Warren Buffett

Billionaire investor Warren Buffett reportedly engaged in talks with top members of the Biden administration as turmoil engulfed the US banking system.

Critics have argued that move was a bailout that will eventually lead to higher costs for bank customers. First Republic’s stock has remained under intense pressure despite last week’s move by the largest US banks to stage a $30 billion rescue of the troubled lender. Shares of both banks were down in Monday trading.

Warren Buffett has spoken to the White House about investing in US regional banks, reports say. · Buffett's Berkshire Hathaway provided critical funding to ...

In both cases, Buffett demanded preferred stock that paid a hefty dividend, and could only be redeemed at a significant premium. The combined value of Berkshire's Bank of America and American Express stakes has slumped by about $9 billion in the past month alone. The billionaire's backing might help to quell fears of more bank failures, and shore up faith in the financial system. He's also offered advice and guidance to the Biden administration on how to deal with the current turmoil in the banking sector, [Bloomberg said](https://www.bloomberg.com/news/articles/2023-03-18/warren-buffett-in-contact-with-biden-officials-on-banking-crisis). It could also reassure depositors that their money is in safe hands. [, and other companies in late 2008, when fear froze credit markets.

Warren Buffett may be eyeing a takeover in the banking industry. Some believe his target will be bank holding company Ally Financial (ALLY). Buffett himself ...

Bancorp (NYSE: [USB](https://investorplace.com/stock-quotes/usb-stock-quote/)), Citigroup (NYSE: [C](https://investorplace.com/stock-quotes/c-stock-quote/)) and BNY Mellon (NYSE: [BK](https://investorplace.com/stock-quotes/bk-stock-quote/)). [high exposure](https://investorplace.com/2023/03/the-7-most-overvalued-buffett-stocks-to-sell-in-march-2023/) to the troubled auto loan industry. On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. What’s more, while he could certainly increase his holdings in ALLY stock, Warren Buffett could also shift his focus to other companies in the banking space for a better deal. This makes for a compelling case that Ally may be high on Buffett’s list of bank holding companies to take over. Still, Buffett may be deterred from acquiring the company due to its After all, Berkshire owns roughly 29.8 million shares of ALLY stock as of the end of December, equal to a stake of just under 10%. [bank stocks that Buffett owns](https://investorplace.com/2023/03/warren-buffett-is-betting-big-on-these-5-bank-stocks/) include U.S. Speculation that Buffett will acquire the company has been mounting since a note from Gordon Haskett Research Advisors floated the possibility of the billionaire stepping in to help the banking world. That said, Ally is rising on rumors that Warren Buffett is eyeing the company for a potential takeover. regional banking sector, though the billionaire has also given some of his views about the current tumult in the sector.” However, it had been facing problems before that as well, with [declining consumer sentiment](https://fred.stlouisfed.org/series/UMCSENT) casting a dark shadow over ALLY stock.

Berkshire Hathaway CEO and billionaire investor Warren Buffett is in contact with senior officials within President Joe Biden's administration, according to ...

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Washington is getting desperate to contain the unfolding banking crisis, and is now looking for new ways to kick the can down the road for a little while ...

The author has no securities or affiliations related to this organization. The author holds no licenses. Buffett, whose Berkshire Hathaway (NYSE: BRK) conglomerate of successful companies amassed him a fortune of around $101.6 billion, has previously stepped in to save the banking industry.

Recently, Seeking Alpha reported that Warren Buffett was in talks with the Biden administration regarding how to solve the Bank crisis.

