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Berkshire Hathaway Inc. agree to fund Goldman Sachs Group Inc. by buying 5-billion (U.S.) worth of preferred shares -

The Oracle weighs inRTGAMWarren Buffett to the rescue! Not only did the chairman of Berkshire Hathaway Inc. agree to fund Goldman Sachs Group Inc. by buying 5-billion (U.S.) worth of preferred shares - and restoring some confidence in at least one corner of the U.S. financial system -

Mr. Buffett also said on Wednesday morning that he supported the U.S. government's contentious $700-billion rescue package.In an interview on CNBC,

Mr. Buffett said that the bailout plan was akin to the U.S. decision to go to war after the attack on Pearl Harbor in 1941, and also warned that the past week will "look like Nirvana" if the plan is not approved by Congress. He did warn, however, that the government shouldn't pay much more than the market price for the illiquid assets it plans to buy from troubled financial firms.

U.S. stock futures were higher on Wednesday morning with about an hour before markets open, suggesting stocks will rise at the start.

Futures for the Dow Jones industrial average rose 89 points, to 10,943. Futures for the broader S&P 500 rose 13 points, to 1200. Goldman Sachs rose to $131.40, up $6.35.In Europe, the U.K.'s FTSE 100 fell 0.4 per cent and Germany's DAX index fell 0.2 per cent in afternoon trading, after a reading on business confidence in the three largest European economies fell more than expected. In Asia, Japan's Nikkei 225 rose 0.2 per cent in overnight trading.Copyright 2001 The Globe and Mail

FBI was investigating four major U.S. financial institutions whose collapse helped trigger the bailout plan.

Executive pay limits gain support as bailout questioned JULIE HIRSCHFELD DAVISWednesday, September 24, 2008WASHINGTON —

Executives whose companies get a piece of the $700-billion (U.S.) government bailout will have their pay packages strictly limited under proposals that are broadly supported by both Republicans and Democrats in Congress.
The Bush administration was resisting the move as it scrambled to overcome widespread misgivings on Capitol Hill and swiftly push through its plan to rescue tottering financial firms by buying up their rotten assets.

Lawmakers in both parties are demanding changes to the administration's rescue proposal despite dire warnings from top economic officials of recessions, layoffs and lost homes if Congress doesn't approve it quickly. Both parties' presidential candidates also insist on alterations to the drastic prescription.

“We have got to look at some alternatives,” said Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee.
Sen. Chris Dodd, D-Conn., the panel's chairman, said the Bush administration's position was “not acceptable.”

Congressional leaders say they are working to approve the rescue by week's end, but the chances of a quick deal were dwindling.

“Just because God created the world in seven days doesn't mean we have to pass this bill in seven days,” said Rep. Joe Barton, R-Texas.
Rep. Barney Frank, D-Mass., the House Financial Services Committee chairman, was in intense negotiations with Treasury Secretary Henry Paulson on key elements of the plan.
“As long as it looks as if we are seriously engaged, it's not too late” to act, Mr. Frank said.
Law enforcement officials, meanwhile, said Tuesday that the FBI was investigating four major U.S. financial institutions whose collapse helped trigger the bailout plan.

Two law enforcement officials said the FBI was looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation. The inquiries will focus on the financial institutions and the individuals who ran them, the senior law enforcement official said.
The law enforcement officials spoke on condition of anonymity because the investigations are ongoing and are in the very early stages.
Mr. Frank has proposed adding substantial congressional oversight over the bailout and a requirement that the government make an effort to renegotiate as many of the mortgages it purchases in the rescue as possible to help strapped borrowers stay in their homes. Mr. Paulson was said to be willing to accept those revisions.
Sen. Charles Schumer, D-N.Y., said Wednesday he believes Congress must act quickly to rebuild the crumbling financial system but that lawmakers must have a strong supervisory role.
If there are provisions for a return of money in connection with the absorption of bad debt at various financial institutions, he said on NBC's “Today” show, “it should go to taxpayers before bondholders, shareholders and executives.”
Sen. Jim DeMint, a South Carolina Republican, differed with Schumer, saying Congress should resist the Bush administration's pleas for the legislation. He said, “The government broke it. I don't trust them to fix it.”
The administration was still battling calls from virtually every quarter of Congress to slap tight limits on compensation for executives whose firms get a federal rescue. Mr. Frank wants the government to restrict the bailout to firms that deny their top people golden parachutes on their way out the door and institute a “clawback” rule to revoke bonuses paid for bogus gains.
Another influential Democrat, Sen. Max Baucus of Montana, proposed tax penalties on the compensation of top executives who earn more than the U.S. president; their pay would only be tax-deductible up to $400,000. Large golden parachutes also would be taxed heavily under the plan by Baucus, the Finance Committee chairman.
Mr. Paulson says such limits would discourage participation in the program.
But the curbs appear to have widespread bipartisan support.
“Clipping executive compensation is easy right now — everybody wants it,” said Rep. Jack Kingston, R-Ga.
Mr. Frank also has been pushing to allow the government to buy equity — rather than just bad debt — in companies it helps so taxpayers can benefit from future profits. That idea is also gaining bipartisan support, but Mr. Paulson argues it would hamstring the very companies the government is trying to help.
He also is strongly opposed to another key Democratic priority: letting judges rewrite mortgages to lower bankrupt homeowners' monthly payments. Democrats view that measure as the heaviest lift and the most likely to be dropped as part of a final deal.
“I share the outrage that people have,” Mr. Paulson told the Senate Banking Committee on Tuesday. “It's embarrassing to look at this. I think it's embarrassing to the United States of America. There is a lot of blame to go around.”
Without the bailout plan, Mr. Paulson and Federal Reserve Chairman Ben Bernanke have sketched out a grave scenario for lawmakers: Neither businesses nor consumers would be able to borrow money, and the world's largest economy would grind to a virtual halt.
© Copyright The Globe and Mail