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Warren Buffett – Playing the American Public like a Piano – announces he will buy Heinz

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February 14, 2013 in Business


Warren Buffett – Playing the American Public like a Piano

Apparently, Warren Buffett still has a bunch of cash laying around — even after pledging in 2006 to ‘give up’ 85% of his personal $44 Billion dollar fortune.  The reality of this, is of course – Warren is simply keeping his money in tax-free non-profit organizations run by his three children.   Also in 2006, Buffett pledged 17.5 million shares of Berkshire Hathaway stock to each of his children’s non-profit organizations.  This translates to well over $3.1 BIllion dollars. Buffett has been distributing a portion of the donations to his children  each year, with the three foundations in line to eventually receive roughly $7.5 billion, or more than $2.5 billion each.

Buffett’s son Peter, along with his wife, Jennifer, runs the NoVo Foundation, which is dedicated to “fighting inequality and gender inequities.” Another son, Howard, runs the Howard G. Buffett Foundation, which works in the developing world to improve agriculture and clean water delivery. Buffett’s daughter, Susan, runs the Sherwood Foundation, which supports non-profits in his hometown of Omaha and funds early childhood education initiatives nationally.

Susan Buffett said at the time that she was unsure of how her organization would spend the new funds. ”We’re all excited to be thinking about that over the next few months,” she said.  Could all of this really just be a clever way to hold funds and prop children up for decades to come?  The reason I bring this up — is because several of his companies have been sued for tax evasion. The Blaze reported in August of 2011 that Berkshire Hathaway owed back taxes dating back to 2002.

“Warren always liked to hire accountants with great imaginations,”  - anon.

Ironic, isn’t it? When Warren Buffett penned that op-ed demanding he be taxed more, we all assumed that meant he had actually paid his own taxes. Not quite the case. Buffett’s famed company, Berkshire Hathaway, owes taxes that are nearly a decade old.

Now, (reported today, FEB 14 2013) Warren Buffett plans to buy Heinz.  That’s right.  H.J. Heinz Co, for a reported $28 Billion dollars, including the assumption of $4 Billion dollars in company debt.  With Brazillian / Swiss businessman Jorge Paulo Lemann, Buffett’s Berkshire Hathaway (BRKA) will own 50% of the venture and Lemann’s 3G Capital will own the remainder.  The All-Cash deal will pay Heinz shareholders $72.50 a share, which is just under 20% of the Heinz stock closing price yesterday of $60.48.   Heinz reports revenues of $11.6 Billion and net income of $1.1 Billion.   Mind you the article linked to above was (quote) written by “Fortune senior editor at-large Carol Loomis – a longtime friend of Warren Buffetts’ and the writer of his annual letter to shareholders. 

Lemann and Buffett were both on the board of directors for Gillette Co. in the 90′s and early 2000′s.  Buffett was on the board because Berkshire Hathaway then owned close to 10% of Gillette.  Lemann and 3G capital have had interests such as Anheuser Busch (Budweiser) and his company 3G Capital bought control of Burger King  in 2010.  Burger King also happens to be a huge user of Heinz Ketchup.

Years ago Tom Kirkendall had an insight that no one had before – or since, it seems – about Warren Buffett.   Called “The Buffett Rule,” Kirkendall explained the media’s reporting of Buffett thusly: “A folksy and media savvy businessman involved in complicated structured finance transactions is given a pass [when others go to jail and receive negative press for the same conduct].”

The Buffett Rule is in full effect today.  A story getting major attention reads: “Goldman Sachs, Buffett to help small businesses.”  Nowhere does the story report that Buffett is a substantial shareholder in Goldman Sachs.  Instead, we’re told that Goldman Sachs (which by now everyone who has been paying attention recognizes is evil) is getting advice from Aw, Shucks Buffett:

NEW YORK (AP) — Goldman Sachs Group Inc. said Tuesday it is teaming with billionaire investor Warren Buffett to invest $500 million to provide thousands of small business owners across America with college scholarships and boost their access to capital.

How thoughtful!  Or is it?

In 2010, there was at least probable cause that Warren Buffett violated insider trading laws when he sold $6.2 million in Moody’s (MCO) shares.  Buffett has been in regular contact with Moody’s executives; in March Moody’s received a notice that it faced an SEC lawsuit; in March Buffett sold his $6.2 million in Moody’s stock.

 A clever media manipulation game

There are certainly no shortage of ‘Aw…shucks!” photographs of Warren Buffett out there in the wild.  Just go a Google Image search for ‘Warren Buffett Ice Cream” and you will see a large number of photographs of Mr.Buffett eating ice cream, a clever ploy to make the American public believe he is simply a kindly old gentleman whom (really!) enjoys his ice cream.   Could this just be a PR stunt to make Mr.Buffett seem like a non-threatening figure with massive wealth and political influence?

- Capthook / K.O. – Thursday, Feb 14, 2014.

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3 responses to Warren Buffett – Playing the American Public like a Piano – announces he will buy Heinz

  1. I have not touched catsup or any Heins product in years.

  2. When the crash happens, will he lose all his wealth?

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