20 percent of Moody’s. He thinks Blankfein is great and wishes he could clone him. He also thinks Moody’s is a wonderful business.
These two pillars of Wall Street had a huge hand in virtually sinking the entire American economy. The SEC finally had the gall to challenge Goldman on a small deal and you would think capitalism as we know it is under siege. Thanks Warren, Oracle of Omaha, who you crapping?