Wall Street again

Well it continues, the manipulation of the Wall Street to suck your money away. Here's some interesting points of note:

The ban on short-selling that was due to expire today, was extended as expected, the SEC saying it will be removed no later than October17.

As the Wall Street Journal says about it this morning, "The decision two weeks ago to ban short-selling of nearly 1,000 stocks failed to prevent big declines in share prices in some of the best-known financial companies, has made an already edgy stock market more volatile, and has raised trading costs for all investors."

Have the troubled financial firms found another way to trick investors? Last week Goldman Sachs wanted to raise $10 billion from investors by selling more stock. They made Warren Buffett an offer no one in their right mind would refuse, $5 billion of preferred stock at a discount, that will also pay him a juicy 10% coupon yield, plus warrants as a sweetener on the side that allow him to buy common stock 8% lower than the current price at some time in the future, if the stock goes up. It worked great. After announcing Buffett was investing in their stock, they had no trouble selling the new issue of common stock.

Yesterday G.E., after having had to assure Wall Street for the third time in a month that its finance arm would not face a funding squeeze, announced it was going to raise $15 billion of capital by selling additional common shares.

And G.E. was also able to announce that Warren Buffett is investing in G.E., always a big influence on investors, as in if Buffett is buying, it must be a buy. As did Goldman Sachs the prior week, G.E. had pre-arranged with Buffett so they could make that announcement, allowing Buffett to buy $3 billion in preferred stock, plus giving him warrants allowing him to buy $3billion of common stock at $22.25 a share any time in the next five years. Buffett dutifully came out and made positive noises about G.E. being "the symbol of American business in the world, with strong global brands and businesses."

What an inexpensive way for firms to move their stock in difficult times, using the image of "the smartest investor in the world". And all Buffett has to do is sit there and wait for them to come to him, to pay billions for the use of his name. What a deal. Which firm will be next?

What a fantastic deal for Warren Buffett - how can I get billions for using my name?