So, if Berkshire could successfully rescue a bank through a $5 billion, 10% preferred share investment with warrants attached, it would increase the value of Berkshire Hathaway shares. The bottom line for Berkshire Hathaway shareholders is that, given Buffett’s track record with financials, a regional bank deal would be a welcome development. If Berkshire simply collected the cash for 20 years, it would add $10 billion in cash to Berkshire’s equity. If it got another $5 billion by selling 10% yielding preferreds to Berkshire, it would increase that amount by 16.66%, but without a possibility of it being withdrawn. If Berkshire’s preferreds cost the same, then Berkshire would own 217 million worth of them. So, yes, a $5 billion investment from Berkshire could potentially tip the scales enough to make FRC an investable stock. A $5 billion 5% yielding preferred is worth $5 billion if the discount rate is 5%. A $5 billion 10% yielding preferred is worth $10 billion if the discount rate is 5%. Assuming that the securities haven’t declined in value since the end of Q4, FRC could sell them for $50.6 billion, realizing a $5.2 billion loss. FRC had $50.6 billion worth of these at the end of the fourth quarter. If you know that giving a bank $5 billion will save it from collapse, and you buy 10% yielding preferred shares from the bank, you make a safe investment. We are, therefore, in a situation in which Warren Buffett could profitably bail out one of the now-struggling regional banks.

As in prior crisis periods for the banks, like the 2008/2009 financial crisis, some investors used the crisis to structure favorable investment deals.

Last week the indicator fell back into the extreme fear range, indicating a market that is in a high state of fear. [Chart of the Day](https://www.chartoftheday.com/) and the bars in the below chart represent the 12-month average gain for the S&P 500 Index across different bullishness levels. As the below chart shows, individual investor bullish sentiment has been at a low level for most of this year. Last week's survey reported investor bullish sentiment fell to 19.2% from the prior week level of 24.8%. As Warren Buffett has said in the past, "Be fearful when others are greedy, and greedy when others are fearful." Shortly after posting that earlier blog article, the [UBS/Credit Suisse deal was announced](https://www.forbes.com/sites/marisadellatto/2023/03/19/ubs-agrees-to-buy-embattled-bank-credit-suisse-central-bank-says/?sh=608d89563e66).

Warren Buffett has reportedly been in talks with the Biden administration about the turmoil surrounding regional banks, which has been rattling markets for ...

“The steps we took were not focused on aiding specific banks or classes of banks. There were signs of a comeback on the morning of March 21, however, following the release of Treasury Secretary Janet Yellen’s speech at the American Bankers Association, set to take place later in the day. It is expected that Yellen will indicate the administration has a plan in place if more banks were to collapse. And a few days later, 11 banks announced they had injected $30 billion in deposits into embattled First Republic Bank. The quick collapse of Silicon Valley Bank — followed by the closing of crypto-friendly bank Signature Bank, because of a “similar systemic risk”– and the ensuing measures regulators took to avoid more damage on Sunday evening March 12, have prompted contagion fears and created chaos in the markets. [Is Your Money Actually Safe at a Bank?

Buffett's Berkshire Hathaway provided critical funding to companies during the financial crisis. Berkshire made a fortune from those deals, but might have to ...

Berkshire Hathaway is Ally Financial's second-largest shareholder. A research firm speculated that ALLY could be a Buffett takeover target.

Ultimate Growth Investing specializes in a price-action-based approach to uncovering the opportunities in growth and technology stocks, backed by in-depth fundamental analysis. Gordon Haskett Research indicated that " [if Buffett](https://seekingalpha.com/news/3948895-ally-financial-gains-amid-vague-buffett-takeover-speculation) were to do a deal in the banking sector he would likely stick to a name that he already owns." Unlock the key insights to growth investing with JR Research - led by founder and lead writer JR. [CS](https://seekingalpha.com/symbol/CS)) demonstrated how quickly the depositors' confidence could unravel in the social media age. However, given the recent volatility, investors should consider a validated bullish reversal before adding new/more positions. Liability sensitivity remains a concern, and increasing interest rates are expected to have a negative impact on net interest income in the near term. The Federal Reserve increased the federal funds target range to 4.25-4.50% in 2022 to address elevated inflation levels, and further increases are expected in 2023. Combined unrealized losses on the AFS and HTM portfolio amounted to about $5.5B. Hence, it didn't experience the outflows of deposits seen in SVB and SBNY, as depositors sought higher yields. Furthermore, retail depositors had good reason to increase their holdings with Ally Bank, as it paid out an average deposit rate of 1.39% in FY22. remains a viable proposition to survive the fallout amid the banking crisis at the appropriate valuation. The Fed, the U.S.