Berkshire to Invest $5 Billion in Goldman

"The Sage of Omaha is famous for his nose for a bargain, and has experience in the securities industry thanks to his rescue of Salomon Brothers in the wake of its early 1990s Treasury bond scandal. While Goldman has a storied name, great relationships, and has fared better than any other securities firm in the credit crunch, it has become more hedge fund with some customer businesses attached than a traditional investment bank or securities trading firm. And now that Goldman could in theory raise deposits to fund that activity, it would have an insurmountable cost advantage. Buffett is acutely aware of the value of cheap funding; it's one of the reasons he entered the insurance business."