Warren Buffett No Longer Trusts Banks More Than The FDIC Does

Warren Buffett's Berkshire Hathaway Inc. has told one of its subsidiaries to stop insuring bank deposits above the amount guaranteed by the federal government, dealing a fresh blow to the financial-services industry as it tries to assuage anxious customers.

The subsidiary, Kansas Bankers Surety Co., is notifying about 1,500 banks in more than 30 states that it will no longer offer a program called "bank deposit guaranty bonds." KBS is an 18-employee subsidiary of Berkshire Hathaway, according to the parent firm's 2007 annual report. It is one of a handful of firms that offer such insurance, a big selling point for banks trying to attract wealthy customers.

Two people briefed on the matter said the order was made Monday by Mr. Buffett, Berkshire Hathaway's chief executive. Chuck Towle, a senior vice president at KBS, declined to comment on why his firm was leaving the business. "We have decided to do so," he said. "We'll work with each individual bank and work it out with them."

Read the full story here

Related:

::The Huffington Post's banking crisis big news page

Comments

[cap2008]

Poor rich people. They won't be able to insure their zillion dollar deposits anymore. They'll have to live with the FDIC $100,000 limit for each account at each bank in which they've put their money. I can hear the violins playing in the background.

[observing]

Question: If the banks had not adjusted to those variable rates and had just frozen the mortgage payments at what they were, would the mortgage crises have been avoided?? Or were those people struggling to pay their mortgage before the increase rate anyway?

[BernieBernie]

These are the same people who elected BUSH. They're running scared and cutting their losses.
What this country needs is a good depression! It will drive out all of these greedy bastards and make the American people understand the important of sound leadership. I wonder what's the big surprise in October?

[flash LI]

The latest bank crash is directly related to Bush. Just another reason to impeach him! NOW!!!

[Bullfrog]

Poor Warren, Without his money, he has no life.

[OldKnute]

Bullfrog????

How can you even say that? He has raised a family, was forever active in his community, I may be wrong, but he still lives in a modest home, one he has owned for years. Everyone I have ever heard speak of Warren, does so with the greatest respect. Just loving the MAN he is.

This is not a deconstructor like DICK CHENEY or a Corporate Raider,,, Warren Buffett is a BUILDER. Berkshire Hathaway was basically GOOD Insurance Company, Actuarial Driven, and basic. Warren WISELY, invested the holdings from Policies, to start a vast investment portfolio. For 30 or no, 40 years, he has taken this company to the pinnacle of success.

We may not run in the same circles,,, but I would bet dinner at the Buffets is not all that different than any other Midwestern home. He has worked hard for every dime he has. AND,,, he has not chosen to just hold onto money like some GREED Obsessed Wall Street Raiders.

You got the wrong man if you are looking for someone to hate or blame for Americas ILLS.

What Warren will do for Obama/Biden is provide the SOLID, Measured, and WISE advice that is needed to turn American Economics around. If McCain thinks you can hit Washington like a bull in a china closet he has LOTS to LEARN.

This is a GUY to LEARN FROM not hate.

All the best

Knute Neo-LIB

[thecanadian]

Well said and I understand that Obama has met with him? Smart & honest man. Obama too of course. He is consulting the best before he shoots from the hip and makes ridiculous promises to U.S. citizens.

Wonderful Match.

Wonder though - all the filth coming out of the McCain Campaign and Zero judgement shown by the McCain thugs - had anything to do with this announcement. (smile)

[Smirk]

Bullfrog is anti-Obama and anti-Democrat.

[iambusto]

yeah but he can buy, sell you and your entire family !!

[Indubio]

And yours too and mine and everyone reading this blog post. I'm not sure that has any relevance to anything important.

[Changeizgood]

Told my bank manager, the way the markets are, I'd be putting my money under my mattress.

No fees for that. No stalled paperwork causing overdrafts, because the check is written out, or out of state delay fees, when your purchases bounce, do to the delay.

