Economic Pearl Harbor

The current Wall Street credit and lending crisis has been called an "economic Pearl Harbor" by mega-investor Warren Buffett. After doing as much study and research as I can, and talking with experts I trust, I believe Buffett's analogy is true.

President George Bush's speech last night was probably the very finest of his presidency. Bush was clear, logical and he didn't "talk down" to his audience as he often does. He told the true and exact story of the events leading up to the crisis and didn't play politics at all. That was a surprise.

In fact, Bush was unusually non-partisan. He clearly reached out to Democrats.

The only political note I will add is strictly my personal opinion that John McCain continues to handle this crisis about as badly as it is possible to handle it. His political "time out" and his proposal to delay the Friday night debate looks incredibly foolish.

An important part of the decision we voters must make in choosing the next President is watching how he or she handles events. McCain looks very bad here. Even if he is totally sincere in his desire to help solve this crisis, he still appears to be playing politics. As I often say, "Perception Becomes Reality."

If the McCain campaign was frightened by the polls yesterday, just wait until next week.

But let's get back to the real crisis. Warren Buffett is like the men and women who volunteered to join the military after Pearl Harbor. He immediately volunteered to serve with his FIVE BILLION DOLLAR INVESTMENT in Goldman Sachs.

From the Bloomberg article linked above:

Sept. 24 (Bloomberg) -- Billionaire Warren Buffett, calling turmoil in the markets an "economic Pearl Harbor,'' said his $5 billion investment in Goldman Sachs Group Inc. is an endorsement of the Treasury's $700 billion bank rescue plan. "I am betting on the Congress doing the right thing for the American public and passing this bill," Buffett said on cable channel CNBC today. "I certainly have a vote of confidence in Goldman and vote of confidence in Congress." Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke are pushing Congress to quickly approve the proposal to remove illiquid assets from the banking system. Buffett is buying a stake in New York-based Goldman after three of the investment bank's biggest competitors collapsed or were forced into emergency sales. "I think the Treasury will pay back the $700 billion and make a considerable amount of money," Buffett said, adding that if he had $700 billion on the government's terms to buy distressed assets, he would. "Unfortunately, I'm tapped out." Goldman rose $4.95, or 4 percent, to $130 at 4 p.m. in New York Stock Exchange composite trading after Buffett's Berkshire Hathaway Inc. agreed yesterday to the investment. It will pay 10 percent interest and give Buffett the right to buy $5 billion in common stock in the next five years at $115 a share. Buffett, 78, has frequently scolded Wall Street for shoddy accounting and risky investments. He's investing in the most profitable U.S. investment bank a week after Lehman Brothers Holdings Inc. went bankrupt and Merrill Lynch & Co. sold itself to Bank of America Corp. Bears Stearns Cos. in March was absorbed by JPMorgan Chase & Co.

I have been a strong and unrelenting critic of Warren Buffett on these pages for his absolute failure to cease investments that are empowering the genocide in Darfur. But I certainly applaud his stepping forward today to help calm the markets and support America during this current crisis.