As Munger's Anti-Gold Campaign Kicks Into High Gear, Buffett Confirms He May Have "Held Something Back" About Sokol

Tyler Durden's picture

Crony capitalism bailout induced dementia may be a bitch but it sure does put things on the fast track. Specifically, from "Neither Dave nor I feel his Lubrizol purchases were in any way unlawful" to "the Sokol situation is inexplicable and inexcusable" in thirty days. Ignore the fact that Buffett both "explained" and "excused" it when he first announced it hoping that would be the end of course. After all who would dare disturb the kindly old Octogenarian of Omaha atop his perch, after he himself made billions off the backs of taxpayers, the same people his sidekick Munger who did precisely the same illegal frontrunning when he bought a boatload of BYD (oddly nobody brought that one up yet: we are confident it is being saved for the Too Bit To Fail launch party at the Museum of Mirrors) told should only buy gold if they believe the country they live in is going to kill them. We wonder if Munger has seen the price of gold lately, and if that to him is any indication of the genocidal inclinations of said host country. As for the demented one, who ended his letter with: "I have held back nothing in this statement. Therefore, if questioned about this matter in the future, I will simply refer the questioner back to this release" we wonder: now that the validity of that statement has been thoroughly refuted by none other than grandpa Warren, whether he would like to revise it, and if so, can he absolutely, definitely guarantee us that his heir apparent (not to mention Munger) was the only one who would frontrun Berkshire on corporate acquisitions in the past? We promise to believe him this time.

From Reuters:

Warren Buffett said he had made a mistake by not asking more about David Sokol's purchases of Lubrizol Corp stock while his former top lieutenant was pitching the chemicals company as a possible takeover target for Berkshire Hathaway Inc.

Sokol was widely considered a leading candidate to succeed Buffett as Berkshire's chief executive, but he resigned last month after it was revealed that he had bought $10 million of shares in Lubrizol. Sokol got a roughly $3 million profit on that stake when Berkshire agreed to buy Lubrizol.

The U.S. Securities and Exchange Commission is probing Sokol, a person familiar with the matter has said, and the controversy has put Buffett's management style into question.

Speaking on Saturday to shareholders from the stage at Berkshire's annual meeting in Omaha, Nebraska, Buffett said he should have probed more deeply when Sokol first revealed in January that he owned Lubrizol stock.

This was after Sokol had spoken with Citigroup Inc bankers about Lubrizol, and two months before Berkshire agreed to buy the chemicals company for roughly $9 billion.

"I obviously made a big mistake by not saying, 'Well when did you buy it,'" Buffett told shareholders. He called the Sokol situation "inexplicable and inexcusable."

In a scathing report, a committee on Berkshire's board this week found that Sokol deliberately misled Buffett about his Lubrizol investments, and that his "misleadingly incomplete disclosures" violated his duty to be candid.

It also said some of Sokol's responses to Buffett's questions about the stake appeared "intended to deceive."

"I think that for reasons that are laid out in the audit committee report, I don't think there's any question about the inexcusable part," Buffett said.

And since this whole affair has now passed way beyond damage control, we can't wait to see just what skeleton falls out of David Sokol's sleeve next...

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Gold 36000's picture

Has everyone forgotten the vast corruption in re-insurance contracts that the Vampire of Omaha did a few years ago?  It was a classic case of moving capital around to various insurance subsidiaries to prove they were capitalized, then once audited they move it on to the next subsidiary.  General Re was the evil AIG of the insurance industry.  Fuck that evil bastard Buffet.

Gold 36000's picture

Can we now rename him the vampire of Omaha?  Now with all his TARP and General Re corruption exposed it is clear he is just a bloodsucker.

To clarify General Re it was a case of each insurance company selling another insurance company a swap or a reinsurance contract.  If two undercapitlized companies sell each other reinsurance contracts then it looks good on paper.  It was and still is a foul nest of dozens of insurance companies buying and selling reinsurance contracts from each other backed by (pause for dramatic effect) each others' reinsurance contracts!

bonddude's picture

Sounds like Enron. This guy thinks because he can pet Becky everybody believes in his mojo.

He's a liar. I like how Michael Steinhardt busted him recently.