I don't care if I have to bury it in the hills, they don't deal fairly with me, why should I place funds there, for them to use and draw interest on, every 12 hours, if they won't give communities, and small business men of color my money. My son's an entrepeneur, and he never stood a chance.
The Chinese, gave him a better shot than America's banking system.

I guess when your born in poverty, your expected to stay put, like KIZZY.

Well this little KUNTA is keeping it at home, thank you.

[lovintheconstitution]

I wish Warren would run....I know there is no panacea to our problems but he seems to have the "Midas touch".

[ilovemydoggy]

Greed is the main problem.

Baby boomer views: http://www.Vaboomer.com

[Praedor]

I would say the answer is to buy gold but...I bought gold a month or so ago, when the backstopping of Frannie and Freddie were just intended to provide confidence with "no danger to taxpayers" and got REAMED.

I bought gold when it was just over $900/oz. Almost the next week it took a plunge to below $800. WTF!? Seriously, I don't understand it. The dollar is crap. Literally, it is a dead man walking. The economy is crap, the news about housing just gets worse, and what happens? The dollar strengthens and gold plunges. This makes no sense!

I'll hold onto my gold and even consider buying more but after getting royally f*cked last time, I am gunshy about getting reamed again. I lost several thousand dollars with the last gold buy.

WTF?!

[OldKnute]

Well,,, I know I am glad that Warren is on the Obama Team. Joe Biden as well. I place property as overvalued by 250 to 400%. If we are in for the needed correction to reset the economy and start to grow the economy in a moderate and sustainable way, we are looking at 2 to 3 years of very rough road.

However, we do have a model to examine in recent history that may still hold out some hope to us for a quicker than normal turn around. This being, the previously un-mined virtual Free Enterprise world of the Internet. 94 to 2000.

Not unlike this Virtual World, just over the horizon exists a Green Flood of Technologies that the Obama Team is advocating huge R&D, Grants, Tax Credits, University Funding and incentives to stimulate. Wind, Solar, Decentralized Grid, Bio-Remediation, Medial Research, Stem Cell, Energy Independence, resetting the Military, Basic and Post Secondary infusions of funding of education.

All programs that have been on hold for 8 years, because of Ideological arguments over Environmental Concerns. How foolish!

Set in motion, EXISTING Products require shipping and installation.
JOBS.

Factories need be converted or expanded to meet demand.
JOBS!

Manufacturing need be increased.
JOBS!

Technicians need be trained and educated.
JOBS!

Universities need increase staffing and Grant research technicians.
JOBS!

New Contracting Companies need be formed, SMALL and LARGE, and employees hired.
JOBS.

Jobs=Incom­e=Revenues at lower or present tax rates that INCREASE!

All the best

Knute Neo-LIB

[Changeizgood]

At Risk On the Job Training in Wind, Solar, and in OUR learning institutions nationwide.

Barack On Team America!

The McSame team got called on their Bush It, just like the Judiciary called Bush and Rove on theirs.

Me smells dessension in the ranky stanky clanky LIARS CLUB, BY THE NAME OF REPUBLICAN!!!

THEY ARE STILL THE ONES THAT DID THIS TO US, AND I DON'T GIVE A FLYING FIG ABOUT LIPSTICK. THEY CAN PUT IT ON A BEAUTY QUEENS LIPS I SEE, AND THE FUNKY POLICIES OF THE REPUBLICANS, STILL BRING ON A THE WORST FUNK IN ANY ELECTION, INCLUDING THE ONE IN 2000.

[chappelforpres]

The unconcerned wealthy would learn much, by revisiting what life was like for France's aristocracy during the revolution. They didn't call it "The Reign of Terror" for nothing!

[OldKnute]

Ummm?

I might remind you, that threats, either direct or implied, over the Internet or communicated via phone systems are Prohibited by Federal Law in the United States of America.

And,,,,,,, punishable by Imprisonment, Fines or BOTH.

So are avocations of violent Revolution or overthrow of the Federal Government by force or insurrection.

