2:10AM EST

Why is this man so wise?  Why?  My trade that I was going to set up for next week when they lift the short ban was long Goldman and short COF.  But Buffet ruined this entire trade.  Horribe horrible wise man.  I was hoping that Goldman would get beat up and trambled because now that Goldman would become a bank, it would not be in jeporardy of being taken out.  There is one thing that separates Goldman from most firms out there and it’s their people.  They attract the best and with that the best trading minds out there minus this one blogging (just kidding…I’m not worthy).  Goldman makes most of their money trading not through securitization like Lehman and Bear Stearns.  Plus as a bank, they sure do trade at a ridiculously low PE.  As a bank, they are a buyout waiting to happen.  Well Buffet now took a 5 billion dollar stake.  Could Goldman now be buyout bait for one of the banks that he has a position in?
Let’s look at the biggest banks that he has shares of: Wells Fargo, US Bankcorp, and Bank of America.  Ok let’s take BofA out of the picture since they just swallowed Merrill.  US Bankcrop may be too small at 59B to buy Goldman.  Merger of equals…maybe.  But Wells Fargo at 113B can easily swallow 50B Goldman.  Hmmm…..is this a sign?  Buffet sure got a good deal….preffered perpetual shares paying 10 percent dividend and during that time, you can purchase $5B worth of shares at $115 within the next five years.  Seriously, that’s 5B worth of call options free for five years.  They estimate the premiums on those warrants are 1.4 billion dollars.  Ok great, he makes an instant 1.4B along with a 10% return on 5B.  Seriously that is a great deal.  Goldman, when I make my first 5 billion, remember that I am waiting in line for the same deal.  Buffet is a jerk but he sure is wise at heck.

Disclosure: Long FXA, CHK, NUE, MSFT, Short: PLD