Quixotic_Not's picture

I'm sure Becky is upset that her and the oralcle from BlowMaha won't be able to lube up with anymore free Lubrizol!

Poor lil' pathological liars...

Caviar Emptor's picture

Dont' forget this too: if two undercapitalized companies sell each other reinsurance contracts then that justifies executive salaries, bonuses and expense accounts culled from client premium payments (who have no idea said companies are undercapitalized and have no intention of paying out )

unclebigs's picture

Why is today's price of gold realistic but the stock price of Webvan and was unrealistic?  

What's a useless metal worth when the PV of future cash flows is $0?

Sheeple, you're paying $1,560 per ounce of metal that is guaranteed to never pay you a dime in return.

Pull your head out of your asses and think.


Id fight Gandhi's picture

Yeah don't buy metals put your money into sound investments like travel zoo and

Fucking dot com bubble back in force with fed backing.

unclebigs's picture

So the only choices are Gold or Travelzoo?  Take a class in Logic 101 Dumbshit.



traderjoe's picture

Look everybody, we have a new PM troll! 

Hey, fucktard, riddle me this - what's the present value of the cash flows to Berkshire stock?

Hint: it doesn't pay a dividend...

Hephasteus's picture

Persistant troll is persistant. I think you will collapse of heart attack during the bargaining phase of all this.

DavidC's picture

I agree with you, but the word is 'persistent'.

Yes, I'm happy to be corrected on my own spelling and grammar!


Calmyourself's picture

Only if you take history 101.. Try stock returns against inflation then tell me about stupid metal. Pull your head out before it all comes down and you miss it..

PY-129-20's picture

Another week, same story. Never gets old.

jm's picture


This is classic cash-flow versus... whatever... thinking.  People can't see outside of their paradigm, so the other side looks like morons.

Real interest rates are negative, so the cost of holding gold is low.  The positive return comes from inflation expectations and currency substitution premia or "All fiat currencies are coming to end" stuff.  I don't count these things out.  But they are low probability events, and so I hedge them with CHEAP lottery tickets. 

Valuing commodities by discounted cash-flow makes them always be zero. Does this mean PM buyers are a bunch of glorified momos chasing a trend?  Denying this run-up is denying reality. 

It's hard for me to see how PMs are better than local currency bonds.   


American Dreams's picture

Check your frame of reference, PMs are not increasing in value they are but retaining purchasing power.  The currency by which you are valuing this store of wealth is dropping rapidly.  Try valuing gold or other PMs in Swiss Francs, this is not a run up it is a decline in your Federal Reserve Note's purchasing power.  


There be no shelter here

jm's picture

So why wouldn't you buy a bond with a Swiss Franc coupon instead of gold?  You get a cash-flow in the former case.

Seriously, some of us are trying to figure out why one should buy gold. 

GoldSilverDoc's picture

To answer your (fairly ignorant) questions:

1) Because it is money, against which the fiat (fake, valueless, etc.) "money" produced by the FED is depreciating. Gresham's law, and all.

2) More than the equivalent amount in toilet-paper-money (i.e., "Federal Reserve Notes")

So, unclebigs only invests in "income producing" assets. I suppose that means he owns a lot of farmland.  Also not the worst idea, although, being both sessile and traceable, it can be taxed and stolen at the whim of a government.

The only one with his head up his ass, is somebody who missed chance to trade only 280 FRN's for an ounce of gold, since he can now buy more than 1500 of those same pieces of shit, with the same ounce.

unclebigs's picture

1)  Gold is not money because it can't be used as a unit of exchange.  Try going to buy groceries today with your Gold.


2)  I own 160 acres of prime farmland that will produce double the income this year than last.  Plus the value has doubled as well.  LMFAO!!!!


3)  Webvan stock skyrocketed too.  Did that confirm the investment thesis in that piece of garbage that produced the same future cash flows as gold (i.e. $0)?  LMFAO!!!!!!


Buy more Gold Sheeple.  Just saw another commercial on TV by some cheeseball wearing a clip-on tie.  He says buy gold.  He must be right.  LMFAO!!!!

Hephasteus's picture

I thought you owned a ferrari.

Or was it a porche.

Or were you studying to be a certified public no account.

Or was it a furniture factory.

Or a dildo store.

It's all so fuzzy now.

