Is Warren Buffett About to Save the Banking Sector? - The Average Joe


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    Is Warren Buffett About to Save the Banking Sector?


    March 20, 2023

    Be “fearful when others are greedy, and greedy when others are fearful.”

    Do you even invest if you don’t know this quote? The investor who famously said it is back in the spotlight.

    Warren Buffett is known for saving banks in their time of need:

    An investment from Buffett is a sign of confidence, and in return, Buffett receives generous terms — which turned into big paydays for his investment firm Berkshire Hathaway (NYSE:BRK)

    • 2008: Gave Goldman a $5B lifeline — an investment that returned nearly $3B by 2020.
    • 2011: Injected $5B into Bank of America — which turned to $17B by 2017.

    The banking sector is in need of the Buffett touch.

    Since SVB collapsed, US regional banks have dealt with “elevated” customer withdrawals. On Sunday, a US official told Reuters that deposits were stabilizing.

    But regional banks are still on thin ice — and First Republic and PacWest are trying to raise money privately to ease investor concerns (unsuccessful so far).

    Buffett is back at it again

    Last week, Biden’s team reportedly held multiple talks with Warren Buffett, focused on his possible investment in the US regional banking sector.

    FuzzyPanda also reported a large number of private jets flying to Buffett’s hometown Omaha.

    With $128B+ in cash at the start of the year — Berkshire has a lot of capital to put to work. Could regional banks be the shark’s next meal?

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