Oracle Of Omaha Honors Subpoena
Courtesy of Karl Denninger at The Market Ticker
So much for "transparency", "fair dealing" and similar.
Warren Buffett was "invited" to testify before the FCIC today. He declined.
Now one must understand that when a Congressionally-authorized panel "invites" you to appear, you’re not really being asked. Right behind said invitation, should you refuse, is nearly-always a subpoena.
Buffett, believing that he has no duty to actually talk about what happened (especially with the ratings agencies of which he has, until fairly recently, held a major stake in via Moody’s), decided to say "nuts" to the invitation.
That in turn led to a subpoena, as expected.
True to form of a snubbed "King" (remember, there’s kings and there is everyone else – the law applies only to the "everyone else") Buffett has failed to provide any sort of prepared testimony in advance to the FCIC. That’s a snub too – it is common practice, and considered good form, to provide a written document containing your opening testimony a day or two before you appear so that the panel is prepared to respond to the gist of your comments.
Buffett, of course, deigned to schedule an interview with Tout TV just before going on, it has been announced. So rather than provide his testimony to the Congress, he will instead give it to CNBS and allow them to spin it into whatever they’d like just before going in the dock.
That’s nice.
The oligarchs are such a sniveling pack of frauds. If there’s nothing to be disclosed of importance, why not show up at the hearing voluntarily? Why not talk about, for instance, what you might have known about bailouts and what Henry Paulson might have told you before you "invested" in Goldman Sachs? Why not talk about what you might have known about ratings agency methodologies and what assumptions were and were not in their models – before it all blew up? After all the chair of the FCIC has called Moody’s an "AAA ratings factory", implying, it would appear, that AAA ratings weren’t a consequence of actual credit analysis but instead were sold to anyone who would come out and pay for a "passing grade."
The most important part of this mess is the fact that ratings were not only in fact sold (thereby implying a conflict of interest) but discerning the truth of incessant rumors that banks were privvy to the ratings models and thus were able to massage what was sent into the agencies so as to "manufacture" whatever rating they wanted and were willing to pay for.
Or perhaps we could talk about Berkshire’s exemptions from reporting requirements that every other company seems to be obligated to, specifically, when Berkshire makes a decision to buy or sell a stake in some firm it holds. Berkshire has hidden behind these waivers for years, claiming of course that it would "damage their position" to disclose what it’s doing (as everyone else is required to do.)
We’ll see what comes of the hearings – I’ll be watching…..