Quixotic_Not's picture

He's just trying to protect his Lubrizol holdings so he doesn't get cornholed with worthless lube!

I actually almost feel sorry for the lil' fairy...

adeptish's picture

"I own 160 acres of prime farmland that will produce double the income this year than last.  Plus the value has doubled as well.  LMFAO!!!!"

Lying troll as well.

I said I would not comment further but it is raining and your comments are too entertaining to let pass.

Does the angry troll still want a cookie?

Freddie's picture

If he doubled his income versus last year in soon to be worthless dollars then he probably made the same amt as last year.  He is probably a lying democrat like buffett.

Pool Shark's picture


"Gold is not money because it can't be used as a unit of exchange.  Try going to buy groceries today with your Gold."


For all but the last 40 years of recorded history, gold has been THE unit of exchange. How's that FRN thing workin' out for you?

Oh, by the way, good luck buying a house, car, or clothes with those vegetables....



Libertarian777's picture

hey! this is the 21st century. we have ipad2's now!

5,000 years (of using gold as money) has no bearing on our zero-cost-to-print FRNs. Did King Tut have an ipad? NO!

the iPad 3 will be 3 times as powerfull as the ipad 2, it will wash your dishes, grow corn and farm for you too! and the iPad 4 will even do your job for you! so you won't have to work or farm!

deflation is awesome.

<sarc off>

traderjoe's picture

Why the fuck do you care what people do with their currency?

No, not everyone has the means or access to owning farmland.

There's a coin shop in virtually every reasonably sized town in America that will turn gold-money into FRN-currency. Gold can be tuned into local currency in virtually every country. Can you travel with your farmland?

Add value or STFU.

GoldSilverDoc's picture

1)  Well, dumbass, I went to my local grocery store yesterday, and asked the owner if he would sell groceries for gold. "Sure,"he said.  "No problem."  Strike one for you, the idiot.

2) Wowee.  160 acres. You are a real big wheel.  A quarter section.  (Even though you are lying, and don't really own a pot to piss in). Where I come from, that's a back yard, pissant.  Strike two.  You're all hat, and no cattle.

3) Future cash flow is not the only measure of value, dumbass.  As evidenced by, oh, the number of pieces of FRN papers you can buy today with an ounce, versus the number a year ago.


We will buy more gold.  But you are too stupid to do so, and obviously are pissed that you were too stupid to have missed the opportunities over the past 10 years.  Too bad for you.

Yits and the Yimrum's picture

bigs, if you are growing quality food for the useless eaters, I would imagine the PTB would consider your efforts to be contrary to public policy.  Please check this with the CFR, and get back to us.

but anyhoow, love your anti gold rant, funny if a little light on convincing argument


Chuck Walla's picture

Then what the fuck are U.S. gold eagles?  Coins minted by the U.S. Treasury I believe. So much for their not being money.  Old silver quarters have more value due to their PM, they are also coin of the realm, legal tender for all debts...  Hmm, I bet even a Seven Eleven takes United States coins.  Doesn't Utah have a law on paying debt with silver & gold?

AndyR's picture

But you can't eat farmland!!.... oh i see...

ColonelCooper's picture

The only response necessary to refute your position is a chart of the POSX.  As long as it continues on its current path, you are wrong.

adeptish's picture

"Sheeple, you're paying $1,560 per ounce of metal that is guaranteed to never pay you a dime in return."

Does the angry troll want a cookie?

Any further comment on your post is a waste of my time...


DeadFred's picture

By the way, anyone recall the current interest rate for lending out your gold?  Oh I forgot it must be zero because gold can't earn anything.  Is Unclebigs a recycle troll? I don't recognize his writing style even if the talking points from the cheat sheet are some old same old.

edit: I take it back, it methman back from the grave

DebtBasedCurrency's picture

Ahh Yee of brainwased western thinking one.. You have been conned to think that "paid in full" = Dollars, when "paid in full" = OZ's. Physical Gold is at the bottom of the "paid in full" pyramid, with all paper notes above the base of gold. John Exter was a rare honest central banker for the fed for about 20 years. The following quote is from an interview you should read before making really cool comments like yours

interview is over 20 years old!

"What particular signs currently make you think we’re getting close to the collapse of the debt pyramid?

