Billionaires Dumping Stocks, Economist Knows Why

Despite the 6.5% stock market rally over the last three months, a handful of  billionaires are quietly dumping their American stocks . . . and  fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for  quite some time, is dumping shares at an alarming rate. He recently complained
of “disappointing performance” in dyed-in-the-wool American companies like  Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been  drastically reducing his exposure to stocks that depend on consumer purchasing
habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and  reduced his overall stake in “consumer product stocks” by 21%. Berkshire
Hathaway also sold its entire stake in California-based computer parts supplier  Intel.

With 70% of the U.S. economy dependent on consumer spending,  Buffett’s apparent lack of faith in these companies’ future prospects is  worrisome.

Unfortunately Buffett isn’t alone.

Fellow billionaire  John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year,
Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.

Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.

So why are these billionaires dumping their shares of U.S. companies? Continue Reading

A Plethora of Happy Coincidences

By: The Common Constitutionalist 

Warren Buffett is President Barack Obama’s BFF.

Warren Buffett receives the Presidential Medal of Coincidence

The Keystone XL Pipeline is the oil pipeline that would carry oil from our friends in Canada down across several of our states to end up in Texas. It was first proposed in 2008.

Buffett’s Berkshire Hathaway bought the Burlington Northern/Santa Fe Railroad in 2009, shortly after Obama was elected.

Buffett’s nickname is the Oracle of Omaha. Omaha is in Nebraska, where resides the headquarters of Berkshire Hathaway; remember that.

Nebraska (with the administrations help) just happens to be the state that put the kybosh on the Keystone XL Pipeline.

As it happens, Burlington Northern Santa Fe LLC, which, as previously stated, is owned by Warren Buffett’s company, Berkshire Hathaway Inc., handles 75 percent of all the oil currently shipped by rail out of North Dakota.

Oil producers in North Dakota had planned to hook into the XL pipeline.

Strange bedfellows: Always remember a liberal is a liberal first, regardless of whatever else he or she claims to be and will always side with other liberals. So when a spokesman for the Sierra Club admitted “there is no question that transporting oil by rail or truck is much more dangerous than a pipeline,” it should come as no surprise that the eco-fanatics sided with the President to kill the pipeline.

Enter Ben Nelson, the honorable Senator from Nebraska. (I told you to remember this: Obama hearts Buffett. Buffett= Nebraska = Nelson)

"So this is what will kill the Pipeline project"

So when it comes to the Keystone oil pipeline and Buffett’s Burlington Northern, all roads lead to Nebraska.

GBTV uncovered a not so startling connection between Berkshire Hathaway and Senator Ben Nelson, who voted against the Keystone XL and lobbied that it be re-routed to avoid Nebraska, effectively killing the project. Ironically, the Senator’s attempts to thwart the pipeline were done while he himself maintained his state would heartily welcome the jobs created from the Keystone project.

 While Nelson’s position then seems counterintuitive, add to it the fact that he is heavily invested in Buffett’s Berkshire Hathaway. From 2007 to 2012 Nelson contributed $27,000 to the company itself and according to a recent financial disclosure statement from 2008, he owned between $1.5 and $6 million of the company’s stock – his largest investment in any one company to date. (So by counterintuitive, I meant completely intuitive.)

It doesn’t end there, of course. Buffett’s Burlington Northern Santa Fe PAC in turn contributed $5,000 to Senator Nelson’s Nebraska Leadership PAC and Berkshire Hathaway employees have reportedly long supported the senator, contributing at least $75,550 to the Nebraska Democrat over the course of his political career according to the Center for Responsive Politics. Coincidence or quid pro quo? I vote…coincidence.

Not coincidentally, Senator Nelson penned an op-ed column on March 5, 2012 entitled “Behind Those High Gas Prices.” As you can imagine, the senator was quick to tell Nebraskans that the spike “has nothing to do with the Keystone Pipeline” and also “isn’t a result of domestic oil production.”

Now move along people; Nothing to see here.

It’s Nice to be Friends


By John Hayward at Human Events:

When President Obama, who is normally a great proponent of “infrastructure” projects, made his bizarre decision to block the Keystone XL pipeline project, I wondered if he might have been induced to create those thousands of American jobs if the oil could be moved by his beloved high-speed rail.

As it turns out, oil is already moved from northern latitudes, such as the booming oil fields of North Dakota, down to the Gulf of Mexico by rail of the old, low-speed variety. Fortunately, as Newt Gingrich pointed out during the Monday night Republican debate in Florida, the oil is on private land, so Obama can’t shut production down.

Shipping the oil with a pipeline would have significantly reduced costs, as an Associated Press report explains:

Billions of dollars of infrastructure improvements have been made in recent years to allow North Dakota’s oil shipping capacity to keep pace with the skyrocketing production. North Dakota is the nation’s fourth-biggest oil producer and is expected to trail only Texas in crude output within the next year.

Alison Ritter, a spokeswoman for the state Department of Mineral Resources, said the state’s so-called takeaway capacity is adequate, though producers and the state were counting on the on the Keystone XL to move North Dakota crude.

Shipping crude by pipeline in North Dakota adds up to $1.50 to its cost, compared to $2 or more a barrel for rail shipments, producers say.

“Oil that would have moved by the Keystone XL is now going to shift to rail transportation,” Ritter said.

Amusingly, a spokesman for the Sierra Club admitted “there is no question that [transporting] oil by rail or truck is much more dangerous than a pipeline,” but that didn’t stop the zero-growth eco-fanatics from calling in their chips with President Downgrade to kill that pipeline.

Those rail shipments are expected to “increase exponentially with increased oil production and the shortage of pipelines,” according to Justin Kringstad, director of the North Dakota Pipeline Authority. That’s going to be quite a windfall for the railroad companies, isn’t it?

I hereby dub thee, Friend of Obama.

As it happens, 75 percent of the oil currently shipped by rail out of North Dakota is handled by Burlington Northern Santa Fe LLC… which just happens to be a unit of Warren Buffett’s company, Berkshire Hathaway Inc. What a coincidence!

For some reason, nobody from BNSF or Berkshire Hathaway would return the AP’s telephone calls, but oilman Harold Hamm told them he was sure this was just a wonderful “lucky break” for Barack Obama’s favorite billionaire, who is “certainly favored by this decision.” I’ve heard Buffett’s famously overtaxed secretary will be a guest at the State of the Union address tonight. Maybe someone could ask her about it.

The “tax me more” refrain from liberal billionaires is one of the oldest sucker games in the book. For the well-connected, the money that can be made through government power – whether by influencing corrupt politicians, or merely predicting what they’re going to do – dwarfs whatever income they offer to cough up.