Reuters / Jim Young
- Warren Buffett called Treasury Secretary Hank Poulson at the height of the 2008 financial crisis, a suggestion that saved the U.S. economy from a deeper recession.
- Renowned investor and Berkshire Hathaway CEO made the government’s provisional capital proposal directly to banks instead of just buying their distressed assets.
- Paulson quickly assembled the bosses of the nation’s largest banks and assured them of accepting billions of dollars in investment.
- The Treasury, in imitation of Goldman Sachs Sachs Buffett’s securities in September 2008, demanded that Chunky tightly pay dividends on the selected stock, as well as stock and rent in return.
- Former President George W. Bush Bush called it “probably the biggest economic bailout” and said it “probably saved the day.”
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Warren Buffett made a late-night call on Saturday, October 11, 2008 to the U.S. Saved from a more catastrophic financial crisis.
In a documentary released in 2018, “Panic: The Untold Story in the 2008 Financial Crisis,” the pair said that billionaire investor and CEO of Berkshire Hathaway, then-Treasury Secretary Hunk Paulson, was dialing.
“Hank, this is Warren,” Buffett said. Bored and ferocious Paulson’s first thought was, “My mom has an elephant named Vern Run, why does she call me?”
Buffett was calling for a troubled asset relief program (TARP) that authorized the Treasury to spend $ 700 billion to buy distressed assets from banks. Legislators passed it on in a desperate attempt to move the financial system forward after the collapse of two of the biggest bank failures in American history – Vachovia and Washington Mutual.
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Once Paulson realized he was Buffett on the line, Berkshire Bose suggested that the government invest directly in banks instead of just buying his assets, as he would “come out very well” using the prospect.
“What he thought was the germ that we did,” Paul said in the documentary.
Paulson convened the bosses of the country’s largest banks the following Monday. He persuaded them to accept billions in government cash, threatening to cut off future aid if they refused.
The Treasury eventually raised funds in more than 700 financial institutions as part of its capital purchase program. In return, he received the preferred stock to pay healthy dividends or debt securities.
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They also got warrants to buy shares of companies at fixed prices in the future, getting some of their recovery from the risk of taxpayers’ money.
The deals were made at least a few weeks ago on the bailout of Goldsmith’s Buffett. Investors paid બેંક 5 billion to the bank in exchange for preferred stock, paying 10% annual dividends as well as stock rent.
Former President George W. Bush hailed the banking program as “probably the biggest economic bailout” in the documentary, adding that it “could potentially save the day.”
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