EXTER   The most important one is this flight to currency.  It is bigger than anything I expected right now.  We are still having troubles with banks, thrifts, insurance companies, & others, which will cause more people to move down to Treasury bills & currency.  At some point they will go to gold.  We’re at the threshold of that point.  When they go to gold instead of currency or Treasury bills, the price of gold will take off.  It will be a bandwagon everyone will want to get on.  Then even those who have bought currency will see how foolish they were & that gold is far better to hold than currency, that it is the best store of value money man has ever found.  It’s stupid for people to hold currency.  The Fed can simply print all they want at very low cost.  Paper money is as abundant as leaves on trees."

yabyum's picture

Tap,tap,tap,tap,tap,tap,tap.tap. OK I thoght about it: Iam keeping my PM's

prole's picture

Sheeple Unit 5 Commander reporting sir! Sir your orders are too vague and subtle for our dim Sheeple minds. Can you confirm your orders meaning sir? I take you to read: BTFD!! Can you confirm, over? (edit-unit 5 commander was a little late posting)

Quixotic_Not's picture

I'll intrepret his conundrum for you SU-5:

Emotionally unstable retards in the (D) & (R) Free Shit Empire™ continue to defend their demigods, while ANY rational person can see the USofA has been hijacked by sociopathic politicos, whose only agenda is to rape, pillage & plunder on behalf of their bankster masters.

Carry on SU-5, keep grazing on pastures of ignorant bliss, buy all the iCrap you're credit limit will allow, and most of all...BTFD!

God save the Queen!

Caviar Emptor's picture

Right. Trust little pieces of paper that say "IOU" and "Get Rich Quick" over the actual money which backs all world currencies. :-) 

Libertarian777's picture

what's even more amazing is people don't even think who is 'owing' that IOU. It sure as hell is NOT the Federal Reserve or the US Treasury. You think when creditors come knocking, The Bernak and Turbo Timmy are going to work on an ipad 2 line to pay back the 'faith and credit'?

That 'full faith and credit' of the USA is the PRODUCTIVE force of the people.

In its truest sense FRNs are slavery. And WE the people are the slaves. Even if they stopped direct taxation, the indirect taxation through inflation of the money supply has exactly the same effect, just its more insidious.

Manthong's picture

In this precarious environment I prefer preserving wealth in the only asset class out there that is durable and not coupled to the system in terms of liability and obligations.

It may be more or less favorably valued by others as time goes on, but I am confident that the system as it exists today is working overtime to make my choice a good one.

If I had faith and confidence that the system was working productively, prudently and in my best interests, my choices would be different.

It's about the only real freedom left (at least for now).

Bicycle Repairman's picture

I was junk #31.  Will 19 more kind-hearted souls step up and put unclebigs out of his misery?  Thanks in advance.

Id fight Gandhi's picture

All these anti gold anti articles still see gold as a commodity and don't bother to mention the destruction of the dollar. They never mention the crazy prices of the stock bubble either.

Getting market matching returns doesn't even keep pace with the decline in the dollar, what are they thinking???

chunga's picture

34.5 oz. container of Maxwell House ground coffee. $14.99 (plus 7% tax). Just got back from Publix. I couldn't help but notice how many people were looking at products and shaking their heads in disbelief. Kraft "Miracle Whip" 30 .oz jar = $5.19 (plus 7% tax).

unclebigs's picture

Kraft Miracle Whip is poison I wouldn't feed my dog.  Probably good for spreading on a woman's tits and licking off however.  You're an idiot.



Calmyourself's picture

You hang onto those frn's and your dog will be eating you at some point. I'm sure you will be better than Miracle whip.

adeptish's picture

The unclebigstroll wants a cookie...

chunga's picture

Witty. Who cares what you'd feed your dog? I'd feed mine with you and your dog but they'd probably chew on you a bit and spit you out after a good game of "stretch". Fire ants could clean up the rest...

Yits and the Yimrum's picture


although I have to admit, I'm not sure what would be worse, a night spent camping on the beach 5 miles south of fuckyoushima or a steady diet of Kraft processed foods?

can you export some of those fire ants to NYC and washington?

Bicycle Repairman's picture

Cheese-food.  Honestly who the f#ck asked Kraft to make cheese-food?