I regret to inform you,,,, you are hereby,,,,, FLAGED!

All the best

Knute Neo-LIB

[FrankFurter]

I was flaged once, I had to wear a special truss for two months....

[Changeizgood]

I know the "let them eat cake" mentality, has gone to their heads.

[WolfLarsen]

Hiding money won't matter if we collapse financially. It will be worth less then the stuffing in the mattress. As long as this country becomes a deregulated nightmare ruled by the predatory instincts of corporations and greedy robber barons we have a bleak outlook.

As long as our income base is driven primarily by consumption instead of production there is little upside. We need to end the reliance and dependence on foreign investors and become a world leader once again in the innovation of future technologies and industry.

We need to stop shopping and start creating. We still have the ability but without the proper leadership we will never find the inclination.

[FrictionSoul]

"We need to stop shopping and start creating."

Absolutely. Necessity is the mother of invention. Everything needs to become local again. I know people deride local businesses as not worth supporting because they are blinded to the realities of how the box chains have it easier via various forms of corporate welfare.

[PioneerKing]

FrictionSoul:
Why are you worried? McCain/Palin will fix every thing with the republican economic policy of trickle down economics.

[Casbah]

WolfLarsen: Agreed. It's striking to me how the current economy and players mirror to a degree the turn of the 20th century, and how Teddy Roosevelt became known as a trust-buster, out of necessity. The U.S. owes it existence as a capitalist democracy in large part due to two Roosevelts: Teddy and Franklin. I think Obama has a similar ability to help boost this country, far more than the so-called maverick McCain, and will shake things up.

[wendynyc]

Watch how the Republicans start the mantra of "tax and spend Democrats" if Obama gets elected and start the blame game trying to pass on everything that's wrong onto his shoulders.

It almost maybe better to leave it to the Repubs to clean up the mess they created.

Knowing how sneaky the Bush-Cheney team is - they are making sure the timing of the total collapse is not before the election in November.

Unfortunately for them - October is generally the worst month for the stock market.

[Swedishgal]

If they could be trusted to clean it up then no problem there but the problem is that they are the problem. Democrats have always had to clean up their messes and unfortunately the people forget too easily. I want Obama to get in office to increase education in this country so maybe we can have voters with longer memories and some brains, which are sorely lacking right now. I can't believe McCain is ahead in some states. Unfrickin' believable!

[MadAppraiser]

The corporate pimps have won, and America has lost!!!

[dugan45]

Richard Cohen's take on the bush years: http://www.nytimes.com/2008/09/11/opinion/11Cohen.html?ref=opinion

[UnknownSoldier]

And they pay this guy money to write.......... Jeesh

[BillyShears]

The goose that lays golden eggs was killed by banks about 4 years ago. This is not gonna be a pretty picture. That sad news is that the banks are still greedy enough to keep their jacked up variable interest rates too high- even with the Fed Funds rate having fallen. They are still trying to squeeze the life out of the housing sector- which was the last stable sector in this market.

[gtposse]

The problem with the capitalist financial system is underlined by greed, collusion, self dealing, insider trading, fraud, corruption, good old boy network, delusion, wall street analysts who don't know what the f-------k they are talking about, manipulation, so called risk management charlatans, snake oil salesmen and women who appear on the "business news" and no regulations.

Unfortunately, It is too late to the fix a system that is financially and morally bankrupt.

[MadeinAmericaProud]

the republicans praise ronald reagan busting the unions and deregulations for all and more importantly no oversights. He even removed the fox who was guarding the hen-house.

When Buffet speaks his words and actions are at a much higher value than greenspan's words will ever be.

When an enemy tells you his mission is to bankrupt your country, listen, remember and make a plan to counter the enemy's mission.

[Swedishgal]

I have nothing but admiration for Buffett and if he is bailing, then that's scary. We need to pay off bills in a hurry then hoard a little money or invest in gold.

[UnknownSoldier]

Not sure if you can get more middle America than Buffet, and if he is bailing out, Jeesh what does that say about the problems we are facing.